## Administrative Tribunal of the International Monetary Fund, Decision, December 18, 2002

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### Case and parties
- Hearing dates: December 16, 17, and 18, 2002.
- Tribunal composition: Judge Stephen M. Schwebel, President; Judges Nisuke Ando and Michel Gentot, Associate Judges.
- Applicant: Ms. “G”, staff member at the Fund’s Washington, D.C. headquarters; national foreign to the United States holding lawful permanent resident (“LPR”) status; employed by the Fund continuously since 1994; age 46 at time of Application.
- Intervenor: Mr. “H”, staff member at the Fund’s Washington, D.C. headquarters; national foreign to the United States holding LPR status; first joined Fund in 1990, appointed fixed-term in 2001; age 54 at time of Application for Intervention.
- Registrar: Celia Goldman.

### Subject of the dispute
- Challenge to denial of Applicant’s request for an exception to the Fund’s expatriate benefits policy as amended by the Executive Board effective in 2002 (Staff Bulletin No. 02/2).
- Core policy feature challenged: 2002 amendment extends expatriate benefits to current and newly appointed staff who are U.S. LPRs only on the condition that they relinquish LPR status and obtain a G-4 visa; only one such change in status permitted per IMF career.
- Applicant and Intervenor contend the amended policy impermissibly discriminates among categories of Fund staff and seek exceptions or “grandfathering” relief.

### Procedural history
- July 2, 2002: Applicant filed Application with the Administrative Tribunal; transmitted to Respondent July 3, 2002.
- August 1, 2002: Intervenor filed Application for Intervention under Rule XIV.
- August 19, 2002: Respondent filed its Answer; supplemented August 23, 2002.
- September 18, 2002: Intervention admitted by President in consultation with Associate Judges.
- October 17–18, 2002: Intervenor and Applicant submitted Replies.
- November 20, 2002: Fund’s Rejoinder filed.
- Tribunal decided oral proceedings would not be held.
- Applicant exhausted internal remedies: May 6, 2002 request for administrative review denied May 20, 2002; July 16, 2002 Grievance filed then dismissed for lack of jurisdiction.

### Factual background and policy context
- Applicant employment history: contractual employee from 1994, fixed-term, then regular staff since 1999; held LPR status from first employment in 1994 and continued LPR status as of Application.
- U.S. immigration points noted:
  - G-4 visa status provided to employees of international organizations and only for duration of employment.
  - G-4 holders may convert to LPR after completion of at least 15 years of employment in G-4 status.
  - LPR status permits indefinite residence in the United States and employment with private employers.
- Applicant requested exception April 9, 2002 to retain LPR status while receiving expatriate benefits; HRD denied April 12, 2002; Director of HRD affirmed denial May 20, 2002.
- Key staff composition (May 2001, Fund staffing = 2,649):
  - 26 percent U.S. nationals (ineligible for expatriate benefits);
  - 60 percent G-4 visa holders (eligible for expatriate benefits);
  - 9 percent LPRs ineligible under 1985 policy;
  - 5 percent LPRs eligible by reason of the “grandfathering” provision.
- Annual cost to the Fund of providing expatriate benefits: approximately $11,000 per eligible staff member.

### Intervention: admissibility and Tribunal ruling
- Rule XIV, paragraph 1 standard invoked for intervention.
- Two statutory requirements for intervention:
  - intervenor within Tribunal’s jurisdiction ratione personae; and
  - intervenor has a right that may be affected by the judgment.
- Tribunal findings:
  - Mr. “H” is within jurisdiction and has a right that may be affected by judgment.
  - Rejected Respondent’s proposed discretionary basis to deny intervention for merely “indirect” interest.
  - Rejected duplication of claims as a ground to deny intervention; similarity of claims tends to favor admission.
  - Conclusion: Mr. “H”’s Application for Intervention met statutory requirements and was granted.

### Parties’ principal contentions
- Applicant seeks full expatriate benefits as of May 1, 2002 while maintaining LPR status; alleges discrimination relative to pre-1985 “grandfathered” LPRs and to G-4 staff, and asserts career-development disincentives.
- Intervenor supports Applicant; asserts age discrimination because the 15-year G-4 requirement precludes some older staff from regaining LPR before retirement; seeks “grandfathering” of all LPR staff at time of January 2002 amendment or of those who, due to age, would lose option to apply for LPR at retirement.
- Respondent contends:
  - 2002 amendment expanded choices and did not adversely affect Applicant or Intervenor;
  - Challenge to pre-1985 policy is time-barred under Article XX for acts taken before October 15, 1992;
  - Visa test is a rational exercise of managerial discretion tied to recruitment/retention and cost objectives;
  - “Grandfathering” of those entitled in 1985 was legal and not discriminatory;
  - Executive Board policy does not permit individual exceptions; any exceptions would be ultra vires.

### Evolution of the Fund’s expatriate benefits policy (1947–2002)
- 1947–1985: benefits granted on basis of nationality foreign to duty station.
- 1984 Working Group considered five allocation bases and recommended option III (visa status prior to appointment).
- January 28, 1985: Executive Board adopted visa-status-based policy; Staff Bulletin No. 85/1 (February 1, 1985) implemented visa test and a “grandfathering” exception for present LPR staff or those who had initiated procedures to attain LPR status.
- 1994: Board reviewed options and retained 1985 policy.
- October 26, 2001: HRD proposed revision arguing visa-status inferences had become increasingly problematic and asymmetric treatment of staff who would give up LPR status was problematic.
- December 18, 2001: Executive Board approved the amendment; Staff Bulletin No. 02/2 notified January 11, 2002, with effect from May 1, 2002.
- Main features of Staff Bulletin No. 02/2:
  - Extends expatriate benefits to current and newly appointed LPR staff who relinquish LPR and obtain G-4 visa;
  - Only one such change in status permitted per IMF career;
  - Current G-4 staff formerly denied eligibility due to prior LPR status within 12 months prior to entry-on-duty are now eligible.
- Staff Bulletin cautioned:
  - Only time spent in G-4 status in the United States counts toward the 15 years required for reacquisition of LPR status.
  - U.S. immigration laws are subject to change.
  - Information and counseling sessions to be made available.

