UNITED NATIONS

Key Compensation 

Elements Should Be 

Reviewed to Address 

Costs and 

Sustainability

Report to Congressional Requesters

June 2014

GAO-14-546

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-546, a report to 

congressional requesters

June 2014

UNITED NATIONS

Key Compensation Elements Should Be Reviewed to 

Address Costs and Sustainability

Why GAO Did This Study

The UN General Assembly has 

expressed concerns about the 

relatively large and growing portion of 

the UN budget spent on total 

compensation. The United States 

contributes 22 percent of the UN’s 

regular budget.

UN total compensation consists of 

salary, benefits, and allowances. Since 

its inception in 1945, the UN has based 

salaries for its professional employees 

on salaries for the U.S. civil service. In

2013, GAO reported that the UN sets 

its salaries between 110 to 120 percent 

of U.S. civil service salaries, and that

UN salaries were 116.9 percent of U.S. 

civil service salaries in 2012. UN 

salaries increased to 119.6 percent in 

2013. GAO also recommended that the 

UN clarify its process for comparing

salaries for UN professional staff with

U.S. civil service salaries. 

GAO was asked to review the structure 

of UN total compensation and how it 

compares with that of U.S. federal 

employees. This report (1) examines

similarities between UN and U.S. 

government benefits and allowances 

and compares their monetary values, 

and (2) examines UN efforts to 

address concerns about the 

sustainability of total compensation 

costs. GAO reviewed UN and U.S. 

government documents and data, and 

interviewed UN and U.S. officials.

What GAO Recommends

The State Department (State) should 

work with other UN member states to 

ensure that the costs of key elements 

of UN total compensation are reviewed 

to address rising staff costs and 

sustainability. State concurred with this 

recommendation.

What GAO Found

Benefits and allowances offered by the United Nations (UN) and the U.S. 

government are generally similar, and GAO found that each provided certain 

benefits or allowances with greater monetary value than the other. Similar UN 

and U.S. benefits include retirement plans and health insurance, while similar 

allowances include hardship and danger pay. Where comparable data were 

available, GAO found that each organization provided some benefits or 

allowances of greater monetary value than the other. For example, under a 

scenario where UN and U.S. staff retire at 62 with 20 years of service, the U.S. 

Federal Employees Retirement System replaces a higher percentage of preretirement salary than the UN Joint Staff Pension Fund. However, when these 

staff retire with 30 years of service, similar percentages of pre-retirement salary

are replaced. In contrast, the UN allowance for staff serving in dangerous duty 

stations with families at separate locations had a higher average monetary value 

per recipient in 2012 than the comparable U.S. allowance. 

United Nations and U.S. Benefits and Allowances That GAO Reviewed

Compensation element Result

Retirement benefits Benefits varied depending on years of service and other factors. 

Health insurance The average cost per employee was higher for eligible U.S. 

government employees than for UN staff. 

Allowances The UN and the U.S. government each provided certain 

allowances with higher monetary value than those provided by 

the other.

Source: GAO analysis of United Nations (UN) and U.S. data. | GAO-14-546

The UN has begun to address concerns about the sustainability of its rising total 

compensation costs, including initiating a review of total compensation, but that 

review does not include key elements. GAO analysis of UN data shows that staffrelated expenditures rose steadily from $1.95 billion in 2002-2003 to $2.98 billion 

in 2010-2011, at an average rate of about 7 percent per 2-year budget, when 

adjusted for inflation. To help address costs, the UN raised its retirement age 

from 62 to 65 for new hires and froze rates paid for allowances for at least 1 year. 

In addition, the UN’s International Civil Service Commission (ICSC) began a 

review of UN compensation, to be completed in 2015. The UN General Assembly 

requested that the ICSC review consider all elements of UN total compensation

holistically, including both monetary and non-monetary elements. However, 

according to ICSC officials and documents, the review focuses only on elements 

within the ICSC’s area of administrative responsibility, such as salary and 

allowances. Other key elements with significant costs, such as pensions and 

retiree health insurance, fall outside the ICSC’s authority and therefore the 

study’s focus. For example, the unfunded liability of the UN’s retiree health 

insurance plan was estimated in 2012 at almost $4 billion. Without including all 

elements of total compensation in its review, member states will not have a 

complete set of information with which to make fully informed decisions about 

changes to the compensation system. View GAO-14-546. For more information, 

contact Thomas Melito at (202) 512-9601 or 

melitot@gao.gov.
Page i GAO-14-546 United Nations Compensation

Letter 1 

Background 3

While the UN and the U.S. Government Offer Generally Similar 

Benefits and Allowances, Each Provides Certain Benefits and 

Allowances with Higher Monetary Values than the Other 6

The UN Has Begun to Address Concerns about the Long-Term 

Sustainability of Rising Compensation Costs, but Its Review of 

Total Compensation Does Not Incorporate Key Elements 19

Conclusions 24

Recommendation for Executive Action 25

Agency Comments and Our Evaluation 25

Appendix I Objectives, Scope, and Methodology 28

Appendix II Additional Information on GAO’s Estimates of Income 

Replacement Rates for United Nations Staff and U.S. Federal 

Civilian Employees 32

Appendix III Comparison of Allowances for United Nations Secretariat Staff 

and U.S. Civil Service Staff Overseas and Foreign Service 

employees 49

Appendix IV Leave Benefits 55

Appendix V Comments from the Department of State 58

Appendix VI GAO Contact and Staff Acknowledgments 62

Contents
Page ii GAO-14-546 United Nations Compensation

Tables

Table 1: Comparison of Benefits for United Nations (UN) 

Professional Staff and U.S. Civil Service Employees 7

Table 2: United Nations (UN) and U.S. Government Benefits and 

Allowances That GAO Reviewed 11

Table 3: United Nations (UN) and U.S. Retirement Income 

Replacement Rates under Different Scenarios 13

Table 4: Comparison of 2012 Allowance Payments to United 

Nations (UN) Secretariat Professional Staff, State Foreign 

Service Employees and Civil Service Employees Serving 

Overseas, and Department of Defense (DOD) Civil 

Service Employees Serving Overseas 16

Table 5: Number of Recipients, Total Monetary Value, and 

Average Monetary Value per Recipient in 2012 for Unique 

United Nations (UN) or U.S. Government Allowances 17

Table 6: United Nations (UN) Actions Taken in Response to 

Concerns over the Sustainability of UN Compensation 

Costs 22

Table 7: Eligibility Requirements and Plan Provisions for the 

United Nations (UN) Joint Staff Pension Fund and the 

Federal Employees Retirement System (FERS) 33

Table 8: United Nations (UN) Professional Staff Retirement 

Income and Income Replacement Rates in the First Year 

of Retirement for Staff Retiring at Age 62 with 30 Years of 

UN Service 42

Table 9: U.S. Civil Service Federal Employees Retirement System 

(FERS) Employee Retirement Income and Income 

Replacement Rates in the First Year of Retirement for 

Employees Retiring at Age 62 with 30 Years of Federal 

Service 43

Table 10: United Nations (UN) Professional Staff Retirement 

Income and Income Replacement Rates in the First Year 

of Retirement for Staff Retiring at Age 62 with 20 Years of 

UN Service 44

Table 11: U.S. Civil Service Federal Employees Retirement 

System (FERS) Employee Retirement Income and 

Income Replacement Rates in the First Year of 

Retirement for Employees Retiring at 62 with 20 Years of 

Federal Service 45

Table 12: U.S. Civil Service Federal Employees Retirement 

Service (FERS) Employee Retirement Income and 

Income Replacement Rates in the First Year of 
Page iii GAO-14-546 United Nations Compensation

Retirement for Employees Who Retire at Age 62 with 30 

Years of Federal Service and Contribute 8.5 Percent of 

Gross Salary to the Thrift Savings Plan (TSP) Annually 46

Table 13: U.S. Civil Service Federal Employees Retirement 

Service (FERS) Employee Retirement Income and 

Income Replacement Rates, for Employees Who Retire at 

Age 62 with 30 Years of Service and Contribute 0 Percent 

of Gross Salary to the Thrift Savings Plan (TSP) Annually 47

Table 14: Retirement Income and Income Replacement Rates in 

the First Year of Retirement for United Nations (UN) Staff 

Who Retire at Age 62 and Who Are U.S. Citizens 

Employed in the United States with 20-Years of UN 

Service 48

Table 15: Comparison of Leave Benefits for United Nations (UN) 

Secretariat Staff and U.S. Civil Service Employees 56

Figures

Figure 1: Comparison of Selected Allowances Offered to Eligible 

United Nations (UN) Professional Staff and U.S. Foreign 

Service Employees and Civil Service Employees Serving 

Overseas 9

Figure 2: United Nations (UN) Secretariat Staff-Related 

Expenditures, 2002-2003 to 2010-2011 20
Page iv GAO-14-546 United Nations Compensation

Abbreviations:

CEB United Nations System Chief Executives Board for 

Coordination

CPI-W Consumer Price Index for Urban Wage Earners and 

Clerical Workers

CSRS Civil Service Retirement System

DOD Department of Defense

FERS Federal Employees Retirement System

FMLA Family and Medical Leave Act

FRTIB Federal Retirement Thrift Investment Board

GS General Schedule

ICSC International Civil Service Commission

IRS Internal Revenue Service

OASDI Old-Age, Survivors, and Disability Insurance

OPM Office of Personnel Management 

SMA Separate Maintenance Allowance

TSP Thrift Saving Plan

UN United Nations 

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Page 1 GAO-14-546 United Nations Compensation

441 G St. N.W.

Washington, DC 20548

June 26, 2014

Congressional Requesters

United Nations (UN) total compensation consists of salary, benefits, and 

allowances. Since its inception in 1945, the UN has based salaries for its 

professional employees on salaries for the U.S. national civil service. In 

May 2013, we reported that the UN sets its salaries between 110 and 120 

percent of U.S. civil service salaries, and that UN salaries were 116.9 

percent of U.S. civil service salaries in 2012. We recommended that the 

UN clarify its process for comparing salaries for professional staff in the 

UN with U.S. civil service salaries.1

In addition, several UN organizations and member states, including the 

United States, have expressed concern regarding the large and growing 

portion of the UN budget spent on the total compensation of its staff. The 

UN Board of Auditors reported that staff costs for the 2010-2011 biennium 

were the UN’s single largest item of expenditure, with costs rising 

because of higher salaries and related staff benefits. The UN SecretaryGeneral and the General Assembly have also raised concerns about the 

long-term sustainability of compensation costs. The United States 

contributes 22 percent of the UN’s regular budget.

You asked us to review the structure of UN total compensation, including 

benefits and allowances, and how it compares with that of U.S. 

government employees. In this report, we (1) examine similarities 

between UN and U.S. government benefits and allowances and compare 

their monetary values, and (2) examine UN efforts to address concerns 

about the sustainability of total compensation costs.

To compare UN and U.S. government benefits and allowances, we 

reviewed relevant UN and U.S. documents and interviewed UN and U.S. 

officials. We examined the similarity of these compensation elements by 

comparing the purpose, structure, and eligibility requirements in the UN 

and U.S. systems. To compare the monetary value of UN and U.S. 

government benefits and allowances, we collected available salary, 

 

1

GAO, UN Compensation: United Nations Should Clarify the Process and Assumptions 

Underlying Secretariat Professional Salaries, GAO-13-526 (Washington, D.C.: May 29, 

2013).
 

Page 2 GAO-14-546 United Nations Compensation

benefits, and allowance data for UN Secretariat professional staff for 

calendar year 2012 from the UN’s Payroll Operations Unit. We also 

collected data for U.S. employees from the Office of Personnel 

Management (OPM), the Department of State (State), and the 

Department of Defense (DOD). Using these data, we calculated average 

benefit and allowance amounts provided to UN staff and U.S. employees. 

For data on allowances, we collected data from State for State Foreign

Service employees and civil service employees serving overseas and 

data from DOD for civil service employees serving overseas, because 

these employees are comparable to UN Secretariat professional staff. 

Data from State and DOD were for calendar year 2012.2

To assess the reliability of these data, we (1) interviewed officials from the 

UN, and officials from OPM, State, and DOD; (2) reviewed available 

technical documentation; and (3) performed basic reasonableness checks 

for obvious inconsistency errors and completeness. When we found 

discrepancies, we brought them to the attention of relevant agency 

officials and worked with them to correct the discrepancies before 

conducting our analyses. We determined that these data were sufficiently 

reliable for the purposes of determining the monetary value of included 

payroll transactions, retirement contributions, staff costs, and the number 

of UN, U.S. civil service, State, and DOD staff receiving benefits and 

allowances. However, these data do not include information on certain 

allowances that are not captured by the UN’s, State’s, and DOD’s central 

payroll systems.

We also 

calculated examples of retirement benefits paid by UN and U.S. 

retirement programs, as well as the average cost of health care benefits 

for both UN staff and U.S. government employees. Because of variations 

in the structure, administration of payments, and data availability for 

individual compensation elements, we calculated monetary value for 

individual compensation elements using different approaches. As a result, 

individual calculations cannot be summed into a single total for all 

benefits, allowances, or compensation.

To examine UN efforts to address concerns about the long-term 

sustainability of total compensation costs, we reviewed UN documents

and interviewed UN officials regarding the long-term costs of UN benefits 

 

2

Although data from the U.S. government and UN payroll represent slightly different time 

periods, we interviewed UN and U.S. officials and determined that these differences were 

not likely to significantly affect our results. 
 

Page 3 GAO-14-546 United Nations Compensation

and allowances and actions taken to address them. In addition, we 

analyzed UN General Assembly resolutions that direct UN organizations 

to perform further actions to address these concerns. Appendix I provides 

more information on our scope and methodology.

We conducted this performance audit from June 2013 to June 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The UN Secretariat administers the programs and policies established by 

the other principal entities of the UN, including the General Assembly and 

the Security Council. The duties of the Secretariat include administering 

peacekeeping operations, mediating international disputes, surveying 

economic and social trends and problems, and preparing studies on 

human rights and sustainable development. The Secretariat is

headquartered in New York City and has employees at other locations 

throughout the world. According to the UN, as of June 30, 2013, the 

Secretariat employed 41,273 people, of which about 30 percent (12,220) 

were professional staff.3

The total compensation package for UN employees consists of salary, 

benefits, and allowances. UN salaries consist of a base salary and post 

adjustment added to account for the cost of living at individual posts. The 

UN administers a staff assessment, which is used to contribute to a tax 

equalization fund, and which does not affect take-home pay. This fund is 

used to compensate UN employees from countries that require them to 

pay taxes on their UN income.4

 

3

United Nations, Composition of the Secretariat: Staff Demographics, Report of the 

Secretary General, A/68/356 (August 2013). 

UN benefits consist of items including 

4

As of the current UN biennium, the United States is the only country that uses the tax 

equalization fund. 

Background

Role of the UN Secretariat 

and Its Professional Staff

Elements of the UN Total 

Compensation Package
 

Page 4 GAO-14-546 United Nations Compensation

retirement, health insurance, and retiree health insurance. In addition, 

about 20 allowances are available to UN professional Secretariat staff, 

including danger pay, hardship pay, mobility allowance, education grants, 

and others. Receipt of these allowances is based on whether a UN staff 

member meets the eligibility criteria established by the UN for each 

allowance. Our 2013 report on UN compensation provides more detailed 

information on benefits and allowances available to UN professional 

staff.5

Separate bodies within the UN administer the different elements of total 

compensation or provide information to the General Assembly about staff 

demographics and trends in compensation.

• International Civil Service Commission (ICSC). The General 

Assembly established the ICSC in 1974 as an independent expert 

body with a mandate to regulate and coordinate the conditions of 

service of staff in the UN common system.6

 

5

As a part of its mandate, 

the ICSC makes recommendations or determinations for certain 

compensation elements for employees within the UN common 

system, such as salary and allowances. On some matters, the ICSC 

can act independently, while on others its decisions are subject to 

General Assembly approval. For example, the ICSC can determine 

changes to the post adjustment, or cost-of-living adjustment portion of 

UN salaries, without prior approval from the General Assembly. In 

addition, the ICSC can set some allowances, such as the hardship 

allowance for employees serving at posts where living conditions are 

considered difficult, without General Assembly approval. However, 

proposed ICSC changes to UN base salary must be approved by the 

General Assembly. The ICSC is also responsible for annually 

reviewing the percentage difference between UN professional salaries 

and those of U.S. civil service employees in a process called the 

margin calculation. The UN’s process uses net salary, rather than 

total compensation, to compare UN and U.S. staff salaries because 

GAO-13-526, 23-31 and 51-57.

6

The UN common system includes the UN Secretariat, its affiliated programs, 13 

specialized agencies, and 1 related entity.

