RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/446
28 September 2001
(01-4651)
General Council
10 October 2001Original:  English
PARTICIPATION OF THE ADVISORY CENTRE ON WTO LAW
IN THE WTO PENSION PLAN
Communication from the Netherlands
The following communication dated 27 September 2001, addressed to the Chairman of the
General Council, has been received from the Permanent Mission of the Netherlands.
_______________
1. I write on behalf of the thirty-two Members and Signatories of the Agreement establishing the
Advisory Centre on WTO Law (hereafter "the Centre") and the least-developed countries.  Irespectfully request the inclusion of the following matter on the agenda of the regular General Council
of the 10 October 2001.  We request the General Council to consider our proposal (see annex 1) to
allow the staff of the Centre to participate in the WTO Pension Plan.
2. The Centre is a new intergovernmental organization that provides legal training, support and
advice on WTO law to developing country and economy-in-transition WTO Members, in particular to
the least-developed among them.  Annex 2 contains a background note on the Centre.  Its founders
believe that a proper balance of rights and obligations under WTO law can only be maintained if allWTO Members have a full understanding of their WTO rights and obligations and an equal
opportunity to resort to the WTO dispute settlement procedures.
3. Article V:1 of the Marrakesh Agreement Establishing the World Trade Organization (the
"WTO Agreement") provides that the General Council shall make appropriate arrangements for
effective co-operation with other intergovernmental organizations that have responsibilities related tothose of the WTO.  Article 27 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") provides, among others, that the Secretariat (i) shall make available a
qualified legal expert to any developing-country Member upon request, in response to the recognized
need to provide additional legal advice and assistance in respect of dispute settlement and (ii) shall
conduct special training courses for interested Members concerning dispute settlement procedures andpractices.
4. In this respect then, and in relation to Article 27 of the DSU, the Centre has "responsibilities
related to those of the WTO".  In this context, "effective cooperation" between the WTO and the
Centre, as mandated in Article V:l of th e WTO Agreement, would be appropriate.
5. The Centre is foreseen to be a very small organization:  one Executive Director, four
professional lawyers and support staff at full capacity.  Members recognized the need of having
competitive conditions of service, including a viable pension plan, to be able to attract and retain
experienced professionals and have decided to apply conditions of service similar to those of theWT/GC/W/446
Page 2
WTO.  However, actuarial experts have advised us that the limited number of the staff of the Centre is
a serious obstacle towards the establishment and maintenance of an independent viable pension plan.
6. In this regard, we believe that effective cooperation between the WTO and the Centre could
be initially concretely established if the staff of the Centre were to participate in the WTO Pension
Plan.  This would be under conditions ensuring, at the very least, the independence of both the WTOand the Centre, and without financial costs or risks to the WTO.  It would have to be structured in a
manner that involves no financial transfers from the WTO to the Centre nor any administrative
dependency between the two organizations.
7. We have commissioned a study on the possible financial and technical implications of
admission of the Centre's staff to the WTO Pension Plan from the perspectives of both organizations
(see annex 3).  The study that was done by Mr. Richard Leblond, the former Actuarial Consultant of
the WTO Pension Plan and the UN Joint Staff Pension Fund, concludes that the ideal solution fromthe perspective of the Centre would be to join the WTO Pension Plan.  From the perspective of the
WTO the study concludes that admission of the Centre to the WTO Pension Plan could be effected
easily from a technical point of view.  It would not adversely impact the actuarial balance of the Plan
and could even be of modest benefit to the WTO
8. Accordingly, I respectfully request that the pr ocess leading towards the possible participation
of the staff of the Centre in the WTO Pension Plan be commenced by a consideration of the proposal
at the regular meeting of the General Council at the 10 October 2001.  The General Council could
then perhaps consider our proposal on its general merits and take a phased approach.  Cognizant of
the technical and financial implications of our proposal it is suggested that the General Council would
in first instance instruct the Management Board of  the WTO Pension Plan to study the technical and
financial implications and invite it to present a recommendation to the General Council on the
admission of membership of the Centre's staff in due course.  Through their representatives on the
Management Board the staff members of the WTO Secretariat being important stakeholders in this
would also have the opportunity of input in the decision-making-process.
9. In conclusion, the founders of the Centre expect that the Centre will make a vital contribution
to the rule of law in international trade and the credibility of the multilateral trading system.  An
effective Centre that is able to attract and retain competent legal officers is therefore invaluable not
only to the users but also to the WTO Membership as a whole.  The Executive Director of the Centre,
Mr. Frieder Roessler, and I are at the disposal of the General Council and the Management Board to
explain further our proposal and to answer any question that the General Council or Management
Board may have in this regard.
