Judgment No. 3676
Decision
The complaint is dismissed.
Summary
The complainant contests a modification in the exchange rate averaging methodology for the calculation of his pension contributions.
Judgment keywords
Keywords
exchange rate; pension; complaint dismissed
Consideration 6
Extract:
[A]ny methodology that is dependent on exchange rates, which have an inherent propensity to fluctuate, will not be stable or foreseeable in the sense that the outcome is, in advance, predictable.
Keywords
exchange rate; pension adjustment system
Considerations 7-8
Extract:
The basic principle is that an amendment to an official’s detriment of a provision governing her or his status constitutes a breach of an acquired right only if it adversely affects the balance of contractual obligations by altering fundamental terms of employment in consideration of which the official accepted an appointment, or which subsequently induced her or him to stay on. In the present case the Tribunal accepts that there was an alteration to a term on which the complainant was employed in the sense that the method of calculating his contribution to the pension fund was altered and, at least at the present moment, increased the contribution and, in that regard, it might be said to be an alteration to his detriment. [...]
In Judgment 832, consideration 14, the Tribunal identified three tests to determine whether the altered term is fundamental and essential. The second test was the reason for the change. Importantly, the Tribunal recognised that ordinarily there would be no acquired right when a rule or a clause depends on variables such as the value of currency. So the mere fact that a pension contribution might change because of fluctuations in exchange rates would not engage the protection of the principle concerning acquired rights.
Reference(s)
ILOAT Judgment(s): 832
Keywords
acquired right; pension adjustment system
Consideration 10
Extract:
[A]bsent the amendments recently made to the methodology, ESO is assuming a disproportionately greater burden of satisfying the requirements under the Fund to pay the total contributions payable in relation to the complainant and other staff. This is a legitimate consideration and militates against a conclusion that the alteration of the methodology used involved an alteration of a fundamental term of employment that would be protected by the principle concerning acquired rights.
Keywords
acquired right; pension adjustment system
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