Staff Meetings – 23th – 28th September 2010

Staff Meetings – 23th – 28th September 2010

LHC + Experiments work marvellously A huge thank you to everybody! CMS Integrated luminosity (end Aug. 2010) LHC experiments present results at 2010 ICHEP ALICE ATLAS Staff meetings / September 2010

Summary • 2011-2015 MTP / Gathering on 25th August • Our point of view • General information • MARS 2010, 2011 CVI • 2010 five-yearly review: Management proposals • Health insurance: first step towards restoring the financial balance • Salaries: less than the minimum • Pensions: Management proposals • Towards full funding, but who pays? • 5YR + Pensions • Effects on our take-home pay • Will CERN remain a centre of excellence? Staff meetings / September 2010

Summary • 2011-2015 MTP / Gathering on 25th August • Our point of view • General information • MARS 2010, 2011 CVI • 2010 five-yearly review: Management proposals • Health insurance: first step towards restoring the financial balance • Salaries: less than the minimum • Pensions : Management proposals • Towards full funding, but who pays? • 5YR + Pensions • Effects on our take-home pay • Will CERN remain a centre of excellence? Staff meetings / September 2010

2011-2015 MTP • The cuts could have been even more painful: the danger was real. • 60 MCHF/yr to the PF is welcome, however it is not consolidated on a long-term basis and fully taken on by the Organization (debt). • We deeply regret the painful cuts for Research & Consolidation • Decreased budget = no increase in staff levels • Revenue: 135 MCHF less income over 5 years • MS contributions cut by 15 MCHF in 2011, then by 30 MCHF/yr • Social Security package: 425 MCHF over 5 years • 60 MCHF/yr to restore Pension Fund - direct capital injection • 25 MCHF/yr as possible outcome of PF and 5YR review • Expenditure: 343 MCHF cut in research & consolidation • Slower accelerator and LHC consolidation • No increase in budget for CLIC • No pro-active asbestos removal • Slower balancing of the deficit: • 330 MCHF cumulative budgetary deficit at end of 2015 (of which 300 MCHF for the PF) Staff meetings / September 2010

Gathering on 25th August Published articles : RSR, Le Figaro, 24 heures, Tribune de Genève, Le Monde, PHYSORG, Le Matin, France 24, Yahoo News, Le Temps, Inform Science, France 2, AGEFI, Info RSR, RFI, Le Progrès, Le Pays Gessien, 20 minutes, Le Courrier, RSI, M2 Radio, Herald de Paris, Público.es, Yes FM • Research without a budget = Europe without a future • Letters sent to all ministries concerned by CERN activities in June • Gathering of about 1000 persons @ CERN in parallel to FC • Message to our politicians: “You are not doing what you said” • Lisbon 2000, Barcelona 2003: 3% of EU GDP invested in R&D by 2010 • Europe 2010: Investment in R&D barely 1.85 % of GDP. Science budgets are cut along with everything else • A successful event • European research laboratories support us (GSI, ESA, ILL were present on the site. ITER, ESO, EMBL sent messages of support) • Large media coverage (TV – Radio – Newspapers) Staff meetings / September 2010

Outline • 2011-2015 MTP/ Gathering on 25th August • our point of view • General information • MARS 2010, 2011 CVI • 2010 five-yearly review: Management proposals • Health insurance: first step towards restoring the financial balance • Salaries: less than the minimum • Pensions: Management proposals • Towards full funding, but who pays? • 5YR + Pensions • Effects on our take-home pay • Will CERN remain a centre of excellence? Staff meetings / September 2010

MARS 2010 Staff meetings / September 2010 • Reminder • Last 5YR: International Indemnity savings → MARS • Recruits from 2007 to mid-2010: • +250 additional steps, not subject to distribution constraints • Results - considering normal and additional steps • Situation in ECE calls for corrective measures • “Outstanding” people in ECE • No “periodic” step in ECE • While calculated on the basis of 1 “exceptional” step only per staff member, only80% of the ECE budget is used for staff members in the ECE zone!

MARS: step distribution 2007- 2010 Staff meetings / September 2010

Salary indexation +3,2% +2,7% RNM = average movements of real net salaries of civil servants RNM < 0 +1,6% RNM > 0 Sept. +0,55% +0,5% -0,8% Staff meetings / September 2010

Summary • 2011-2015 MTP/ Gathering on 25th August • our point of view • General information • MARS 2010, 2011 CVI • 2010 five-yearly review: Management proposals • Health insurance: first step towards restoring the financial balance • Salaries: less than the minimum • Pensions : Management proposals • Towards full funding, but who pays? • 5YR + Pensions • Effects on our take-home pay • Will CERN remain a centre of excellence? Staff meetings / September 2010

Why a five-yearly review? • The principle: CERN must remain a centre of excellence • As specified in the Staff Rules & Regulations - Art. II 1.03 • “The Organization must be able to recruit and retain the staff members required for the execution of its mission • from all Member States • staff must be of the highest competence and integrity” • The means: periodic reviews of the financial and social conditions offered to the personnel • Every year: adjustment of salary and allowances • Every 5 years: general review = the 5YR • Compulsory subject: salary levels • Optional subjects: other employment conditions • The 2010 5YR: • Compulsory subject: salary levels • Only one optional subject: CERN Health Insurance Scheme - CHIS Staff meetings / September 2010