Administration of UN 

Compensation Elements
 

Page 5 GAO-14-546 United Nations Compensation

the General Assembly has directed the ICSC to conduct the margin 

calculation only using salaries.7

• Joint Staff Pension Fund Board. The UN Joint Staff Pension Fund 

provides retirement and related benefits to UN staff and is 

administered by the Joint Staff Pension Fund Board in accordance 

with regulations adopted by the General Assembly. The Joint Staff 

Pension Fund is a defined benefit fund that provides benefits to more 

than 67,000 retirees and beneficiaries. As of 2013, approximately 

121,000 active participants from 23 organizations in the UN system 

are accumulating pension benefits under the Joint Staff Pension 

Fund.

• Health and Life Insurance Section. This office is part of the UN Office 

of Program Planning, Budget, and Accounts, and administers health 

plans, after-service health insurance, and life insurance for UN 

Secretariat staff.

• United Nations System Chief Executives Board for Coordination 

(CEB). The CEB provides coordination and strategic guidance, and 

prepares reports on staff demographics and other compensation 

issues for use by UN organizations. The Human Resources Network 

of the CEB brings together directors of human resources departments 

from more than 30 UN and related organizations at biannual 

meetings.

 

7

In a 2014 resolution (A/RES/68/253), the General Assembly requested that the ICSC, as 

part of its ongoing compensation review, ensure the comparability of the UN total 

compensation package, including all monetary and nonmonetary elements, under the 

Noblemaire Principle. This principle states that UN compensation should be set high 

enough to attract civil service employees from all member states, including those with the 

highest-compensated government employees.
 

Page 6 GAO-14-546 United Nations Compensation

Benefits and allowances offered by the UN and the U.S. government are 

generally similar, and each provides certain benefits or allowances with 

greater monetary value than the other. Similar UN and U.S. benefits 

include retirement plans and health insurance for staff and retirees, while 

similar allowances include hardship pay and education grants. Where 

comparable data were available, our comparisons of UN and U.S. 

government benefits and allowances show that each entity provided 

some benefits or allowances of greater monetary value than those 

provided by the other. We did not compare some benefits and 

allowances, such as danger pay and retiree health benefits, because of 

the limited availability of comparable data.

The UN and the U.S. government offer generally similar benefits, with 

some minor differences. For example, both the UN and the U.S. 

government offer health, dental, and retiree health insurance to their staff. 

Table 1 compares the benefits available to eligible UN professional staff 

and U.S. civil service employees.

While the UN and the 

U.S. Government

Offer Generally 

Similar Benefits and 

Allowances, Each 

Provides Certain 

Benefits and 

Allowances with 

Higher Monetary 

Values than the Other

Benefits and Allowances 

Offered to UN Staff Are 

Generally Similar to Those 

Offered to U.S. 

Employees, with Some 

Differences in Structure
 

Page 7 GAO-14-546 United Nations Compensation

Table 1: Comparison of Benefits for United Nations (UN) Professional Staff and U.S. Civil Service Employees

Type of benefit UN professional staff U.S. civil service employees

Retirement income UN Joint Staff Pension Fund Federal Employees Retirement System or Civil Service 

Retirement System

Health insurance UN-sponsored health insurance Federal Employees Health Benefitsa

Retiree health insurance After-service health insurance Federal Employees Health Benefits and Medicare

Life insurance UN group life insurance planb Federal Employees’ Group Life Insurance

Dental insurance UN-sponsored dental insurance Federal Employees Dental and Vision Insurance 

Program 

Vision insurance No separate benefit, but vision benefits 

included in UN-sponsored health 

insurance

Federal Employees Dental and Vision Insurance 

Program 

Payment to survivor upon death of 

employee

Death grant Survivor benefit

Source: GAO analysis of UN and U.S. documents. | GAO-14-546

a

Most federal employees who are eligible for Federal Employees Health Benefits are also eligible to 

apply for coverage under the Federal Long Term Care Insurance Program.

b

The UN offers an optional life insurance plan, but does not contribute to its cost. U.S. civil service 

employees are automatically enrolled in group life insurance, unless they waive the coverage. The 

U.S. government covers one-third of the cost of this insurance.

While similar in purpose, some of the benefits offered by the UN and the 

U.S. government differ in design and structure. For instance, while both 

the UN and the U.S. government offer retirement benefits, the UN offers 

its professional staff a pension plan that provides retirees a defined 

benefit, based on factors including an employee’s age, years of 

participation in the plan, and salary history. The UN pension plan provides 

benefits similar to the Civil Service Retirement System (CSRS), a

retirement plan providing U.S. federal civilian retirees with a defined 

benefit. CSRS was created in 1920 and was the only retirement plan for 

most federal civilian employees until 1984. However, most current U.S. 

civil service employees, including all those hired after 1984, are covered 

by the Federal Employees Retirement System (FERS).8

 

8

OPM reported that as of September 30, 2011, approximately 89 percent of U.S. federal 

employees were covered under FERS. 

FERS is a threepart retirement plan consisting of (1) a basic defined benefit pension, (2) 

Social Security benefits, and (3) the Thrift Saving Plan (TSP)—a 

retirement savings and investment plan in which employee contributions 

are matched by the employer up to a certain percentage of salary. 
 

Page 8 GAO-14-546 United Nations Compensation

Compared with participants in the UN Pension Fund or CSRS, U.S. civil 

service employees participating in the FERS plan receive a smaller 

defined benefit pension, but receive Social Security and earnings from 

accumulated TSP investments upon retirement.9

Many allowances offered by the UN to its professional staff are similar to 

those offered by the U.S. government, but both entities also offer 

allowances unique to their own employees. Figure 1 compares similar 

allowances provided by both the UN and the U.S. government to eligible 

staff, as well as allowances offered by one but not the other.

Further information on 

eligibility requirements and key plan provisions of the UN Pension Fund 

and FERS can be found in appendix II.

10

 

9

CSRS employees may also contribute a portion of pay to the TSP, however, they do not 

receive employer matching contributions.

10Figure 1 focuses specifically on allowances provided by either the UN or the U.S. 

government, and not on other forms of compensation that each entity may provide. As 

noted in the figure, in some cases, while the UN and the U.S government provide forms of 

compensation or assistance for a related purpose, the other may provide this assistance 

under a different mechanism than an allowance. 
 

Page 9 GAO-14-546 United Nations Compensation

Figure 1: Comparison of Selected Allowances Offered to Eligible United Nations 

(UN) Professional Staff and U.S. Foreign Service Employees and Civil Service 

Employees Serving Overseas

Notes: In fig. 1, we do not discuss U.S. allowances, such as transit benefits, that are available only to 

U.S. civil service employees serving domestically.

a

The UN also pays employees with dependents at a higher salary rate than those without 

dependents. According to the International Civil Service Commission, this practice is similar to the 

practice of member states that provide a tax advantage for having dependents. Many UN employees 

are not eligible for these tax advantages, as they might be if they were employed in their national civil 

service, because most UN employees are not required to pay income taxes on their UN earnings in 

their home country. The UN also has separate allowances specifically related to dependents, 

including the children’s allowance and the secondary dependent’s allowance.

b

While the amount of the UN mobility allowance varies depending on the level of hardship of the duty 

station to which the staff member is moving, UN staff members moving between nonhardship duty 

stations also receive the allowance. The U.S. government also offers certain relocation incentives. 

However, these incentives are either for hardship duty stations only or require an employee to sign an 

agreement to complete a specified period of service with the agency granting the incentive.

c

In cases of unsatisfactory service, payment of the UN’s compensation-for-termination allowance is at 

the discretion of the Secretary-General for up to half of what is otherwise payable. The Office of 

Personnel Management does not permit the payment of the compensation-for-termination allowance 

in cases of unsatisfactory service. 
 

Page 10 GAO-14-546 United Nations Compensation

As shown in figure 1, both the UN and the U.S. government, for example, 

provide allowances to compensate staff for serving in a dangerous or 

hardship duty station and to account for the cost of living at particular duty 

stations. However, the UN and the U.S. government each offer some 

allowances to staff that are not offered by the other. For example, eligible 

UN professional staff may receive a dependents allowance, to 

compensate for having a child or other qualifying dependent; or a mobility 

allowance, to provide incentive for staff to change duty stations. Similar 

allowances are not part of the compensation package for U.S. Foreign 

Service employees and civil service employees serving overseas. In 

addition, U.S. government employees can be eligible for student loan 

repayments, at the discretion of each agency, if the employee signs a 

service agreement to remain with the agency for at least 3 years. 

Appendix III provides more detailed information on UN and U.S. 

allowances.

Using available data, we compared specific benefits and allowances 

provided by the UN and the U.S. government, and found that each entity 

provided certain benefits and allowances of greater monetary value than 

those provided by the other. However, the lack of available or comparable 

data prevented us from making a monetary comparison of all UN and 

U.S. benefits and allowances.

We were able to compare certain UN and U.S. compensation elements, 

including retirement benefits, health insurance, and allowances such as 

hardship pay. Table 2 summarizes the benefits and allowances that we 

compared and the results of our analysis.

The UN and the U.S. 

Government Each 

Provided Certain Benefits 

and Allowances of Greater 

Monetary Value than 

Those Provided by the 

Other

UN and U.S. Benefits and 

Allowances That Were 

Comparable
 

Page 11 GAO-14-546 United Nations Compensation

Table 2: United Nations (UN) and U.S. Government Benefits and Allowances That GAO Reviewed

Compensation element Result

Retirement benefits The results of our estimates varied depending on years of service and other factors. For example, under a 

scenario where UN staff and U.S. federal civilian employees retire at age 62 with 20 years of service, the 

Federal Employees Retirement System (FERS) replaced a higher percentage of preretirement salary than 

the UN Joint Staff Pension Fund. When these employees retire at age 62 with 30 years of service, FERS 

and the UN Pension Fund replaced similar percentages of preretirement salary.a

 

Health insurance The average cost per employee was higher for eligible U.S. government employees than for UN staff. 

Allowances The UN and the U.S. government each provided certain allowances with higher monetary value than 

those provided by the other.

Source: GAO analysis of UN and U.S. data. GAO-14-546

a

We compared the UN Joint Staff Pension Fund and FERS as of December 2012. Both plans have 

recently changed in ways that we did not model. For instance, effective January 2014, the General 

Assembly increased the normal retirement age from 62 to 65 for new UN staff. For U.S. federal 

civilian employees, contribution rates for the FERS pension increased for those hired on January 1, 

2013, or later. Employees enrolled in FERS and first hired in 2013 contribute 3.1 percent of gross 

salary toward their pension plan, while employees first hired in 2014 or later contribute 4.4 percent. 

Retirement Benefits

To compare the UN and U.S. civil service retirement systems, we 

estimated income replacement rates for UN employees and U.S. civil 

service employees covered by FERS under different scenarios, including 

differing work histories, and retirement contribution rates.11

 

11Because approximately 89 percent of current U.S. federal civilian employees are 

covered under FERS, and this percentage will continue to grow in the future, we focused 

our analysis on FERS.

Income 

replacement rates provide a method of comparing retirement programs 

that describe how much of a worker’s preretirement salary is replaced in 

the first year of retirement by a retirement plan. For example, an 

employee with a preretirement salary of $100,000 who received $60,000 

in the first year of retirement from his or her retirement plan has an 

income replacement rate of 60 percent. Our scenarios had varying 

results. One scenario showed that income replacement rates under FERS 

were higher than for the UN Pension Fund, given the economic conditions 
 

Page 12 GAO-14-546 United Nations Compensation

of the time periods we analyzed.12 In another scenario, the income 

replacement rates for the two systems were similar. Both scenarios are 

summarized in table 3.13 One of our scenarios compares UN staff and 

U.S. civil service employees covered by FERS who retire at age 62, 

contribute an equivalent percentage of salary to their retirement, and 

have 30 years of service.14 Our estimates show that the FERS retirement 

package replaces between 63 and 69 percent of salary, while the UN 

Pension Fund replaces between 63 and 68 percent of salary. We also 

compared UN staff and U.S. employees with 20 years of service who 

retire at age 62 and contribute an equivalent percentage of salary to their 

retirement. Our estimates show that FERS replaces between 48 and 55 

percent of salary, and the UN Pension Fund replaces between 40 and 44 

percent of salary.15

 

12When analyzing income replacement rates for UN employees and U.S. civil service 

employees under FERS, we made several simplifying assumptions. We assumed that 

employees (1) retired at the end of December 2012, and (2) started collecting retirement 

income in January 2013. Additionally, we assumed wages grew at the same rate in the 

UN and the U.S. government. We also assumed that both UN and U.S. government staff 

were married at retirement, and that U.S. employees selected a FERS pension with a 50 

percent benefit for their surviving spouse, and converted their TSP balance into a similar 

50 percent survivor annuity at retirement. UN employees receive a 50 percent survivor 

annuity payable to surviving spouses automatically, with no reduction in pension benefits 

required. For the analysis of TSP annuities, we assumed that U.S. government employees 

invested in the TSP’s Government Securities Investment Fund (G fund), and that this fund 

earned its historical rates of return. See app. II for additional details about the 

assumptions used in our calculations.

13In both of these scenarios, we assumed that UN staff and U.S. civil service employees

covered by FERS retire at age 62. However, U.S. government employees who retire at 

age 62 receive a Social Security benefit that is 25 percent lower than for employees who 

retire at age 66 with equivalent earnings histories. 

14To provide a contribution rate for U.S. civil service employees covered by FERS that 

was equivalent to the UN contribution rate, we assumed that U.S. employees contribute 

9.4 percent of net salary to their retirement plans. We chose 9.4 percent because it is the 

mean pension contribution rate across UN professional staff pay grades. A contribution by 

U.S. employees of 9.4 percent of net salary corresponds to 7.3 to 8.3 percent of gross 

salary, allocated across contributions to the FERS pension, Social Security, and the TSP. 

Therefore, U.S. government employees’ TSP contributions range from 2.7 to 3.5 percent 

of 2012 gross pay in this scenario. See app. II for additional details on our analysis.

15We included this scenario because, according to UN officials, the UN tends to hire 

midcareer staff with prior work experience, who are therefore less likely to accumulate 30 

years of service at the UN. 
 

Page 13 GAO-14-546 United Nations Compensation

Table 3: United Nations (UN) and U.S. Retirement Income Replacement Rates under Different Scenarios

Salary range Income replacement rate (percent) 

Scenario UNa U.S. governmentb UN

U.S. government

(FERS) 

U.S. federal civilian employees and UN staff 

with 30 years of service who retire at age 62 

and contribute similar proportions of take-home 

pay toward retirement

$65,272-$176,274 $47,413-$120,347 63 - 68 63 - 69

U.S. federal civilian employees and UN staff 

with 20 years of service who retire at age 62 

and contribute similar proportions of take-home 

pay toward retirement

$65,272-$176,274 $47,413-$120,347 40 - 44 48 - 55

Source: GAO analysis of UN and U.S. data. | GAO-14-546

Notes: The income replacement rate we calculated for UN staff divided total (gross) retirement 

income in the first year of retirement by net remuneration (take-home pay) in the last year of work. 

The income replacement rate we calculated for U.S. federal civilian employees divided total (gross) 

retirement income in the first year of retirement by net salary (take-home pay after taxes) in the last 

year of work. We use this measure for the purpose of comparing the Federal Employees Retirement 

System (FERS) and the UN Joint Staff Pension Fund; it is not meant to assess the absolute 

generosity or appropriateness of either retirement plan.

These salary ranges represent the administrative salary ranges of the UN and U.S. professional 

systems, and attempt to show the minimum and maximum of each system. Unlike the UN’s margin 

calculation, they do not reflect consideration of the distribution of employees or the individual or 

average pay of employees within the systems.

a

For UN staff, the salary range represents UN net remuneration in New York City at the dependency 

rate of salary, a rate of salary paid by the UN to staff members with dependents. Net remuneration is 

defined by the UN as net base salary plus post adjustment. This represents take-home pay for a staff 

member with dependents, and is consistent with the UN’s method for calculating income replacement 

rates in retirement.

b

The salary range for U.S. federal employees is gross salary in New York, net of U.S. federal and 

New York state taxes. We estimated taxes assuming employees were married and filing jointly, with 

no children. We used this measure of salary to ensure comparability with take-home pay at UN 

headquarters.

