RESTRICTED  
  
WT/BFA/W/597  
WT/L/1150  
24 August  2022 
(22-6340) Page: 1/27 
Committee on Budget, Finance and Administration  
General Council  
6-7 October 2022   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WTO PENSION PLAN  
 
 
 
ANNUAL REPORT AND FINANCIAL STATEMENTS  
FOR THE YEAR ENDING  
31 DECEMBER  2021 
 
 
 
 
 WT/BFA/W/597 • WT/L/1150  
 
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  CONTENTS  
1  HIGHLIGHTS  ................................ ................................ ................................ ................  4 
1.1  Investment return  ................................ ................................ ................................ ...... 4 
1.2  Asset allocation  ................................ ................................ ................................ ..........  5 
1.3  Participants and beneficiaries 2021  ................................ ................................ ...............  6 
2  SUMMARY OF MANAGEMENT BOARD ACTIVITIES  ................................ .........................  7 
3  REVIEW OF THE WTOPP INVESTMENT PERFORMANCE  ................................ .................  7 
4  ACTUARIAL POSITION OF THE PLAN  ................................ ................................ ............  8 
5  IPSAS ACCRUED LIABILITIES OF THE PLAN  ................................ ................................ . 8 
6  ORGANIZATION AND STRUCTURE OF THE PENSION PLAN ON 31  DECEMBER  2021  ...... 9 
7  ACCOUNTS  ................................ ................................ ................................ .................  10 
8  EXTERNAL AUDITOR  ................................ ................................ ................................ .. 10 
9  FINAN CIAL STATEMENTS  ................................ ................................ ...........................  12 
9.1  Management letter of representation  ................................ ................................ ............  12 
9.2  Statement 1: Income and expenditure statement  ................................ ..........................  13 
9.3  Statement 2: Balance sheet  ................................ ................................ ........................  14 
9.4  Schedule A: Source and application of funds  ................................ ................................ . 15 
9.5  Schedule B: Breakdown of expenditures  ................................ ................................ ....... 15 
9.6  Schedule C: Investment mandate overview  ................................ ................................ ... 16 
9.7  Schedule D: Asset allocation  ................................ ................................ .......................  17 
9.8  Schedule E: Investment performance  ................................ ................................ ...........  18 
9.9  Schedule F: Investment performance history from inception to 31  December  2021 .............  19 
9.10  Schedule G: Exchange rates  used for closing on 31  December  2021 ................................  19 
9.11  Schedule H: Participation in the Pension Plan  ................................ ...............................  20 
9.12  Schedule I: Structure of the WTO Pension Plan  ................................ ............................  21 
9.13  Schedule J: Glossary of terms  ................................ ................................ ...................  21 
ANNEXES  ................................ ................................ ................................ .......................  24 WT/BFA/W/597 • WT/L/1150  
 
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  MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD  
The Management Board of the World Trade Organization Pension Plan (WTOPP ) is pleased to present to 
the General Council and to Plan participants and beneficiaries its 2021 Annual Report prepared in 
accordance with Article 5 of the Regulations of the Plan.  
 
The Covid -19 pandemic continued to affect many aspects of our lives in 2021. The Pension Plan 
Secretariat and the Management Board maintained regular operations largely remotely and continued 
to hold Board and Working Group meetings virtually or, in the second half of the year, in hybrid format.  
 
Most of the Board's work in 2 021 was directed to actuarial matters. This included transitioning to a new 
consulting actuary, c -alm, and finalizing a full actuarial valuation based on new assumptions and 2020 
participant data. Assumptions about improvements in life expectancy and futur e asset returns were 
updated, among others. The application of these and other actuarial assumptions to 2020 participant 
data led to the identification of a substantial projected actuarial imbalance that will have to be 
addressed. This finding was confirme d in a further interim actuarial valuation conducted with 2021 data. 
Consequently, work in 2022 will be largely devoted to developing recommendations to bring the 
actuarial position of the Plan back into long-term balance.  
 
In 2021, the WTO Pension Plan in vestment portfolio had a real return of 9.7%. This strong performance 
results partly from improving economic fundamentals as the pandemic situation stabilized, and partly 
from changes in valuation not based on economic performance. More generally, prudent management 
of the investment portfolio has resulted in 5 year average rolling returns consistently above the target 
rate of return for the past decade.  Nonetheless, two financial market crises early in the life of the plan 
mean that the historical average  real return since the inception  of the plan  has been 2.6% , which is 
below the Plan's long term target.  
 