Attachments: Annex 1: Proposal on the Advisory Centre on WTO Law Joining the WTO
Pension Plan
Annex 2: Background Note on the Centre
Annex 3: Study on the Possibility of Joining the WTO Pension PlanWT/GC/W/446
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ANNEX 1
Proposal on the Advisory Centre on WTO Law Joining the WTO Pension Plan
I. INTRODUCTION
1. The Advisory Centre on WTO Law (hereafter "the Centre") is a new intergovernmental
organization in Geneva independent of the WTO.  It provides legal training, support and advice on the
law of the WTO to developing country and economy-in-transition WTO Members, in particular to the
least-developed among them.  Its founders believe that a proper balance of rights and obligations
under WTO law can only be maintained if all WTO Members have a full understanding of their WTO
rights and obligations and an equal opportunity to resort to the WTO dispute settlement procedures.
2. The Agreement establishing the Advisory Centre on WTO Law entered into force on 15 July
2001 and the constituent meeting of its General Assembly was held on 17 July 2001.  Of the 32
signatories of this Agreement, nine are developed countries, 22 developing countries and one an
economy in transition.  All least developed countries, whether Members of the Centre or not, are
entitled to the services of the Centre.  Membership of the Centre remains open to all WTO Membersand those in the process of accession to WTO through an accession procedure.  Jordan will be the first
WTO Member to accede.
3. Article V:l of the Marrakesh Agreement Establishing the World Trade Organization (the
"WTO Agreement") provides that the General Council shall make appropriate arrangements for
effective cooperation with other intergovernmental organizations that have responsibilities related tothose of the WTO.  Article 27 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") provides, among others, that the Secretariat (i) shall make available a
qualified legal expert to any developing-country Member upon request, in response to the recognized
need to provide additional legal advice and assistance in respect of dispute settlement and (ii) shall
conduct special training courses for interested Members concerning dispute settlement procedures andpractices.
4. In this respect then, and in relation to Article 27 of the DSU, the Centre has "responsibilities
related to those of the WTO".  In this context, "effective cooperation" between the WTO and the
Centre, as mandated in Article V:I of the WTO Agr eement, would be appropriate.  We believe that
effective cooperation between the WTO and the Centre could be initially concretely established if the
staff of the Centre were to participate in the WTO Pension Plan.  The Centre's Members and
Signatories and the least-developed countries therefore request the General Council of the WTO tocommence the consideration of the possible admission of the staff of the Centre to membership in the
WTO Pension Plan.  The General Council is invited to instruct the Management Board of the WTO
Pension Plan after careful study of the technical and financial implications of possible admission of
the Centre' staff to submit a recommendation for decision to the General Council in due course
II. CONDITIONS OF SERVICE OF THE CENTRE
5. The Centre is foreseen to be a very small organization:  one Executive Director, four
professional lawyers and support staff at full capacity.  In view of its small size and the desire of
Members to keep administrative burdens to a minimum, the General Assembly of the Centre adopted
a compensation philosophy, staff regulations and staff rules similar to the conditions of service of the
WTO Secretariat.  Members recognized the value and the need of having competitive conditions ofservice, to be able to attract and retain experienced professionals and to act as a responsible employer
at the same time.  In this respect a pension plan that offers coverage in the areas of disability,WT/GC/W/446
Page 4
retirement, death and related benefits for staff members and their survivors is considered a .valuable
asset.
6. In respect of pensionable requirements the employees of the Centre already enjoy the same
conditions of service as employees of the WTO Secretariat.  This concerns the salary scale and the
method of its annual adjustment, the grading of posts, the mandatory nature of the participation of thepermanent staff in a future pension plan, the financial contributions of employer and employee as a
percentage of the pensionable remuneration and the same rigorous medical clearance before hiring
effected by the Joint Medical Services in Geneva.  Copies of these Regulations are available on the
website of the Centre ( www.acwl.ch).  Members are committed in the staff regulations to explore the
possibility of the Centre's staff participating in the WTO Pension Plan.
III. JOINING THE WTO PENSION PLAN
7. Admission to the WTO Pension Plan would be under the same conditions as for the staff of
the WTO, with guarantees to maintain the independence of both organizations and without financial
costs or risks to the WTO.  The Centre, although an essential part of the legal system of the WTO, can
fulfil its function only as long as it remains in dependent of the WTO.  The relationship between the
Centre and the WTO Pension Plan would therefore have to be structured in a manner that involves
neither financial transfers from the WTO to the Centre nor any administrative dependency betweenthe two organizations.