While our analysis of income replacement rates showed varying results, 

several factors affected our estimates. First, to achieve higher income 

replacement rates than UN staff, U.S. employees have to make voluntary 

contributions to their retirement plan and accept a higher degree of risk in 

their retirement income because of their TSP investments. TSP 

investment risks include both individual ability and willingness to defer 

income and to make appropriate asset allocation choices, as well as 

market risk on returns. Because the amount that U.S. civil service 

employees contribute to their TSPs affects the income replacement rate, 

we also analyzed scenarios for U.S. employees who make different 

contributions to their TSPs. For example, we analyzed a scenario where 

U.S. civil service employees who have 30 years of government service, 

retire at age 62, and contribute the average contribution rate among 

FERS employees who made elective contributions to the TSP in 2012, 
 

Page 14 GAO-14-546 United Nations Compensation

and found that FERS replaced between 77 to 82 percent of their 

salaries.16 In contrast, if employees make no elective contribution to the 

TSP throughout their careers, our estimates show income replacement 

rates from 57 to 64 percent. Second, UN staff generally earn higher 

salaries than U.S. civil service employees in comparable jobs. Therefore, 

UN pensions may not replace as great a percentage of preretirement 

salary as the FERS retirement plan, but in some cases may have the 

same or greater estimated monetary value. Last, the income replacement 

rates we obtained for FERS employees reflect the economic conditions 

over the 30-year period from 1983 to 2012, with relatively high wage 

growth and asset fund returns in the early years of this period. Scenarios 

using different economic conditions would have obtained different income 

replacement rates.17

Health Insurance

We compared the costs of health care plans for UN staff based in New 

York City, New York, and U.S. civil service employees, and found that the 

average organizational cost per employee in 2012 was 5 percent higher 

for U.S. employees than for UN staff. The average health care subsidy for 

UN professional staff in New York who participated in a plan in 2012 was 

$6,228, according to UN payroll data. Approximately 98 percent of UN 

 

16In 2012, the average contribution rate for U.S. civil service employees who made 

elective contributions to the TSP was 8.5 percent. When also including contributions to an 

employee’s FERS pension and Social Security, employees in this scenario contribute 

between 12.3 and 13.5 percent of gross salary to retirement. U.S. civil service employees 

who made no elective contributions to the TSP contributed between 3.8 percent and 5.0 

percent of gross salary to retirement in 2012, including their contributions to their FERS 

pension—0.8 percent of salary—and their contributions to Social Security, which in 2012 

was 4.2 percent of salary up to the Social Security income threshold. U.S. civil service 

employees contributed 4.2 percent of their salary to Social Security—up to the Social 

Security maximum taxable income level—in 2012, because of a temporary payroll tax 

reduction, but this contribution rate returned to 6.2 percent in 2013. 

17Salary growth rates and the market performance of the TSP’s G fund, the default fund 

for employees’ TSP investments, reflected a period of high growth in the 1980s and 

1990s, with salary growth rates exceeding 5 percent per year and G fund returns at or 

exceeding 9 percent per year throughout most of the 1980s, followed by a period of slower 

growth. It is also significant that the period of high salary growth occurred early in the 

working lives of the workers in our scenarios, building up their portfolios and allowing 

interest to compound on a larger base than would have occurred if the period of high 

growth came later in their careers. For example, workers facing lower salary increases at 

the beginning of their careers may never obtain the TSP balances that they would have 

done had they started their careers in a high-growth period.
 

Page 15 GAO-14-546 United Nations Compensation

professional staff in New York received a health care subsidy, and when 

we included both participants and nonparticipants, we found that the 

overall average cost per UN staff member in New York was 

approximately $6,100.18 According to OPM, the average agency cost of 

providing health care plans to U.S. employees who participated in federal 

employee health benefit plans in 2012 was $8,022, excluding employees 

of the U.S. Postal Service.

19 When we accounted for the 80 percent 

participation rate in federal employee health benefit plans,20 we found that 

the average agency cost per employee, excluding U.S. Postal Service 

employees, was approximately $6,417, including both participants and 

nonparticipants.21

Allowances

Comparing allowances, we found that the UN and the U.S. government 

both provide certain allowances with higher monetary value than those 

provided by the other. Using available data, we were able to compare 

three allowances with similar purposes. Table 4 provides a summary of 

our analysis of these allowances.

 

18The average subsidy for participants without dependents was approximately $3,600, 

while the average subsidy for participants with dependents was approximately $7,800. 

19OPM’s data include nonprofessional staff as well as professional staff. We did not 

present data on average health insurance costs for U.S. civil service employees at a 

specific location because OPM does not disaggregate these data by location. In addition, 

we did not conduct a detailed comparison of the coverage of UN and U.S. civil service 

health insurance plans. 

20According to an OPM official, the 80 percent participation rate among non-Postal 

employees reflects primary policy holders only. It does not include employees who may be 

otherwise covered under a federal health care plan, such as through a spouse. 

21The average cost to the agency for self-only plans in 2012 was approximately $4,500, 

while the average cost to the agency for self-and-family plans was approximately $10,300. 
 

Page 16 GAO-14-546 United Nations Compensation

Table 4: Comparison of 2012 Allowance Payments to United Nations (UN) Secretariat Professional Staff, State Foreign Service 

Employees and Civil Service Employees Serving Overseas, and Department of Defense (DOD) Civil Service Employees 

Serving Overseas

Allowance names

Type of allowance UN U.S. government

Average amount 

per recipient—UN

Average amount per 

recipient—State 

Average amount 

per recipient—DOD

Serving in a hardship 

duty station

Hardship pay Hardship 

differential

$10,294

5,299 recipients

$13,902

7,018 recipients

$9,248

11,858 recipients

Maintaining family at 

a separate location 

from a duty station

Additional 

hardship 

allowance for 

nonfamily duty 

station

Separate 

maintenance 

allowance (SMA)a

$12,141

2,928 recipients

$8,831

876 recipients

$9,446

622 recipients

Relocation and 

moving expenses

Nonremoval 

allowance

Foreign transfer 

allowance

$1,918

7,541 recipients

No data available $1,785

1,118 recipients

Source: GAO analysis of UN, State, and DOD data. | GAO-14-546

a

The U.S. government offers three kinds of SMA: (1) involuntary SMA, which is granted because of 

dangerous, unhealthful, or adverse living conditions at the employee’s post; (2) voluntary SMA, 

granted to employees who face special needs or hardship involving the employee or family members; 

and (3) transitional SMA, granted to employees whose family members require temporary, postevacuation housing or in connection with an unaccompanied assignment. According to the UN, the 

involuntary SMA is more comparable to the UN’s additional hardship allowance for nonfamily duty 

stations. However, we were not able to disaggregate involuntary, voluntary, and transitional SMA 

based on the data provided by State and DOD.

As shown in table 4, UN staff received higher average dollar amounts for 

additional hardship allowance for nonfamily duty stations than State and 

DOD staff received for the separate maintenance allowance. UN staff 

also received a higher average dollar amount for the nonremoval 

allowance than DOD staff did for the foreign transfer allowance. Finally, 

State staff received higher average dollar amounts for hardship 

differentials than UN staff did for hardship pay, but UN dollar amounts 

were higher than those paid to DOD staff.

We also compared other allowances that are unique to either the UN or 

the U.S. government. Table 5 shows the allowances, total number of 

recipients, total spent by the UN or U.S. government on each allowance 

in 2012, and average monetary value per recipient.
 

Page 17 GAO-14-546 United Nations Compensation

Table 5: Number of Recipients, Total Monetary Value, and Average Monetary Value per Recipient in 2012 for Unique United 

Nations (UN) or U.S. Government Allowances

Unique UN allowances

Type of allowance Allowance name

Number of 

recipients

Total monetary 

value

Average monetary 

value per recipient

Support of dependents Dependentsa 6,126 $28,724,961 $4,689

Incentive to change duty stations Mobility 1,065 $8,557,920 $8,036

Return to home country after 

service

Repatriation grant 478 $10,736,110 $22,460

Unique U.S. government 

allowances

Supplement repayment of student 

loans

Student loan repayment 4,643b $32,937,786b $7,094

Source: GAO analysis of UN Payroll and State and DOD data. | GAO-14-546

a

UN allowances specifically related to dependents, include the children’s allowance and the 

secondary dependents’ allowance. The UN also pays employees with dependents at a higher salary 

rate than those without dependents. According to the International Civil Service Commission (ICSC), 

this is similar to the practice of member states that provide a tax advantage for having dependents. 

Many UN employees are not eligible for these tax advantages, as they might be if they were 

employed in their national civil service, because most UN employees are not required to pay income 

taxes on their UN earnings in their home country.

b

Data on student loan repayments are for State and the Department of Defense (DOD) only. Other 

U.S. federal agencies also offer this allowance to eligible U.S. civil service employees.

As shown in table 5, the UN provides allowances to its staff that are not 

provided by the U.S. government to Foreign Service employees and civil 

service employees serving overseas. For example, the UN provides a 

mobility allowance as an incentive for its staff to move among duty 

stations, including moving to more difficult duty stations.22

 

22While the UN Secretariat does not currently require its staff to move between duty 

stations, including moving between headquarters and the field, the UN General Assembly 

adopted a resolution in April 2014 approving a managed mobility framework that is 

scheduled to begin implementation in 2016. This framework will add more specific 

requirements on staff moves, including imposing a 7-year time limit for staff serving in 

headquarters posts, and requiring at least one geographic move for staff to be eligible for

positions at the P-5 grade level. 

UN staff who 

received this allowance received an average amount of $8,036 in 2012. 

As shown in table 5, the U.S. government also provides some eligible 

Foreign Service employees and civil service employees serving overseas, 

in addition to employees serving domestically, with a student loan 

repayment incentive, but the UN does not provide a similar allowance to 

its professional staff. According to State officials, the agency spent 
 

Page 18 GAO-14-546 United Nations Compensation

approximately $12 million in 2012 on 1,337 employees serving both 

domestically and abroad for student loan repayments.23

The lack of available and, in some cases, comparable data prevented us 

from comparing certain other UN and U.S. benefits and allowances, 

including the costs to fund retirement benefits and retiree health 

insurance, certain allowances, and leave benefits.

According to 

DOD, the agency spent approximately $20.9 million in 2012 on 3,306 

employees for student loan repayments.

• Costs to fund retirement benefits and retiree health insurance. While 

we compared income replacement rates for the UN Pension Fund and 

FERS, we were unable to estimate future costs to the UN and the 

U.S. government of providing retirement benefits or retiree health 

insurance because of the lack of comparable data. For instance, while 

both the UN and OPM conduct regular studies to estimate the future 

costs of their respective retirement systems, these studies use 

differing methods and assumptions to determine future costs, 

including different assumptions on key factors such as investment 

growth rates and rates of inflation as well as different actuarial 

methods of assigning retirement costs across years of employee 

service. Because of these differences, the UN’s and OPM’s current 

estimates cannot be used to produce a valid comparison of future 

costs. 

• Allowances, including danger pay and education grants. Comparable 

data were not available for certain allowances, including danger pay 

and education grants. Payroll data on these allowances are 

maintained at individual duty stations and are not linked to the State, 

UN, and DOD central payroll systems. Therefore, these allowances 

were not reflected in the payroll data that we collected.

• Leave benefits. While we previously reported that UN Secretariat staff 

are eligible for more generous leave benefits than those received by 

U.S. civil service employees,24

 

23Federal agencies may repay certain types of insured, or guaranteed, student loans, up 

to a maximum of $10,000 for an employee in a calendar year and not more than $60,000 

for any one employee. In return, employees must sign a service agreement to remain with 

the agency for at least 3 years. 

we were unable to compare the 

24GAO-13-526. 

Other Benefits and Allowances 

That Could Not Be Compared
 

Page 19 GAO-14-546 United Nations Compensation

monetary value of leave used by UN staff and U.S. employees 

because the UN and U.S. agencies were unable to provide 

comparable data on leave amounts used by their employees. See 

appendix IV for more information on UN and U.S. civil service leave 

benefits.

The UN has begun to take action to address concerns about the longterm sustainability of its rising total compensation costs, but its ongoing 

effort to review total compensation does not incorporate the costs of key 

elements, such as pensions and health insurance. Staff-related 

expenditures rose steadily from $1.95 billion in 2002-2003 to $2.98 billion 

in 2010-2011, the most recent period for which data were available, at an 

average rate of about 7 percent per 2-year budget, when adjusted for 

inflation. Concerns about the level of total compensation costs and longterm sustainability have been raised by the Secretary-General, General 

Assembly, member states, and other UN organizations. In response, the 

General Assembly, the ICSC, the UN Joint Staff Pension Fund, and 

others have taken actions aimed to address these concerns, such as 

freezing current allowance amounts. Efforts to study and revise the total 

compensation package include the ICSC’s review of total compensation 

and the CEB’s baseline study of compensation costs. The General 

Assembly has called upon the ICSC to include all elements of total 

compensation in its review. However, we found that the ICSC review 

does not incorporate key elements of total compensation, such as retiree 

health insurance.

The UN has recently begun taking action in response to concerns about 

its total compensation costs raised by the General Assembly, member 

nations including the United States, and various UN organizations. These 

concerns have focused on the long-term sustainability of UN total 

compensation, as well as the present and historical costs of specific 

elements of UN compensation. According to budget data provided by the 

UN Secretariat, staff-related expenditures rose steadily from $1.95 billion 

in 2002-2003 to $2.98 billion in 2010-2011, at an average rate of about 7 

percent per 2-year budget, when adjusted for inflation.25

 

25Staff-related expenditures includes salaries, benefits (including contributions to pensions 

and health insurance), certain allowances (including dependency, hardship, and mobility 

allowances), and other costs.

Figure 2 shows 

The UN Has Begun to 

Address Concerns 

about the Long-Term 

Sustainability of 

Rising Compensation 

Costs, but Its Review 

of Total 

Compensation Does 

Not Incorporate Key 

Elements

The UN Has Begun to 

Take Action to Address the 

Long-Term Sustainability 

of Its Rising Total 

Compensation Costs
 

Page 20 GAO-14-546 United Nations Compensation

that staff-related expenditures accounted for over half of the regular 

budget during this period. Between 2004-2005 and 2010-2011, growth in 

staff-related expenditure was accompanied by faster growth in the 

Secretariat’s regular budget, causing a decline in the share of staffrelated expenditures in the regular budget over this time period.

Figure 2: United Nations (UN) Secretariat Staff-Related Expenditures, 2002-2003 to 

2010-2011

Concerns have also been raised in regard to specific elements of the UN 

total compensation package. For instance, the General Assembly has 

brought attention to the growing margin, or percentage difference, 

between average UN salaries and average U.S. civil service salaries. The 

General Assembly has stipulated that the UN salaries should be between 

110 and 120 percent of U.S. civil servant salaries, with a desirable 

midpoint of 115 percent over 5 years. We previously reported that the 

margin between UN and U.S. civil service salaries increased from 109.3 
 

Page 21 GAO-14-546 United Nations Compensation

percent in 2002 to 116.9 percent in 2012.26

Additionally, the General Assembly has raised questions regarding the 

long-term sustainability of other elements of UN compensation, such as 

retiree health insurance. In 2013, the Secretary-General reported the 

unfunded liability for its after-service health insurance program to be 

almost $4 billion. The General Assembly expressed “deep concern” over 

these costs, and the Secretary-General noted that the UN lacks the 

assets to settle this liability. The Secretary-General further reported that a 

long-term funding strategy is needed. In 2012, a General Assembly 

resolution noted that the UN Joint Staff Pension Fund ran a deficit for a 

second consecutive biennium, and emphasized the need to ensure the 

long-term sustainability of the fund.

In 2013, the margin rose 

again to 119.6 percent, also raising the 5-year average above 115 

percent to 115.7 percent.

The General Assembly, the ICSC, and others have taken actions to 

address these concerns. For instance, to address the rising costs of 

salaries and allowances, the General Assembly and the ICSC have taken 

steps such as freezing allowance amounts for at least 1 year, freezing the 

post adjustment for New York in 2014, raising the retirement age for new 

hires from 62 to 65, and conducting a review of the UN total 

compensation package for professional staff. UN actions taken in 

response to specific concerns are summarized in table 6.

 

26GAO-13-526. In 2012, the General Assembly took action to alleviate these concerns by 

freezing the implementation of the New York post adjustment for 6 months.
 

Page 22 GAO-14-546 United Nations Compensation

Table 6: United Nations (UN) Actions Taken in Response to Concerns over the Sustainability of UN Compensation Costs

Element(s) of UN 

compensation Concern Action

Allowance amounts The General Assembly expressed concern about increases in 

claims for the education grant, resulting in a 35 percent 

increase in education grant payments between 2009 and 

2011.

In 2013, the General Assembly froze all UN 

professional allowances amounts for at least 

1 year.

After-service health 

insurance 

The General Assembly expressed “deep concern” about the 

long-term sustainability of its after-service health insurance 

program. The Secretary-General reported that the UN lacks 

the assets to settle these unfunded liabilities and that a longterm funding plan is needed to address them.

In 2011, the UN required eligible participants 

to enroll in Medicare Part B, with the UN 

reimbursing the required premium, which 

was estimated to lower actuarial liabilities by 

$258 million. It also increased deductibles to 

health care plans in 2009 and 2013 to 

further contain health care costs.

Pensions The actuarial value of the UN Joint Staff Pension Fund 

declined from a surplus of 4.25 percent in 1999 to a deficit of 

1.87 percent in 2011 (second consecutive 2-year deficit). 

While this deficit is within the safety margin of plus or minus 2 

percent established by the UN’s Committee of Actuaries, the 

General Assembly has raised concerns over the fund’s 

financial sustainability, as the increasing longevity of UN staff 

has increased its liabilities.