### Jurisdictional determinations by the Tribunal
- Jurisdiction ratione materiæ:
  - Applicant found to be “adversely affected” and thus Tribunal has material jurisdiction because Applicant, employed after 1985 and holding LPR status, is not entitled to expatriate benefits.
- Jurisdiction ratione temporis:
  - Tribunal treated the 1994 reaffirmation and the 2002 amendment as administrative acts within its temporal jurisdiction.
  - Reconsideration, reaffirmation, and amendment of the 1985 policy within the Statute’s effective period rendered the Application and Intervention not inadmissible on temporal grounds for the central policy challenge.
  - However, challenge to the original 1985 “grandfathering” proviso was held time-barred because no evidence the proviso was re-considered and re-adopted within the Tribunal’s jurisdictional period.

### Legal standards applied
- Nondiscrimination limits discretionary authority; changes must be:
  - based on proper consideration of relevant facts;
  - reasonably related to objectives;
  - made in good faith;
  - not prompted by improper motives; and
  - not discriminatory in an unjustifiable manner.
- Tribunal defers to managerial discretion unless decisions are arbitrary, capricious, discriminatory, improperly motivated, based on error of law or fact, or violate fair and reasonable procedures.
- For classification to pass equal-treatment challenge, there must be a “rational nexus between the classification of persons subject to the differential treatment and the objective of the classification.”

### Tribunal’s assessment of the visa criterion and the 2002 amendment
- Findings on reasonableness:
  - The visa criterion selection was deliberate, not arbitrary.
  - The choice of visa status as the classification basis is rationally related to objectives of expatriate benefits (repatriation and maintaining international character for recruitment/retention).
  - General differences between LPR and G-4 status provide a rational basis: LPR status broadens options for indefinite U.S. residence; G-4 status is limited to employment duration and oriented toward repatriation.
- Assessment of 2002 amendment:
  - The 2002 amendment’s salient feature—eligibility following the staff member’s choice of visa status—better aligns with objectives and is more finely tailored than the unamended 1985 policy.
  - Staff willing to convert to G-4 assume risk of potential difficulty in reacquiring LPR, but conversion better realizes repatriation rationale.
- Arguments concerning age and reacquisition of LPR:
  - Applicant and Intervenor argue the 15-year G-4 requirement disproportionately disadvantages older/longer-serving staff.
  - Tribunal sustained Fund’s position that LPR status is not a Fund “benefit” and reacquisition prospects are governed by U.S. law; disadvantage in regaining LPR conflicts with repatriation rationale of expatriate benefits.

### Tribunal’s conclusions on “grandfathering” and exceptions
- Jurisdiction ratione temporis lacking for challenge to the 1985 “grandfathering” proviso; the proviso remains as adopted in 1985.
- “Grandfathering” protects acquired rights of incumbents and is not an obligation to retroactively grant new benefits to others.
- Neither Applicant nor Intervenor had ever been entitled to expatriate benefits; Respondent argued “grandfathering” does not apply to them.
- Tribunal found no impermissible discrimination in the Fund’s expatriate benefits policy and concluded Fund did not err in declining to grant exceptions.
- The Executive Board policy does not expressly empower Fund Administration to grant exceptions that would be contrary to policy objectives; any such exception would be ultra vires.

### Disposition
- The Administrative Tribunal unanimously decided:
  - The Application of Ms. “G”, and the Application of Mr. “H” as intervenor, are denied.
- Signed by:
  - Stephen M. Schwebel, President;
  - Nisuke Ando, Associate Judge;
  - Michel Gentot, Associate Judge;
  - Celia Goldman, Registrar.
- Location and date: Washington, D.C., December 18, 2002.

*Administrative Tribunal of the International Monetary Fund, Decision, December 18, 2002.*

### Introduction

### Introduction

### Case and parties
- On December 16, 17, and 18, 2002, the Administrative Tribunal of the International Monetary Fund, composed of Judge Stephen M. Schwebel, President, and Judges Nisuke Ando and Michel Gentot, Associate Judges, met to adjudge the case brought against the International Monetary Fund by Ms. “G”, a staff member of the Fund; Mr. “H” was admitted as an Intervenor.
- Applicant: Ms. “G”, a staff member employed at the Fund’s Washington, D.C. headquarters; a national foreign to the United States holding lawful permanent resident (“LPR”) status.
- Intervenor: Mr. “H”, a staff member at the Fund’s Washington, D.C. headquarters; also a national foreign to the United States holding LPR status.

### Subject of the dispute
- Applicant contests denial of her request for an exception to the Fund’s policy governing expatriate benefits as amended by the Fund’s Executive Board effective in 2002.
- The 2002 amendment extends expatriate benefits to current and newly appointed Fund staff who are U.S. LPRs on the condition that they relinquish their LPR status in favor of obtaining a G-4 visa.
- Applicant sought an exception to allow receipt of expatriate benefits while retaining LPR status; Applicant and Intervenor contend the amended policy impermissibly discriminates among categories of Fund staff and that exceptions should be drawn to correct that discrimination.