8. Annexed to this proposal is a study on the technical and financial aspects of a possible
extension of the WTO Pension Plan to the Centre's staff, from the perspective of both the Centre and
the WTO.  Mr. Richard Leblond, the former Actuarial Consultant of the WTO Pension Plan and the
UN Joint Staff Pension Fund, who is now retired, did this study that was commissioned by thePreparatory Committee of the Centre.  The report concludes that from the perspective of the Centre
the ideal solution would be to join the WTO Pension Plan.  Creating its own self-insured pension
scheme with a private insurance company would be a costly affair in view of the small population and
would not offer the same kind of risk coverage nor benefits for the staff.  Joining another scheme, for
example the UN Joint Staff Pension Fund, would require application of the UN Common system.  Itwould pose the same problems for the Centre as those that led the WTO to leave this system and
pension plan.
9. From the perspective of the WTO admission of the Centre to membership in the WTO
Pension Plan could be effected easily from a technical point of view and would not adversely impact
the actuarial balance of the Plan.  The study actually concludes that based on the profile and probable
average career pattern of the Centre's staff the contributions paid by the Centre and its employees are
very likely to produce an actuarial surplus rather than  an actuarial deficit.  So admitting the Centre's
staff could even be of modest benefit to the WTO Pension Plan because it would broaden the base of
the WTO scheme.
10. Current WTO Pension Plan Regulations (document WT/L/282) only foresee participation in
the scheme by WTO staff.  Allowing the Centre's staff to enter under the same conditions and to enjoy
the same benefits would require amendment of these Regulations by a decision of the General Councilof the WTO.  Technically, simply adding an article to the WTO Pension Plan Regulations that
stipulates the conditions required for an international organization in Geneva with a Seat Agreement
to be considered for admission could do this.  It would be for the Management Board of the WTO
Pension Plan to reach agreement with an applying international organization after which the General
Council would decide on admission to membership in the plan.
11. We see no risk of the WTO Pension Plan being flooded with requests from other international
organizations in Geneva to join the scheme sin ce there are no other international organizations inWT/GC/W/446
Page 5
Geneva in such a symbiotic relationship with the WTO.  Furthermore, it would require as a minimum
the application of the above-mentioned pensionable requirements and other conditions that may be set
by the General Council and the Management Boar d. Admission would anyway require a consensus
decision of the General Council so there is no risk of setting an unwanted precedent.
12. The Centre's Members and Signatories want to  stress, once again, the fundamental importance
they attach to the full respect of the competencies and independence of both organizations.  The
Centre was created as an independent international organization, in particular with the need to
maintain the neutrality of the WTO Secretariat in dispute settlement in mind.  Participation of the
Centre in the WTO Pension Plan would not create a functional relationship nor would it give either
organization influence over the policy of the other.  In our view it would be identical to the situation
until end of 1998 when the GATT/WTO still participated in the UN Common System and its Joint
Staff Pension Fund.  The Centre would also not seek any influence or representation in themanagement of the WTO Pension Plan.
IV. CONCLUSION
13. In concreto, the Centre's Members and Signatories request the General Council of the WTO to
consider their proposal on admission of the Centre's staff to the WTO Pension Plan on its general
merits and to take a phased approach.  Cognizant of the technical and financial implications of theproposal it is suggested that the General Council invites the Management Board of the WTO Pension
Plan to study the technical and financial implications of possible admission of the Centre carefully.
Through their representatives on the Management Board the staff members of the WTO Secretariat
being important stakeholders would also have the opportunity of input in the decision making.  The
Management Board could be invited to submit a recommendation on the addition of a general articleto the Pension Plan Regulations on admission of membership and a specific draft decision on the
Centre's request in due course.
14. In conclusion, the founders expect that the Centre will make a vital contribution to the rule of
law in international trade and the credibility of the multilateral trading system.  An effective Centre
that is able to attract and retain competent legal of ficers is therefore invaluable not only to the users
but also to the WTO Membership as a whole.WT/GC/W/446
Page 7
ANNEX 2
Background Note on the Advisory Centre on WTO Law
I. THE AGREEMENT ESTABLISHING THE ADVISORY CENTRE ON WTO LAW
1. On the occasion of the third Ministerial Conference of the WTO in Seattle, on 1 December
1999, the Ministers of Bolivia, Canada, Colombia, Denmark, Dominican Republic, Ecuador, Egypt,
Finland, Guatemala, Honduras, Hong Kong China, Ireland, Italy, Kenya, Netherlands, Nicaragua,
Norway, Pakistan, Panama, Paraguay, Peru, Philippines, Sweden, Thailand, Tunisia, United
Kingdom, Uruguay, Venezuela and Zimbabwe signed the "Agreement establishing the Advisory
Centre on WTO Law".  The Agreement remained open for signature until 31 March 2000. India,Latvia and Senegal signed before that date.  The Agreement thus has currently 32 signatories: nine
developed countries, 22 developing countries and one economy in transition.