It is important to bear in mind that price volatility as measured by the value of the portfolio on 
31 December of each year is usually not a good indic ator of the underlying economic potential of the 
investments. Current economic circumstances remain challenging for investors and are likely to remain 
so for some time. More information on the investment philosophy of the Management Board and details 
on the allocation of assets can be found in the report and its annexes.  
 
In closing, I would like to thank the members of the Management Board for their engagement and 
valuable contributions to matters concerning the Plan. On behalf of the Management Board, I w ould like 
to thank WTOPP Secretariat staff for their support and service. The Management Board and the Plan's 
Secretariat are fully engaged in ensuring the continued good governance and the sustainability of the 
WTO Pension Plan and are pleased to share th is annual report with you.  
 
Jean-Marc van Dril, Chair of the Management Board  
 
 WT/BFA/W/597 • WT/L/1150  
 
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  1  HIGHLIGHTS  
1.1  Investment return  
Figure 1 Historical returns net of inflation and fees   
 
1.  In 2021 the Pension Plan's investment portfolio delivered a nominal rate of return of 11. 3%. As 
Swiss inflation for 2021 was 1.6%, the portfolio's real return was 9. 7% for the year , considerably higher 
than the target rate set for actuarial valuation purposes . This good performance was fuelled by the po st 
pandemic recovery , which supported economic fundamentals , but was also due to increasing market 
valuations. While above -average expected returns are generally welcome, over the past several years 
investment performances have been consistently inflated b y market valuations that exceeded actual 
economic performance of the underlying assets. This increases the likelihood of below -target returns in 
the coming years.  
Table 1 Net investment return  
 Nominal  Real 
2019  12.6%  12.4%  
2020 4.2%  5.0%  
2021  11.3% 9.7% 
 
WT/BFA/W/597 • WT/L/1150  
 
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  1.2  Asset allocation  
Figure 2 Asset allocation as of 31 December 202 1, actual vs. strategy  
 
2.  The WTOPP  rebalances its portfolio in the first quarter of each year, by re -aligning as necessary the 
allocation to each asset class with the strategy.1 This mechanism takes advantage of volatility in 
financial markets as it is carried out by selling securities th at have become relatively more expensive 
and buying assets that have become relatively cheaper. Since a Board decision in 2020, a rebalancing 
will also be triggered by changes in financial markets causing the weight of equities in the portfolio to 
deviate from the strategic allocation by more than 10%.  
Figure 3 Detailed asset allocation 202 1 
 
 
1 See reference to rebalancing in the Glossary and Annex 2 for more information on this approach.  
International 
Equities
34.9%
Emerging Markets 
Equities
8.5%
Small Caps
8.3%CHF  bonds
3.7%Emerging Countries 
Bonds
9.5%Senior Loans
6.6%Euro Real Estate
4.1%Prisa Lp
5.5%Swiss Real Estate
9.9%Insurance Linked 
Securities
4.9%
Cash
4.2%WT/BFA/W/597 • WT/L/1150  
 
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  1.3  Parti cipants  and beneficiaries 202 1  
Figure 4 Plan membership by type  
 
a including deferred retirement benefits.  
3.  There were 716  participants on 31 December 202 1, which was slightly higher than 709 participants 
on 31 December 20 20. On the other hand, the number of beneficiaries increased  from 408 to 427 over 
the same period.  
Table 2 Plan membership   
Membership  2020 2021 
Number of Participants  709 716 
Number of Beneficiaries  408 427 
 
Table 3 Types of benefits   
Types of benefits  Total number  Average monthly benefit  
Year  
2020 Year 
2021 Year  
2020 Year  
2021 
Retirement benefits  182 194  CHF 7,000   CHF 7,000  
Early retirement benefits  136 138  CHF 5, 100   CHF 5, 000  
Disability benefits  a 22 22  CHF 5,600   CHF 5, 600  
Surviving spouse's benefits  26 29  CHF 4, 100   CHF 4, 200  
Child's benefits  18 19 CHF 400   CHF 500  
Deferred retirement benefits  24 25   -     -  
a  includes benefits paid to beneficiaries above retirement age (13 individuals at end 2021)  
4.  As the number of beneficiaries continues to increase, so do the benefits paid annually by the Plan. 
Periodic benefits and lump sum benefits amounted to CHF 30.5 million in 202 1, which is over 
CHF 2 million more than the year before . The periodic benefits have exceeded the received contributions 
(CHF 29.4 million)  for the first time in 2021 . Pension benefits will continue rising but investment returns 
are expected to help keep the Plan's balance of income and expenditures positive in the coming years. 
WT/BFA/W/597 • WT/L/1150  
 