### Procedural history
- July 2, 2002: Ms. “G” filed an Application with the Administrative Tribunal; the Application was transmitted to Respondent on July 3, 2002.
- July 10, 2002: Registrar issued a summary of the Application within the Fund pursuant to Rule XIV, paragraph 4.
- August 1, 2002: Mr. “H” filed an Application for Intervention under Rule XIV.
- August 2, 2002: Application for Intervention transmitted to Applicant and Respondent; each accorded thirty days to present views on admissibility of the intervention.
- President directed that Respondent’s Answer remain due forty-five days from transmittal of the Application but be held in the Office of the Registrar until admissibility of the intervention was resolved (action pursuant to Rule XXI, paras. 2 and 3).
- August 19, 2002: Respondent filed its Answer; Respondent supplemented the Answer on August 23, 2002 to comply with Rule VIII, paragraph 1.
- September 18, 2002: President, in consultation with the other members of the Tribunal, admitted the Intervention; previously submitted pleadings transmitted to Mr. “H”.
- October 17, 2002: Intervenor submitted his Reply.
- October 18, 2002: Applicant submitted her Reply.
- November 20, 2002: Fund’s Rejoinder filed.
- Tribunal decided oral proceedings would not be held as they were not necessary for disposition of the case.

### Factual background
- Employment history of Applicant:
  - Employed by the Fund continuously since 1994: initially as contractual employee, later as fixed-term staff member, since 1999 as a regular staff member.
  - At first employment in 1994, Applicant was an LPR of the United States and remained in that visa status as of Application.
  - As of the time of her Application, Applicant was 46 years of age.
- 1998: When considering a fixed-term appointment, Applicant raised expatriate benefits with Human Resources Department (“HRD”); was advised no exceptions to policy could be made and took no steps to contest that decision.
- January 2002: Fund amended certain eligibility criteria for expatriate benefits. Unlike previous policy, amended policy makes benefits available to staff members currently in LPR status on the condition that they relinquish LPR status in favor of G-4 visa status.
- Under U.S. immigration laws as described:
  - G-4 visa status is provided specifically to employees of international organizations and only for the duration of their employment.
  - Other provisions permit G-4 visa holders, upon completion of at least 15 years of employment in that visa status, to convert to LPR status.
  - An individual with LPR status may remain in the United States indefinitely and seek employment with private employers.
- April 9, 2002: Applicant wrote to HRD requesting an exception to the amendment to receive expatriate benefits without giving up LPR status, stating she sought the exception “...principally to rectify the discrimination created by the Amendment.”
- Applicant’s arguments presented to HRD and later to the Tribunal:
  - The amended policy discriminates against her vis-à-vis other staff members with LPR status who were “grandfathered” under a pre-1985 policy and receive expatriate benefits while maintaining LPR status.
  - The policy discriminates against mid-career LPR staff vis-à-vis mid-career G-4 staff because mid-career LPR staff who relinquish LPR status for G-4 may not attain 15 years of employment in G-4 status before retirement age to regain LPR status under U.S. law.
  - Career development concerns: disincentive to accept overseas assignments as these would not count toward the 15-year G-4 requirement.
  - The underlying policy of offering expatriate benefits on the basis of visa status is challenged: visa status may not correlate with the goal of expatriate benefits to compensate for additional costs of maintaining contacts with one’s home country; “cultural proximity” or permanence in the U.S. may not be reflected by visa status.
- April 12, 2002: HRD officer notified Applicant of denial of exception request: policy approved by the Executive Board does not grant management authority to make exceptions and must be applied uniformly.
- May 6, 2002: Applicant requested administrative review from Director of HRD.
- May 20, 2002: Director affirmed denial, explaining:
  - “... an intention to sever ties with one’s home country cannot be inferred automatically from possession of an RA visa,” but the Fund cannot offer expatriate benefits to every staff member “for reasons of costs and to remain consistent with the policy objective of these benefits.”
  - The Executive Board concluded that “the most reasonable place to draw the line is to provide expatriate benefits to any staff member who is not a permanent resident or citizen of the duty station country, including allowing permanent residents who relinquish that status and obtain a G-4 visa to become eligible for such benefits.”
  - “All staff who are not U.S. citizens have the option to obtain G-4 visas and thereby gain eligibility for expatriate benefits. Therefore, similarly situated staff are being treated in a like manner, and this cannot be considered discriminatory.”
  - The Director noted that difficulties in regaining LPR status after converting to G-4 arise from U.S. law, not Fund policy.
  - The Director observed that “grandfathering” under a pre-existing policy is a commonly recognized practice when a change would otherwise abolish a benefit.
- July 2, 2002: Applicant filed her Application with the Administrative Tribunal.
- Exhaustion of administrative remedies:
  - Applicant fulfilled Article V, Section 1 of the Tribunal’s Statute requirement to exhaust all available channels of administrative review before filing with the Tribunal.
  - July 16, 2002: Applicant filed a Grievance with the Fund’s Grievance Committee to preserve review rights.
  - Fund argued Grievance Committee lacked jurisdiction because Applicant challenged a decision of the Executive Board, expressly excluded under GAO No. 31, Rev. 3 (November 1, 1995); Grievance Committee dismissed the Grievance on that basis.