2. Any WTO Member and any State or customs territory in the process of acceding to the WTO
may join the Centre by acceding to the Agreement.  Jordan is expected to be the first WTO Member
to accede.  All of the 49 countries designated by the United Nations as least-developed countries areentitled to the services of the Centre even without being Member of the Centre.  Once all signatories
have completed their domestic approval procedures and Jordan has acceded, there will already be 72
Members of the 142 WTO membership that are entitled to the legal services of the Centre.
II. ENTRY INTO FORCE OF THE AGREEMENT
3. For the Agreement establishing the Centre to enter into force two conditions had to be met:
First, a minimum of 22 States or customs territories must have accepted the Agreement.  Second, the
total of the contributions of the States or customs territories that have accepted the Agreement must
have exceeded US$12 million (US$6 million for the endowment fund and US$6 million of multiyear
contributions, in indicated in the table below). Both conditions were met on 15 June 2001.  Thirty
days thereafter - on 15 July 2001 - the Agreement entered into force.
III. START-UP OF THE CENTRE
4. The constituent meeting of the Centre's General Assembly was held on 17 July 2001.  It
adopted all legal instruments, regulations and decisions that had been prepared by the Preparatory
Committee, including the seat agreement with Switzerland, the Centre's financial regulations, the
conditions of service for the staff, the rules of procedure for the General Assembly and the
Management Board, and the budget for 2001.  The General Assembly also appointed the members of
the Management Board of the Centre for a two-year  period:  Dr. Said El-Naggar (former Appellate
Body Member from Egypt);  Mr. Stuart Harbinson (current Chairperson of the General Council of the
WTO and Ambassador of Hong Kong, China);  Dr. St uart Robinson (former senior Director in the
GATT Secretariat from Switzerland);  Mrs. Marithza Ruiz de Vielman (Ambassador of Guatemala in
the United Kingdom);  Mr. John Weekes (former Chairperson of the General Council of the WTO
from Canada).  Mr. All Said Mchumo (Ambassador of Tanzania and former Chairperson of theGeneral Council of the WTO) was appointed as the representative of the least-developed countries.
The Management Board elected Dr. E1-Naggar as Chairperson and Mr. Weekes as Vice-Chairperson.
The Chairperson of the Preparatory Committee, Mr. Otto Genee of the Netherlands, was appointed as
Chairperson of the General Assembly in 2001;  Ms. Olga Lucia Lozano of Colombia was appointed as
Vice-Chairperson.  The Management Board appointed Mr. Frieder Roessler as Executive Director andthe General Assembly approved his terms of service.  Mr. Roessler was previously director of the
legal affairs division of the GATT/WTO and taught international economic law at various
universities.WT/GC/W/446
Page 8
5. The Centre is currently located at Chemin Louis-Dunant 19, next to the new office of the
World Bank in Geneva.  In July 2002 the Centre will move to new premises in the Business Centre
"Les Nations" (Avenue Guiseppe Motta 31-37) that is presently being constructed.  Even though the
Centre is still in its start-up phase, its Members have already requested its services in four WTO
dispute settlement cases.
6. The staff of the Centre will initially consist of the Executive Director, four lawyers, one office
manager and a secretary.  The office manager has already been hired.  Recruitment of three lawyers is
currently underway.  The capacity of the Centre will be expanded in response to the demand for its
services.
IV. SERVICES OF THE CENTRE
7. The Centre will provide legal counselling on WTO law matters to developing-country and
economy-in-transition Members of the Centre and all least-developed countries free of charge up to amaximum of hours to be determined by the Management Board.  It will also provide legal support
throughout dispute settlement proceedings in the WTO at discounted rates for its Members and least-
developed countries in accordance with the schedule of fees set out in Annex IV of the Agreement
establishing the Centre.  The Centre thus functions essentially as a law office specialized in WTO law.
In addition, the Centre will offer training on WTO jurisprudence on a regular basis.  Intern and traineeprogrammes will be developed for government officials from developing country Members and least-
developed countries.  Its mandate and modest size require the Centre to stay within its own niche, to
avoid overlap and to complement the training and technical co-operation provided by the WTO
Secretariat and other international institutions.