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  Figure 5 Contribution income and benefit expenditure  
 
a Including transfer values paid to other Organizations.  
b Including transfer values received from other Organizations.  
2  SUMMARY OF MANAGEMENT BOARD ACTIVITIES  
5.  In 202 1 the WTO Pension Plan Management Board met five times in regular Board meetings and 
once in a special session. The meetings occurred in a virtual or hybrid format due to C OVID -19 
restrictions .  They took place on February  22nd, March 18th, April 27th, June  24th, October 4th and 
December  10th. As ongoing items, the agendas for all meetings included the presentation of the 
investment situation and a report by the Secretariat on matters arising since the previous meeting of 
the Management Board. Additionally, the Board's agenda included recurring items such as the approval 
of the Plan's Annual Report and Financial Statements for submission to the General Council and review 
of the Plan's actuarial position.  
6.  Outside the formal Board meetings, the Management Boar d Working Groups met nine times. For 
comparison, the working groups met six times in 20 20, twelve  times in 201 9, and nine times  in 201 8. 
Six meetings addressed  actuarial issues  (focused on the development of the relationship with the new 
consulting actuary , c-alm, and the finalization of the assumptions for the pending full  actuarial  
valuation ), two dealt with investment  (to prepare decisions on the Swiss real estate vehicle ), and one 
addressed disabilities . 
7.  In 2021 the Board and Secretariat accomplish ed several important projects , such as completing t he 
procurement process for a new Consulting Actuary and relaunching  the periodic actuarial valuation 
process . A review of assumptions to be used for the 2020 actuarial v aluation was also completed. In 
addition, a guideline for the validation of data and assumptions used in actuarial valuations, actuarial 
assumptions, and the actuary's methodology  was developed and adopted . 
8.   Another significant accomplishment made by the B oard and Secretariat was securing a clean audit 
opinion from the new External Auditors. In accordance wit h the Auditor's recommendation , a Financial 
Reporting Framework for the Plan has been adopted and an analysis of the applicability of IPSAS 
accounting standards for the Plan has commenced.  The Management Board also reviewed four disability 
cases , and it adopted a guideline on honouring court orders in the context of divorces.  
3  REVIEW OF THE WTOPP INVESTMENT PERFORMANCE  
9.  The investment portfolio had a nomin al return of 11.1% in 202 1, compared to 10.4% for the 
Pension  Plan's benchmark. Swiss inflation for 202 1 was close to 1.6%. Hence, the portfolio's real return 
was 9.5% for the year, well above the Plan's target.   
10.  The Plan's portfolio generated annual returns of + 9.2% and + 6.4% in nominal terms, respectively , 
over the last three and five years. The 5 -year return exceeds the Plan's target return (Swiss inflation 
+ 3.5%) by 2.4% per year . 
WT/BFA/W/597 • WT/L/1150  
 
