Austerity Measures Not Seen in Top-Ranking U.N. Official's Salaries

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Published April 07, 2011

| FoxNews.com

The United Nations, facing one of the most serious financial challenges since its founding, has instructed top officials to pare their budgets for next year.

Meantime, the world body continues to pay its highest-ranking employees salaries that -- in addition to being tax-free -- are considerably higher than the taxable compensation received by cabinet members and other top-ranking officials in the Obama administration, which has frozen federal salaries for two years as an austerity measure.

Confidential U.N. personnel records obtained by Fox News also show that the U.N. at the end of last year, just before Secretary General Ban Ki-moon called for spending cuts, employed 489 top-ranking executives on its payroll. That is slightly more than the number of equivalent positions -- 484 -- on the top-ranking payroll schedule of the U.S. government's executive branch.

The number of U.N. employees at top-level compensation is even higher when a host of U.N. Special Envoys, Special Representatives of the Secretary General, and their deputies are added in, as the U.N. payroll records do.

These dignitaries are paid in the same extremely generous fashion.

The additional top brass brings the number of highest-ranking U.N. officials to 560 -- about 16 per cent more than the number of officials on the so-called Executive Schedule of the U.S. government payroll, whose pay is set by Congress.

Click here to see the U.N. personnel records.

The average salary of officials on the five levels of the U.S. Executive Schedule as of last December was $162,111, before taxes, according to the U.S. Government's Office of Personnel Management, which keeps the salary records.

Click here to read the U.S. Executive Schedule

On paper, the salaries of top U.N. officials appear to be the same or even, in some cases, slightly lower than those of their U.S. counterparts. But the U.N. paychecks are boosted beyond the salary scale on the books by a so-called "post adjustment" -- a shifting salary multiplier based on the cost of living where they work, which is universally applied but does not show up on the pay charts.

Click here to see the U.N. pay chart effective January 2011.

The discrepancy in pay with top U.S. officials is made even larger by the fact that employees based at U.N. headquarters in New York -- and indeed, in most places around the world -- pay no income taxes. (For U.S. employees of the U.N., who must by law file U.S. income taxes, the amount is repaid out of a U.N. compensating fund.)

To show how the system works: In the case of U.N. Secretariat employees in New York City, for example, the current post-adjustment multiplier is 61.3 -- meaning that they receive as their actual salary 161.3 per cent of the amount listed on U.N. pay charts.

In other designated headquarters cities, where most of the remaining top U.N. executives work --Rome, Vienna and Geneva -- the post adjustment is either nearly the same as the New York figure, or, in the case of Geneva, higher by a half.

The only cheaper U.N. headquarters city is Nairobi, where the post adjustment factor is little more than half the New York rate -- meaning salaries are still 32.5 percent higher than officially posted on U.N. salary scales.

Click here to read the U.N. post adjustment index.

To get a rough idea of the comparative U.N. advantage, Fox News used the post adjustment for New York City, by far the biggest U.N. headquarters city, as the starting point for calculations.
The U.N. base salaries used were first reduced by the amount of an internal U.N. tax equalization assessment before the post adjustment was applied, in the same way the U.N. does its calculations. (The so-called staff assessment is the tax equalization fund used to pay the taxes of those, including U.S. citizens, whose earnings are otherwise taxed by their native countries.)

Even with that reduction, using U.N. tables, Fox News estimates that Secretary General Ban's very top lieutenants do considerably better than even U.S. Cabinet officials. A U.N. Under Secretary General (USG), for example, is deemed in diplomatic terms to be the equivalent of a U.S. Cabinet secretary -- the secretary of state, for example -- who is at the top level of the Executive Schedule, earning $199,700 per year.

The USG, on the other hand, is shown on the formal U.N. pay scale with one dependent as earning $145,854.

But once the New York post adjustment is applied, that amount rises to $234,827. Even in Nairobi, where the cost of living is lower, the post adjustment would bring the USG salary to $192,899.

But then comes another twist. The U.N. salary, at this point, is tax free, while U.S. government officials must pay federal and state taxes based on where they live, which would lower their salaries (assuming no deductions) by about 21 percent on federal taxes alone.

The same differences due to post adjustments apply to the salaries of U.N. Assistant Secretaries General (ASGs), whose equivalent U.S. posts are at Level 2 or 3 of Washington's Executive Schedule, and for U.N. directors of agencies, known as D2s, who are at roughly Level 5 of the executive scale.

Using the same method of calculation, a New York-based ASG with a dependent earns $133,776 on the formal U.N. salary scale. But after the New York post adjustment is applied, the salary suddenly climbs to $215,781, tax free.

The most generous U.S. equivalent salary on the Executive Schedule would be $179,700 -- before taxes.

For D2s, the calculation is a little more complicated, because salaries can rise with years of service in six graduated steps.

Taking the third of the six steps as a starting point, the D2 salary with a dependent would be $116,320 on the formal U.N. pay chart.

After the New York post adjustment, however, it would be $187,624, tax free.

The U.S. equivalent salary, level 5 on the Executive Schedule, is $145,700.

Again, that is before U.S. taxes.

George Russell is executive editor of Fox News

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http://www.foxnews.com/world/2011/04/07/austerity-measures-seen-ranking-officials-salaries/