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