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For diplomats at U.N., pay package is competitive


NEW YORK - Imagine an employer who subsidizes up to 40 percent of your rent - as much as $13,000 in annual housing costs.

Then imagine the boss gives you more than $17,000 a year to pay for your child's private education - for 20 years.

Among other fringes, you receive a "children's allowance" - $1,936 per child annually - for up to six offspring.

But, alas, it's still expensive to live in New York City. So the company awards you a 41 percent cost-of-living adjustment on top of your six-figure base salary.

For most people, that is only a pipe dream. But foreign nationals working for the United Nations in the United States can get all these goodies - and more.

Highly compensated and pampered with perks and privileges, thousands of international civil servants are savoring the good life at U.N. headquarters in Turtle Bay.

And when they retire and go home after wrestling with global woes, the U.N. turns hundreds of them into pension millionaires. The striped-pants set believes in taking care of its own - even its own alleged war criminal.

$2.3 million nest egg

Former U.N. Secretary General Kurt Waldheim may have been the most reviled figure in the world body's 57-year history. A Nazi intelligence officer in the Balkans between 1942 and 1945 - when Jews were deported en masse to death camps and Allied POWs were executed - he lied about his war record for more than 40 years.

His reward? A $124,754-a-year lifetime U.N. pension, paid in the currency of his choice, that has let him quietly amass a $2.3 million retirement nest egg over the past 20 years, courtesy of the U.N.'s 190 member nations.

A posting at the green-glass Secretariat Building is a passport to the lush life. Among the benefits:

A pension so sweet, one need work only five years to qualify - and can start cashing out at age 55.

An average annual gross salary, for the 3,000-strong professional class of $121,571, including base pay and a cost-of-living adjustment - and all that before a staff assessment (a kind of internal tax) is deducted.

An all-but-guaranteed "step up" or raise every 12 months for most jobs - and as often as every 10 months in some cases.

Six weeks of vacation - after just one year on the job.

Free round-trip travel back to the home country every two years for employees, spouses and dependent children, with a daily subsistence allowance for two rest stopovers en route.

A $275-a-day "assignment grant" for 30 days - just for starting work in New York. And an additional cash bonus, $137 a day for each dependent, as part of the grant.

U.S. contribution

Americans on the U.N. payroll - about 10 percent of the 4,892 New York-based staffers - are generally denied the housing and education subsidies and some other perquisites because they work in their home country. Yet the United States pays $566 million - or 22 percent - of the U.N.'s $2.6 billion biennial budget. Its share was reduced from 25 percent two years ago in return for Washington's pledge to make good on long-overdue dues payments.

Meanwhile, the diplomats from overseas stationed here are routinely lavished with dozens of cushy if little-known grants, allowances, subsidies and other inducements.

Such giveaways to the expatriate U.N. staff come at a cost to the average New Yorker. Struggling to meet rent and college payments, and with no comparable subsidies, longtime New Yorkers are placed at an unfair competitive disadvantage when it comes to the housing and education markets.

U.N. brass say their benefits package must be competitive to assure high standards for staff.

Officials complain that other countries have outpaced the U.N. They say Germany, France, Switzerland, Japan and Singapore offer significantly higher compensation, but that U.S. civil service employees abroad and Foreign Service officers enjoy greater housing, education and social benefits.

Six weeks of vacation - 30 days - may sound like a lot, the U.N. staffers say. But in Germany, they get seven weeks. A child's cash allowance of $1,936 per offspring per year may be tough for Americans to fathom. But in France, the equivalent payments exceed $2,000 per child.

Falling behind

"Our allowances have fallen behind the American, European and Japanese civil service models in many cases," said Manfred Ordelt, chief of salaries and allowances at the U.N.'s International Civil Service Commission.

But critics of the U.N. argue that the subsidy system has an insidious effect on the host city, particularly in housing and education, because it artificially drives up the costs for everybody else.

"Ritzy private schools and East Side landlords look at the subsidies as a wonderful windfall that gives them an excuse to raise prices," said Daniel Mitchell, a senior fellow at the Heritage Foundation, a conservative Washington-based think tank.

"New Yorkers, who already pay high taxes - which help to fund the extravagant subsidies of U.N. bureaucrats - then have to pay even more for their rent and schooling."

Education allowance

Consider the education allowance. The U.N. pays 75 percent of costs, up to a ceiling of $17,584 annually, for each expatriate's child. Starting at age 5 and continuing to age 25, the grant can cover everything from private school expenses to university tuition.

The cost? If a diplomat stays in town for 20 years and educates just one child in America in that time, the U.N. would shell out a maximum $351,680. The private schooling of three children, over 20 years each, would set back the U.N. $1.05 million.

The rental subsidy could also make New Yorkers' blood boil: In their first four years in the city, diplomats can get up to 40 percent of their rent paid free and clear - as much as $13,000 a year, or $1,083 a month, in some cases.

Under a complicated formula, the maximum rent-reimbursement rate drops to 30 percent in the fifth year, 20 percent in the sixth year and 10 percent in the seventh year, after which it ends. The value of the subsidy can be as high as $71,500 over seven years - or up to $10,241 annually averaged out over that time.

While subsidies of 40 percent for rent and 75 percent for education may seem steep, the U.N. notes that the U.S. civil service abroad offers employees 100 percent reimbursement for housing and education. American U.N. employees posted in New York are ineligible for both subsidies.

Then there's the "children's allowance" in which a parent receives a flat payment of $1,936 a year for each dependent child, from birth up to age 21. This is described as a "social benefit" and is handed out for up to six children.

If there is no primary dependent - a child or spouse - then the "secondary dependent's allowance" could kick in. That's a $693 annual stipend for an employee who provides financial support for a mother, father, brother or sister.

'Post adjustment'

There's more. U.N. staffers get a "post adjustment" - basically a cost-of-living sweetener - to ensure that their salaries have the same purchasing power at duty stations anywhere in the world. In New York, that allowance is currently set at 41 multiplier points, with each point equal to 1 percent of base salary.

In other words, it's so expensive to live here that the U.N. heaps 41 percent on top of an employee's net pay as part of the compensation package.

"The idea is that a staffer at a certain pay level in New York doesn't get any more or less than a staffer in Ouagadougou," said the U.N.'s Ordelt, referring to the capital city of tiny West African nation Burkina Faso.


And then there are the pensions. An undersecretary general - and there are 19 of them in New York - would have a final average pensionable remuneration of $203,380, of which 46 percent, or $93,716, would be a typical annual pension.

An assistant secretary general - there are 14 of them - with pensionable income of $188,395 would get an $86,661 pension.

Retirees with lengthy service at high levels of pay can accumulate seven-figure windfalls over time - in countries such as the Democratic Republic of the Congo, where per capita income averages $600, and Cambodia, where the average annual pay is $1,300.

As for top-dollar compensation, Secretary-General Kofi Annan pulls down $294,020 a year, including $220,968 in gross annual salary and a $73,052 cost-of-living adjustment.

Salaries at the world body are often described as tax-free. Wrong, the U.N. staffers say, they pay a staff assessment of about 32 percent, a kind of internal flat tax which is deducted from the gross salaries and from which deductions are not permitted. The assessment brings down Annan's take-home pay.

But don't feel too sorry for the secretary general.

He also gets a "representation allowance" - $25,000 - for entertainment expenses, not to mention the keys to an opulent townhouse on Sutton Place once owned by J.P. Morgan's daughter, which comes complete with gardens, river views and three formal parlors. In his homeland, Ghana, the per capita income averages $1,900 a year.

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