8. The General Assembly has approved as part of the financial regulations the opening of a
Technical Expertise Trust Fund.  This Fund will be available for developing-country and economy-in-
transition Members to defray part of the costs of technical expertise to prepare the underlying
technical dossier in fact-intensive dispute settlement proceedings, both in the exploratory and the
panel phase.  The Trust Fund is to be funded by donor governments and intergovernmental
organizations only.  It will be made operational once pledges by donors have been received.
V. INSTITUTIONAL STRUCTURE OF THE CENTRE
9. The Centre has a General Assembly, a Management Board and an Executive Director.  The
General Assembly is composed of the representatives of the Members and the least developed
countries.  It meets at least twice a year to oversee the functioning of the Centre and to adopt the
annual budget.  The Management Board takes the decisions necessary to ensure an efficient and
effective operation of the Centre and reports to the General Assembly.  The Board consists of four
members, serving in their personal capacity and selected on the basis of their professionalqualifications, a representative from the least developed countries and the Executive Director ex
officio.  In the transition period of the first five years there are two members from developed
countries.  The Executive Director represents the Centre externally, appoints staff and external
consultants, and manages the day-to-day operations.
VI. FINANCING THE CENTRE'S ACTIVITIES
10. Each of the developed-country Members of th e Centre - Canada, Denmark, Finland, Ireland,
Italy, the Netherlands, Norway, Sweden and the United Kingdom - contributes US$1,000,000 to the
endowment fund and/or US$1,250,000 to finance expenditures in the first five years of operation.
The schedule of contributions of the developed Members is set out in Annex I of the Agreement.
Developed countries have no access to the legal services of the Centre.WT/GC/W/446
Page 9
11. The Members that are developing countries or economies in transition pay a one-time
financial contribution to the Centre's endowment fund.  According to Annex II of the Agreement
establishing the Centre, these contributions vary with the share in world trade and income per capita,
and range from US$50,000 for Members falling in category C to US$ 300,000 for Members in
category A.  The least-developed countries are not required to make contributions to the endowmentfund and furthermore receive priority in the provision of the Centre's services.
12. According to the Schedule of Fees set out in Annex IV of the Agreement, Members that are
developing countries or economies in transition are accorded legal advice on WTO law free of charge
up to a maximum number of hours to be determined by the Management Board.  However, the
Centre's support in dispute settlement proceedings is subject to hourly fees ranging from US$25 for
the least-developed countries to US$200 for Category  A Members.  Developing countries that are not
Members of the Centre are charged for all legal services hourly fees ranging from US$250 to US$350.
13. To finance its regular activities after the transitional period of five years, the Centre will draw
on revenue generated by its endowment fund and the user fees.  Multiyear contributions from
developed country Members will finance the first five years of operation as user fees and earnings
flow into the endowment fund to stimulate its buildup.  The 32 founding members agreed to make
available US$8.8 million for the endowment fund and US$7.25 million in the form of multiyearcontributions.  On the basis of the current membership an amount of around Sw F 20 million is
projected for the endowment fund after five year s.  From the sixth year onwards the Centre is
expected to be financially self-sufficient on the basis of the user fees and the revenues from the
endowment fund.  The Centre may accept - under stri ct conditions - voluntary contributions from
governmental and non-governmental donors for specific  purposes that are not related to actual dispute
settlement cases, such as training and internships programmes.WT/GC/W/446
Page 10
THE SIGNATORIES AND THEIR FINANCIAL CONTRIBUTIONS
WTO Member Endowment
FundMultiyear
ContributionsTotal
Contributions
Developed Countries
Canada* US$ 1,250,000** US$ 1,250,000
Denmark* US$ 1,000,000 US$ 1,000,000
Finland* US$ 1,000,000 US$ 1,000,000
Ireland* US$ 1,000,000 US$ 1,250,000 US$ 2,250,000
Italy* US$ 1,000,000 US$ 1,000,000
Netherlands* US$ 1,000,000 US$ 1,250,000 US$ 2,250,000
Norway* US$ 1,000,000 US$ 1,250,000 US$ 2,250,000
Sweden* US$ 1,000,000 US$ 400,000 US$ 1,400,000
United Kingdom* US$ 1,850,000 US$ 1,850,000
Developing Countries and Economies in Transition
(payable in 4 years)***
Category A
Hong Kong US$300,000 Dominican Rep.* US$50,000
Category B Ecuador* US$50,000
Colombia US$100,000 Guatemala US$50,000
Egypt US$100,000 Honduras US$50,000
India* US$100,000 Kenya* US$50,000
Pakistan* US$100,000 Latvia* US$50,000
Philippines US$100,000 Nicaragua* US$50,000
Thailand* US$100,000 Panama* US$50,000
Uruguay US$100,000 Paraguay US$50,000
Venezuela US$100,000 Peru* US$50,000
Category C Senegal US$50,000
Bolivia US$50,000 Tunisia US$50,000
Zimbabwe US$50,000
* Signatories that have deposited their instrument of ratification per 15 June 2001 and that have
become Members.