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  11.  The post pandemic recovery supported economic fundamentals in 2021:  global corporate earnings 
rose significantly, and dividends increased around 10%. Equity valuations continued to expand, 
contributing significantly to the positive returns. Equity investments, which represent 50% of the  
Pension Plan's target allocation, h ad a return of 17.2% in 2021, close to the benchmark (16.8%).  
12.  Rising inflation pushed bond yields higher , causing negative returns in most bond markets. 
However, bond investments in the portfolio generated a positive return thanks to their lower sensitivit y 
to interest fluctuations. Fixed income investments (21% of the Pension Plan's target asset allocation)  
returned 0.4% vs. -0.1% for the plan's benchmark. CHF denominated bonds delivered a negative 
performance in 2021 ( -0.5%) while senior loans had a retur n of 4.3%.  
13.  Investments in Insurance Linked Securities (5% of the Pension Plan's target asset allocation) had 
a return of 3.5% for the year compared to 4.0% for the benchmark.  
14.  Real estate investments delivered a strong performance in 2021, driven by low vac ancy rates, 
soaring property prices and a catch -up effect compared to 2020. Real estate investments represent 
20% of the target asset allocation. The return on this portion of the portfolio was 11.4% for the year. 
The Swiss real estate fund  (Credit Suisse 1A Immo PK)  had a return of 11.0% in 202 1 while the 
SXI index, which tracks the return of Swiss publicly traded real estate funds, had a return of 
7.3%. International real estate funds, which include the Plan's investments in Warburg Henderson fund, 
PRISA LP and , since December 2018 , CBRE Fund, had a consolidated return of 11.4%.  
15.  Despite the improvement in 2021, bond yields remain low in  absolute terms and  do not offer 
prospective returns compatible with the WTOPP's long term targets. On the other hand, valuations in 
equity and real estate markets have increased and are currently at elevated levels , well above those 
observed before Covid -19. Historically , higher valuations have been associated with lower prospective 
returns.  
4  ACTUARIAL POSITION OF THE PLAN  
16.  The company c -alm AG was appointed as the Plan's new Consulting Actuary in the first half of 2021 . 
It completed an actuarial valuation  for the Plan  based on 2020 data that identified a considerable funding 
gap, when compared to the last formal valuation in 2016 . This difference was mainly due to the use of 
new assumptions , in particular regarding the Plan's future investment returns and expected longevity 
of participants and beneficiaries.  
17.  While the current contribution rate is 23.7% of pensionable remuneration, the valuation found that 
it should be 10.5% points higher to  ensure a  long-term balance with expenditures . This would be 
equivalent to a "required contribution rate"  (or RCR) of 34.2% as of end 2020. An interim valuation as 
of 31 December 2021 confirms this large funding gap, albeit with a slightly lower 33.1% required 
contribution rate , due to high er than expected  valuations of the Plan's investment assets.  
18.  Following the identification of this actuarial deficit, the principal focus of the Management Board in 
2022 will be to formulat e proposals to address the actuarial imbalance for adoption by the General 
Council. These adjustments will nee d to be thoroughly analysed and discussed. Options could in principle 
include increasing the assets by raising the actual contribution rate, directly adding more  capital, 
reducing the liabilities by adjusting certain benefits , or a combination of all three  options . 
5  IPSAS ACCRUED LIABILITIES OF THE PLAN  
19.  The WTO's financial statements include an actuarial estimate of pension benefits that differs in 
scope and method from the WTOPP's actuarial valuation discussed in Section 4 , above. In line with the 
Internati onal Public Sector Accounting Standards (IPSAS), this estimate is produced for reporting on 
the WTO's accrued liabilities for employee benefits as at 31 December of each year, which includes 
mainly pensions and after-service health insurance.  
20.  The IPSAS es timate of the pension liability represents the hypothetical liability of the Organization 
to cover all its current employees' and retirees' acquired pension entitlements as of 31 December  2021. 
Unlike the Plan's actuarial valuation discussed in Section 4 above, the IPSAS estimate  does not consider 
future staff and uses a different methodology for setting the discount rate.  
21.  Both valuations are reported together with the balance sheet, in Statem ent 2 of the financial 
statements.  WT/BFA/W/597 • WT/L/1150  
 
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  6  ORGANIZATION  AND STRUCTURE OF THE PENSION PLAN ON 31  DECEMBER  2021 
22.  The Management Board of the Plan was duly constituted by the General Council in accordance with 
Article 4 of the Regulations on 26 March 1999.  
23.  The Regulations and Administrative Rules of the WTO Pension Plan were adopted by the 
General  Council on 16  October  1998 (WT/L/282). The General Council approved the Rules of Procedure 
of the Management Board on 8 May 2001 (WT/L/402). The Regulations of the WTO  Pension Plan were 
amended by the General Council on 1 December 2005, on 28 July 2009, on 26  October  2011, on 
30 November  2015 and on 26 July 2017. The Administrative Rules were amended on 
23 September  2005 and on 7  December  2016, and the Rules of Procedur e were amended on 
7 December  2016.  
24.  Key components of the governance and administrative structure of the Pension Plan included the 
following on 31 December 202 1. 
 Mr.  Jean -Marc van Dril, Chairperson  
Mr. Robert Cook  
Members elected 
by the General 
Council  Ms. Antonia Carzaniga  
Members appointed 
by the Director -
General  Ms. Alicia Goujon  Mr. Christian Dahoui  
Mr. Conor Harrington  Mr. Rainer Lanz  
Ms. Darija Sinjeri  Mr. Thomas Verbeet  
Ms. Wei -Ting Chiu  
Alternates elected 
by the General 
Council  Ms. Kerry Allbeury  
Alternates appointed 
by the Director -
General  Mr. Loudon Mattiya  Ms. Laura Monnet  
Mr. Rodolfo Rivas  Ms. Nthisana Phillips  
Ms. Chiara Santangelo  Ms. Zheng Wang  
Mr. Robert Luther  Observer on behalf of the beneficiaries  
Mr. Paul Rolian  Alternate observer on behalf of the beneficiaries  
Secretariat  John Breckenridge, Secretary  
Yann Marcus, Pensions Officer  
Dário Muhamudo, Pension Specialist  
Accounting and Outsourced 
Administrative Support services  Trianon S.A.  
Consulting Actuary  c-alm 
Medical Adviser  Centre d'expertise médicale Lancy (CEML)  
Investment Analyst/Consultant  MBS Capital Advice S.A.  
Global Custodians  The Northern Trust Company  
Pictet Asset Services  
Fund Managers   Babson Capital (senior loans portfolio hedged in CHF)  
Blackrock (emerging market bonds portfolio hedged in CHF)  
Crédit Suisse (Small cap equity portfolio, Swiss bond portfolio, 
Swiss real estate portfolio and senior loans portfolio hedged in 
CHF) 
GMO (emerging market bonds portfolio hedged in CHF)  
MFS (emerging market bonds portfolio hedged in CHF)  
NN (senior loans portfolio hedged in CHF)  
Pictet (Equity portfolios (global equities and emerging markets)  
Prisa LP (US Real Estate portfolio)  
Warburg Hende rson (European real estate portfolio)  
CBRE (European real estate portfolio)  
Scor (Insurance Linked Securities)  
Gam (Insurance Linked Securities)  
External Auditor  French Court of Audit  WT/BFA/W/597 • WT/L/1150  
 
