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Economic loss: Since the applicant was due to retire at the time the selection would have been made, his economic loss was the value of the salary and emoluments of an ASG, without any adjustment for the receipt of entitlements as a D-2 Director, which is a simple calculation of the gross earnings minus deductions, plus the respondent’s subsidy contributions. Any actual income he made is adjusted against this amount. Pension: The pension calculation is more difficult. Two methods of calculation are open as the Pension Fund has stated it will not recalculate the applicant’s pension: the first is simply to actuarially calculate the capital value of the increased income stream; and the second is to ascertain the cost on the open market of acquiring an annuity that would fund the difference in the income streams. The applicant having tendered a quotation of USD180,000 to purchase an annuity, and this seeming reasonable (and less than the Pension Fund’s calculation of USD230,000), this amount is assessed. Beaudry UNDT/2010/039 explained why sums awarded for pension do not come within the cap. Effect of art 10.5(b) of the Statute: Applying the cap in this article of two years’ net base salary – agreed at USD354,600 – would lead to a shortfall of USD378,670 from the actual loss calculated. Beaudry dealt with the meaning of “exceptional circumstances” within the meaning of art 10.5(b) of the Statute and that reasoning is adopted here. There is a very substantial difference between the sums which, on first principles, justice requires to be paid, and the sum arbitrarily selected in art 10.5(b) as the cap. This substantial difference amounts to an exceptional circumstance justifying an award more closely approximating just compensation than compliance with the cap would permit. This does not necessarily mean that the whole sum should be awarded. The sum of USD475,000 is awarded, taking into account the cap sum, together with USD180,000 for loss of pension: a total of USD655,000. If the pension loss is covered by the cap in art 10.5(b), the discrepancy between what justice requires and the limit is so great that to apply the limit would effect such a grave injustice on the applicant as also to constitute exceptional circumstances. In this event, the cap cannot be applied and the resulting sum awarded is USD655,000. The sum of USD655,000 is assessed on the basis that any lesser sum would represent such a significant departure from the amount of compensation actually required to be paid to place the applicant in the same position as he would have been in had the respondent not breached his contract as to impose an exceptional injustice. Outcome: The sum of USD655,000 is awarded to the applicant.