Effective January 2014, the General 

Assembly raised the normal retirement age 

from 62 to 65 for new staff.

Source: GAO analysis of UN documents. | GAO-14-546

In addition, the UN has initiated a review of its total compensation 

package. Specifically, in 2012, the ICSC began a review of UN total 

compensation, and the General Assembly endorsed this action. The 

ICSC added the total compensation review to its 2013-2014 work plan 

and has begun collecting data related to many elements of the UN 

compensation package. The CEB has assisted the ICSC with this data 

collection effort.27

 

27In addition to assisting the ICSC in data collection, in 2013, the CEB began a baseline 

costs study of the UN compensation package. According to ICSC and CEB officials, this 

study will be used to validate the cost estimates performed as part of the ICSC total 

compensation review, and will be reported to the General Assembly.

As a result of its review, the ICSC plans to issue 

several recommendations to the General Assembly on changes to the 

overall compensation structure. The study is scheduled for completion in 

2015.
 

Page 23 GAO-14-546 United Nations Compensation

While the UN is undertaking efforts to examine its compensation 

package, we found that the ICSC’s review does not incorporate all key 

elements of total compensation. The General Assembly’s 2013 resolution 

commenting on the ICSC’s total compensation review noted that the 

ICSC should review all elements of total compensation holistically, 

including both monetary and nonmonetary elements. Further, the ICSC 

has reported that a holistic review of all elements of compensation is 

important to prevent fragmentation of the UN compensation system. 

However, according to ICSC officials and documents, the ICSC’s review 

of total compensation will not incorporate all key elements of total 

compensation. Instead, the ICSC review will focus on certain 

compensation elements, such as salary and allowances. Other key 

elements of compensation with significant costs, including benefits such 

as pensions, health insurance, and after-service health insurance, will not 

be incorporated into the ICSC review.

According to the ICSC, the compensation review will result in the 

development of a compensation calculator and a series of 

recommendations to the General Assembly about possible changes to 

the UN compensation structure. The calculator will be based on a series 

of estimates about the current and future costs of individual elements of 

compensation. For example, an estimate of danger pay might multiply the 

total number of staff serving at duty stations eligible for that allowance by 

the danger pay rate of $1,600 per month as of 2013. However, according 

to ICSC officials, the calculator will not generate estimates for key 

elements of compensation, including pensions, health insurance, and 

retiree health insurance.

ICSC officials noted that because the various elements of compensation 

affect one another, their study may have effects on elements of 

compensation not directly included in their review. For example, any 

changes proposed to the salary structure could affect other items that are 

linked to salary, such as pensions. However, ICSC officials stated that, as 

part of their review, they will not make specific recommendations related 

to compensation elements outside of their area of administrative 

responsibility. Within the UN system, several different entities have 

administrative responsibility for the various elements of total 

compensation. The ICSC is responsible for matters pertaining to salary 

and allowances, the Joint Staff Pension Fund Board administers the 

pension fund, and the Health and Life Insurance Section administers 

health and retiree health insurance plans. ICSC officials told us that their 

review will focus only on the elements of compensation—salary and 

allowances—that are within their area of responsibility. In addition, ICSC 

The ICSC’s Total 

Compensation Review 

Does Not Incorporate Key 

Elements of Total 

Compensation
 

Page 24 GAO-14-546 United Nations Compensation

officials told us that issues related to elements outside their responsibility 

will be flagged for separate review by the UN entities with responsibility 

for their administration, such as the UN Joint Staff Pension Fund and the 

UN Health and Life Insurance Section.

Until all aspects of UN total compensation have been reviewed by the 

ICSC and other relevant entities, the General Assembly and member 

states will not have a comprehensive set of information with which to 

make fully informed decisions about proposed changes to address 

concerns about the compensation system. The cost to the UN of some of 

the elements not fully incorporated in either study is significant. For 

example, the unfunded liability of the UN’s retiree health insurance plan 

was estimated in 2012 to be almost $4 billion. In addition, according to 

the UN Secretariat, contributions to the Joint Staff Pension Fund and 

health insurance plans totaled $419 million in 2010-2011, which was 8 

percent of the 2-year regular budget.

We found that the UN and the U.S. government offer generally similar 

benefits and allowances to their employees, with some differences. Our 

comparisons of the monetary value of certain UN and U.S. benefits and 

allowances show that each offered compensation elements of higher 

value than the other. However, the lack of available or comparable data 

prevented a comparison of other UN and U.S. benefits and allowances.

The Secretary-General; General Assembly; member states, including the 

United States; and other UN organizations have expressed concerns 

about the rising costs and long-term sustainability of the UN’s total 

compensation package. Many of these concerns relate to the 

organization’s retiree health insurance system and its pension fund. The 

retiree health insurance system, for example, has a large unfunded 

liability that may place the long-term viability of the program at risk. The 

UN has recognized these issues and begun taking actions to address the 

costs of its compensation package. The ICSC’s ongoing review of total 

compensation and the CEB’s baseline compensation cost study are 

important steps in understanding the current costs of the compensation 

package, with the ICSC study making recommendations about possible 

changes to the structure of the system and developing a cost calculator 

that could be used to estimate the impact of these possible changes. 

However, because various entities within the UN system have 

administrative responsibility over different elements of the compensation 

package, the ICSC review will not include key elements of compensation, 

particularly pensions, health insurance, and retiree health insurance. 

Conclusions
 

Page 25 GAO-14-546 United Nations Compensation

Without a holistic evaluation of its compensation package that 

incorporates all key elements of compensation, the General Assembly 

and member states will not be able to make fully informed decisions 

about proposed changes to the compensation system.

To assist member states in their oversight of the budgetary implications 

and financial sustainability of UN total compensation, the Secretary of 

State should work with other member states to ensure that the costs of 

key elements of total compensation are reviewed to address rising staff 

costs and sustainability.

We provided a draft of this report for comment to the Secretary of State, 

the Secretary of Defense, the Director of OPM, the Executive Director of 

the Federal Retirement Thrift Investment Board (FRTIB), and the UN. 

State, OPM, and the UN provided us with technical comments, which we 

incorporated into the report as appropriate. State also provided written 

comments, which we reprinted in appendix V.

State agreed with our recommendation and stated that it generally 

accepts and endorses our findings. State noted that our report reveals 

that several elements of compensation, including pension benefits and 

after-service health benefits, are not included in the ICSC’s compensation 

review. State further commented that the ICSC review faces inherent 

challenges, including complexities associated with the Noblemaire 

Principle, which requires that compensation for UN professional staff be 

set in comparison to the highest compensated national service, which the 

UN has considered to be the U.S. federal civil service. State commented 

on ambiguities with the Noblemaire Principle, including ambiguities over 

the comparison group and which elements of compensation should be 

included in the comparison. We agree that there are ambiguities 

associated with the Noblemaire Principle and therefore we did not use it 

as the basis for our comparison of UN and U.S. government benefits and 

allowances. As we discuss in the report, the UN General Assembly has 

directed that only salaries be used as part of the margin calculation, 

rather than total compensation, which would include benefits and 

allowances in addition to salaries. It was beyond the scope of our review 

to comment on how the Noblemaire Principle should be applied, and our 

comparisons of UN and U.S. government benefits and allowances should 

not be interpreted as a statement or opinion on how Noblemaire 

comparisons should be conducted.

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 26 GAO-14-546 United Nations Compensation

We are sending copies of this report to the appropriate congressional 

members, the Secretary of State, the Secretary of Defense, the Director 

of OPM, the Executive Director of the FRTIB, the UN, and other 

interested parties. In addition, the report is available at no charge on the 

GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-9601 or melitot@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix VI. 

Thomas Melito

Director, International Affairs and Trade
 

Page 27 GAO-14-546 United Nations Compensation

List of Requesters

The Honorable Bob Corker

Ranking Member

Committee on Foreign Relations

United States Senate

The Honorable Lindsay Graham

Ranking Member

Subcommittee on State, Foreign Operations,

 and Related Programs

Committee on Appropriations

United States Senate

The Honorable John Barrasso

United States Senate

The Honorable Richard Burr

United States Senate

The Honorable Tom Coburn

United States Senate

The Honorable James Inhofe

United States Senate

The Honorable Johnny Isakson

United States Senate

The Honorable Mike Lee

United States Senate

The Honorable James Risch

Unites States Senate

The Honorable Marco Rubio

United States Senate
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-14-546 United Nations Compensation

We were asked to review the structure of United Nations (UN) total 

compensation, including benefits and allowances, and how it compares 

with that of U.S. government employees. In this report, we (1) examine 

similarities between the UN and U.S. government benefits and 

allowances and compare their monetary values, and (2) examine UN 

efforts to address concerns about the sustainability of total compensation 

costs. 

To compare UN and U.S. government benefits and allowances, we 

reviewed relevant UN data and interviewed UN officials to determine the 

elements of the UN total compensation package available to UN 

Secretariat professional staff in 2012. Similarly, we reviewed relevant 

U.S. data and interviewed U.S. officials to determine similar elements of

total compensation offered in 2012 to U.S. civil service employees, and 

for U.S. civil service employees serving overseas for the Departments of 

State (State) and Defense (DOD), and State Foreign Service employees. 

We examined the similarity of these compensation elements by 

comparing the purpose, structure, and eligibility requirements in the UN 

and U.S. systems.

To compare the monetary value of elements of the UN total 

compensation package with similar elements of the U.S. government total 

compensation package, we collected available salary, benefit, and 

allowance data for UN Secretariat professional staff from the UN’s Payroll 

Operations Unit for calendar year 2012. We also collected available data 

for U.S. government employees, including civil service employees serving 

overseas and Foreign Service employees, from the Office of Personnel 

Management (OPM), State, and DOD. For data on health insurance, life 

insurance, and retiree health care benefits, we collected data from OPM 

on U.S. civil service employees, because OPM does not disaggregate 

these data by salary scale, occupation, or location. For data on retirement 

benefits, we collected data on the cost of the Federal Employees 

Retirement System (FERS) pension plan from OPM on U.S. civil service

employees hired under FERS, because OPM does not disaggregate 

these data by salary scale or occupation; and we collected data on Thrift 

Saving Plan (TSP) participation rates and deferral rates from the Federal 

Retirement Thrift Investment Board (FRTIB) for U.S. civil service

employees who are enrolled in the FERS retirement plan, because the 

FRTIB does not disaggregate these data by salary scale or occupation. 

For data on allowances, we collected data from State and DOD for 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 29 GAO-14-546 United Nations Compensation

Foreign Service employees and civilians serving overseas, because 

these employees are comparable to UN Secretariat professional staff. 

Data from State and DOD were for calendar year 2012.1

To assess the reliability of UN data, we interviewed UN officials, reviewed 

available technical documentation, and performed basic reasonableness 

checks of the data for obvious inconsistency errors and completeness. 

When we found discrepancies, we brought them to the attention of 

relevant agency officials and worked with these officials to correct the 

discrepancies before conducting our analyses. We determined that these 

data were sufficiently reliable for our analyses, including determining the 

monetary value of available UN payroll transactions, and the number of 

employees receiving these benefits and allowances in calendar year 

2012; determining the monetary value of retirement contributions for UN 

staff for income replacement rate scenarios that we conducted and for 

determining the UN pension benefit formula; and for discussing UN staffrelated costs and the level of these costs as a percentage of the regular 

budget. However, these data do not include complete information on 

certain allowances that are not captured in the UN’s central payroll 

system, such as danger pay allowances.

Because of 

variations in the structure, administration of payments, and data 

availability for individual compensation elements, we calculated monetary 

value for individual elements using different approaches. As a result, 

individual calculations cannot be summed into a single total for all 

benefits, allowances, or compensation.

To assess the reliability of U.S. data, we interviewed officials from OPM, 

State, DOD, and the FRTIB; reviewed available technical documentation; 

and performed basic reasonableness checks for obvious inconsistency 

errors and completeness. When we found discrepancies, we brought 

them to the attention of relevant agency officials and worked with officials 

to correct the discrepancies before conducting our analyses. We 

determined that these data were sufficiently reliable for our analyses. 

However, these data do not include information on certain allowances 

that are not captured by State’s and DOD’s central payroll systems, such 

as danger pay. 

 

1

Although data from the U.S. government and UN payroll represent slightly different time 

periods, we interviewed UN and U.S. officials and determined that these differences were 

not likely to significantly affect our results. 
Appendix I: Objectives, Scope, and 

Methodology

Page 30 GAO-14-546 United Nations Compensation

Using these data, we calculated benefit and allowance amounts provided 

to UN staff and U.S. government employees.

We also estimated benefit amounts UN and U.S. retirement programs 

would pay to employees—which we expressed in the form of income 

replacement rates—under different scenarios, including differing years of 

service and contributions toward retirement. We note, however, that these 

are illustrative examples, which do not represent actual or average 

benefits received by UN staff or U.S. government employees. We 

calculated these income replacement rates for UN staff and for U.S. civil 

service employees covered by FERS. The income replacement rates we 

calculated divided a workers’ gross retirement income in the first year of 

retirement by the worker’s net salary in his or her final year of work. We 

use this measure for the purpose of comparing FERS and the UN Joint 

Staff Pension Fund; it is not meant to assess the absolute generosity or 

appropriateness of either retirement plan.2

To identify health care costs for the UN, we used data on health care 

subsidies from the UN payroll system. UN payroll data contain the 

amount of health care subsidy that each employee receives from the 

organization. We examined the mean and median values of the health 

care subsidy for professional staff located in New York, first for the entire 

staff population, and then for staff members who participate in a health 

care plan. Because approximately 98 percent of UN staff members 

receive a health care subsidy, there is little difference between average 

plan costs for the entire staff population, and average plan costs per 

participant. We also examined the mean and median values of the health 

care subsidy for participants with and without dependents.

For more information on our 

assumptions and methodology in estimating income replacement rates, 

see appendix II.

 

2

The income replacement rates in this report measure the value of retirement income at 

the time of an employee’s retirement, which may not fully reflect differences in benefit 

indexation. For example, the Social Security benefit is fully indexed to inflation using the 

Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), while the 

FERS defined benefit is partially indexed to inflation (with a formula based on CPI-W). The 

TSP allows participants to select an annuity that is partially indexed, or one with level 

payments. In the scenarios presented in this report, we assume the TSP participants have 

selected an annuity with benefit increases that are partially indexed to inflation. The UN 

retirement benefit includes pension adjustments that reflect both changes in the U.S. 

Consumer Price Index and changes in the exchange rate between the United States and 

the retiree’s country of residence.
Appendix I: Objectives, Scope, and 

Methodology

Page 31 GAO-14-546 United Nations Compensation

To identify health care costs for U.S. civil service employees, we used 

data provided by OPM about the average cost to the agency of providing 

health insurance. OPM provided the average cost per participant, overall, 

and broken down into participants in self-only plans and participants in 

self-and-family plans. We multiplied this average cost by the participation 

rate in 2012, approximately 80 percent, to obtain the average cost to 

federal agencies of providing health insurance to U.S. civil service 

employees. A limitation of using OPM health care cost data to compare 

U.S. civil service employees with UN staff is that OPM’s data are not 

restricted to professional employees. To the extent that professional civil 

service employees choose different plans or have different patterns of 

health care usage than nonprofessional employees, federal agency costs 

to provide health insurance to professional employees may differ from the 

overall average.

To show growth in UN staff costs over time, we collected data on staffrelated expenses from the UN Secretariat. We adjusted these figures for 

inflation using the annual U.S. gross domestic product deflator from the 

U.S. Bureau of Economic Analysis, which we normalized to use 2011 as 

the base year.

To examine UN efforts to address concerns about the long-term 

sustainability of total compensation costs, we reviewed UN documents 

and interviewed UN officials regarding the long-term costs of UN benefits 

and allowances and actions taken to address them, including the 

International Civil Service Commission’s total compensation review and 

the UN Chief Executive Board’s baseline compensation cost study. In 

addition, we analyzed UN General Assembly resolutions that direct other 

UN organizations to perform further actions to address these concerns.

We conducted this performance audit from June 2013 to June 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 32 GAO-14-546 United Nations Compensation

To compare the UN and U.S. government retirement systems, we 

estimated income replacement rates for UN staff and U.S. federal civilian

employees at various salary levels and under different scenarios, 

including varying years of UN or U.S. government employment and 

retirement contribution rates for U.S. federal civilian employees. Income 

replacement rates are a method of comparing retirement programs that 

describe how much of a worker’s preretirement salary is replaced in the 

first year of retirement by a retirement plan. We focused our analysis on 

U.S. federal civilian employees hired under FERS, which covers 

approximately 89 percent of current federal civilian employees and all 

federal civilian employees hired since 1984.

Retirees from the UN receive a pension, while the vast majority of active 

U.S. federal civilian employees receive retirement benefits under FERS. 