** The change in the contribution of Canada from endowment fund to multiyear was approved by theGeneral Assembly on 17 July 2001.
*** Contributions may be paid in four installments if the Member finds this necessary.WT/GC/W/446
Page 11
How to contact the Centre and its staff
The Centre: Advisory Centre on WTO Law
Chemin Louis-Dunant 19Case Postale 132
1211 Genève 20
Switzerland
Telephone:  +41 22 919 2121
Fax:  +41 22 919 2122E-mail*:  info@acwl.ch
Website*:  www.acwl.ch
Executive Director: Mr. Frieder Roessler
Telephone:  +41 22 919 2121
E-mail*:  frieder.roessler@acwl.ch
Office Manager: Mrs. Natacha Zofka
Telephone:  +41 22 919 2111
E-mail*:  natacha.zofka@acwl.ch
*expected to be operational as from I October 2001
More information
• Download the Agreement establishing the Advisory Centre on WTO Law
• Download a PowerPoint presentation on the Centre
• Download the Financial Regulations of the Centre
• Download the Rules of Procedures of the General Assembly
• Download the Rules of Procedures of the Management Board
• Download the Staff and Pension Regulations and Staff rules of the Centre
• Download the job application form of the CentreWT/GC/W/446
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ANNEX 3
Study on the Possibility of Joining the WTO Pension Plan
Advisory Centre on WTO Law
7 September 2001
About this material
This report has been prepared at the request of the Chairman of the Preparatory Committee to
the Advisory Centre on WTO Law to undertake a study on the technical and financial aspects of apossible extension of the definition of the participants in the WTO Pension Plan to accommodate the
staff of the Centre, from the perspective of both the Centre and the WTO.
Contents Page
I. BACKGROUND 15
II. FEATURES OF THE CENTRE 15III. TECHNICAL ASPECTS OF JOINING THE WTO PENSION PLAN 16IV. FINANCIAL ASPECTS OF JOINING THE WTO PENSION PLAN 17
V. CONCLUSIONS 19WT/GC/W/446
Page 15
I. BACKGROUND
The Agreement establishing the Advisory Centre on WTO Law (hereafter "the Centre") has
entered into force on 15 July 2001 and the constituent meeting of the General Assembly and the
Management Board was held on 17 July 2001 to adopt - among other basic documents - the
conditions of service for the staff that had been prepared by the Preparatory Committee. It wasdecided to apply the WTO salary structure and to follow other pensionable requirements such as the
same strict medical clearance as for the WTO Secretariat.
In this policy document the Members of the Centre also recognize the value of and the need
for a pension scheme in order to be able to attract good staff members and thus enhance continuity in
the Centre. Being a very small organization, the Members are committed to explore as the first and
preferable option the possibility of entering the staff of the Centre as participants in the WTO Pension
Plan under the same rights and obligations as the WTO staff. This would require amendment of thecurrent WTO Pension Plan provisions through a decision of the General Council of the WTO,
possibly on the basis of a proposal by the Management Board of the WTO Pension Plan.
II. FEATURES OF THE CENTRE
Following are some of the features of the Centre, which may have an influence on its Pension
Plan:
1. Status of an International Organization in Switzerland
As a result of its Headquarters Agreement with Switzerland, the Centre is exempt from
national taxes as well as from the Swiss requirements to participate in the First and Second Pillars.
The First Pillar is the national Social Security system and the Second Pillar is a law describing theminimum benefits, which must be provided by all Swiss employers in their pension plan.
Article 17 of the Headquarters Agreement also specifies that staff members who do not have
the Swiss nationality are not subject to:
• the Swiss legislation on old age and survivors' insurance (AVS),
• the invalidity insurance (AI),
• the unemployment insurance (AC),
• the system of indemnities agains t loss of income (APG), nor to
• the Second Pillar.
The situation of staff members of Swiss nationality is to be resolved through an exchange of
letters.
2. Need for Qualified Staff
While the Centre does not, legally, have to provide a Pension Plan, it must be able to recruit
competent staff, most of them very knowledgeable in international law in general and in WTO law in
particular. As such, it will have to compete with the WTO itself and with several governments that
have such staff.