### Intervention of Mr. “H”
- August 1, 2002: Mr. “H” filed an Application for Intervention under Rule XIV.
- Mr. “H” background:
  - Like Applicant, a national foreign to the United States with LPR status employed at the IMF’s Washington, D.C. headquarters.
  - First joined the Fund in 1990 as a contractual employee; served in that capacity until 2001 when appointed as a fixed-term staff member.
  - Previously employed with the World Bank.
  - As of the Application for Intervention, he was 54 years of age.
- September 18, 2002: President, in consultation with Associate Judges, decided to admit Mr. “H”’s Application for Intervention, after considering the views of the parties; intervenor thereafter participated in the proceedings as a party.

_Administrative Tribunal of the International Monetary Fund, meeting of December 16, 17, and 18, 2002._

### 4. In order to inform the Fund community of proceedings pending before the Tribunal, the Registrar, upon

### 4. In order to inform the Fund community of proceedings pending before the Tribunal, the Registrar, upon

### Intervention: statutory requirements and Tribunal rules
- Rule XIV, paragraph 1 of the Rules of Procedure: “1. Any person to whom the Tribunal is open under Article II, Section 1 of the Statute may, before the closure of the written pleadings, apply to intervene in a case on the ground that he has a right which may be affected by the judgment to be given by the Tribunal.”
- Two statutory requirements for intervention (citing Mr. “P” (No. 2), Applicant v. International Monetary Fund, Respondent, Judgment No. 2001-2 (November 20, 2001), paragraph 49):
  - the intervenor must be a person within the Tribunal’s jurisdiction ratione personae; and
  - the intervenor must have a right that may be affected by the judgment to be given by the Tribunal.
- Article II, Section 2 (c) (i) definition retained: “the expression ‘member of the staff’ shall mean: (i) any person whose current or former letter of appointment, whether regular or fixed-term, provides that he shall be a member of the staff.”

### Parties’ positions on admissibility of Application for Intervention
- Applicant’s position:
  - Opposed granting the Application for Intervention because the intervention was not in her interest.
  - Asserted the intervention would raise issues she did not wish to raise and would add procedural burden without obvious benefit.
  - Did not address statutory requirements for intervention nor whether Mr. “H” met them.
- Respondent’s position:
  - On balance did not object to granting intervention.
  - Suggested Tribunal has discretion to deny intervention where prospective intervenor has only an “indirect” interest.
  - Proposed factors for discretionary denial:
    a. timing of the application for intervention (prejudice or hampering of party’s arguments);
    b. “relatedness” of intervenor’s factual and legal situation to that of the applicant and degree of complication introduced;
    c. extent to which intervenor’s situation and arguments are “...simply duplicative or cumulative...”;
    d. potential prejudice to the applicant if intervention denied.
  - Applied test to case: noted early filing by Mr. “H” (before Fund filed its Answer) and similarity of age-discrimination argument to Applicant’s theory; nonetheless argued Mr. “H”’s interest was adequately represented by Ms. “G” and he could pursue his own application later.

### Tribunal’s analysis and decision on intervention
- Tribunal findings:
  - It was undisputed Mr. “H” is a person to whom the Tribunal is open under Article II, Section 1.
  - Mr. “H” has a right that may be affected by the judgment because he, like Applicant, has LPR status and would be affected by decisions on the legality of the expatriate benefits policy.
  - Rejected Respondent’s contention that Tribunal may deny intervention when intervenor is only “indirectly” affected:
    - Respondent offered no legislative history or jurisprudence supporting such a discretionary power.
    - The “indirect” characterization of Mr. “H”’s interest was not persuasive.
  - Emphasized the breadth of the “may be affected” standard: interests need only be affected, not necessarily determined, by the judgment.
  - Noted res judicata limitations but recognized precedent effect in regulatory decision challenges; therefore future challenges could be affected by the Tribunal’s judgment.
  - Rejected the view that duplication of claims is a ground to deny intervention; identity between applicant’s and intervenor’s claims is often a touchstone for admission.
  - Found Applicant’s argument that intervention would unduly burden her unpersuasive given the similarity of contentions.
- Conclusion: Mr. “H”’s Application for Intervention met statutory requirements and was granted.