CHIS: a reminder • CHIS = HIS + LTC • Staff point of view – Staff Association survey in 2008 • Health Insurance is priority nº2 • Maintain current benefits and increase contributions as needed • Actuary’s point of view– Actuarial study in 2009 • LTC: no problem • HIS long-term structural deficit is confirmed • +233 MCHF/15 yrs are required to balance the scheme in kCHF Staff meetings / September 2010

CHIS: a reminder • TREF – May 2010 • Comparison with other International Organizations – based in Geneva • CERN scheme is different, but on the whole equivalent to others See Echo nº 102 - 24th May 2010 Staff meetings / September 2010

Management proposals: Benefits Staff meetings / September 2010 • Concertation processisongoing • Proposalsseparatedintothree important parts 1. Replacing the 200 CHF annualdeductible 2. Cover of hospitalization: APDRG pricing 3. Othermeasures

Replacing the annual deductible Expenses borne by the scheme Current system Hospitalization excluded Adult Child 0% 90% Case 4 Proposed system Hospitalization included 80% 90% 100% Adult Case 3 Child Case 2 in CHF/yr Case 1 Expenses borne by the insured member 222 500 3000 cost neutral to CHIS balance Staff meetings / September 2010

Management proposals: Contributions Staff meetings / September 2010 • Increase contributions annually in order to • recover from the deficit • preserve HIS reserves • Schedule for the increase in contributions • +8 % in 2011 • +4 %/yr from 2012 to 2015 • Compensate for the effects of under-indexation of pensions • Align contribution rates between active and retired staff • for HIS • for LTC • Reminder: a pensioner contributes on a basis ~15% higher than his pension • Provisional numbers for 2011 • Staff member contribution rate could increase by ¼ of a percentage point: 4.02% → 4.27%

5YR-2010: Salary levels • Salary: the most important employment condition • in order to attract and retain staff • compulsory subject of a 5YR • among the 5 highest priorities– Staff Association survey in 2008 • Reminder: a method must be followed 1. Large-scale comparison: high-tech industry • Local survey for career paths AA - B • International survey for career paths C - G 2. Most competitive country retained: CH - in 2010 5YR and 2005 5YR 3. Management makes proposals using results as a guide Staff meetings / September 2010

Survey results: Career paths AA to B 2010 - LOCAL MARKET salary survey results - Comparison with MEDIAN point - CERN = 100% Staff meetings / September 2010

5YR-2010: Local survey principle Management understanding Our understanding • Point of disagreement • SR&R-Annex A1 states “… the employers…that offer salaries that are among the most competitive.” • Management: MEDIAN point is appropriate for salary comparison • Staff Association: MEDIAN point is too low to represent “among the most competitive salaries” Staff meetings / September 2010

Survey results: Career paths C to G 2010 - INTERNATIONAL salary survey results - Comparison with 3rd quartile point - CERN = 100% Staff meetings / September 2010

5YR-2010: International survey principle Management understanding Our understanding • Point of disagreement • SR&R - Annex A1 states “… the employers…that offer the most competitive salaries…” • Management: Q3 point is appropriate for salary comparison • Staff Association: Q3 point is too low to represent “the most competitive salaries” Staff meetings / September 2010

Management proposals: Salary grid • Our position • career paths D to G • a long way from the results of the data collection • this adjustment would have no impact on CERN’s attractiveness • all career paths: room for improvement • median/3rd quartile disagreement • single/married Staff meetings / September 2010

Management proposals: Salary grid Staff meetings / September 2010 • Even testing this minimalist improvement Negative reaction • Other Management proposals • B to E • extend “b” salary bands in order to facilitate CP change • F and G • Align step value to 1.37% of first salary position, as in other career paths • Remove some positions in order to limit the maximum position increase to 8% • Our position: OK, but in all career paths • Entry positions should be increased in order to improve CERN’s attractiveness • End-of-career positions should be added in order to increase midpoint value

Management proposals: Stipends for Fellows • Our position - prepared with Fellow representatives • Already severe cuts in 2005 5YR • Not acceptable unless savings are kept inside Fellows budget, e.g. to increase training and travel budgets Staff meetings / September 2010 • Maintain current stipend levels for Senior Fellows • Reduce Junior Fellows stipends by • 6.0% at entry level (Ze.0) • 3.0% at next level (Ze.1)

2010 5YR: schedule • Schedule for 2010 5YR (Salary + CHIS): • SCC - 30th September 2010 • Completion of internal concertation process before TREF • TREF – 5th October 2010 • Management proposals presented to Member States for discussion • Council - in December 2010 • Decision for application as from 1st January 2011 • In between • Further SCC, TREF, RTG8 meetings, as needed • Staff consultation in the autumn Staff meetings / September 2010