In order to recruit its staff, the Centre will thus have to offer not only adequate salaries (which
it has already decided to do by applying the WTO salary structure), but also an adequate benefit
package including a pension plan comparable to that of the WTO and of most governments.WT/GC/W/446
Page 16
3. Small Size
The Centre is projected to have only seven staff members, five of whom, including the
Executive Director, will be recruited in the year 2001 and the other two in 2002. Furthermore, the
Executive Director will have the choice of participating or not in the Centre's Pension Plan, which
means that the Pension Plan may cover as few as six staff members by the end of 2002.
A pension plan covering so few staff members could not be self-insured, in part because the
risks could not be sufficiently spread, but also because the administration costs per capita would be
too high. This means that, if the Centre cannot join an existing pension plan (such as the one of the
WTO or another), it would have to conclude an arrangement with an insurance company.
4. Expected career length within the Centre
As noted above, the primary objective of the Centre's compensation philosophy is to secure
staff members of the highest standards of competence, integrity and efficiency that meet the Centre'srequirements. A secondary objective is to take into account the needs and aspirations of its staff
members while seeking to ensure the required diversification of the Secretariat.
The consequence of those objectives is that the Centre will need to strike a balance between
continuity of staff and a certain renewal of the staff. In other words, a very limited number of staff can
expect to "make a career" at the Centre, with the majority of staff being expected to serve for a limitedduration, such as two to five years.
III. TECHNICAL ASPECTS OF JOINING THE WTO PENSION PLAN
As mentioned earlier, for the staff of the Centre to be covered under the WTO Pension Plan,
the General Council of the WTO would have to amend the Regulations of the Pension Plan. In this
chapter, we examine the technical aspects of that possibility from each Organization’s perspective.
5. From the Perspective of the WTO
There are several organizations that participate in a pension plan with one other organization
or more. An example of such an arrangement is the United Nations Joint Staff Pension Fund, in which
participate not only the United Nations Organization but some 18 other Organizations, ranging from
very large ones (such as the FAO, the ILO and the WHO) to much smaller ones (such as the Europeanand Mediterranean Plant Protection Organization and the International Tribunal for the Law of the
Sea).
In that example, membership in the UNJSPF is open to the specialized agencies of the United
Nations and to any other international, intergov ernmental organization, which participates in the
common system of salaries, allowances and, other conditions of service of the United Nations and the
specialized agencies. Admission to membership is by decision of the UN General Assembly, upon the
affirmative recommendation of the United Nations Joint Staff Pension Board, after acceptance by theorganization concerned of the UNJSPF Regulations and agreement reached with the Board as to the
conditions, which shall govern its admission.
It will be recalled that the WTO was a member of the UNJSPF until the end of 1998. Its
decision to terminate its membership as from 1 January 1999 was linked to its decision to adopt a
salary system different from the UN common system (and independent of the US dollar).
Now that the WTO has developed its own system of remuneration and other conditions of
service, it is clear that any organization wishing to become a member of the WTO Pension PlanWT/GC/W/446
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should first adopt the same system of remuneration and other conditions of service. Admission to
membership in the WTO Pension Plan should be by decision of the WTO General Council, after
acceptance by the organization concerned of the WTO Pension Plan Regulations and agreement
reached with the Management Board of the WTO Pension Plan as to the conditions, which shall
govern its admission and continued membership.
The admission of the Centre to membership in the WTO Pension Plan would necessitate
merely the addition of an article in the Pension Plan Regulations, which would stipulate the conditions
required for an organization to be considered for admission.
6. From the Perspective of the Centre
For the Centre, its admission to membership in the WTO Pension Plan would represent an
ideal solution and would be the logical extension of its decision to adopt the WTO system of
remuneration and other conditions of service. It would require a decision by its General Assembly toaccept the WTO Pension Regulations. At the same time, the General Assembly should give power to
its Executive Director to reach agreement with the Management Board of the WTO Pension Plan as to
the conditions governing the admission of the Centre into the Pension Plan.
IV. FINANCIAL ASPECTS OF JOINING THE WTO PENSION PLAN
The financial aspects of a possible admission of the Centre to membership in the WTO
Pension Plan are examined here from each Organization’s perspective.
7. From the Perspective of the WTO
The only financial commitment made by the WTO Council towards the WTO Pension Plan is
to pay its required contributions, as stipulated in the Pension Plan Regulations (currently 15 per cent
of its participants' pensionable remuneration). Those contributions, together with the participants' owncontributions (currently at 7.5 per cent of their pensionable remuneration) are paid into the WTO
Pension Plan and are invested so as to produce investment income.