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  7  ACCOUNTS  
25.  The financial statements and schedules are presented in Section 9 of this Report. The notes to the 
financial statements found in Annex 1 include important additional explanations about the accounts. 
These notes are integral to understanding the accounts an d the financial position of the Plan.  
26.  The income and expenditure statement for the period 1 January – 31 December 202 1 is reproduced 
in Statement 1.  
27.  The balance sheet as at 31  December  2021 is reproduced in Statement 2.  
28.  The source and application of funds for the period 1  January – 31 December  2021 are reproduced 
in Schedule A.  
29.  Details of the exchange rates used for closing the accounts on 31  December  2021 and the currency 
breakdown as of 31  December  2021, after hedging, are provided in Schedule G.  
30.  A glossa ry of terms to facilitate an understanding of the tables is reproduced in Schedule J.  
31.  Explanations of significant events in the 202 1 accounts can be found in the notes in  Annex 1 . 
8  EXTERNAL AUDITOR  
32.  The report of the External Auditor on the Accounts of the WTO Pension Plan for the year 
ended  31 December 202 1 is produced separately from the Annual Report . 
 WT/BFA/W/597 • WT/L/1150  
 
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 OPINION OF THE EXTERNAL AUDITOR  
 
Cour  des comptes  
   FRANCE  
 
 
 
Le Premier  president  
        Paris,  3 0 JUIN 2022 
 
 To 
 Mr Jean -Marc  VAN  DRIL  
 Chairman of the Management Board 
 of the Pension Plan of the World 
 Trade Organization  
 
AUDIT OPINION  
 
We have audited the Financial Statements of the Pension Plan of the World Trade 
Organization (WTOPP) for the 12 -month period ended 31 December 2021. These Financial 
Statements  include  a Statement of  income  and expenditure, the  Balance  Sheet  and 
additional tables. They have been prepared in conformity to  the Regulations of the WTO 
Pension Plan and Rules of procedure of the Plan under the responsibility of the Secretariat 
of the Management Board of  the Pension Plan  of the World  Trade  Organization, and in  
accordance to  the principles and accounting methods in  use since the creation of  _the Plan 
and formally approved  on 24 June  2021.  They  are Special  Purpose  Financial  Statements.  
Our responsibility is to express an opinion on these statements based on our audit.  
 
We have  conducted  our audit  in accordance  with the International  Standards  on Auditing  
(ISA). These standards require us to plan and perform our audit in order to obtain 
reasonable assurance that the Financial Statements are free from material misstatements. 
An audit namely consists in collecting, by sampling, audit evidence regarding the am ounts 
and the information presented in the Financial Statements. It also consists in evaluating the 
appropriateness .of the accounting principles and estimates made by the Secretariat of the 
Plan, and the overall presentation of the  Financial Statements. We  believe that the evidence 
collected is  sufficient and  appropriate to constitute a  reasonable basis for our opinion.  
 
In our opinion,  the Financial  Statements  give a fair view of the financial  position  of the Pension 
Plan of the World Trade Organization as at 31 December 2021, as well as of the profit and 
loss result at  date,  in conformity with  the special  accounting framework of  the Pension Plan  
of the World Trade Organization.  
 
