NOTICE FROM THE STAFF REPRESENTATIVES
ON THE RETIREMENT AND PENSION COMMITTEE
ON INTEREST ACCREDITATION FOR THE PERIOD
FROM JULY TO DECEMBER 2004
It is our responsibility to
inform the staff that the Retirement and Pension Committee, chaired by
Ambassador Michael King of Barbados, held its first 2005 meeting on
February 2 to consider, among other things, the accreditation of interest
to the participants’ accounts for the period from July 31 to December 31,
2004.
After examining the
analytical report presented by the Secretariat of the Fund, the Committee
concluded that the Fund’s financial market performance during the second
half of the year had been positive, with a return of 10.92% for 2004. An
important point to consider is that in 2004 the number of participants who
retired and chose to receive benefits in the form of a pension rose
significantly. This is noteworthy since it demonstrates a high degree of
confidence in the OAS Retirement and Pension Plan. In this regard, we can
report that actuarial studies show that the Fund is in a sound position
with regard to its future obligations, with the actuarial reserve for
pensioners having been adjusted from $54.8 to $63.1 million.
Taking the various
accreditation scenarios into account, once the obligation to pay out
pensions and to continue replenishing the accounting reserve has been met,
the Committee decided to accredit the participants’ accounts with 4.5% for
the period from July to December 2004. These calculations will be made, as
is customary, on the balance of the individual accounts as of June 30,
2004. This 4.5%, added to the 1.5% approved on June 30, gives a combined
return of 6.1% for 2004. We should recall that the stock market performance
in the first half of the year did not enable us to anticipate these
results.
Experts, as well as the
practices of similar types of funds, indicate that our fund is on the right
track and that prospects for the rate of return in 2005 could be normal,
normal being an annual rate in the range of 8 to 8.5%.
We are cautiously awaiting
future developments that could have an impact on the performance of
financial markets. Let us trust that the Fund will continue to gain in
strength.
Daniel Perna
Alternate Representative |
Alfonso Munévar
Principal Representative |
February 2, 2005
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