text: submo Amer awar cons two­ can had 57. overr h~ r' i, i I5 1I I)av mo ithI kraIla I'ba!ca,,ca a ac 59 ,.ma in gr 60 "c th gu of de nc "c 61, ad: be ree fir th I'l I,'. f (- f li!. nre /.Bo (trt ~:ar j"i. I, ; i.55.Reflecting viewsexpressed inthedebateintheFifthCommittee, theGeneral Assembly, insectionI,paragraph 8,ofresolution 39/246, requested theBOard"to re-examine theoperation ofthetwo-track pension adjustment systemincountries wheretheadjusted UnitedStatesdollar .~mount, whenconverted intolocalcurrency, yieldsalargerbenefit inlocalcurrency unitsthantheadjusted localcurrency amountandtoreporttotheGeneral Assembly atitsfortieth session onfurther limiting theresultant excessbenefits".3.Reviewofthetwo-track pension adjustment system (a)Howmanyunitsoflocalcurrency willhegetwhenheretires?54.Atitsthirty-ninth session theGeneral Assembly approved recommendations of thePension Boardthatweredesigned tolimittheextentbywhichthe local-currency .equivalent ofthe"United Statesdollartrack"couldexceedthe "localtrack". Thelimitwassetat20percent.Intheopinion oftheBoardsuch alimitprovidedafairbalance between theentitlement toafullUnitedStates dollar-denominated benefit andtheneedtosafeguard thepurchasing powerofthe benefit inlocalcurrency terms.!QIcommute notmorethanonethirdofthebenefit. Anyfurther limitation ofthe amountthatcouldbetakenoutasalump-sum wouldbeactuari~lly disadvantageous totheFund.Theaverage amountofthelump,-sums paidoutinthefirst11months of1984,duringwhichperiodtherewere268retirements andearlyretirements, was $125,600. TheBoardalsonotedthat th~~ntroduction effective 1January 1985of the6.5per'cent discount rateandofthegenerally lowernewscaleofpensionable remuneration fortheProfessional andhighercategories, andalsothelimitation on maximum accumulation forthemostseniorofficials recommended inparagraph 51 above,wouldtendtoreduce, overtime,theamounts thatwouldbepaidoutbyway ofpartial commutation ofperiodic benefits. Therefore, asatechnical body,the Pension Boardwasnotinfavourofanyfurther limitation ofthecommutation option. 56.Initsreviewofthetwo-track pension adjustment system, theBoardrecalled thataparticipant whobecomes entitled toaperiodic benefitstartsoutwitha basicpension determined inaccordance withtheRegulations oftheFUnd,pursuant tothoseRegulations thisbasicpensionisdenominated inUnitedStatesdollars. Thetwo-track adjustment systemwasintroduced inthe1970sinordertoprotect the purchasing powerofthebenefitafterawardattimeswhentheUnitedStatesdollar wasweak.Unlessaparticipant whoisentitled toapension benefit chooses to submitproofofresidence inaparticular country (otherthantheUnitedStatesof America) -andthereisnoobligation forhimtodoso-hispension benefit, after award,issubject toadjustment onthebasisofmovements oftheUnitedStates consumer priceindex. Thebenefit soadjusted constitutes the"norm". Underthe two-track adjustment abeneficiary whooptsfortheprotection ofthelocaltrack candraw,overhislife-time, fromthePension FundmoreUnitedStatesdollars than hadheremained solelyontheUnitedStatesdollartrack. (b)Howwillthepurchasing powerofhisbenefit in(a)abovebeprotected overtime?57.Aparticipant whoretires inacountry otherthantheUnitedStates, andwho considers submitting proof.ofresidence sothatthetwo-track systemcanbeapplied tohim,islikelytoattachimportance totwofactors: -17-L f~ ! I, i i58.Inaccordance withparagraph 5(b)(iii)ofthePension Adjustment System, the local-currency baseamountiscalculated byapplying tothedollaramount"the average, computed overthe36consecutive calendar monthsuptoandincluding the monthoftheseparation, oftheexchange ratesbetween theUnitedStatesdollarand thecurrency ofthecountry ofresidence". Suchanaverageishigherthanthespot ratewhenthedollarisdropping, andlowerwhenthedollarisrising. Inthe lattersituation, thelocal-currency baseamountmaytherefore belessthanthe baseamount(indollars) calculated inaccordance withtheRegulations. Insuch casesatwo-track systemwithaverylow"cap"(andafortio~i witha 0percent cap)couldproduce aresultthatwouldbeinconsistent withtheRegulations, namely alocalcurrency benefit thatwouldbelowerthanthebasicpension determined in
analysis: The text appears to be discussing the pension system of international officials, specifically the two-track pension adjustment system, and its implications on the purchasing power of benefits. The language used is technical and refers to financial and economic concepts, such as exchange rates, inflation, and benefit calculations. This suggests that the topic is closely related to economic and financial matters.