several requests, reports onwhichweretobesubmitted totheAssembly atits fortieth session. Therequests inquestion wereasfollows: (a)withtheassistance oftheCommittee ofActuaries, toreviewthemethod ofcalculating thelump-sum commutation ofbenefits usingauniform discount rate (sect.I,para.5); (b)TOre-examine thequestion oftheimposition ofaceiling onthehighest levelsofpensions, andontheamountthatmaybepaidtoaparticipant bywayof lump-sum commutation ofpartofhisperiodic benefit (sect.I,para.7)J lc).TOre-examine theoperation ofthetwo-track pension adjustment systemin countries wheretheadjusted UnitedStatesdollaramount, whenconverted intolocal cur~ency, yieldsalargerbenefit inlocalcurrency unitsthantheadjusted local currency amount(sect.I,para.8); (d)Inthelightoftheresults oftheactuarial valuation oftheFundasat 31December 1984,toconsider additional measures, withaviewtoavoiding, if possible, further increases intherateofcontribution ofmemberorganizations and participants totheFund(sect.I,para.9); (e)Toconsider, takingintoaccount, interalia,thelegalaspects ofthe question, anycompensatory orinterim mE~asures regarding participants whose pensionable remuneration hasbeenhigheJ:thanitwillbeasat1January 1985,and tomakeappropriate recommendations, itbeingunderstood thatsuchrecommendations willalsoaddress thequestion oftheequality oftreatment ofparticipants retiring ondifferent dates,andthatsuchmeasures aswillbeapproved bythe Assembly would,ifnecessary, beapplicclble witheffectfrom1January 1985 (sect.11,para.3); -11-t e(f)Toco-operate withtheInternational CivilService Commission (ICSC)in there-examination oftheprocedure foradjustment ofpensionable remuneration in between comprehensive reviews (sect.11,para.5)J (g)Toco-operate withICSCinthereviewofthemethodology forthe determination ofpensionable remuneration fortheProfessional andhigher categories andformonitoring thelevelofpensionable remuneration (sect.11, para.6)J e rri(h)Toreviewthecomposition oftheBoard(sect.IX).' 35.ThePension Board's observations ontherequest contained insectionI, paragraph 9,ofresolution 39/246, aresetoutinparagraphs 12-23above. 1.Methodofcalculating thelump-sum commutation ofbenefits 36.UndertheRegulations oftheFund(arts.28(f),29(c)and30(c»aretired participant maycommute intoalump-sum aportion (normally notmorethan onethird)oftheactuarial equivalent ofhisperiodic benefit. Thediscount (interest) rateusedincalculating thelump-sum isdecided bytheBoar~ ~~nderthe authority vestedinitbyarticle 11oftheRegulations. Priorto1J"Jary 1979 theratewas3.25percentJitwasraisedto4percenteffective 1Ja.luary 1979, K4.5percenteffective 1January 1983and6.5percenteffective 1January 1985. f,"Ontheoccasion ofeachincrease, thechangewasmadeprospectivelYJ inother Iwords,thenewratedidnotapplytopriorperiods ofservice. Conseauently, ~he commutation oftheperiodic benefit ofeachretiring participant isbasedona composite rate.Thelongertheportion ofcontributory service withlowdiscount rates,theloweristhecomposite rateJconversely, theshorter theportion of contributory service withlowdiscount rates,thehigherdoesthecomposite rate become. n 1\ I, r I' L I1t37.TheBoard's practice ofusingcomposite rateshasresulted inasmooth transition eachtimethediscount ratewaschanged. Amajoradvantage ofasmooth transition isthatitmakesitunnecessary forparticipants tochoosetheirdateof separation insuchawayastobenefit fromachange'inthediscount rate.Were theytodoso,member,organizations mightbefacedwithdisruptions totheir programmes because ofthesuddendeparture oflargenumbers ofexperienced staff. . 38.Theuseofauniform discount rateapplicable toallservice wouldresultin decreases (orincreases) intheamountofthelump-sum, fromoneday,tothenext, wheneve~ achangewasmade.Allthechanges madeinthediscount ratesince1979 havebeenincreases, becauseinterest rateswererisingworld-wide. Inthepast coupleofyears,bycontrast, therehasbeenasteepdropininterest ratesinthe UnitedStatesandmanyothermarket-economy countries, andmanyeconomists believe thatthedecline ininterest rateswillcontinue. Werethistohappen, andifthe Fundapplied auniform discount rate,pressures woulddevelop forlowering the discount rate.Inthisconnection itisalsoimportant torecallthattheworld hasbeenexperiencing aperiodofhistorically unusualinterest-rate volatility. IftheFundapplied thelatestdiscount ratetoallservice, thatratewouldhave
**Analysis**
This text appears to be related to the administration of a pension fund, discussing the calculation of lump-sum commutations of benefits, the discount rate used, and the potential impact of changes in interest rates on the fund. The text also mentions the review of the composition of the Board and cooperation with the International Civil Service Commission (ICSC). The content seems to be focused on the financial and administrative aspects of the pension fund, rather than on broader economic development or humanitarian issues.

**Category**
Employment, Industry