Summary • 2011-2015 MTP / Gathering on 25th August • our point of view • General information • MARS 2010, 2011 CVI • 2010 five-yearly review: Management proposals • Health insurance: first step towards restoring the financial balance • Salaries: less than the minimum • Pensions: Management proposals • Towards full funding, but who pays? • 5YR + Pensions • Effects on our take-home pay • Will CERN remain a centre of excellence? Staff meetings / September 2010

March 2010: successful gathering 2000 signatures from active and retired CERN staff ! Staff meetings / September 2010

What’s new since March? • White paper on full funding - from Pension Fund Governing Board • recognizes CERN’s historical responsibility towards the PF deficit by proposing: CERN: +109 MCHF / STAFF: +5 MCHF • CERN Council took note of this document without approving it • Advisory Group – representatives of MS, DG, but no staff reps. • no longer exists • but a mandate has been given to DG by MS • Internal concertation procedure • first Management proposals have been received • CERN MTP Budget – 2011 to 2015 • provision of 25 MCHF/yr: 9 MCHF/yr dedicated to PF • special contribution to PF: 60 MCHF/yr over 30 years Staff meetings / September 2010

Management package - until full funding is reached Staff meetings / September 2010

Management package – our position Staff meetings / Sept. 2010 • We separate the proposals into two parts • Part 1 is acceptable • In 2005: • such an increase was recommended by PF Governing Board • this recommendation was supported by Staff Association • this recommendation was rejected by CERN Council • Since 2005: • 2008 stock market crash: 800 MCHF losses in CERN Pension Fund • contribution rate is the main leverage with respect to acquired rights • Organization and staff jointly participate to this effort • Part. 2: unacceptable

Management package – Our position Staff meetings / September 2010 • We separate the proposals into two parts • Part 2 is not acceptable as it stands

Management package – Our position effort Prop. nº 2, 3, 4, 5, 6 Promises commit only those who receive them… Prop. nº 7 time Stop 30yr 2011 • Why is Part 2 not acceptable as it stands? • For employees: proposals nº 2 to 6 are not revisable • For employers: proposal nº 7 is revisable at any time • What will happen if Council decides to stop its additional contribution of 60 MCHF/yr before PF achieves full funding? • Too risky considering a period of 30 years • Example of 2011-15 MTP: 60 MCHF are added to CERN cumulative deficit! Staff meetings / September 2010

Management package – Our position effort Prop. nº 2, 3, 4, 5, 6 Prop. nº 7 effort time Prop. nº 2, 3, 4, 5, 6 30yr 2011 Prop. nº 7 time 30yr 2011 • When concerting with the Management • As a guarantee - that the additional 60 MCHF/yr would be paid for 30 years - is legally impossible, we proposed that CERN takes out a bank loan • Capital of around 1 000 MCHF immediately injected into the PF • Reimbursement of 60 MCHF/yr by CERN to the bank • Such a solution was approved by Council in 2006: • CERN reimbursed its debt to the PF by taking out a bank loan of 450 MCHF • A majority of delegations now express opposition to another bank loan • We must now find another solution acceptable to all parties involved! Staff meetings / September 2010

Management package – Our position Staff meetings / September 2010 • Changes relating to purchasing power loss • Art. II 1.15: Annual Adjustment of Pensions • “With a view to protecting the beneficiaries' purchasing power… the Council shall decide annually on the adjustment to be made to pensions…” • “The cumulated loss of purchasing power incurred by a beneficiary from 1 January 2005 shall not exceed 8%.” • Art II 1.15 adopted by Council only 4 years ago • So, what is Council’s word worth? • Today from 8% to 10-12%, and tomorrow 16%? • When you go too far there are no more limits • Acquired rights under attack • Actuary: very limited impact on PF funding ratio → We will defend the current 8% ceiling

Management package – Our position Package for newcomers is unacceptable !  Future Staff = FUTURE of CERN - 23% • Future staff: benefits package drastically reduced • Future staff will have the greatest disadvantage • CERN PF: the worst scheme of all International Organisations Staff meetings / September 2010

Pensions – Our opinion Staff meetings / September 2010 • Member States • Consider our pension level too high • Want to test ILOAT jurisprudence to see how far they can go to decrease benefits • CERN Management • In its current proposals, carries out most of the orders given by the Advisory Group • Should protect the employment package for new recruits, thus preserving CERN’s long term interest • Staff • Should not accept that the future of CERN is put in danger • Should be prepared for action

Summary • 2011-2015 MTP / Gathering on 25th August • our point of view • General information • MARS 2010, 2011 CVI • 2010 five-yearly review: Management proposals • Health insurance: first step towards restoring the financial balance • Salaries: less than the minimum • Pensions: Management proposals • Towards full funding, but who pays? • 5YR + Pensions • Effects on our take-home pay • Will CERN remain a centre of excellence? Staff meetings / September 2010

Effects on your take-home pay • Pensions + 5YR proposals - from 1st January 2011 • The majority of the staff will see their take-home pay reduced! • This is socially unacceptable and could kill the team spirit which has always been the strongest asset of CERN  Staff meetings / September 2010

Conclusion Staff meetings / September 2010 Will CERN remain a centre of excellence?

Staff Meetings – 23th – 28th September 2010