The organization's liability for after service health insurance has been estimated by a consulting actuary.

The Consulting Actuary calculated the actuarial sufficiency as at 31 December 1993 on the following basis.

4. All calculations were performed by the Consulting Actuary in accordance with established actuarial principles and practices.

But it wouldn't have to be approved by regulators you'd have to convince an actuary that it would be safe.

Both the Consulting Actuary and the Committee of Actuaries stressed that great care must be taken when considering the dollar amounts.

An independent consulting actuary was engaged to carry out a valuation of post retirement health insurance benefits as of 31 December 2003.

The Consulting Actuary provided the Board with broad estimates of the savings that might be achieved should the 120 per cent cap provision be lowered.

On the basis of the 31 December 1993 actuarial valuation, the Consulting Actuary estimated the actuarial implications of possible higher and lower future interest rates as follows

The Consulting Actuary had estimated that the changes in the mortality assumptions would increase the actuarial costs for the Fund by about 1.05 per cent of pensionable remuneration.

The Consulting Actuary submitted to the Board at its forty sixth session the report on the twenty second actuarial valuation of the Fund as at 31 December 1993.

The Committee noted the estimates prepared by the Consulting Actuary on the impact of possible increases or decreases in the interest rate on the required rate of contribution.

The provision of 463,000 is made for the services of a consulting actuary who will provide the following services, in accordance with article 10 of the regulations of the Fund

In the statement on the actuarial position of the Fund as at 31 December 1993, reproduced in annex V below, the Committee of Actuaries and the Consulting Actuary concluded that

The Board agreed with the actions taken by the Secretary, the Consulting Actuary and the Committee of Actuaries to respond positively to the requests made by the Panel of External Auditors.

It concurred with the Consulting Actuary that, because of the volatility of the emerging costs, there could be no assurance that the current cost estimate would hold true for the future.

2. At its meetings in June 1994, the Committee of Actuaries reviewed the results of the actuarial valuation as at 31 December 1993, which was carried out by the Consulting Actuary.

On the basis of that study, the actuary estimated that as of 31 December 2003, the net liability for after service health insurance benefits for all participants in UNDP was 341 million.

The Consulting Actuary estimated that a new Unisex Mortality Table for commutation purposes, as applied to future service, would increase the required contribution rate by about 0.10 per cent of pensionable remuneration.

Accordingly, the Consulting Actuary and the Committee of Actuaries consider that there is no requirement, as of 31 December 1993, for deficiency payments under article 26 of the Regulations of the Fund.

The most significant activities under this project were the funding of an actuary for four months, the funding of one expert in social security planning and administration for one and one half months.

The Consulting Actuary indicated that the valuation involved projections far into the future under the various actuarial assumptions and that the results for the next 30 years reflected the long term nature of the projections.

Both the Consulting Actuary and the Rapporteur of the Committee of Actuaries expressed the view that the set of assumptions used in the Regular Valuation was appropriate, when all its elements were considered as a whole.

The Board took note of the results of the actuarial valuation of the Fund as at 31 December 1993 and the comments and explanations of the Consulting Actuary and the Rapporteur of the Committee of Actuaries.

The Committee of Actuaries informed the Board that, based on suggestions made by the Consulting Actuary, it had agreed on the form of presentation of the additional disclosures and statements suggested by the Panel of External Auditors.

Both the Consulting Actuary and the Committee of Actuaries pointed out that the actuarial imbalance, when expressed in dollar terms, should only be considered in relation to the magnitude of the liabilities and not in absolute terms.

The Consulting Actuary also noted that this was one of the positive indicators which had led the Committee of Actuaries to express the opinion that the current contribution rate need not be changed at the present time.

As regards the actuarial sufficiency of the Fund to meet its liabilities under the Regulations, the statement prepared by the Consulting Actuary and approved by the Committee of Actuaries, which is reproduced in annex IV, concluded as follows

The Consulting Actuary and the Rapporteur of the Committee of Actuaries drew to the attention of the Board that there had been several changes in the mortality assumptions used in actuarial valuations since the 1984 Unisex Mortality Table had been adopted.