Emphasis  of matter  
 
We alert users that the Financial Statements are prepared in accordance with a special 
purpose framework  and that, as a  result, they may not  be suitable for another purpose.  
 
(signed)  
Pierre  MOSCOVIC I 
  
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 9  FINANCIAL  STATEMENTS  
9.1  Management letter of representation  
33.  Pursuant to Article 5(d) of the WTO Pension Plan Regulations, t he Management Board of the 
WTO Pension Plan is responsible for these financial statements. The  financial disclosures in this 
report are intended to fairly present the Plan's financial results i n a manner that is complete and 
understandable.  
34.  The Management Board is responsible for establishing and maintaining adequate internal control 
over financial reporting so as to provide reasonable assurance regarding the reliability of these 
financial state ments for external purposes. This includes policies and procedures that 1)  provide for 
the maintenance of records that accurately and fairly reflect the transactions of the Plan, 2) provide 
reasonable assurance that transactions are authorized and recorded  in compliance with the Plan's 
Regulations and Rules and 3) provide reasonable assurance regarding the prevention or timely 
detection of unauthorized acquisition, use or disposition of the Plan's assets. However, due to the 
inherent limitations of internal  control over financial reporting, these controls may not prevent or 
detect all misstatements.  
35.  Based on the above, the Management Board has concluded that these financial statements 
present fairly the Plan's financial position and performance as of 31 December  2021. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
____________________  ____________________  
Jean-Marc van Dril  
Chair 
WTOPP Management Board  John Breckenridge  
Secretary  
WTO Pension Plan  WT/BFA/W/597 • WT/L/1150  
 
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 9.2  Statement 1: Income and expenditure statement  
INCOME AND EXPENDITURE STATEMENT (e xpressed in Swiss Francs)   
2021 2020 
Income     
Investment income       
Profit on securities  75,371,340  28,322,317  
Currency revaluation  -  45,307   
 75,371,340  28,367,624   
Contributions    
Organization, regular contributions          19,486,923   19,216,651  
Organization, additional contributions                         -     -    
Participants, regular contributions            9,778,321   9,608,334  
Interests on validations                      361   408  
Restorations              136,669   -    
Transfers from other organizations                 32,150   -    
  29,434,424  28,825,393  
Reimbursements claims under the death and disability 
insurance  645,051  1,346,247  
Total income  105,450,815 58,539,264  
Expenditure    
Periodic benefits    
Retirement benefits (Art. 23)  15,771,686   15,209,952  
Early retirement benefits (Art. 24)  8,331,035   8,169,088  
Disability benefits – (Art. 28)  1,478,417   1,483,685  
Surviving Spouse benefits (Art. 29)   1,456,261   1,180,840  
Child benefits (Art. 30)  109,448   98,006  
         27,146,847  26,141,571 
Lump sum benefits    
Withdrawal settlements (Art. 26)               710,058   582,051  
Commutations (Articles 23c), 24d), and 25c))  2,139,862   1,588,468  
Residual settlements (Article 33)  483,242  - 
Transfers to other organizations  33,257  - 
Interests on t ransfers to other organizations  1,726  - 
           3,368,145  2,170,519  
Participants' death and disability coverage  707,813  697,185  
Loss on investment    
Currency revaluation  2,950   -    
Negative credit interest  197,963   166,885  
  200,913   166,885   
Investment and other administrative expenses    
Management fees  577,824   509,415  
Trianon and other administrative costs  209,943   227,155  
Consultancy fees  120,000   120,000  
Actuarial expenses  93,738   46,000  
Bank charges  28,928   24,946  
 1,030,433  927,516  
Total expenditure  32,454,151  30,103,676  
Profit / Loss ( -) for the period  72,996,664 28,435,588  WT/BFA/W/597 • WT/L/1150  
 