### Summary of parties’ principal contentions (issues and remedies sought)
- Applicant’s principal contentions (summarized):
  1. The Fund’s expatriate benefits policy discriminates against Applicant vis-à-vis staff in LPR status hired before 1985 who remain eligible under a 1985 “grandfathering” provision.
  2. Discrimination arises vis-à-vis staff who differ only in visa histories (e.g., those who began in G-4 status), because converting now to G-4 would prevent acquiring 15 years in that status before early retirement and would disincentivize overseas assignments (those assignments would not count toward the 15-year period).
  3. Applicant’s request for exception aligns with the policy’s spirit: compensate international staff for maintaining cultural ties with home countries.
  4. The possibility of obtaining LPR status is part of the overall benefits package (though not a direct Fund benefit); Staff Bulletin No. 02/2 recognizes advantages of regaining LPR status.
  5. Timing of the new policy harmed Applicant; earlier implementation would have allowed completion of 15 years in G-4 by early retirement—thus “grandfathering” is appropriate where timing is an issue.
  6. Staff in LPR status face similar challenges to G-4 colleagues yet G-4s with comparable rank and family status have substantially higher income due to expatriate benefits.
  7. Relief sought: be granted full expatriate benefits as of May 1, 2002, while maintaining LPR visa status.
- Intervenor’s principal contentions (summarized):
  1. Supports Applicant’s contentions.
  2. Current policy represents age discrimination because it “...requires older staff to perform an action that deprives them of an opportunity that is available to younger staff with identical employment and national characteristics.” The 15-year rule precludes completing required service before retirement age—even after 25 years in international organizations (including World Bank service).
  3. Policy is discriminatory for lacking the 1985 “grandfathering” clause.
  4. Tribunal has jurisdiction under Article XX because the January 2002 amendment, the request for exception, and the denial are post-October 15, 1992; 2002 amendment is a new policy despite elements from 1985 and 1947 policies.
  5. Uniform application of the 2002 amendment yields discriminatory results across categories:
     a) staff who may relinquish LPR status and, due to age, will be able to complete 15 years before retirement and thus retain option to regain LPR;
     b) staff (like Applicant) who, because of age, cannot complete 15 years before early retirement;
     c) staff (like Intervenor) who, because of age, cannot complete 15 years before mandatory retirement.
  6. LPR status should be considered a “benefit” facilitated by the Fund.
  7. Granting exceptions will not interfere with policy’s intent; HRD has authority to grant exceptions.
  8. Relief sought: preferably “grandfathering” of all staff holding LPR status at the time of the January 2002 amendment or alternatively grandfathering only those who, because of their age at amendment, would lose the option to apply for LPR at retirement.
- Respondent’s principal contentions (summarized):
  1. Applicant and Intervenor have not been adversely affected by the 2002 amendment; the amendment expanded choices and gave opportunity to become eligible for expatriate benefits.
  2. A staff member who benefits less from a favorable change has no legal claim; timing that yields less benefit does not constitute being adversely affected.
  3. Core complaint challenges the 1985 policy denying expatriate benefits to staff with LPR status; as that policy predates the Tribunal’s Statute, such claims fall outside Tribunal jurisdiction ratione temporis under Article XX. Later requests for exception to pre-Statute policy are also outside jurisdiction.
  4. Assuming jurisdiction, the 1985 policy and its 2002 amendment are proper exercises of managerial discretion, supported by evidence and rationally related to legitimate purposes; visa test for eligibility has rational nexus to recruitment and retention objectives and cost considerations.
  5. The 1985 “grandfathering” was legal and not discriminatory.
  6. The 2002 amendment is not discriminatory between Applicant/Intervenor and younger LPR staff; achieving LPR status after 15 years in G-4 is a function of U.S. law, not a Fund “benefit”; Applicant’s focus on disadvantage in regaining LPR conflicts with repatriation rationale of expatriate benefits.
  7. “Grandfathering” normally preserves entitlement to a benefit after abolition or reduction; Applicant and Intervenor have never been entitled to expatriate benefits, so no basis for grandfathering.
  8. The 1985 and 2002 policies make no provision for individual exceptions; any such exception would be ultra vires.

### Fund’s expatriate benefits policy: purpose and components
- Recruitment and retention rationale:
  - IMF mandated to “...pay due regard to the importance of recruiting personnel on as wide a geographical basis as possible.” (IMF Articles of Agreement, Article XII, Section 4(d); see also IMF Rules and Regulations, Rule N-1.)
  - Expatriate benefits compensate staff for costs of maintaining associations with home countries and facilitate repatriation, supporting international character and retention.
- Expatriate benefits currently offered (as described):
  - Home Leave (GAO No. 17, Rev. 9) (May 6, 1999):
    - Purpose: enable eligible staff to “...spend periods of authorized leave with their families in their home countries as a means of maintaining their cultural and personal ties to those countries.”
    - Includes allowances for travel costs of staff and qualifying family members, allowance toward expenses at home leave destination, insurance coverage, and travel time for home leave during accrued annual leave. (GAO No. 17, Rev. 9, Section 1.01.)
  - Education Allowances (GAO No. 21, Rev. 7) (June 12, 2000):
    - Purpose: assist eligible staff serving outside home countries “...in educating their children, either in their home countries or elsewhere, in a manner intended to facilitate their children’s eventual return to their home countries.”
    - Allowances may defray tuition, boarding or subsistence, travel and certain types of tutoring. (GAO No. 21, Rev. 7, Section 1.01.)
  - Certain aspects of repatriation benefits pursuant to GAO No. 8, Rev. 6 (January 1, 1988).

*International Monetary Fund Administrative Tribunal materials and associated Tribunal judgment summaries.*

### 43. Over time, the Fund has enacted changes to the eligibility requirements for receiving

### 43. Over time, the Fund has enacted changes to the eligibility requirements for receiving expatriate benefits.

### Evolution of the Fund’s expatriate benefits policy (1947–2002)
- 1947–1985: The IMF granted expatriate benefits on the basis of nationality foreign to the duty station, regardless of visa status.
- Early 1980s: A Joint Bank/Fund Working Group was established to reassess eligibility criteria.
- Working Group considered five allocation bases: (I) nationality; (II) international recruitment; (III) visa status prior to recruitment; (IV) length of residence in the U.S.; and (V) a combination of visa status prior to appointment and residency.
- Working Group recommendation (Report of the Working Group on Expatriate Benefits, June 27, 1984): option III, visa status prior to appointment, as “...the most logical criterion and recognizes the different circumstances and needs of U.S. nationals and permanent residents on the one hand and expatriates in G-4 status on the other.”

### 1985 policy adoption and “grandfathering”
- January 28, 1985: IMF Executive Board replaced the nationality test with a visa-status-based policy.
- Staff Bulletin No. 85/1 (February 1, 1985) stated: “...all staff members stationed at headquarters who have held permanent resident (PR) status or U.S. citizenship at any time during the 12 months prior to their entry-on-duty date in the Fund, or who acquire PR status or U.S. citizenship after their entry on duty, will not be eligible for expatriate benefits.” (Staff Bulletin No. 85/1, Section 1.a.) (Emphasis in original.)
- Staff Bulletin No. 85/1, Section 1.b.: A “grandfathering” exception allowed present staff in LPR status (and those who had initiated procedures to attain LPR status) to remain eligible for present and future expatriate benefits.

