UNWIND

UN PENSION LUMPSUM - US RESIDENTS or CITIZENS (ex-G4 visa holders)

The taxation of the pension fund annuity has a consequence to those who had taken the lump-sum pension.  According to papers prepared by Robert Smith the pension fund recovery period should be reduced as a consequence of the lump-sum.  However, on reading the tax publication 575 I am unable to establish that the recovery period reduces for the lump-sum, but that the pension fund cost should reduce instead.  To clarify this matter I have independently written to the IRS and await their reply.  In the interim I am pleased to share this letter with you Download Irs_lumsum formula for UN pensions.

Existing staff in UNICEF/UN New York may wish to consult AFICS on this matter.

UPDATE ON 4/23/2009

I received a letter from the IRS saying that my inquiry does not qualify for Taxpayer Advocate Service.  Apparently Taxpayer Advocate Service handles significant hardship issues and inquiries that have not been resolved using normal channels.  As this is a busy time for the IRS, I will have to wait until the summer to check on another source.  John Northcut will also try to help.

Update 4/28/2009:

Our UN Canadian, John Northcut has communicated with the IRS authorities in the USA and received an e-mail response confirming that when you take a pension lump sum (say 1/3^rd or less) as a direct payment before you became a US resident (and did not roll it over into a IRA) that you have effectively and immediately reduced your duration of cost recovery.  For instance if the IRS tables determine that your pension recovery for a joint tax return is 360 months then you can only recover you pension cost for 240 months if you took a 1/3^rd lump sum.  John’s e-mail text and IRS response can be viewed in the attached pages UN Pension - taxation of balance annuity after lump sum .

CFAIS will be including this message in a letter than John is drafting to the Canadian tax authorities (John has already discussed verbally with them the contents of the letter).

 

Disclaimer:

These notes are for education purposes only.  Please consult a tax professional for final application in your personal situation.

The Growth Fetish

 

The capitalist economic model has been very successful for over 50 years bringing economic prosperity to the West and with it also improving the economic life of the rest of the world through globalization.  However, it has peaked and now people are asking: What else?

 

Prosperity is measured in average GDP figures and the higher that figure the more prosperous a country and its people are. But now there is the realization that all this enhanced GDP has not improved the well being of people.  People are unhappy as hell.  After years of sustained economic growth and increased personal incomes we must confront the awful fact: People are not any happier.  So there is a great contradiction of the modern economic capitalist model.  Also, this damn average GDP figure, does not take view of the fact that the majority of the wealth is held in the hands of a few.  India has prospered in terms of average GDP and a middle-class, but its poor are poor as hell.

 

To the West. In the old days people were proud of what they produced as engineer, doctor, carpenter, writer, mechanic.  But now people are proud of what they possess, big house, big (and expensive) car, watch, whatever.  This is the work of the market place and the advertising media. Everything is based on "growth" and every thing is done to make sure people SPEND, SPEND, SPEND.  The more they spend the more prosperous society is.  So they change designs to make new attractions for another sale. People can't decide for themselves what they want as the market places fools and cajoles them of what they want. And, sadly this has also spread to the medical establishment.

 

Although a small number of children do require drug therapy, the boom in prescription of Ritalin reflects expectations of children in a society in the grip of all needing this drug when they do not. Lawrence Diller, a physican whose book Running on Ritalin exposes the misuse of the drug. If a child is a bit inattentive, there goes the parent, the parent who does not have time, take the child to the doctor and the drug is prescribed.  Every active child is supposed to have a chemical disorder. Now because I have been active, super active, perhaps I need Ritalin too to calm me down.

 

Nutritionists describe obesity in terms of energy imbalance, usually caused by excessive calories consumption and insufficient physical activity.  In the old days it may have been described as gluttony and sloth.  Food suppliers have caught on this weakness and go forth meeting the needs of the consumer palate for them to eat more and more. And the obesity industry is also doing a good business.

 

Likewise to greed in "eating" there is greed in also consuming other things, and the greed has gotten so great that people will even borrow to consume more and pay more.  Teens worry their mums for a $400 pair of sneakers since it has the name of Michael Jordan on it; the same shoes w/o that name may sell for $40.  Ditto with other things from kids to adults.  Whatever happened to emotional integration to family and friends?.  It has all been lost by the curse of money and the  curse and greed of over-consumption.

 

Spending has become a form of entertainment. People must always have a project to cover their depression: the house needs renovation (when it does not), another house, a beach front, etc.  There is the unheard cry for recognition and material possessions serve as the pacifier................. promoted by the advertising industry.  You are now due for another vacation.

 

So not only economists are to blame, the whole damn society.  And this economic downturn may be a welcome gesture for the West to downshift to a post growth society. Let people rethink again and again, there there is more to life than just economic growth as brilliantly outlined by Clive Hamilton in the Growth Fetish.  I must thank Sir Richard Jolly for introducing this book for my reading list. 

 

Mandatory reading for reformers: The Growth Fetish

 

 

GOING TO SCHOOL

The motivation of these children to go to school are unbelievable.  Please review their transportation method in Download Going_to_school. In comparison, I am thinking of the children in the West who drop out of school and don't want to go to school even when there is a school bus to pick them up.  Perhaps, these kids in the West are preoccupied with the possessions they own from which they draw their consumption identity at an early age.  We must salute UNICEF for its primary education campaign that it thrusts into developing country education programs and condone all governments that prevent the girl-child from a right to have an education.

UN PENSION FUND - LETTERS OF CONCERN

It seems that UN staff and UN retirees have been cheerleaders of the fund for many years. Of course, we salute the management of UNJSPF for keeping the fund solvent and honoring pension liabilities.  However, "best" could always be "better." It is important to gradually begin to understand the working of the funds and start asking questions and ask for greater transparency of the fund.

1.    On March 15, 2009, I sent the following letter to the Chief Executive Officer of UNJSPF:

1. Download UN Pension Fund Letter1 for weblog . 

2.    On March 18, 2009 I received from the Chief Operating Officer of UNJSPF:

1. The attached response letter: Download UN Pension Fund Letter - Response from UNJSPF Chief of Operations, and
2. Statement of Sensitivity Analysis: Download Sensitivityanalysis[1] UN Pension.  This is your fund UN staff. It appears that the last sensitivity analysis of the pension was done only in 2005. In letters (please see below) I have requested a more frequent updating of sensitivity analysis to image the solvency of the UN Pension fund through various market and currency exposures.

3.    On March 20, 2009 about 5 P.M, I received this letter from the Chief Executive Officer of UNJSPF:

1. Download UN Pension Fund Letter - Response from Chief Executive Officer

4.    On March 25, 2009, I sent the following letter to the Chief Executive Officer of UNJSPF:

1. Download UN Pension Fund - Response Letter1

5.    On March 26, 2009, I received the following letter from the Chief Executive Officer of UNJSPF:

1. Download UN Pension Fund Letter - Response2 from Chief Executive Officer 03262009

6.    On March 27, 2009, I sent the following letter to the Chief Executive Officer of UNJSPF:

1. Download UN Pension Fund- Response Letter2. Unresolved is the protection of women's rights, extension of retirement age in UN system and open  policy of interactive web-based communication with UNJSPF. Did you think of it? UN staff and retirees and their surviving spouse are part-owners of UNJSFP..... While some of the responses from UNJSPF (above) about management of the fund are not totally satisfactory for our understanding, we hope in the near future it will become clearer to us as we see greater transparency in the fund.

Further reading: UN Salary & Pension - Is their discrimination against women?