The UN Joint Staff Pension Fund and FERS have some structural 

differences. The UN Joint Staff Pension Fund provides retirees a defined 

benefit, based on factors including an employee’s age, length of 

participation in the plan, and salary history. The UN pension is similar to

the Civil Service Retirement System (CSRS), which also provides U.S. 

federal civilian retirees with a defined benefit.

1

Table 7 provides additional information on the eligibility requirements and 

other plan provisions of the UN Pension Fund and FERS, including 

retirement age, contribution rates, and benefits formulas. 

FERS is a three-part 

retirement plan consisting of (1) a basic defined benefit pension, (2) 

Social Security, and (3) the TSP—a tax-advantaged retirement savings 

and investment plan in which employee contributions are matched by the 

employer up to a certain percentage of salary. Compared with 

participants in the UN Pension Fund or CSRS, U.S. federal civilian

employees participating in the FERS plan receive a smaller defined 

benefit pension, but receive Social Security and earnings from 

accumulated TSP investments upon retirement.

 

1

CSRS covers U.S. government employees who were hired before 1984 and did not 

switch to FERS.

Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal 

Civilian Employees

Eligibility Requirements 

and Plan Provisions for 

the UN Pension Fund and 

FERS
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 33 GAO-14-546 United Nations Compensation

Table 7: Eligibility Requirements and Plan Provisions for the United Nations (UN) Joint Staff Pension Fund and the Federal 

Employees Retirement System (FERS)

UN Joint Staff Pension Fund FERS

Retirement age The retirement age is 60 for employees who began 

working at the UN before January 1, 1990. Normal 

retirement age is 62 for employees who began 

working at the UN after January 1, 1990.

The retirement age for UN employees hired on or 

after January 1, 2014 is 65.

The retirement age is 60 with at least 20 years of 

service or 62 with at least 5 years of service. A 

person with 30 years or more of service may retire 

earlier; the minimum retirement age ranges from 55 

to 57. 

Retirement contribution Defined benefit

The current rate of contribution to the fund is 23.7 

percent of pensionable remuneration. The employee 

pays one-third, or 7.9 percent, of that amount. The 

UN pays the remaining two-thirds, or 15.8 percent.

Defined benefit

The current contribution rate to FERS is 12.7 percent 

of gross salary.a For employees hired before 

January 1, 2013, employees pay 0.8 percent of their 

gross salary and agencies pay the remainder, or 

11.9 percent. For employees hired in 2013, the 

employee contribution is 3.1 percent of gross salary, 

and the employer contribution is 9.6 percent. For 

employees hired on or after January 1, 2014, the 

employee contribution is 4.4 percent of gross salary.

Thrift Savings Plan (TSP) (U.S. employees only)

The U.S. agency contributes 1 percent of pay 

automatically to the TSP. Employees may contribute 

pre-or post-tax income to the TSP up to the federal 

limit ($17,500 in 2013). The government matches up 

to 4 percent of gross salary.

Social Security (U.S. employees only)

The employer and the employee each contribute 6.2 

percent of earnings to Social Security up to the 

Social Security income threshold ($113,700 in 

2013).

b

Benefits formula For employees who reach full retirement age and 

have at least 5 years of service, the annual pension 

is calculated as 1.5 percent of the final average 

remuneration for each of the first 5 years of service, 

plus 1.75 percent of the final average remuneration 

for each of the next 5 years of service, plus 2 percent 

of the final average remuneration for each year of 

service between year 10 and year 35 of service; plus 

an additional 1 percent of final average remuneration 

for any years of service above 35, up to a maximum 

total accumulation rate of 70 percent of final average 

remuneration.

Final average remuneration generally means the 

highest average pensionable remuneration for 36 

months of the last 5 years of service. 

Employees who meet the age and service 

requirements receive an annual pension benefit 

equal to the following formula: 1.1 percent of their 

average “high-3” salary for each year of service. For 

employees who retire under age 62, or with less than 

20 years of service, the formula is 1 percent of their 

average high-3 salary for each year of service. Thus, 

an employee, retiring above age 62, who worked 30 

years receives an annual pension benefit equal to 33 

percent of his or her high-3 salary. “High-3” is an 

employee’s average salary in the three highest-paid 

consecutive years of service.

Source: GAO analysis. | GAO-14-546

a

Certain groups of federal employees have different retirement contribution levels under FERS. For 

example, law enforcement officers and firefighters, congressional employees, and members of 

Congress have higher contribution rates. We are not including these groups of federal employees in 

our estimates of income replacement rates under FERS.
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 34 GAO-14-546 United Nations Compensation

b

In 2011 and 2012, employees contributed up to 4.2 percent of wages to Social Security, up to the 

Social Security income threshold, because of a temporary reduction in payroll taxes.

When analyzing income replacement rates for UN staff and U.S. federal 

civilian employees under FERS, we made several simplifying 

assumptions. We assumed that staff (1) retired at the end of December 

2012 at age 62, and (2) started collecting retirement income in January 

2013.2 Additionally, we assumed wages grew at the same rate for both 

UN staff and U.S. federal civilian employees. In certain scenarios, we 

assumed that staff worked for 30 years at their respective UN or U.S. 

government employers, and in others we assumed that staff had 20-year 

work histories. Both UN and U.S. staff are assumed to be married at 

retirement, and U.S. employees are assumed to select a FERS pension 

with a 50 percent benefit for their surviving spouse.3

We made the following additional assumptions for estimating retirement 

income from TSP portfolios for U.S. federal civilian employees:

When estimating 

Social Security benefits, we assumed that all employees had a 35-year 

Social Security work history, as Social Security benefits are based on a 

person’s highest 35 years of earnings. Thus, we assumed that employees 

receiving Social Security have a work history prior to their years of service 

with the federal government or the UN.

 

2

FERS employees are eligible for a nonreduced FERS pension after 20 years of work at 

age 60 or older, or 5 years of work at age 62 or older. In 2013, FERS employees could 

retire with nonreduced Social Security benefits at age 66; FERS employees who retired at 

age 62 in 2013 receive a Social Security benefit that is 25 percent lower than a 66-yearold with an identical earnings history would receive. UN staff are fully vested in their 

pension after 5 years of work once they have reached the normal retirement age, which 

was 60 for staff who started employment prior to 1990, 62 for staff who started or 

reentered employment on January 1,1990, or later, and 65 for staff who started or 

reentered employment on January 1, 2014, or later. 

3

The default option for FERS employees who are married is a spousal survivor benefit in 

which the spouse receives 50 percent of the FERS retiree’s pension if the FERS retiree 

dies before his or her spouse. Selecting this benefit results in a reduction in the FERS 

pension (relative to an unmarried recipient) of 10 percent in most cases. FERS employees 

may select a 25 percent spousal benefit, which results in a reduction in the FERS pension 

of 5 percent (relative to an unmarried recipient) in most cases, or they may select no 

spousal benefit. However, FERS employees who are married require their spouse’s 

written permission to select any option other than the default option. UN employees 

receive a 50 percent survivor annuity payable to surviving spouses automatically, with no 

reduction in pension benefits required.

Key Assumptions for 

Estimates of Income 

Replacement Rates
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 35 GAO-14-546 United Nations Compensation

1. We assumed that employees participated in the TSP for each year of 

their 20- or 30-year work histories. 

2. We assumed that TSP investments were fully invested in the TSP’s G 

fund,4 and we allowed the TSP rate of return to vary each year,5

reflecting the annual rate of return of the G fund for the years 1988-

2012.6

3. We assumed that FERS retirees purchased an annuity using their 

entire TSP balance at the end of 2012.

We applied these rates of return to an individual’s TSP 

contributions to calculate his or her final TSP balance.

7 We used an annuity interest 

rate of 1.95 percent, which was the annual average rate in 2012. We 

also assumed that the retiree’s spouse was the same age as the 

retiree and that the retiree selected an annuity with a 50 percent 

survivor benefit with increasing payments to adjust for the cost of 

living.

We calculated income replacement rates for UN staff and U.S. federal 

civilian employees at various levels of take-home pay in their final year of 

work. We focused on take-home pay, rather than gross salary, because 

for UN staff there is no measure that directly corresponds to U.S. federal 

civilian employees’ gross salary, since most UN member states do not 

require their citizens who work for the UN to pay income taxes. UN staff 

members’ take-home pay is termed net remuneration, which is obtained 

 

4

The G fund stands for the Government Securities Investment Fund. This is the default 

fund into which an employee’s TSP investments are put unless an employee actively 

selects an alternative fund. The G fund’s investment objective is to produce a rate of 

return that is higher than inflation while avoiding exposure to credit (default) risk and 

market price fluctuations. The G fund purchases Treasury securities that are guaranteed 

by the U.S. government.

5

Salary growth rates and the market performance of the TSP’s G fund reflected a period 

of high growth in the 1980s and 1990s, with salary growth rates exceeding 5 percent per 

year and G fund returns at or exceeding 9 percent per year throughout most of the 1980s, 

followed by a period of slower growth. It is also significant that the period of high salary 

growth occurred early in the working lives of the employees in our scenarios, building up 

their portfolios and allowing interest to compound on a larger base than would have 

occurred if the period of high growth came later in their careers. 

6

For the years 1983 to 1987, we used the rate of return equal to the annual interest rate 

on Social Security special issues, which very closely track the annual interest rate on the 

TSP G fund. 

7

A TSP life annuity is an insurance product that provides guaranteed monthly payments 

for as long as the retiree, or his or her designated survivor, is alive. 

Methodology for 

Estimating Income 

Replacement Rates
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 36 GAO-14-546 United Nations Compensation

from the UN’s published salary scales, and is equal to the base salary for 

an employee’s assigned grade and step, an allowance for staff members 

with dependents, and a post adjustment reflecting the cost of living for the 

location where the staff member is posted. In our scenarios, we define 

“salary” for UN staff as the net remuneration for a staff member of the 

assigned grade and step, living in New York City, New York, receiving 

salary at the dependent rate. For U.S. federal civilian employees, takehome pay is calculated by applying federal and New York state tax rates 

to the General Schedule gross salary scale for New York.8

First, we estimated the income replacement rates for UN staff and U.S. 

federal civilian employees who contribute an equivalent percentage of 

salary to their retirement. Obtaining this equivalent contribution rate 

involves identifying the percentage of net remuneration that UN staff 

contribute to their retirement, and identifying the comparable contribution 

rate from take-home pay made by U.S. employees. To identify the 

percentage of net remuneration that UN staff contribute to their 

retirement, we first calculated the dollar value of the pension contribution

that UN staff at each grade and step must make, and then divided that 

dollar value by the appropriate level of net remuneration. UN staff are 

required to contribute 7.9 percent of their pensionable remuneration to 

their pension plan.9

 

8

We assume that U.S. employees are married and filing jointly, with no children, and with 

a spouse with zero taxable income. 

To obtain the dollar value contributed to the pension 

plan at each grade and step, we multiplied the appropriate level of 

pensionable remuneration by 7.9 percent. We then divided this dollar 

value by the appropriate level of net remuneration, resulting in the 

percentage of net remuneration contributed to pensions by UN workers 

who live in New York City and are paid at the dependent rate, at various 

grade and step levels. UN workers who are posted in New York City and 

paid at the dependent rate contribute between 8.9 percent and 9.8 

percent of net remuneration to their pension plans. The mean and median 

contribution rate, across all grade and step levels (not weighted by 

population), is 9.4 percent.

9

Because UN pensions are subject to taxation in the country where the staff member 

receives the pension benefit, they are established in gross terms to account for the 

amount of taxes UN retirees will have to pay on their pension benefits. “Pensionable 

remuneration” is a term used by the UN to describe the “grossed-up” salary scale on 

which pension contributions and subsequent gross pensions are based. Thus pensionable 

remuneration is higher than net remuneration for UN staff. 

Estimating Equivalent 

Contribution Rates
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 37 GAO-14-546 United Nations Compensation

To obtain an equivalent contribution rate for U.S. civil service employees, 

we estimated income replacement scenarios for U.S. civil service 

employees who contribute 9.4 percent of their net salary to retirement. 

We defined net salary for U.S. employees as gross salary, net of U.S. 

federal and New York state taxes. We used net salary as a measure for 

U.S. employees, as it was more comparable to UN net remuneration, or 

take-home pay. After we converted gross salary to net salary, we 

obtained the corresponding dollar value U.S. employees contributed to 

retirement. When applying the U.S. federal tax code and the New York 

tax code, we assumed that our U.S. civil service employees were 

married, filing jointly, with no children. Once we obtained the dollar value 

of the worker’s contribution to retirement, we converted this into a 

percentage of gross income that each worker contributes to retirement.10

Once we obtained the percentage of gross salary that each U.S. civil 

service worker in our scenarios contributes to retirement, we were able to 

determine the worker’s contribution rate to the TSP in each year. In our 

scenarios in which UN staff and U.S. federal civilian employees have 

equivalent contribution rates, we determined the TSP contribution rate as 

a residual result of the other calculations. As a result, the TSP 

contribution rate equals the total contribution rate to retirement, minus the 

mandatory Social Security contribution rate each year, minus the 

mandatory 0.8 percent contribution rate to the FERS pension plan.11

 

10Because of the tax code, even though all U.S. civil service workers in a given scenario 

are contributing 9.4 percent of net salary to retirement, their contribution rate as a 

percentage of gross salary varies across salary levels.

For 

example, in the scenarios in which we set equivalent retirement 

contributions between UN staff and U.S. federal civilian employees, an 

employee is assumed to contribute 0.8 percent of gross pay to a FERS 

11One limitation of the residual approach for generating TSP contribution rates is that we 

are not recalculating the relationship between net salary and gross salary for every level of

salary in each year of an employee’s 20- or 30-year salary history. In practice, the 

effective tax rate for an individual at any given level of 2012 salary would have changed 

over the past 20 or 30 years, for two reasons. First, even if the federal and New York tax 

rates did not change, the individual would have fallen into different tax brackets in some of 

the years when his or her salary was lower. Second, even had the individual experienced 

no salary growth over the previous 20 or 30 years, the federal and New York state tax 

rates would have changed over this period, resulting in different effective tax rates in 

different years. 

TSP Contributions
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 38 GAO-14-546 United Nations Compensation

pension, 4.2 percent of gross pay to Social Security, and between 2.7 to 

3.5 percent of gross pay to the TSP depending on salary.12

In addition to this indirect approach, where TSP contributions are 

identified as a residual, we also present scenarios where we directly set 

the level of TSP contribution. In the direct approach shown in tables 12 

and 13, we entered a TSP contribution as a constant percentage of gross 

salary and multiplied this contribution rate by each year’s salary, to obtain 

an annual contribution to the TSP for each employee.

Once we calculated each employee’s annual contribution rate to the TSP, 

through either the indirect or the direct method, we then calculated the 

employing agency’s matching contribution rate to the TSP.13 We then 

summed the employee and employer contribution to the TSP, to obtain 

the total dollar value of contributions to the TSP for each employee in 

each year. Once we determined each employee’s annual contributions to 

the TSP fund, including both the employee and employer contributions, 

we calculated the employee’s final TSP balance. As stated earlier, we 

assumed that employees invest their entire TSP balance in the G fund.14

Once the final TSP balance was obtained, we calculated a lifetime TSP 

annuity for each worker using the TSP Annuity Calculator Worksheet, 

published by the FRTIB, along with accompanying tables from the FRTIB, 

including monthly annuity factors and interest adjustment factors.15

In directly setting the level of TSP contribution, we presented income 

replacement rates for U.S. federal civilian employees with two different 

 

12Since 1990, in most years employees have contributed 6.2 percent of salary to Social 

Security, up to the Social Security maximum taxable income level, which was $110,100 in 

2012. In 2012, workers contributed 4.2 percent of salary to Social Security, because of

temporary tax provisions in 2011 and 2012. The Social Security employee tax rate 

returned to 6.2 percent in 2013. Our model incorporates these variations in Social Security 

tax rates.

13Federal agencies contribute an automatic 1 percent of gross salary to the TSP for all 

FERS employees. In addition, agencies match 100 percent of employee contributions up 

to 3 percent of gross salary, and match 50 percent of employee contributions up to 5 

percent of gross salary. Thus the maximum employer contribution to the TSP in any year 

is 5 percent (1 percent automatic plus up to 4 percent matching contribution.) 

14We do not apply a constant rate of return, but instead assign the rate of return earned by 

the G fund in each year from 1988 to 2012.

15The FRTIB administers the TSP.
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 39 GAO-14-546 United Nations Compensation

TSP contribution levels: 8.5 percent of gross salary, and 0 percent of 

gross salary. We selected 8.5 percent of gross salary because, according 

to an FRTIB report, the contribution deferral rate to the TSP among FERS 

participants in 2012 was 8.5 percent of salary.

16

Our scenarios examine workers retiring at the end of December 2012. 

However, changes have been made to the FERS retirement system for 

U.S. federal civilian employees hired on January 1, 2013, or later. 