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 9.3  Statement 2: Balance sheet  
Balance sheet  
(expressed in Swiss Francs)  
Assets  At 
31.12.202 1 At 
31.12.20 20 Liabilities  At 
31.12.202 1 At 
31.12.20 20 
Investments     Current liabilities     
Securities  706,361,395  632,128,748  Accrued expenses  540,004  161,828  
Cash and cash 
equivalentsa 30,985,894  31,171,342    540,004  161,828  
  737,347,289 663,300,090   Capital    
Current Assets    Capital as at 1 
January  665,585,646   637,150,059  
Withholding 
taxes to be 
recovered  1,775,026   1,533,772  Profit / Loss ( -) 72,996,664   28,435,588  
Accrued income  - 913,612    738,582,311 665,585,646  
Receivable 
additional 
contributions  -  -       
  1,775,026    2,447,384     
Total assets  739,122,315 665,747,474  Total liabilities  739,122,315 665,747,474  
a Cash and cash equivalents include cash on bank accounts and cash held on investment accounts  with 
custodian banks, which amount to CHF 27, 964,674 and CHF 2,975,776 respectively. Cash held on investment 
accounts for extended periods of time is normally immaterial. However, since 2019 the Plan has started to use 
investment accounts to shelter operating cash from negative interests.  
36.  Please note that this balance sheet shows neither the present value of future benefits 
(the pension liability) on the liability side, nor the capitalized future contributions on the asset side. 
In the WTO's financial statements, the pension liabilities are estimated at CHF  1,438 million 
according to IPSAS accounting rules. If the Pension Plan's a sset value of CHF  739 million  is deducted 
from this amount, the result is an estimated net accrued liability for employee benefits of 
CHF 701 million.  This net value represents the hypothetical liability of the Organization to cover all 
its current employe es' and retirees' pension entitlements as of 31 December 20 21. It differs from 
the long -term valuation used in managing the Plan mainly in that it does not consider future staff 
and uses a different methodology for setting the discount rate.  
37.  On the other hand, the actuarial model used in managing the Plan per Article  9 of the 
Regulations takes into account future pension contributions and benefits for an open group of 
participants, and a projected real return rate based on expected return of the stra tegic portfolio 
allocation (see Schedule D). Its purpose is to produce best, yet conservative, estimates of future 
benefits, pension contributions and the investment returns . This model estimates the present value 
of future benefits at CHF  1,945  million , which, as explained in Section 4 of the Annual report,  
represents a significant  funding gap . The Management Board is working on a proposal for measures 
to close this funding gap .  
  WT/BFA/W/597 • WT/L/1150  
 
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 9.4  Schedule A: Source and application of funds  
Source and application of funds  
(expressed in Swiss Francs)   
2021 2020 
Funds as at 1 January  665,747,474  637,325,896  
Plus:   
Source    
Receipt of contributions              29,434,424   28,825,393  
Investment income              75,170,427   28,200,739  
Reimbursements of death and disability insurance claims                    645,051   1,346,247  
Increase in current liabilities                    378,176   -  
Total           105,628,078 58,372,379  
Less:    
Application    
Settlement of benefits              30,514,992   28,312,090  
Participants' death and disability coverage                    707,813   697,185  
Investment and other administrative expenses                 1,030,433   927,516  
Reduction in current liabilities  -  14,009  
Total 32,253,238  29,950,800  
Funds as at 31 December  739,122,315 665,747,474  
 
9.5  Schedule B: Breakdown of expenditures  
Expenditures  
(Expressed  in Swiss Francs)  
 2021 2020 
Investment Management fees  a   
MFS 110,521  147,667  
Northern Trust  19,001  37,168  
Pictet  b 448,302 324,580 
   
Total   577,824  509,415  
Consultancy fees    
MBS Capital Advice  120,000  120,000  
Actuarial expenses    
Mercer  (2020) c -alm (2021)  c 93,738  46,000  
Administrative costs    
Trianon and other administrative costs  209,943  227,155  
Other expenses    
(bank charges and external audit)  28,928  24,946  
Total  1,030,433  927,516  
Note:  Costs related to the WTOPP  Secretariat are borne by the WTO and are not reflected in the Plan's 
Financial Statements (see paragraph 9 of Annex 1).  
a  management fees shown in this table are  fees invoiced separately to the Plan as well as custody 
fees. They exclude m anagement fees e mbedded in the reported value of the holdings. which are 
estimated at CHF 1,690,700  for 202 1.  
b the increase in fees is due to the high performance of equity funds, which are managed and/or 
deposited with Pictet, as well as the Board's decision to increase asset allocation in the second half 
of 2020.  
c actuarial fees in 2021 cover exceptional costs o f transitioning to a new actuary, including setting up 
the new model and benchmarking against previous actuarial results.  WT/BFA/W/597 • WT/L/1150  
 