### Reassessments and 1994 reaffirmation
- 1994: IMF Executive Board reviewed options: (I) revert to nationality; (II) adopt a “modified INTELSAT option” (would consider spouse visa status); or (III) retain Staff Bulletin No. 85/1.
- Board rejected options I and II on grounds of cost and administrative difficulty, and retained the 1985 policy.

### Issues raised by Staff Association Committee and HRD
- October 1997: Staff Association Committee (“SAC”) circulated “Expatriate Benefits and Green Card Holders: Is Visa Status a Fair Criterion for Eligibility?” exploring difficulties with the 1985/1994 system and alternatives.
- 2001 staff composition (as of May 2001, Fund staffing = 2,649):
  - 26 percent were U.S. nationals (ineligible for expatriate benefits);
  - 60 percent were G-4 visa holders (eligible for expatriate benefits);
  - 9 percent were LPRs who were ineligible under the 1985 policy; and
  - 5 percent were LPRs eligible by reason of the “grandfathering” provision.
- Annual cost to the Fund of providing expatriate benefits: approximately $11,000 per eligible staff member.
- SAC memorandum (June 13, 2001) requested re-establishment of the nationality test as the SAC described the “...current practice is discriminatory, creating wide inequalities in benefits for staff members in broadly similar situations.” SAC offered an alternative: granting expatriate benefits to LPRs willing to convert to G-4 status.

### HRD proposal and rationale (2001)
- HRD reported to the Executive Board (October 26, 2001) proposing revision of the 1985 policy.
- HRD rationale:
  - Expatriate benefits promote the international character of the Fund and aid recruitment and retention of an internationally diverse staff.
  - The nationality criterion would be “in many respects” most consistent with the diversity mandate of the Articles of Agreement because LPR visa status holders are considered non-U.S. nationals for meeting geographic diversity objectives yet do not receive expatriate benefits.
  - Difficulties with the visa test had increased due to greater international labor market mobility since 1985; visa status inferences regarding intention to stay in the United States had become increasingly problematic.
  - Many non-U.S. nationals hired had completed education in the United States and had acquired LPR status to support themselves during studies without intending permanent residence; mid-career recruits with U.S. work experience may hold LPR status though not permanently resident.
  - Current policy disadvantaged those who acquire U.S. work experience compared with compatriots who had not worked in the United States, because such staff cannot become eligible for expatriate benefits even if they convert to a G-4 visa.
- HRD identified as most problematic: asymmetric treatment of those who wish to give up LPR status but remain ineligible to qualify for expatriate benefits.

### 2002 amendment (Staff Bulletin No. 02/2)
- December 18, 2001: Executive Board approved the policy change forming the basis of the dispute before the Administrative Tribunal.
- Staff Bulletin No. 02/2 (“Amendment of Eligibility for Expatriate Benefits”), notified to staff January 11, 2002, with effect from May 1, 2002 (referred to as the “2002 amendment”).
- Main features of the 2002 amendment:
  - Extends expatriate benefits to current and newly appointed Fund staff who are LPRs on the condition that they relinquish their LPR status in favor of obtaining a G-4 visa.
  - Only one such change in status is permitted per IMF career.
  - Current G-4 staff who previously had been denied eligibility because they held LPR status within the 12 months prior to their entry on duty are also now eligible for expatriate benefits.
- Staff Bulletin cautioned on reacquisition of LPR status:
  - Under currently applicable law, only time spent in G-4 status in the United States will count toward the 15 years required for reacquisition of LPR status.
  - U.S. immigration laws are subject to change.
  - Information and counseling sessions would be made available to assist staff.

### Legal issues and Administrative Tribunal jurisdiction
- The Respondent raised two jurisdictional challenges in Answer and Rejoinder: jurisdiction ratione materiæ and ratione temporis.
- Jurisdiction ratione materiæ:
  - Article II of the Statute of the Administrative Tribunal defines the Tribunal’s competence to pass judgment upon applications by staff members challenging the legality of an administrative act adversely affecting them; defines “administrative act” and “regulatory decision.”
  - Respondent argued Applicant was not “adversely affected” because Applicant has been and continues to be ineligible for expatriate benefits as a U.S. LPR employed after 1985, and the 2002 amendment only expanded Applicant’s options by permitting conversion to G-4 status.
  - Respondent relied on IMFAT precedent (Mr. “R”, IMFAT Judgment No. 2002-1) which held that review of an individual decision denying an exception may require review of the underlying regulatory decision.
  - Tribunal analysis noted the Commentary to the Statute: an applicant must be adversely affected to challenge a decision; the tribunal cannot resolve hypothetical questions or issue advisory opinions.
  - Tribunal conclusion: Applicant is adversely affected because, as a staff member employed after 1985 and continuing to hold LPR status, she is not entitled to expatriate benefits. Accordingly, the Tribunal has jurisdiction ratione materiæ.
- Jurisdiction ratione temporis:
  - Article XX, Section 1 of the Statute: “The Tribunal shall not be competent to pass judgment upon any application challenging the legality or asserting the illegality of an administrative act taken before October 15, 1992...”
  - Respondent contended Applicant’s challenge is essentially to the 1985 “visa test” policy predating October 15, 1992, and prior jurisprudence (Mr. “X”, IMFAT Judgment No. 1994-1; Ms. “S”, IMFAT Judgment No. 1995-1) interpreted Article XX to bar challenges to pre-October 15, 1992 acts even where effects persist.
  - Mr. “X” principle: identify the allegedly illegal administrative act and when it was taken; the Tribunal’s jurisdiction is not extended by subsequent consequences of a pre-1992 act.
  - Ms. “S” principle: challenges to pre-existing regulatory provisions and denials of exceptions to them are time-barred under Article XX; Article VI, Section 2 cannot override the lex specialis of Article XX.
  - Intervenor argued the January 2002 amendment, Applicant’s request for exception to that amendment, and denial of the request are post-October 15, 1992; the Fund’s 2002 policy may be considered “new” by virtue of its amendment even though it contains elements of earlier policies.