In return for those stipulated contributions, the WTO Pension Plan is responsible for the
payment of all benefits becoming due under its Regulations, as well as for the payment of all costs
incurred in the administration of the Plan. An actu arial valuation is performed from time to time (at
least every three years) to verify that the stipulated contribution rates continue to be adequate to
finance the liabilities of the Pension Plan. If that  should not be the case, the WTO Council would have
to decide, upon the recommendation of the Management Board, whether the Regulations should be
amended so as to reduce the future liabilities or increase the contribution rates to be paid by the
participants and by the WTO.
Before admitting a new organization to membership into the WTO Pension Plan, the WTO
Council should be satisfied that such admission will  not lead to a future actuarial imbalance which
might require an increase in the contribution rates or a modification in some of the benefits to be paid.
In the case of the Centre the contributions that will be paid by the Centre and by its staff
members who would be admitted as participants in the WTO Pension Plan are very likely to produce
an actuarial surplus rather than an actu arial deficit, for the following reasons:
(a) The large majority of the Centre's staff members are expected to remain in service
less than five years, for the reasons described earlier in this report. This means that
they will become entitled, upon separation from service, to a withdrawal settlement
equal to 10 per cent of their final average remuneration, multiplied by their years (andWT/GC/W/446
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fractional years) of participation in the WTO Pension Plan. As the Pension Plan will
have received, on their behalf, 22.5 per cent of their pensionable remuneration every
year of their participation, and will have invested that money so as to generate some
investment income, it is clear that the excess contributions that will have been paid
(about 12.5 per cent of pensionable remuneration for each year of participation) willhave been more than sufficient to pay the administration costs related to them.
(b) For the very few individuals who might, some day, qualify for a periodic pension
from the WTO Pension Plan, there is no reason to believe that such individuals would
have a profile very different from the average WTO participant in a similar situation.
For those individuals, the 22.5 per cent contribution rate should be sufficient to
finance their benefits.
Of course, the size of the surplus that is expected to be generated by the Centre's participants
will be quite small in relation to its overall assets, given that the Centre's staff population will remain
at less than 1 per cent of the population in the WTO Secretariat. Nevertheless, the important point is
that the WTO should not fear any adverse financial effect if it admits the Centre to membership into
the WTO Pension Plan.
8. From the Perspective of the Centre
In becoming a Member Organization in the WTO Pension Plan, the Centre would be
providing to its staff a very competitive pension plan at a very reasonable cost (7.5 per cent from the
staff and 15 per cent from the Organization). As was mentioned earlier in this report, the Centre is
much too small to have its own self-insured pension plan. This means that, if the Centre cannot joinan existing pension plan (such as the one of the WTO or another), it would have to conclude an
arrangement with an insurance company.
In order to provide the same level of benefits as the WTO Pension Plan, an insurance
company would require annual premiums well in excess of the 22.5 per cent required under the WTO
Pension Plan. This is because:
(a) An insurance company will apply very conservative tariffs, in part to protect itself
against future improvements in life expect ancy, but also because it is limited in the
types of investments it can make, which reduces its expected return on plan assets.
(b) The costs that would be incurred by the insurance company to administer a plan
similar to the WTO Pension Plan would be quite high (no economy of scale), perhaps
as much as 5 per cent of covered salaries.
(c) An insurance company is a commercial venture and would want to make a profit.
We have estimated that an insurance company would charge an annual premium of some 30
per cent to 35 per cent of covered payroll in order to provide benefits similar to the WTO Pension
Plan. This represents about 50 per cent more than the contributions that would be required under the
WTO Pension Plan (i.e., 22.5 per cent of pensionable remuneration).
Another possible solution would be to join the pension plan of another organization.
However, this would require the use of a different system of remuneration, identical to that
organization’s own system. As an example, the Centre could apply for membership in the United
Nations Joint Staff Pension Fund, but it would first have to adopt the UN Common System of salaries
and other conditions of service. Since that system was a problem for the WTO, it is likely that it
would be a problem also for the Centre whose char acteristics are very similar to those of the WTO.WT/GC/W/446
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V. CONCLUSIONS
It was and remains clear to all concerned that, from the perspective of the Centre, the ideal
solution would be to join the WTO Pension Plan. Ou r report has attempted to show that, from the
perspective of the WTO, the admission of the Centre to membership into the WTO Pension Plan
could be effected easily from a technical point of view and would not adversely impact the actuarialbalance of the Plan.
We therefore recommend to the Centre's General Assembly to take the necessary steps to
implement that solution.
We stand ready to answer any question that may be raised in connection with this report.
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