Assuming a conservative decrease in the utilization rate of the two track option below 35 per cent, the Consulting Actuary estimated the actuarial savings resulting from adoption of a 110 per cent cap at approximately 0.20 per cent of pensionable remuneration.

Having considered the results of the valuation of the United Nations Joint Staff Pension Fund as at 31 December 2001 and the observations thereon by the Consulting Actuary of the Fund, the Committee of Actuaries and the United Nations Joint Staff Pension Board,

Based on the results of the most recent actuarial valuation, the Committee of Actuaries and the Fund's Consulting Actuary were of the opinion that the present contribution rate of 23.70 per cent was sufficient to meet the benefit requirements under the Plan.

The Consulting Actuary indicated that the utilization rate could be expected to decrease if the cap were reduced and this would increase the cost savings however, it would be difficult to estimate the extent of any reduction in the rate of utilization.

As indicated in the table above, the actuarial value of assets exceeds the actuarial value of all accrued benefit entitlements under the Fund, based on the understanding of the Consulting Actuary, of the Regulations of the Fund in effect on the valuation date.

The Consulting Actuary also provided detailed explanations of the various factors which had contributed to the increase in the imbalance, including in particular the use of the new mortality tables reflecting longer longevity, and the demographics and levels of pensionable remuneration of new entrants.

The methodology used by the Consulting Actuary was reviewed by the Committee of Actuaries, which agreed that it should be applied in assessing the emerging cost on the occasion of the next valuation of the Fund, at which time the methodology would be re examined.

The Committee observed that, if the cap were to be lowered, there would obviously be some savings to the Fund it therefore requested the Consulting Actuary to provide the Board with broad estimates of the savings that might be achieved should the cap be lowered.

The Consulting Actuary has observed that the actuarial deficit, when expressed in dollar terms, should be considered in relation to the magnitude of the liabilities. The deficit of 1,857.1 million under the regular valuation represented 4.3 per cent of the projected liabilities of the Fund.

As regards the continued appropriateness of the assumption of a 6 per cent annual rate of inflation, the Consulting Actuary indicated that this reflected anticipated inflation over many decades into the future, and therefore should not be assessed solely in relation to current levels of inflation.

Both the Consulting Actuary and the Committee of Actuaries observed that it could be anticipated that investment earnings and inflation rates would change each year, resulting in real rates of return in particular years both above and below the 3 per cent actuarial assumption used in the Regular Valuation.

The Board concurred with the view of both the Committee of Actuaries and the Consulting Actuary that great care should be taken in assessing the results of the valuation in dollar terms, so as not to create undue anxieties for participants and beneficiaries, as well as for Member States.

In its report to the General Assembly in 1991, 15 the Board indicated that the Consulting Actuary had estimated the cost of the longer term modification of the pension adjustment system that it was recommending quot to be in the order of 0.3 per cent of pensionable remuneration quot .

(b) that the Pension Board, with the assistance of the Committee of Actuaries and Consulting Actuary, should provide an opinion as to the sufficiency of the assets to meet the liabilities under the Regulations of the Fund, taking into account the provision of article 26 of those Regulations and

quot (b) That the Pensions Board, with the assistance of the Committee of Actuaries and Consulting Actuary, should provide an opinion as to the sufficiency of the assets to meet the liabilities under the Regulations of the Fund, taking into account the provisions of article 26 of those Regulations and

In both the valuation report of the Consulting Actuary and the report of the Committee of Actuaries, the actuarial valuation results are presented in terms of percentages of pensionable remuneration, i.e. the required rate of contribution and the consequential surplus or deficit as measured against the current rate of contribution.

(c) that the Pension Board would consult with the Board of Auditors to address the question of including in the Pension Board apos s report, a statement by the Committee of Actuaries and the Consulting Actuary on the actuarial position of the Fund, to which the Board of Auditors may refer in their observations on the accounts of the Fund.