*Source: IMF material describing the historical development of expatriate benefits eligibility, Staff Bulletins No. 85/1 and No. 02/2, HRD reports, SAC memoranda, and relevant Administrative Tribunal jurisprudence.*

### 69. The question therefore is whether the facts of the present case may be distinguished

### 69. The question therefore is whether the facts of the present case may be distinguished

### Jurisdiction ratione temporis
- The Tribunal must resolve when the administrative act whose legality is challenged was taken for purposes of its jurisdiction ratione temporis.
- The Fund’s Executive Board first adopted the visa test for eligibility for expatriate benefits in 1985, before the entry into force of the Tribunal’s Statute.
- The question is whether subsequent Executive Board actions within the Tribunal’s jurisdiction period permit Tribunal review.

### Reaffirmation and amendment of policy within the Tribunal’s temporal jurisdiction
- Executive Board actions within the period of the Tribunal’s jurisdiction included:
  - Reaffirmation of the visa test in 1994.
  - Refinement of the visa test by a 2002 amendment.
- In 1994 the Executive Board considered three options: (I) reverting to the nationality criterion; (II) adopting the “modified INTELSAT option”; or (III) retaining the 1985 policy, and it chose option (III).
- In 2001 the Fund’s Human Resources Department presented a broad re-examination of eligibility criteria and recommended an amendment retaining the fundamental policy that G-4 visa holders are entitled to expatriate benefits and LPR visa holders are not; the Executive Board adopted the amendment to take effect in 2002.
- The Tribunal treated the 1994 reaffirmation and the 2002 amendment as “administrative act[s]” falling within its jurisdiction ratione temporis.
- Because re-consideration, reaffirmation, and amendment of the 1985 policy occurred after the Statute took effect, the Tribunal concluded the Application and the Intervention are not inadmissible on temporal grounds.

### Central legal question: discrimination in allocating expatriate benefits by visa status
- The Tribunal must determine whether the Fund’s policy (adopted in 1985 and reaffirmed in 1994) of determining eligibility for expatriate benefits on the basis of visa status discriminates impermissibly among categories of Fund staff.
- Applicant (Ms. “G”) challenges the underlying policy as discriminatory, asserting that LPR versus G-4 status may not correlate with the objectives of expatriate benefits (e.g., compensating additional costs of maintaining contacts with one’s home country, “cultural proximity”, or degree of permanence in the United States).
- The Fund contends that:
  - The policy is a proper exercise of managerial discretion.
  - It is supported by evidence and rationally related to legitimate purposes (recruitment and retention objectives, costs associated with benefits).
  - The policy is not discriminatory because there is a rational nexus between the visa test and policy objectives.

### Relevant precedent and standards of review
- The Tribunal relied on prior decisions (e.g., Mr. “R” v. IMF, IMFAT Judgment No. 2002-1) and international administrative jurisprudence to state standards:
  - Nondiscrimination imposes a substantive limit on discretionary authority in policy-making and administrative functions.
  - Changes must be based on proper consideration of relevant facts, reasonably related to objectives, made in good faith, not prompted by improper motives, and not discriminate in an unjustifiable manner (de Merode, WBAT Decision No. 1 (1981), paragraph 47).
  - Discretionary decisions cannot be overturned unless shown to be arbitrary, capricious, discriminatory, improperly motivated, based on error of law or fact, or carried out in violation of fair and reasonable procedures.
  - The Tribunal must respect managerial discretion and cannot substitute its judgment for that of management on the advisability of policy decisions (Lindsey; Report of the Executive Board commentary).
  - For a classification to withstand an inequality challenge there must be a “rational nexus between the classification of persons subject to the differential treatment and the objective of the classification.” (Mould, WBAT Decision No. 210 (1999), paragraph 26.)
  - The International Labour Organisation Administrative Tribunal: a breach of equal treatment requires different treatment of staff members who are in the same position in fact and in law (Vollering, ILOAT Judgment No. 1194 (1992), paragraph 2).

### Application of standards to the Fund’s visa-based classification
- The Tribunal may ask whether the decision “could ... have been taken on the basis of facts accurately gathered and properly weighed.” (Lindsey, paragraph 12.)
- The Tribunal must find a rational nexus between the classification and its objectives.
- The Tribunal noted deference to the Fund’s managerial and administrative discretion, particularly where managerial expertise is implicated.
- The Tribunal observed that prior careful study and consideration of alternatives (as in Mr. “R” and de Merode) weigh in favor of upholding legislative changes when reasonably undertaken.