Employees enrolled in FERS and first hired in 2013 contribute 3.1 percent 

of gross salary toward their pension plans, while employees first hired in 

2014 or later contribute 4.4 percent.

We selected 0 percent in 

order to present the lower bound on income replacement rates for U.S. 

FERS employees. 

17

To estimate Social Security benefits, we assumed that each employee 

has a 35-year total employment history (1978 to 2012), which includes 

employment years in addition to the employees’ 30-year or 20-year U.S. 

government work histories in our scenarios.

The benefit formula remains 

unchanged; thus, employees are funding a larger portion of their 

retirement income. In addition, although employees may choose not to 

contribute to the TSP, the default contribution rate was set at 3 percent 

for employees hired after August 2010. FERS employees who contribute 

4.4 percent of gross salary toward their pension plan contribute more 

toward their retirement plans than UN employees, even when they 

contribute nothing to their TSP accounts. Under our scenario 4 below, we 

estimated income replacement rates for U.S. federal civilian employees 

who did not defer any of their salary to the TSP in any years of service.

18

 

16TSP participation rates and contribution rates have varied over time. The average 

employee contribution rate among TSP participants who made any elective contributions 

was 8.5 percent in 2012. In November 2012, among federal civilian employees who were 

enrolled in FERS, 86 percent of those who were eligible to participate in the TSP were 

making payroll deductions. 

We estimated each 

employee’s wage history, starting with the employee’s final salary in 

17OPM estimates the cost of the FERS basic annuity at an amount equal to 12.7 percent 

of pay. For FERS employees first hired before 2013, the federal government contributes 

11.9 percent of pay and employees contribute 0.8 percent of pay. For FERS employees 

hired in 2013 or later, the federal government pays 9.6 percent of pay. Employees first 

hired in 2013 pay the remaining 3.1 percent and employees hired after pay 4.4 percent.

18We assumed that all employees had a 35-year Social Security work history because 

Social Security benefits are based on a person’s highest 35 years of earnings. 

Social Security Benefits
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 40 GAO-14-546 United Nations Compensation

2012, and then determining salaries for earlier years. To set wage growth 

rates, we used the annual salary growth rate assumptions for various 

years that are listed in OPM’s assumptions for the Civil Service 

Retirement and Disability Fund. Wage growth rates varied over the 35-

year period, ranging from 5.5 percent in 1979 to 3.25 percent in 2012. We 

applied the same salary growth rates to both the UN staff and U.S. civil 

service employees.

To estimate Social Security contributions, we calculated the dollar value 

of employee contributions to Social Security each year by multiplying 

each year’s Old-Age, Survivors, and Disability Insurance (OASDI)19 tax 

rate by the lesser of the employee’s salary20

Our income replacement rate estimates are defined as gross retirement 

income divided by take-home pay in the final year of work. Specifically, 

we estimated the income replacement rate as follows:

in that year or the Social 

Security maximum taxable earnings. We show income replacement rates 

for U.S. federal civilian employees who retire at age 62. Employees who 

retire at age 62 in 2013 have not reached Social Security’s full retirement 

age for 2013, and therefore receive a reduced Social Security benefit that 

is 25 percent lower than the benefit received by employees retiring at the 

full retirement age (66 in 2013) with equivalent earnings histories.

• The income replacement rate for U.S. employees equals gross 

retirement income in the first year of retirement divided by net salary 

in the final year of work.

• The income replacement rate for UN staff equals gross retirement 

income in the first year of retirement divided by net remuneration in 

the final year of work.

 

19The OASDI program provides benefits for retired workers, their families, and the 

survivors of deceased workers through the Old-Age and Survivors Insurance Program, 

and provides benefits to disabled workers and their families through the Disability 

Insurance program. Since 1990, the OASDI tax rate has been set at 6.2 percent for 

employers and employees. An exception is the period 2011 and 2012, when the OASDI 

tax rate for employees was temporarily reduced to 4.2 percent. 

20For U.S. federal civilian employees in the FERS retirement plan, the income base for the 

Social Security tax is total pay, up to the maximum taxable amount. For U.S. citizen 

employees of the UN, the income base for the Social Security tax is the gross base salary

plus the post adjustment, plus any salary allowances. The gross base salary is defined as 

the net base salary, at the dependent or single rate, plus the staff assessment.

Calculating Income 

Replacement Rates
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 41 GAO-14-546 United Nations Compensation

In order to compare the employee and employer contributions to 

retirement plans, we also calculated the amount of retirement income 

attributable to employee contributions, and the amount of retirement 

income attributable to employer contributions. In conducting these 

calculations,

• For the UN pension, we attributed one-third of the pension benefit to 

the employee contributions and two-thirds of the pension benefit to 

employer contributions, based on the UN contribution rates.

• For the FERS pension, we attributed 6 percent of pension income to 

employee contributions and 94 percent to employer contributions, 

based on the percentage of salary that employees contribute (0.8 

percent) and the percentage of salary that agencies contribute (11.9 

percent).

• For Social Security, we attributed half of the Social Security income to 

employee contributions and one-half to employer contributions, 

because in most years of the program, employees and employers 

contribute equally to Social Security.

• For the TSP annuity, we attributed a percentage of the annuity to 

employee contributions that equaled the sum of all TSP contributions 

made by the employees over their working lives divided by the sum of 

all TSP contributions made by the employer and the employee 

combined over the employee’s working life. We attributed a 

percentage of the annuity to employer contributions that equaled the 

sum of all TSP contributions made by the employer over the 

employee’s working life divided by the sum of all TSP contributions 

made by the employer and the employee combined over the 

employee’s working life.

Using these calculations, we constructed the income replacement rates 

for the employee and employer, where

• the income replacement rate (employee) equals retirement income 

attributable to the employee’s contributions divided by final year 

salary, and

• the income replacement rate (employer) equals retirement income 

attributable to the employer’s contributions divided by final year 

salary.

Below we present income replacement rates for UN staff or U.S. federal 

civilian employees under five scenarios.
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 42 GAO-14-546 United Nations Compensation

In our first scenario, UN staff and U.S. federal civilian employees have 

worked for 30 years at their respective UN organization or U.S. 

government agency and contribute an equivalent percentage of their 

salaries to their retirement. Because UN staff contribute, on average, 9.4 

percent of net remuneration to their pensions, in this scenario we assume 

that U.S. federal civilian employees also contribute 9.4 percent of takehome pay to their retirement. This corresponds to 7.3 to 8.3 percent of 

gross salary, allocated across contributions to the FERS pension, Social 

Security, and the TSP. U.S. federal civilian employees’ TSP contributions 

in this scenario therefore range from 2.7 to 3.5 percent of 2012 gross pay. 

Table 8 shows our estimates of income replacement rates for UN staff 

who retire at age 62, while table 9 shows our estimates of income 

replacement rates for U.S. FERS employees who retire at age 62.

In each table, we also show the percentage of salary replaced by the 

employee’s and employer’s contributions to the retirement package. As 

can be seen in table 8, the total income replacement rates for UN staff 

range from 63 percent to 68 percent, and the portion of income replaced 

by the UN ranges from 42 percent to 45 percent. As shown in table 9, the 

total income replacement rates for U.S. federal civilian employees who 

retire at age 62 range from 63 to 69 percent, and the portion of income 

replaced by the U.S. government ranges from 48 to 49 percent.

Table 8: United Nations (UN) Professional Staff Retirement Income and Income Replacement Rates in the First Year of 

Retirement for Staff Retiring at Age 62 with 30 Years of UN Service

2012 net 

remunerationb UN gross 

pension

Income replacement 

rate

Income replacement 

rate (employee)

Income replacement 

rate (employer)

Grade/stepa (A) (B) (C = B / A) (D) (E = C – D)

P1/1 $65,272 $40,861 63% 21% 42%

P1/5 $73,575 $46,476 63% 21% 42%

P2/6 $93,254 $59,775 64% 21% 43%

P3/8 $116,358 $75,391 65% 22% 43%

P4/8 $138,197 $91,293 66% 22% 44%

P5/7 $160,050 $107,327 67% 22% 45%

P5/13 $176,274 $119,467 68% 23% 45%

Source: GAO Analysis of UN data. | GAO-14-546

Notes: The income replacement rate is defined as total retirement income in the first year of 

retirement divided by net remuneration (take-home pay) in the last year of work.

a

This column presents UN grade levels at the UN Professional (P1-P5) grade levels. We selected 

step levels for each grade, ranging from the lowest step for P1 to the highest step for P5, in order to 

represent the full range of salary levels from P1 to P5. For the other grade levels, we include the step 

level at the midpoint of each grade.

Scenario 1—UN Staff and 

U.S. Federal Civilian 

Employees with 30-Year 

Work Histories Making 

Equivalent Contributions
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 43 GAO-14-546 United Nations Compensation

b

This column presents UN net remuneration in New York City at the dependency rate of salary. Net 

remuneration is defined by the UN as net base salary plus post adjustment. This represents takehome pay for a worker with dependents, and is consistent with the UN’s method for calculating 

income replacement rates.

Table 9: U.S. Civil Service Federal Employees Retirement System (FERS) Employee Retirement Income and Income 

Replacement Rates in the First Year of Retirement for Employees Retiring at Age 62 with 30 Years of Federal Service

2012 net 

salaryb FERS pension

Social 

Security 

Thrift Savings 

Plan (TSP) 

annuity

Total gross 

retirement 

income

Income 

replacement 

rate

Income 

replacement rate 

(employee)

Income 

replacement 

rate (employer)

Grade/stepa (A) (B) (C) (D) (E = B + C +D) (F = E / A) (G) (H = F – G)

9/1 $47,413 $15,322 $14,384 $2,807 $32,513 69% 19% 49%

9/5 $53,022 $17,364 $15,750 $3,016 $36,131 68% 19% 49%

10/5 $57,847 $19,124 $16,928 $3,190 $39,241 68% 19% 49%

11/5 $63,020 $21,010 $18,015 $3,396 $42,420 67% 18% 49%

12/5 $74,465 $25,182 $19,316 $3,808 $48,307 65% 17% 48%

13/5 $86,092 $29,945 $20,767 $3,951 $54,663 63% 16% 48%

14/5 $98,816 $35,386 $22,141 $4,264 $61,791 63% 15% 48%

15/5 $113,472 $41,625 $22,323 $7,104 $71,052 63% 14% 48%

15/10 $120,347 $44,534 $22,323 $8,616 $75,473 63% 14% 48%

Source: GAO analysis of U.S. data. | GAO-14-546

Notes: The income replacement rate is defined as total retirement income in the first year of 

retirement divided by net salary (take-home pay after taxes) in the last year of work. Employees in 

this scenario contribute 9.4 percent of net pay toward retirement, which is equivalent to 7.3 to 8.3 

percent of gross salary. In 2012, employees in this scenario contribute between 2.7 and 3.5 percent 

of gross salary to their TSP accounts.

a

This column presents U.S. government grade levels on the General Schedule (GS) scale from grade 

9 to grade 15. We selected step levels for each grade, ranging from the lowest step for GS-9 to the 

highest step for GS-15, in order to represent the full range of salary levels from GS-9 to GS-15. For

the other grade levels, we include the step level at the mid-point of each grade.

b

This column presents U.S. civil service net salary in New York, New York, to ensure comparability 

with take-home pay at UN headquarters.

Tables 10 and 11 reflect the assumptions made under our second 

scenario, where UN staff and U.S. federal civilian employees have 

worked for 20 years at their respective employers and contribute an 

equivalent percentage of their salaries to their retirement. Table 10 

provides our estimates of income replacement rates for UN staff who 

retire at age 62, and table 11 shows our estimates of income replacement 

rates for U.S. FERS employees who retire at age 62. In each table, we 

also show the percentage of salary replaced by the employee’s and 

employer’s contributions to the retirement package. As can be seen in 

table 10, the total income replacement rates for UN staff range from 40 

percent to 44 percent, and the portion of income replaced by the UN 

range from 27 to 29 percent. As shown in table 11, the total income 

Scenario 2—UN Staff and 

U.S. Federal Civilian 

Employees with 20-Year 

Work Histories Who Make 

Equivalent Retirement 

Contributions
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 44 GAO-14-546 United Nations Compensation

replacement rates for U.S. federal civilian employees who retire at age 62 

range from 48 percent to 55 percent, and the portion of income replaced 

by the U.S. government ranges from 35 percent to 38 percent.

Table 10: United Nations (UN) Professional Staff Retirement Income and Income Replacement Rates in the First Year of 

Retirement for Staff Retiring at Age 62 with 20 Years of UN Service

2012 net 

remunerationb UN gross pension

Income replacement 

rate

Income replacement 

rate (employee)

Income replacement 

rate (employer)

Grade/stepa (A) (B) (C = B / A) (D) (E = C – D)

P1/1 $65,272 $26,333 40% 13% 27%

P1/5 $73,575 $29,951 41% 14% 27%

P2/6 $93,254 $38,522 41% 14% 28%

P3/8 $116,358 $48,585 42% 14% 28%

P4/8 $138,197 $58,833 43% 14% 28%

P5/7 $160,050 $69,166 43% 14% 29%

P5/13 $176,274 $76,990 44% 15% 29%

Source: GAO Analysis of UN data. | GAO-14-546

Notes: The income replacement rate is defined as total retirement income in the first year of 

retirement divided by net remuneration (take-home pay) in the last year of work.

a

This column presents UN grade levels at the UN Professional (P1-P5) grade levels. We selected 

step levels for each grade, ranging from the lowest step for P1 to the highest step for P5, in order to 

represent the full range of salary levels from P1 to P5. For the other grade levels, we include the step 

level at the midpoint of each grade.

b

This column presents UN net remuneration in New York City at the dependency rate of salary. Net 

remuneration is defined by the UN as net base salary plus post adjustment. This represents takehome pay for a worker with dependents, and is consistent with the UN’s method for calculating 

income replacement rates.
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 45 GAO-14-546 United Nations Compensation

Table 11: U.S. Civil Service Federal Employees Retirement System (FERS) Employee Retirement Income and Income 

Replacement Rates in the First Year of Retirement for Employees Retiring at 62 with 20 Years of Federal Service

2012 net 

salaryb FERS pension

Social 

Security

Thrift 

Savings Plan 

(TSP) annuity

Total gross 

retirement 

income

Income 

replacement 

rate

Income

replacement 

rate (employee)

Income 

replacement 

rate (employer)

Grade/stepa (A) (B) (C) (D) (E = B + C +D) (F = E / A) (G) (H = F – G)

9/1 $47,413 $10,215 $14,384 $1,597 $26,195 55% 18% 38%

9/5 $53,022 $11,576 $15,750 $1,713 $29,040 55% 17% 37%

10/5 $57,847 $12,749 $16,928 $1,809 $31,487 54% 17% 37%

11/5 $63,020 $14,006 $18,015 $1,924 $33,946 54% 17% 37%

12/5 $74,465 $16,788 $19,316 $2,153 $38,258 51% 15% 36%

13/5 $86,092 $19,963 $20,767 $2,220 $42,950 50% 14% 36%

14/5 $98,816 $23,591 $22,141 $2,497 $48,229 49% 13% 35%

15/5 $113,472 $27,750 $22,323 $4,361 $54,433 48% 13% 35%

15/10 $120,347 $29,690 $22,323 $5,249 $57,262 48% 12% 35%

Source: GAO analysis of U.S. data. | GAO-14-546

Notes: The income replacement rate is defined as total retirement income in the first year of 

retirement divided by net salary (take-home pay after taxes) in the last year of work. Employees in 

this scenario contribute 9.4 percent of net pay toward retirement, which is equivalent to 7.3 to 8.3 

percent of gross salary. In 2012, employees in this scenario contribute between 2.7 and 3.5 percent 

of gross salary to their TSP accounts.

a

This column presents U.S. government grade levels on the General Schedule scale from grade 9 to 

grade 15. We selected step levels for each grade, ranging from the lowest step for GS-9 to the 

highest step for GS-15, in order to represent the full range of salary levels from GS-9 to GS-15. For 

the other grade levels, we include the step level at the midpoint of each grade.

b

This column presents U.S. civil service net salary in New York, New York, to ensure comparability 

with take-home pay at UN headquarters.

In scenario 3, we estimate income replacement rates for U.S. federal 

civilian employees who contribute the 2012 U.S. average contribution to 

the TSP in each year of service, which was 8.5 percent of gross salary for 

those FERS employees who made any elective contributions. We 

estimated this scenario for U.S. employees who retire at age 62. As 

shown in table 12, income replacement rates for employees who retire at 

age 62 range from 77 to 82 percent, with the portion of income replaced 

by the U.S. government ranging from 52 to 53 percent.

