Once you become eligible to receive a retirement benefit, part of the benefit can be commuted into a lump sum which would be payable upon separation from service. The lump sum may not be greater than 1/3 of the actuarial equivalent of the full benefit and the remaining periodic benefit will be reduced accordingly (Articles 28(g) and 29(e) of the Fund’s Regulations).
If a retiree selects to commute part of his/her benefit into a lump sum, the Fund will automatically pay the maximum lump-sum allowed (i.e., the actuarial equivalent of 1/3 of the benefit OR the total of his/her own contributions with compounded interest, whichever is greater). The retiree may, however, choose a lesser amount as a lump-sum by specifically indicating such amount in the relevant Payment Instructions Form for less than 5 years of contributory service or for more than 5 years of service.
The Lump Sum is always calculated and paid in US dollars. If you want it in local currency, it will be converted at the current exchange rate applied by your bank. If you want to keep it in US dollars, be sure you have already opened an account in US dollars and that this account is the one indicated on your payment instructions form. Please note that once the Fund has implemented your benefit election, it is considered irrevocable.
The Withdrawal Settlement under Article 31 is one-time benefit payment to a former participant who is not entitled to or chooses NOT to elect ANY form of periodic pension benefit that carries potential future survivors’ benefits; the former participant will receive the reimbursement of his/her own contributions plus interest, and where applicable increased by 10 per cent for each year in excess of five up to a maximum of 100 per cent. A withdrawal settlement extinguishes all other rights to any other future benefits.
At the request of the beneficiary, articles 28 and 29 allow for partial commutation of up to 1/3rd of the pension entitlement into a one-time lump-sum cash payment. If elected, the lump-sum represents a portion of the periodic retirement benefit and is payable at the time of benefit implementation; it can represent up to a maximum of 1/3 of the actuarial equivalent of the retirement benefit. If a beneficiary elects to commutate part of his/her retirement benefit into a lump sum, the proportionately reduced balance will be paid for life to the beneficiary in the form of a periodic benefit. Payment of the lump sum does not impact the right/s to potential future survivors’ benefits.
Lump Sum Specifics
If I decide to take a lump sum does it have to be a one third lump sum?
No. You may take any amount as a lump sum provided that it does not exceed the actuarial equivalent of one third of your benefit or your contributions with interest.
May I have my lump sum paid into a different account than my monthly benefit?
If I wish to receive my lump sum in a currency other than US dollars how will the conversion be done? And what about the monthly pension?
Your US dollar lump sum would be converted by the bank, using the bank rate of exchange available at the time of payment. On the other hand, should you request to receive your periodic benefit in an equivalent currency, the UNJSPF itself would establish the amount payable by using the UN Operational rate of exchange in effect for the month preceding the calendar quarter of payment. See information on the local or two-track pension system.
Rolling Over into an IRA account
If you would like to request the roll-over of your lump sum or withdrawal settlement from the Fund to an IRA account, please note that the Fund can only remit payments to an account in the name of the participant that is capable of receiving wire transfers. If your account meets these criteria, have your bank provide you with specific instructions as to how they wish to receive payments via wire transfer bearing in mind that the funds will be remitted from JP Morgan Chase Bank in New York City.
Next, fill out the relevant Payment Instructions Form for less than 5 years of contributory service or for more than 5 years of service and, under the Lump Sum banking information box, note to refer to an annex sheet providing the necessary IRA information. Obtain this annex sheet from your financial institution, most will provide you with a form called the Fedwire Instructions Document, detailing what the Fund needs in order to correctly issue the payment. Sign and submit this document to the Fund along with your UNJSPF Payment Instructions. In case you cannot obtain a Fedwire Instructions Document, please detail the following on a blank sheet of paper:
Line 1: Bank name where financial institution has an account
Line 2: Address
Line 3: Address
Line 4: (United States of America)
Line 5: Bank identifier (SWIFT, ABA#, CHIPS UID) of Line 1 bank
Line 6: Name of financial institution
Line 7: Account number of Line 6 financial institution with Line 1 bank
Line 8: Beneficiary’s name
Line 9: (Blank)
Line 10: Account number of beneficiary with Line 6 financial institution
Note: Print your name, UID, and date on the paper and sign it with your original ink signature