### Assessment: reasonableness of the visa criterion
- The Tribunal considered the Fund’s choice of a visa criterion for expatriate benefits to be reasonable:
  - The selection procedure was deliberate rather than arbitrary.
  - The substance of the Fund’s choice is rational and defensible.
  - The Executive Board’s choices in 1985, reaffirmation in 1994, and refinement in 2002 are exercises of managerial authority that the Tribunal will not override when rationally related to the Fund’s mission and objectives.
- Rationale articulated by the Tribunal:
  - LPR visa advantages run counter to a fixed intention of the staff member to return to his home country upon completion of Fund service; LPR status generally broadens options for continued residence in the United States (indefinite expatriation) rather than definite repatriation.
  - G-4 visa holders’ options are more limited and directed toward eventual repatriation.
  - While not necessarily true in every individual case, the generalization provides a rational basis for differentiating benefits between G-4 and LPR status holders.

### The 2002 amendment: substance and tailoring
- The 2002 amendment differs from the prior policy by:
  - Opening eligibility for expatriate benefits to staff who are currently in LPR status (or were in LPR status within the 12 months prior to their joining the Fund) on the condition that they convert to G-4 visa status.
- Under the pre-2002 policy (1985–2002) staff were assigned for purposes of eligibility to the visa status held during the period preceding their appointment, regardless of later change to G-4 status.
- The Tribunal found the salient feature of the 2002 amendment—that eligibility follows the staff member’s choice of visa—better realizes the objective of a fair and rational allocation of expatriate benefits than the unamended 1985 policy:
  - The amendment is more finely tailored to achieving goals of expatriate benefits, especially repatriation.
  - A staff member’s prior visa status may reflect prior educational or employment history rather than a settled intention about repatriation.
  - As of 2002, only staff willing to incur the risk of not being able to regain LPR status in the future would be accorded expatriate benefits.

### Arguments concerning disadvantage to longer-serving staff and future LPR status
- Applicant and Intervenor contend the 2002 amendment disadvantages older and longer-serving staff relative to younger staff and those already holding G-4 status regarding the ability to regain LPR status in the future.
- Specific contentions:
  - Applicant references U.S. immigration law permitting individuals who have spent 15 or more years in G-4 status to move to LPR status, asserting the possibility of acquiring LPR status in the future must be considered part of the overall benefits package of Fund staff even if not a direct Fund benefit.
  - Intervenor asserts LPR status should be considered a “benefit” not administered by the Fund but “facilitated” by it.
- The Fund responds that:
  - The ability to regain LPR status is governed by U.S. law.
  - Applicant’s focus on reacquisition of LPR status conflicts with a key rationale for expatriate benefits, namely repatriation following separation from the Fund.

*IMF Administrative Tribunal (judgment excerpt).*

### 86. The Tribunal on this question sustains the position of the Fund. LPR status is not a

### 86. The Tribunal on this question sustains the position of the Fund. LPR status is not a

### Jurisdiction ratione temporis over the “grandfathering” provision
- The “grandfathering” proviso challenged by Applicant originates from the 1985 enactment.
- The Tribunal finds jurisdiction ratione temporis lacking for the Applicant’s challenge to the “grandfathering” proviso because there is no evidence that the proviso has been re-considered and re-adopted within the time period of the Tribunal’s jurisdiction in a manner comparable to the visa test itself.
- Conclusion: the “grandfathering” proviso "is and remains just that adopted in 1985."

### Allegation of impermissible discrimination and the nature of “grandfathering”
- Applicant contends the Fund’s expatriate benefits policy discriminates because staff who were employed in LPR visa status prior to 1985 continue to receive expatriate benefits under a “grandfathering” provision without relinquishing their LPR visa status.
- The Tribunal notes precedent: Viswanathan v. Asian Development Bank, AsDBAT Decision No. 12 (1996) held that an organization is not obliged to make retroactive a newly introduced benefit. (Paragraph 19.)
- The Tribunal explains that “Grandfathering” provisions are intended to maintain the acquired rights of incumbents rather than to ensure equality of treatment for subsequently recruited staff members.
- Footnote observation: both Applicant and Intervenor use the term “grandfathering” in their requests for relief, but Respondent points out that neither Ms. “G” nor Mr. “H” has ever been entitled to expatriate benefits under the Fund’s policy; therefore, “grandfathering” is not correctly applied in this case per Black’s Law Dictionary (6th ed. 1990, p. 699):
  - “Grandfather clause. Provision in a new law or regulation exempting those already in or a part of the existing system which is being regulated. An exception to a restriction that allows all those already doing something to continue doing it even if they would be stopped by the new restriction.”

### Requests for exceptions to eligibility requirements
- Applicant seeks an exception for herself based on her age and personal circumstances.
- Intervenor seeks an exception for all LPR staff members who, by reason of their age, would not be able to fulfill 15 years of service before retirement if they were now to convert to G-4 status.
- Respondent contends the expatriate benefits policy does not allow for exceptions and that any exception would be ultra vires.
- Tribunal findings:
  - Having concluded the Fund’s policy on allocation of expatriate benefits is not discriminatory, the Fund did not err in declining to grant exceptions in favor of the Applicant.
  - The expatriate benefits policy adopted by the Executive Board does not expressly empower the Administration of the Fund to grant exceptions to that policy.
  - While the Managing Director and associates have a measure of appreciation in exercising authority, that discretion does not extend to granting exceptions to a Fund policy which, if granted, would run counter to its essential objectives.

### Decision
- The Administrative Tribunal of the International Monetary Fund unanimously decides:
  - The Application of Ms. “G”, and that of Mr. “H” as intervenor, are denied.
- Signatories:
  - Stephen M. Schwebel, President
  - Nisuke Ando, Associate Judge
  - Michel Gentot, Associate Judge
  - Celia Goldman, Registrar
- Location and date: Washington, D.C., December 18, 2002

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_Source: https://www.imf.org/-/media/files/imfat/j2002-3.pdf_