Transforming ICT tools for pension investments

The Investment Management Division (IMD) of the UN Joint Staff Pension Fund (UNJSPF) has reached an important mid-point in its bid to modernize and upgrade the information and communication technology (ICT) tools it uses to manage Pension Fund investments.

On Tuesday, the IMD concluded a $3.4 million contract with Risk Metrics to provide the Division with state of the art risk management software.

Two years of preparatory technical work was undertaken by IMD and the Procurement Division in the Department of Management to reach this point after a very thorough international competitive bidding exercise. This software, used only by the most sophisticated fund managers, will provide the Fund with real time monitoring of market risk in the Pension Fund portfolio.  It will provide close monitoring of the fund assets by currencies, industrial sectors, geographic regions and asset classes thereby enabling IMD management to minimise risk exposure for any given level of return. It will also allow IMD to stress-test the Fund for various economic scenarios, such as changes in interest rates or oil prices.

The Representative of the Secretary-General for Investments of the UN Joint Staff Pension Fund, Mr. Warren Sach, indicated that the new risk management software will be fully installed during the second half of this year. It will then be integrated with the new Trade Order Management System (Charles River) that came on line in the first half of 2010, which itself followed the introduction in 2009 of SWIFT (Society for Worldwide Interbank Financial Telecommunication). Once the Risk Metrics software is up and running later this year it will be followed by a new Operations and Portfolio Accounting System.  

The combined effect of these four inter-locked software packages will be to provide the IMD with secure, economical and reliable tools that allow straight through processing on an automated basis embodying a multiplicity of internal controls and a minimum of manual intervention.  Development of these systems will help ameliorate the risks that come with investing in the current difficult financial environment, an environment in which it is impossible to eliminate risk but for which solutions exist, and are being used, to manage such risk.

In the photograph, from left to right