Scenario 3—U.S. Federal 

Civilian Employees with 30 

Years of Service Who 

Contribute the Average 

Amount of Gross Salary to 

the TSP
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 46 GAO-14-546 United Nations Compensation

Table 12: U.S. Civil Service Federal Employees Retirement Service (FERS) Employee Retirement Income and Income 

Replacement Rates in the First Year of Retirement for Employees Who Retire at Age 62 with 30 Years of Federal Service and 

Contribute 8.5 Percent of Gross Salary to the Thrift Savings Plan (TSP) Annually

2012 net 

salaryb FERS pension

Social 

Security

TSP 

annuity

Total gross 

retirement 

income

Income 

replacement 

rate

Income 

replacement 

rate (employee)

Income 

replacement 

rate (employer)

Grade/stepa (A) (B) (C) (D) (E = B + C +D) (F = E / A) (G) (H = F – G)

9/1 $47,413 $15,322 $14,384 $9,054 $38,760 82% 29% 53%

9/5 $53,022 $17,364 $15,750 $10,261 $43,376 82% 29% 53%

10/5 $57,847 $19,124 $16,928 $11,301 $47,353 82% 29% 53%

11/5 $63,020 $21,010 $18,015 $12,415 $51,440 82% 29% 53%

12/5 $74,465 $25,182 $19,316 $14,881 $59,380 80% 27% 52%

13/5 $86,092 $29,945 $20,767 $17,696 $68,408 79% 27% 52%

14/5 $98,816 $35,386 $22,141 $20,911 $78,438 79% 27% 53%

15/5 $113,472 $41,625 $22,323 $24,598 $88,545 78% 26% 52%

15/10 $120,347 $44,534 $22,323 $26,317 $93,174 77% 25% 52%

Source: GAO analysis of U.S. data. | GAO-14-546

Notes: The income replacement rate is defined as total retirement income in the first year of 

retirement divided by net salary (take-home pay after taxes) in the last year of work. Employees in 

this scenario contribute 8.5 percent of gross salary to their TSP accounts each year, in addition to 0.8 

percent of salary toward their FERS pensions, and the Social Security tax (4.2 percent of gross salary 

up to the 2012 income threshold of $110,100). In 2012, employees in this scenario contribute 

between 12.3 and 13.5 percent of gross salary toward retirement.

a

This column presents U.S. government grade levels on the General Schedule scale from grade 9 to 

grade 15. We selected step levels for each grade, ranging from the lowest step for GS-9 to the 

highest step for GS-15, in order to represent the full range of salary levels from GS-9 to GS-15. For 

the other grade levels, we include the step level at the midpoint of each grade.

b

This column presents U.S. civil service net salary in New York to ensure comparability with takehome pay at UN headquarters.

Under scenario 4, we estimate income replacement rates for U.S. federal 

civilian employees who did not defer any of their salary to the TSP in any 

years of service. TSP portfolios for these employees consist entirely of 

their agencies’ automatic 1 percent contribution to the TSP each year. As 

shown in table 13, the income replacement rates for employees who 

retire at age 62 range from 57 to 64 percent, with the portion of income 

replaced by the employer ranging from 46 to 47 percent.

Scenario 4—U.S. Federal 

Civilian Employees with 30 

Years of Service Who 

Contribute 0 Percent of 

Gross Salary to the TSP
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 47 GAO-14-546 United Nations Compensation

Table 13: U.S. Civil Service Federal Employees Retirement Service (FERS) Employee Retirement Income and Income 

Replacement Rates, for Employees Who Retire at Age 62 with 30 Years of Service and Contribute 0 Percent of Gross Salary to 

the Thrift Savings Plan (TSP) Annually

2012 net 

salaryb FERS pension

Social 

Security

TSP 

annuity

Total gross 

retirement 

income

Income 

replacement 

rate

Income 

replacement 

rate (employee)

Income 

replacement 

rate (employer)

Grade/stepa (A) (B) (C) (D) (E = B + C +D) (F = E/ A) (G) (H = F – G)

9/1 $47,413 $15,322 $14,384 $671 $30,376 64% 17% 47%

9/5 $53,022 $17,364 $15,750 $760 $33,875 64% 17% 47%

10/5 $57,847 $19,124 $16,928 $837 $36,889 64% 17% 47%

11/5 $63,020 $21,010 $18,015 $920 $39,944 63% 16% 47%

12/5 $74,465 $25,182 $19,316 $1,102 $45,601 61% 15% 46%

13/5 $86,092 $29,945 $20,767 $1,311 $52,023 60% 14% 46%

14/5 $98,816 $35,386 $22,141 $1,549 $59,076 60% 13% 47%

15/5 $113,472 $41,625 $22,323 $1,822 $65,769 58% 12% 46%

15/10 $120,347 $44,534 $22,323 $1,949 $68,806 57% 11% 46%

Source: GAO analysis of U.S. data. | GAO-14-546

Notes: The income replacement rate is defined as total retirement income in the first year of 

retirement divided by net salary (take-home pay after taxes) in the last year of work. Employees in 

this scenario contribute 0 percent of gross salary to their TSP accounts. In 2012, employees in this

scenario contribute between 3.8 and 5 percent of gross salary toward retirement.

a

This column presents U.S. government grade levels on the General Schedule scale from grade 9 to 

grade 15. We selected step levels for each grade, ranging from the lowest step for GS-9 to the 

highest step for GS-15, in order to represent the full range of salary levels from GS-9 to GS-15. For 

the other grade levels, we include the step level at the midpoint of each grade.

b

This column presents U.S. civil service net salary in New York to ensure comparability with takehome pay at UN headquarters.

In our final scenario, we provide estimates of income replacement rates 

for UN staff members who are U.S. citizens employed in the United 

States. Like other UN staff members, U.S. citizens participate in the UN 

pension plan. In addition, they must also contribute to Social Security, 

and therefore are eligible for Social Security benefits. 

For the purposes of taxation, the U.S. Internal Revenue Service (IRS) 

treats UN staff who are U.S. citizens working in the United States as “selfemployed” workers. According to IRS rules governing the taxation of such 

workers, UN staff who are U.S. citizens working in the United States must 

pay both the employer portion and the employee portion of Social 

Security taxes. However, the UN normally reimburses its U.S. citizen staff 

for one half of the Social Security tax. Therefore, UN staff who are U.S.

citizens effectively pay the same rate of Social Security taxes as other 

salaried employees in the United States.

Scenario 5—UN Staff Who 

Are U.S. Citizens 

Employed in the United 

States with a 20-Year UN 

Work History
Appendix II: Additional Information on GAO’s 

Estimates of Income Replacement Rates for 

United Nations Staff and U.S. Federal Civilian 

Employees

Page 48 GAO-14-546 United Nations Compensation

Our estimates show that UN staff who are U.S. citizens have higher 

income replacement rates than other UN staff who retire with 20 years of 

service because they contribute to and receive Social Security benefits. 

As seen in table 14, the income replacement rate for UN employees who 

are U.S. citizens and retire at age 62 ranges from 56 to 68 percent, and 

the portion of income replaced by the employer ranges from 38 to 45 

percent. However, U.S. citizen employees of the UN who work in the 

United States have to contribute both to the UN pension plan and to 

Social Security. A UN official commented that UN staff who are U.S. 

citizens and who are working in the United States make up only a small 

percentage of total UN staff, and very few of these staff spend their entire 

career with the UN working in the United States.21

Table 14: Retirement Income and Income Replacement Rates in the First Year of Retirement for United Nations (UN) Staff Who 

Retire at Age 62 and Who Are U.S. Citizens Employed in the United States with 20-Years of UN Service 

2012 net 

remunerationb UN pension

Social 

Security

Total gross 

retirement 

income

Income 

replacement 

rate

Income 

replacement 

rate (employee)

Income 

replacement 

rate (employer)

Grade/stepa (A) (B) (C) (D=B+C) (E = D / A) (F) (G = E-F)

P1/1 $65,272 $26,333 $17,914 $44,247 68% 23% 45%

P1/5 $73,575 $29,951 $18,755 $48,706 66% 22% 44%

P2/6 $93,254 $38,522 $20,756 $59,278 64% 21% 42%

P3/8 $116,358 $48,585 $22,322 $70,907 61% 20% 41%

P4/8 $138,197 $58,833 $22,323 $81,156 59% 20% 39%

P5/7 $160,050 $69,166 $22,323 $91,489 57% 19% 38%

P5/13 $176,274 $76,990 $22,323 $99,313 56% 19% 38%

Source: GAO analysis of UN data. | GAO-14-546

a

This column presents UN grade levels at the UN Professional (P1-P5) grade levels. We selected 

step levels for each grade, ranging from the lowest step for P1 to the highest step for P5, in order to 

represent the full range of salary levels from P1 to P5. For the other grade levels, we include the step 

level at the midpoint of each grade.

b

This column presents UN net remuneration in New York City at the dependency rate of salary. Net 

remuneration is defined by the UN as net base salary plus post adjustment. This represents takehome pay for a worker with dependents, and is consistent with the UN’s method for calculating 

pension amounts.

 

21According to a UN official, approximately 1,000 UN professional staff who are U.S. 

citizens are working in the United States. UN staff who are U.S. citizens and spend a 

portion of their career in another country are generally subject to the Social Security 

windfall elimination provision, which reduces the Social Security benefit formula for these 

staff.
Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. Civil 

Service Staff Overseas and Foreign Service 

employees

Page 49 GAO-14-546 United Nations Compensation

United Nations (UN) 

U.S. Civil Service Staff Serving Overseas and 

Foreign Service Employees

Allowances offered to eligible UN staff and U.S. Foreign Service employees and U.S. civil service employees 

Serving in a dangerous 

duty station

Danger pay is a special allowance that has been 

established for internationally and locally recruited 

staff members who are required to work in a duty 

station where very dangerous conditions prevail, 

including those where staff face high risk of 

becoming collateral damage in a war or active 

armed conflict or where medical staff risk their lives 

when deployed to deal with a public health 

emergency. The Chairman of the International Civil 

Service Commission is responsible for authorizing 

the application of danger pay to a duty station based 

on the recommendations of the UN Department of 

Safety and Security or the World Health 

Organization. Danger pay is granted for up to 3 

months at a time, subject to ongoing review. As of 

the publication of this report, the UN offered danger 

pay to staff in 15 duty stations.

For internationally recruited staff, the allowance is 

$1,600 per month. For locally recruited staff, the 

allowance is based on the local salary scale. 

The U.S. government provides danger pay to all 

civilian employees serving in places where conditions 

of civil insurrection, civil war, terrorism, or wartime 

conditions that threaten physical harm or imminent 

danger to the health or well-being of an employee 

exist. Danger pay is additional compensation of up to 

35 percent over basic compensation to staff, for 

service at places in foreign areas where dangerous 

conditions that could threaten the health or well being 

of an employee exist. As of the publication of this 

report, the U.S. government offered danger pay to 

employees in 29 locations. 

Allowances, based on 

duty station, for cost of 

living

The UN pays a post adjustment to staff to ensure 

equity in purchasing power of staff members across 

duty stations. The post adjustment is a part of the 

staff’s salary and is not considered an allowance. 

The post adjustment is higher for staff with 

dependents.

The U.S. government grants a post allowance to staff 

officially stationed at a post in a foreign area where 

the cost of living is substantially higher than in 

Washington, DC. The post allowance is designed to 

permit staff to spend the same portion of their salaries 

for their standard living expenses as they would if 

they were residing in Washington, D.C. The amount 

paid is a flat rate that varies by basic salary, size of 

family, and post. 

Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. 

Civil Service Staff Overseas and Foreign 

Service employees
Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. Civil 

Service Staff Overseas and Foreign Service 

employees

Page 50 GAO-14-546 United Nations Compensation

United Nations (UN) 

U.S. Civil Service Staff Serving Overseas and 

Foreign Service Employees

Travel for education, 

security and medical 

evacuation, rest and 

recuperation, home 

leave, and family visit

The UN pays travel expenses for staff when they are 

initially appointed; when they change their duty 

station; when they separate from service; when they 

travel on official business; when they travel for home 

leave; when they travel to visit family members, and 

for rest and recuperation. In special circumstances 

requiring evacuation of staff members and their 

families for medical or security reasons, the UN also 

covers certain travel and travel-related costs. The 

UN pays travel expenses for staff dependents on the 

initial appointment; on separation from service, and 

on education grant travel and home leave. Staff also 

receive a daily allowance while on travel for official 

business.

UN staff are also entitled to travel expenses for their 

child for one return journey from the educational 

institution to their duty station, if the educational 

institution is outside the country of the duty station. 

At some duty stations, the UN allows an additional 

round-trip journey in a non-home leave year.

The U.S. government pays travel and related 

expenses for members of the Foreign Service and 

their families under a number of circumstances, 

including when they are proceeding to and returning 

from assigned posts of duty; for authorized or 

required home leave; for family members to 

accompany, precede, or follow a foreign service 

member to a place of temporary duty; for 

representation travel; medical travel; rest and 

recuperation travel; evacuation travel; or other travel 

as authorized.a

In addition, the U.S. government pays the expenses 

for a child to travel to and from a secondary school or 

post-secondary school, once each way annually. The 

age limitation for secondary education travel is 20 

(before the 21st birthday) and for post-secondary 

education the age limitation is 22 (before the 23rd 

birthday.)

The U.S. may also grant Foreign Service staff and 

their eligible family members rest and recuperation 

travel to the United States, its territories, or other 

locations abroad.

Maintaining a family at a 

separate location from a 

duty station

The UN provides an Additional Hardship Allowance 

for staff serving in certain duty stations where they 

are involuntary separated from their families. The 

Additional Hardship Allowance is paid in addition to 

the normal hardship allowance. The amount of the 

allowance varies according to grade and 

dependency status, and ranged from $6,540 to 

$23,250 as of 2013.

In addition, for a UN staff member located in a duty 

station that lacks appropriate schools and medical 

facilities to meet family members’ needs, and who is 

obliged to pay rent in another city for their family, the 

staff member’s rent at the duty station and the rent 

for the family in the capital city can be considered 

one combined rent for the purposes of determining 

the rental subsidy.

The U.S. government offers a separate maintenance 

allowance to assist staff who are required to maintain 

family members at locations other than their overseas 

post of assignment either due to (a) dangerous, 

notably unhealthful, or excessively adverse living 

conditions at the post, (b) because of special needs 

or hardship involving the employee or family member, 

c) if the family needs to stay temporarily in 

commercial quarters, such as a hotel. 
Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. Civil 

Service Staff Overseas and Foreign Service 

employees

Page 51 GAO-14-546 United Nations Compensation

United Nations (UN) 

U.S. Civil Service Staff Serving Overseas and 

Foreign Service Employees

Serving in a hardship 

duty station

The UN provides an annual hardship allowance to 

staff on assignment in duty stations where living and 

working conditions are difficult. In determining the 

hardship allowance, the UN considers a duty 

station’s conditions of safety and security, health 

care, housing, climate, isolation, and conveniences 

of life. The hardship allowance varies depending on 

the duty station, salary level, and whether the staff

member has dependents. Duty stations are 

categorized on a scale of difficulty from A to E, 

based on security conditions and quality of life at the 

duty station. Staff serving in more difficult duty 

stations receive higher allowance amounts. As of 

May 2013, the hardship allowance ranged from 

$4,360 to $23,250. 

The U.S. government provides a post hardship 

differential, which is additional compensation of 25, 

30 or 35 percent of salary to staff for service at places 

in foreign areas where conditions of environment 

differ substantially from conditions of environment in 

the continental United States and warrant additional 

compensation as a recruitment and retention 

incentive. A hardship differential is established for 

locations where the living conditions are 

extraordinarily difficult, involve excessive physical 

hardship, or are notably unhealthy. A U.S. 

government agency may also grant a difficult-to-staff 

incentive differential to staff assigned to a hardship 

post upon a determination that additional pay is 

warranted to recruit and retain staff at that post. The 

allowance is an additional 15 percent of salary.

Relocation and Moving 

Expenses

UN staff are eligible for an assignment grant that is 

intended to provide staff with a reasonable cash 

amount at the beginning of the assignment for the 

costs incurred as a result of appointment or 

reassignment. The amount of the grant varies by 

duty station and whether the staff has dependents.

For example, a staff member with two dependents 

assigned to headquarters for a period of two years 

might earn an assignment grant of $7200, to 

compensate for 30 days at the beginning of the 

assignment.

The UN also pays removal and shipment costs for 

staff. Staff may ship personal effects only, or 

household goods and personal effects in some 

cases. The UN has established weight limits for this 

allowance, which depend on the staff’s number of 

dependents.

The U.S. government grants a foreign transfer 

allowance to staff for extraordinary, necessary and 

reasonable expenses, incurred by staff transferring to 

any post of assignment in a foreign area, prior to 

departure. This allowance includes a miscellaneous 

expense portion, a wardrobe expense portion, a predeparture subsistence expense portion, and a lease 

penalty expense portion.

