Is the OECD broke?

You have to laugh.  The OECD, along with a number of other international organisations, has the mother of all pension (superannuation) schemes for its staff, based on ridiculously generous promised pensions upon retirement.

It is said that quite a lot of retired OECD staffers earn more in retirement than many current staff members.

But the organisation has not been prepared to face up to the financial implications of this crazy arrangement and makes NO provision whatsoever in its accounts to fund the actual and potential retirement pensions of its staff.  It is a pay-as-you-go scheme, whereby the current contributions of the members are in part funding all those ex-staff members sunning themselves in the south of France.

(Any lectures from the OECD on fiscal prudence and budget management should be immediately dismissed, if they have not been already.)

Evidently, Austraila thinks this arrangement is no good and has campaigned to have some explicit accounting for the costs of current and future pension entitlements.  But the organisation is not having a bar of it.  Evidently, UNESO is in the same boat.  My guess is that it applies to all sorts of international organisations, many of which got going in the early 1960s.

Maybe it is time for Australia to withdraw its membership.  The terms of membership and the option to withdraw make no mention of being liable for any run-off costs, so now could be a good time.

It’s hard to know what we get for our money in any case, given the recently released Survey of Australia, with its particularly corporatist (and impenetrable) take on industrial relations; its endorsement of all enviromental measures, notwithstanding their ineffectiveness and costliness; and its mirror-take (reflecting Treasury’s wish-list) on preferred medium term ‘reforms’.

Go on, Swanny.

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19 Responses to Is the OECD broke?

  1. johno

    Could we dump the UN as well? It’s Time Australia had an independent foreign policy, instead of kowtowing to the nasty regimes that have too much sway over UN decisions.

  2. Poor Old Rafe

    Super post!

    Re the UN, the dead heart of the problem, one of my boys did two months in the Big Apple as a UN intern, (great for his cv but hard on my back pocket). He reported that a huge percentage of the top jobs are up for grabs due to retirements in the next few years, given the demographic of the workforce. This was causing a great deal of elbowing for position among the people lower down.

    No doubt the departing people will have very generous retirement packages.

  3. “Any lectures from the OECD on fiscal prudence and budget management should be immediately dismissed”. Such a good line, I stole it :)

  4. Keith

    Any lectures from the OECD on fiscal prudence and budget management should be immediately dismissed, if they have not been already.

    Any Oz public servants with OECD on their cv should be similarly dismissed.

  5. Econocrat

    It’s hard to know what we get for our money in any case, given the recently released Survey of Australia, with its particularly corporatist (and impenetrable) take on industrial relations; its endorsement of all enviromental measures, notwithstanding their ineffectiveness and costliness; and its mirror-take (reflecting Treasury’s wish-list) on preferred medium term ‘reforms’.

    Treasury has an officer stationed at the OECD to vet the reports before they are released.

    So, Treasury kind of exports its groupthink.

  6. Louis Hissink

    It’s also one reason why the UN is peddling the CO2 tax etc – redistributing the wealth but with a transaction tax as it passes through the UN system, to fund their unfunded pensions.

    Ironic, isn’t it – the vanguard of the global socialist state and it seems now that they are discovering that their utopia, a moneyless socialist state, needs money.

    As Jo Nova etc point out, it’s the money angle, but not so much greed as the dawning realisation that they face a financial implosion which will ultimately involve stealing our retirement savings.

  7. banz

    Whats the big deal? Look around the world, this is SOP.
    In our own country at Federal/State level isnt there a 210 billion dollar shortfall? Cant earn 8% averages anymore either :)
    Member a couple of years ago where members of Government funds recieved substantial salary sacrifice concessions? The whole thing is mostly a ponzi scheme, just be patient, we are going to see some truly amazing things happen in this area in a couple of years :)
    Get ready for the “save the Government superfunds tax”, oops, sorry levy.
    Heres the thing, if future labour cant pay off all this debt, and it cant, past labour will, thats scary.

  8. The international agency that is destroying education globally chasing after the poorly understood PISA is broke?

    Perhaps the head’s insistence that everything they do they do for Green Growth is not working out so well.

    The world would be a better place and our children and tax dollars would be safer if we closed the doors on UNESCO and OECD. Even before we address the absurd compensation.

  9. Wal1957

    Our pollies unfunded “ponzi” superannuation scheme mirrors the OECD. Juliar and Goosy will be able to collect from their unfunded, very generous super scheme as soon as they are thrown out. WE mere mortals have to wait until we are 65.
    Oh well… I guess someone has to stay working long enough to pay off the near $300 Billion deficit that will be they’re lasting legacy to us all.

  10. Lysander Spooner

    Can someone please provide a link to an AUTHORITATIVE source of info (sorry Judith….I trust ya but need a link).

  11. blogstrop

    The Spoonerism is reborn.

  12. Lysander Spooner

    Blogstrop; actually I am Lysander Spooner incarnate and have been for at least 4 years now :-)

    My favourite (shortened/slightly modified) LS quote is: “Just because men signed the constitution 112 years ago does not make it legally binding upon us?”

  13. ar

    Not sure what the subeditor was thinking with this headline:

    No need for anyone to heed this drivel

  14. Mundi

    It will be interesting to see what happens in the USA. State and regional councils all have the same setup, and.only the really extreme ones have started to fail.

    So does French law allow unfounded liabilities like this? How does their super annual ion system work? Or do thy just put everyone on pensions.

  15. Leigh Lowe

    That is kind of a scary thought.
    I have always regarded these international organisations as vacuous oxygen thieves, but I had mistakenly thought that they were only current thieves.
    The thought that they could be racking up a monster unfunded super bill is truly scary.
    And all it would take is a Foreign Minister with an antipodean cringe and/or a massive ego and we will pick up the tab ” in recognition of our international responsibilities”
    Is there a way of finding out what, if any, our future liabilities to these barrow-pushing oxygen thieves are?

  16. Jim Rose

    Poor Old Rafe, Back in the day, I knew a few who worked at the international financial institutions representing their country. They very quickly became very bored with the lack of intellectual challenge.

    When I visited the World Bank, it was like visiting a roman brothel.

    Every one was propositioning me. Sell me some Angolan oil debts; fund some South American free trade agreement research. I left with my virtue intact.

    None could give me directions to the Cato institute for my afternoon appointment.

  17. Aynsley Kellow

    Judith Sloane: ‘My guess is that it applies to all sorts of international organisations, many of which got going in the early 1960s.’

    Your guess is correct, but I’m with Lysander Spooner: what about some actually research rather than a rant based on guesswork and impressions?

    Pay and conditions at the OECD are essentially benchmarked to other economic IOs. And, yes, there are problems with the OECD, but it continues to do good work. Try Producer Subsidy Equivalents/Estimates for some good Australian work adopted by the OECD and exerting at least some discipline on the CAP.

    If Judith Sloane is interested in basing what seems to be a recent obsession with the ills of OECD, she might consult the book Peter Carroll and I published last year on it. Or the paper on Australia’s 40 years of membership due out this month in Aus J Politics and History. Both are critical, but they do not support the pastiche that Judith Sloane presents here and in her recent pieces in the Oz. The functioning and merits of IOs deserve some actual scholarship, not guesses. Does she make guesses about price elasticities in her economic analysis? I hope not.

  18. Sinclair Davidson

    Aynsley Kellow – perhaps you could get some OECD types to speak on the record?

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