The U.S. government offers a home service transfer 

allowance for extraordinary, necessary and 

reasonable expenses, for staff prior to transferring 

back to a post in the United States. This allowance 

includes a miscellaneous expense portion, a 

wardrobe expense portion, a subsistence expense 

portion, and a lease penalty expense portion.

Representation 

expenses

Some UN staff receive a small representation 

allowance, which permits them to extend official 

hospitality to individuals outside of the UN. For the 

purpose of official hospitality, heads of departments 

or offices may also authorize the reimbursement of 

reasonable expenditures incurred by staff who do 

not receive a representation allowance. 

The U.S. government provides representation 

allowances intended to cover allowable items of 

expenditure by staff whose official positions entail 

responsibility for establishing and maintaining 

relationships of value to the United States in foreign 

countries. Staff may submit vouchers to be 

reimbursed for allowable expenses or payments may 

be made on their behalf. 
Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. Civil 

Service Staff Overseas and Foreign Service 

employees

Page 52 GAO-14-546 United Nations Compensation

United Nations (UN) 

U.S. Civil Service Staff Serving Overseas and 

Foreign Service Employees

Compensation for 

termination

The UN may pay a termination indemnity to a staff 

member whose appointment is terminated by the 

employing organization for any of the following 

reasons: abolition of post or reduction of staff, 

health, unsatisfactory service or agreed termination. 

In cases of unsatisfactory performance, the 

termination indemnity is at the discretion of the 

Secretary-General and up to half of what is 

otherwise payable.

The U.S. government authorizes severance pay for 

full-time and part-time staff who are involuntarily 

separated from Federal service and who meet other 

conditions of eligibility. To be eligible for severance 

pay, staff must be serving under a qualifying 

appointment, have a regularly scheduled tour of duty, 

have completed at least 12 months of continuous 

service, and be removed from Federal service by 

involuntary separation for reasons other than 

inefficiency (i.e., unacceptable performance or 

conduct).

Education Subsidy UN staff serving outside their home country are 

eligible for an education grant to cover part of the 

cost of educating children in full-time attendance at 

an educational institution. The amount of the grant is 

equivalent to 75 percent of allowable costs, subject 

to a maximum that varies from country to country.

Staff are eligible for the grant up to the fourth year of 

their child’s postsecondary education, or age 25. For 

U.N. staff in the U.S., the maximum education grant 

in May 2013 was $43,589. 

The UN also covers up to 100 percent of boarding 

costs, up to a maximum amount, for children at the 

primary or secondary level if educational facilities 

are inadequate in the staff’s duty station.

The U.S. government provides an allowance to assist 

staff in meeting the extraordinary and necessary 

expenses in providing adequate elementary and 

secondary education for dependent children at an 

overseas post of assignment. The amount of the 

grant depends on whether the child is in a school at 

post, a school away from the post, or in home study 

or at a private institution.

Housing Subsidy UN staff are eligible for a rental subsidy intended to 

provide equity in accommodation expenses among 

UN staff in duty stations where rents vary 

considerably; and to alleviate hardships staff may 

face if their rent is higher than average for 

reasonable standard accommodations.

For duty stations in Europe and North America, the 

UN determines a reasonable maximum rent level (or 

threshold) that is used to determine how much an 

staff should pay, taking into account their rent, their 

income, and whether they have dependents. Newly 

hired staff are eligible to receive a subsidy for the 

portion of their rent that exceeds the threshold up to 

a maximum of 40 percent of rent. They can receive 

the subsidy for up to seven years, and it declines 

over time. In years 1-4, the subsidy is 80 percent, in 

year 5 the subsidy is 60 percent, in year 6 it is 40 

percent, and in year 7 it is 20 percent. 

For duty stations outside Europe and North America, 

the standard rental subsidy is 80 percent of the rent 

exceeding the threshold, up to a maximum of forty 

percent of rent.

U.S. civilian staff are eligible for housing subsidies, 

called quarters allowances, that are designed to 

reimburse staff for substantially all costs of residing in 

either temporary or permanent living quarters. A 

quarters allowance is not granted when Government 

housing is provided.

A temporary quarters subsistence allowance is 

granted to staff for the reasonable cost of temporary 

quarters, meals and laundry expenses incurred by 

staff and/or family member at the foreign post upon 

initial arrival or preceding final departure.

A living quarters allowance is granted to staff for the 

annual cost of suitable, adequate, living quarters for 

the staff and his or her family.

An extraordinary quarters allowance is granted to 

staff who must vacate permanent quarters due to 

renovations, or unhealthy or dangerous conditions.
Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. Civil 

Service Staff Overseas and Foreign Service 

employees

Page 53 GAO-14-546 United Nations Compensation

United Nations (UN) 

U.S. Civil Service Staff Serving Overseas and 

Foreign Service Employees

UN Allowances Not Offered to U.S. Employees

Support of dependents The UN provides eligible staff members an annual 

children’s allowance of $2,929 per child under age 

18 (or under 21 if a full-time student), and this 

amount is doubled for staff with disabled children.

The UN also pays employees with dependents at a 

higher salary rate than those without dependents. 

According to the UN, this is similar to the practice of 

member states that provide a tax advantage for 

having dependents. Many UN employees are not 

eligible for these tax advantages, as they might be if 

they were employed in their national civil service, 

because most UN employees are not required to 

pay income taxes on their UN earnings in their home 

countries. To qualify for the dependents salary rate, 

UN staff must have a primary dependent (i.e., one 

dependent spouse or a first dependent child, if there 

is no dependent spouse). For staff with no primary 

dependent, the UN also provides a secondary 

dependent’s allowance for eligible staff members 

caring for a dependent parent or sibling.

No comparable allowance.

Incentive to change duty 

stations

To encourage movement from one duty station to 

another, the UN provides an annual mobility 

allowance to staff on an assignment of one year or 

more who have had 5 consecutive years of service 

in the UN system. The amount of this allowance 

varies by the staff’s number of assignments, duty 

station, and whether the staff has dependents. As of 

August 2012, this allowance ranged from $2,020 to 

$16,900.

No comparable allowance, though the U.S. 

government offers a difficult-to-staff incentive. See 

“Serving in a hardship duty station” above.

Repatriation after 

service

UN provides, upon separation, a repatriation grant to 

staff members whom the organization is obligated to 

repatriate and who at the time of separation are 

residing, by virtue of their service with the United 

Nations, outside their home country. The UN

determines the amount based on salary scale and 

varies according to family status and length of 

service outside the home country.

No comparable allowance.
Appendix III: Comparison of Allowances for 

United Nations Secretariat Staff and U.S. Civil 

Service Staff Overseas and Foreign Service 

employees

Page 54 GAO-14-546 United Nations Compensation

United Nations (UN) 

U.S. Civil Service Staff Serving Overseas and 

Foreign Service Employees

U.S. Allowances Not Offered to UN Staff

Student Loan 

Repayment

No comparable allowance. Some U.S. government agencies have a program to 

repay certain types of Federally made, insured, or 

guaranteed student loans as an incentive to recruit or 

retain highly qualified personnel. Agencies may make 

payments to a loan holder of up to $10,000 in a 

calendar year, up to an aggregate maximum of 

$60,000 for any one staff. In return, staff must sign an 

agreement to remain in the service of the paying 

agency for at least 3 years. If the staff separates 

voluntarily or is separated involuntarily for 

misconduct, unacceptable performance, or a negative 

suitability determination under 5 CFR part 731 before 

fulfilling the service agreement, he or she must 

reimburse the paying agency for all student loan 

repayment benefits received.

Source: GAO analysis of UN and Office of Personnel Management data. | GAO-14-546

a

The information for this allowance is relevant to Foreign Service Officers only.
Appendix IV: Leave Benefits

Page 55 GAO-14-546 United Nations Compensation

As we previously reported, UN staff are eligible for more generous leave 

benefits than U.S. civil service employees.1 For example, UN staff on 

fixed-term contracts earn more annual leave than U.S. civil service 

employees. UN staff earn 30 days of annual leave per year, while U.S. 

civil service employees earn 26 days a year once they have 15 or more 

years of service. U.S. civil service employees with less than 3 years of 

service earn 13 days per year, and those with 3 but less than 15 years of 

service earn 20 days per year. In addition, UN staff can be eligible for 

more sick leave than U.S. civil service employees, depending on the 

length of service. UN Secretariat staff do not earn sick leave the way they 

earn annual leave. Those with a sick leave need, who have worked for 

the UN for less than 3 years, are entitled to sick leave of up to 3 months 

on full salary and 3 months of half salary. UN staff who have completed 3 

or more years of service are entitled to up to 9 months of sick leave. In 

contrast, U.S. civil service employees earn 4 hours of sick leave per pay 

period, or 1 day per month and may carry over unlimited amounts of sick 

leave into subsequent years. In addition, UN staff are entitled to paid 

maternity and paternity leave, as well as eligible for paid leave if they 

adopt a child, which is not offered to U.S. civil service employees. U.S. 

civil service employees are entitled to take certain amounts of time away 

from work for these purposes, but must use either their paid leave or 

unpaid leave under the Family and Medical Leave Act to account for their 

absences. Both UN staff and U.S. civil service employees have 10 

holidays per year, though the dates may vary for UN staff depending on 

their duty station. Table 15 compares leave benefits for UN staff and U.S. 

civil service employees.

 

1 GAO-13-526. 

Appendix IV: Leave Benefits
Appendix IV: Leave Benefits

Page 56 GAO-14-546 United Nations Compensation

Table 15: Comparison of Leave Benefits for United Nations (UN) Secretariat Staff and U.S. Civil Service Employees 

UN staff U.S. civil service employees

Annual leave UN staff on fixed term contracts earn 2.5 working 

days per month (30 days per year), and may carry 

over up to 60 days per year. 

Full-time employees with less than 3 years of service earn 4 

hours annual leave per bi-weekly pay period (13 days per 

year). Those with 3 but less than 15 years of service earn 6 

hours of annual leave per bi-weekly pay period and 10 hours of 

annual leave in the last pay period of the year (20 days per 

year).Those with 15 or more years of service earn 8 hours per 

bi-weekly pay period (26 days per year). Senior Executive 

Service, Senior Level, Scientific or Professional employees and 

employees in equivalent pay systems earn 8 hours of leave per 

bi-weekly pay period, regardless of years of service. At its 

discretion, an agency may advance annual leave to an 

employee in an amount not to exceed the amount the 

employee would accrue within the year. Employees stationed 

in the United States may carry over 30 days of annual leave. 

Those stationed overseas may carry over 45 days, and Senior 

Executive Service employees may carry over 90 days.

Sick leave UN staff members with less than 3 years of 

service are entitled to use up to 3 months of full 

salary and 3 months on half salary of certified sick 

leave. Staff members with more than 3 years of 

service are entitled to up to 9 months of full salary 

and 9 months of half salary of certified sick leave.

Within the maximum entitlement referenced 

above, staff members are entitled to up to 7 days 

of uncertified sick leave, which can be used for 

purposes such as family emergencies. Since UN 

staff do not earn sick leave, sick leave does not 

accumulate.

Full-time employees accrue 4 hours of sick leave for each biweekly pay period (13 days per year). There is no limitation on 

the amount of sick leave that can be accumulated or the 

amount an employee may use for his or her own personal 

medical needs. A full-time employee may use only up to 13 

days of sick leave for general family care and bereavement 

purposes and up to 12 weeks of sick leave to care for a family 

member with a serious health condition each year. An 

employee is entitled to no more than a combined total of 12 

weeks of sick leave each year for all family care purposes. At 

its discretion, an agency may advance up to 13 or 30 days of 

sick leave (depending on the reason for which sick leave is 

advanced) to an employee, when required by the exigencies of 

the situation, for the same reasons it grants sick leave to an 

employee. 

Maternity leave Leave with full pay for a total period of 16 weeks 

(usually 6 weeks prior to anticipated date of 

delivery and 10 weeks after birth.) Annual leave 

accrues during maternity leave if the staff member 

returns to work after a maximum of 6 months.

A birth mother may use her sick leave for prenatal care, any 

period of incapacity due to her pregnancy, childbirth, or 

recovery from childbirth. The Family and Medical Leave Act

(FMLA) of 1993 entitles the birth mother to use up to 12 weeks 

of unpaid leave for prenatal care, any period of incapacity due 

to her pregnancy, childbirth, or recovery from childbirth or to 

care for or bond with her newborn within the 12 months 

following the birth of the baby. The employee may substitute 

annual leave or sick leave, as appropriate, for any unpaid leave 

under the FMLA. Also, if the birth mother has exhausted her 

available paid leave, she can apply to receive donated leave 

under the Voluntary Leave Transfer or Voluntary Leave Bank 

Programs (see “Special leave” below), for her incapacitation 

because of childbirth and recovery from childbirth.
Appendix IV: Leave Benefits

Page 57 GAO-14-546 United Nations Compensation

UN staff U.S. civil service employees

Paternity leave A birth father is entitled to leave with full pay for up 

to 4 weeks (up to 8 weeks when serving in a nonfamily duty station) within the 12 months following 

the child’s birth.

A birth father, and certain other family members, including 

same-sex domestic partners, may use sick leave to care for the 

birth mother for prenatal care and for any period of incapacity 

due to her pregnancy, childbirth, or recovery from childbirth. 

The FMLA entitles a husband to use up to 12 weeks of unpaid 

leave to care for his wife for prenatal care, and for any period of 

incapacity due to her pregnancy, childbirth, or recovery from 

childbirth. The act also entitles the birth father or anyone who 

will stand in loco parentis to the child, including same-sex 

domestic partners, to 12 weeks of unpaid FMLA leave to care 

for or bond with the newborn within the 12 months following the 

baby’s birth. An employee entitled to FMLA leave for these 

purposes may substitute annual leave or sick leave, as 

appropriate, for any unpaid leave under FMLA. Also, if the birth 

father or certain other family members, have exhausted their 

available paid leave, they can apply to receive donated leave 

under the Voluntary Leave Transfer or Voluntary Leave Bank 

Programs (see “Special leave” below), to care for the birth 

mother during her incapacitation because of childbirth and 

recovery from childbirth.

Adoption leave Special leave with full pay may be granted for the 

adoption of a child.

The FMLA allows parents to use up to 12 weeks of unpaid 

leave to adopt a child. Parents may also use accrued sick and 

annual leave for purposes related to the adoption of a child.

Special leave Full, partial or no pay may be granted for 

advanced study or research in the interest of the 

organization.

U.S. civil service employees have some additional categories 

of paid leave, including leave to serve as a juror or a witness, 

leave for bone marrow and organ donation, limited amounts of 

leave for certain types of military service, and leave sharing 

programs that allow employees to donate annual leave to 

colleagues who have certain emergency needs.

Official holidays Ten holidays per year, the dates of which vary by 

duty station.

Ten federal holidays per year. In addition, employees located in 

the Washington, D.C., area may receive a federal holiday for 

Inauguration Day, which occurs every 4 years.

Source: GAO analysis of UN and Office of Personnel Management data. | GAO-14-546
Appendix V: Comments from the Department 

of State

Page 58 GAO-14-546 United Nations Compensation

Appendix V: Comments from the Department 

of State

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix
Appendix V: Comments from the Department 

of State

Page 59 GAO-14-546 United Nations Compensation
Appendix V: Comments from the Department 

of State

Page 60 GAO-14-546 United Nations Compensation

See comment 1.
Appendix V: Comments from the Department 

of State

Page 61 GAO-14-546 United Nations Compensation

The following are GAO’s comments on the State Department’s letter 

dated June 11, 2014.

State commented that the ICSC review faces inherent challenges, 

including complexities associated with the Noblemaire Principle, which 

requires that compensation for UN professional staff be set in comparison 

to the highest compensated national service, which the UN has 

considered to be the U.S. federal civil service. State further commented 

on ambiguities with the Noblemaire Principle, including ambiguities over 

the comparison group and which elements of compensation should be 

included in the comparison. We agree that there are ambiguities 

associated with the Noblemaire Principle and therefore we did not use it 

as the basis for our comparison of UN and U.S. government benefits and 

allowances. As we discuss in the report, the UN General Assembly has 

directed that only salaries be used as part of the its margin calculation, 

rather than total compensation, which would include benefits and 

allowances in addition to salaries. It was beyond the scope of our review 

to comment on how the Noblemaire Principle should be applied, and our 

comparisons of UN and U.S. government benefits and allowances should 

not be interpreted as a statement or opinion on how Noblemaire 

comparisons should be conducted.

GAO Comment
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 62 GAO-14-546 United Nations Compensation

Thomas Melito, (202) 512-9601, melitot@gao.gov

In addition to the staff named above, Elizabeth Repko (Assistant 

Director), Debbie Chung, Leah DeWolf, Mark Dowling, Jeremy Latimer, 

Valérie Nowak, John O’Trakoun, Rhiannon Patterson, Steven Putansu, 

Jerry Sandau, David Schneider, Frank Todisco, and Ozzy Trevino made 

significant contributions to this report.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(320984)
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