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 9.6  Schedule C: Investment mandate overview  
Investment mandate overview  
Asset  
class  Fund  
Manager  Benchmark  Ex-ante 
tracking 
error  Inception  Location  Website  
Global 
Equities  Pictet & Cie  40% MSCI Europe,  
40% MSCI 
North  America, 
20% MSCI  Pacific  Indexed  January  
2011 Geneva, 
Switzerland  pictet.com  
Emerging 
Markets 
Equities  Pictet & Cie  MSCI Emerging 
Markets  Indexed  May 
2016 Geneva, 
Switzerland  pictet.com  
Global 
Small Caps 
Equities  Credit 
Suisse  MSCI World ex 
Switzerland Small 
Caps Indexed  August  
2020 Zürich, 
Switzerland  credit‑suisse.com  
Emerging 
Market 
Bonds  BlackRock  JP Morgan EMBI 
Glob Div. hedged in 
CHF Indexed  January  
2016 New York, 
United States  blackrock.com  
Emerging 
Market 
Bonds  MFS JP Morgan EMBI 
Glob Div. hedged in 
CHF 2%-3% January  
2011 Boston, 
United  States  mfs.com  
Emerging 
Market 
Bonds  GMO JP Morgan EMBI 
Glob Div. hedged in 
CHF 3%-5% January  
2011 Boston, 
United  States  gmo.com  
Senior 
Loans  Barings  CS Loans index 
hedged in CHF  3%-5% October  
2012 New York, 
United  States  babsoncapital.com  
Senior 
Loans  Credit 
Suisse  CS Loans index 
hedged in CHF 2%-4% October  
2012 New York, 
United  States  credit -suisse.com  
Senior 
Loans  NN CS Loans index 
hedged in CHF  2%-4% October  
2012 Phoenix, 
United  States  Inginvestment.com  
US 
Real Estate  PRISA LP  NCREIF Fund Index 
ODCE  - February  
2015 Madison,  
United States  pramericarei.com  
European 
Real Estate  Warburg 
Henderson  6.5% p.a.  - December  
2006 Hamburg, 
Germany  warburg -henderso
n.com  
European 
Real Estate  CBRE  - - December 
2018 London, 
United 
Kingdom  cbre.com  
Swiss Real 
Estate  Credit 
Suisse  SXI Real Estate 
Fund Index  - November  
2008 Zürich, 
Switzerland  credit -suisse.com  
Insurance 
Linked 
Securities  Scor 
 Swiss Re Global 
CAT bond Hedged 
CHF - December  
2019 Paris,  
France  scor.com  
Insurance 
Linked 
Securities  Gam Swiss Re Global 
CAT bond Hedged 
CHF - December  
2019 Connecticut,  
USA gam.com/fr/mana
gers/fermat -
capital -
management  
CHF Bonds  Credit 
Suisse  SBI AAA -BBB 1 -5 Y - August   
2020 Zürich, 
Switzerland  credit‑suisse.com  
 WT/BFA/W/597 • WT/L/1150  
 
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 9.7  Schedule D: Asset allocation  
Asset Allocation  
as of 31  December  2021 
Assets  MCHF  Current  
weightings  Strategy  Deviation from  
the strategy  
Global equities  380.2 51.6% 50.0%  1.6% 
Developed markets  256.7 34.8% 32.0%  2.8% 
Emerging Markets  62.4 8.5% 10.0%  -1.5% 
Small Caps 61.1 8.3% 8.0%  0.3% 
CHF bondsa 145.2 19.7% 21.0%  -1.3% 
CHF Bonds  27.0 3.7% 4.0%  -0.3% 
Emerging countries bonds  69.6 9.4% 10.0%  -0.6% 
Senior loansb 48.6 6.6% 7.0%  -0.4% 
Real Estate  145.0 19.7% 20.0%  -0.3% 
European Real Estate  31.5 4.3% 5.0%  -0.7% 
U.S. Real Estate  40.6 5.5% 5.0%  0.5% 
Switzerland  Real Estate  72.8 9.9% 10.0%  -0.1% 
Other Investments  36.1 4.9% 5.0%  -0.1% 
Insurance Linked Securitiesa 36.1 4.9% 5.0%  -0.1% 
Cash  31.0 4.2% 4.0%  0.2% 
Total  737.4    
Note:  Numbers may not add precisely to totals provided due to rounding.  
a Hedged in CHF. The Plan hedges 80% of foreign bonds and ILS investments renewed quarterly.  
b Senior loans are floating rate fixed income instruments, granted to sub -investment grade borrowers, 
have the highes t level of seniority in the capital structure of corporate issuers and are secured by 
the assets of the borrowing company.  
  WT/BFA/W/597 • WT/L/1150  
 
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 9.8  Schedule E: Investment performance  
Investment Performance as of 31  December  2021(expressed in nominal terms)  
 Over  
1 year p.a.  Over  
3 years p.a.  Since  
inception p.a.  TEa IRa 
TOTAL       
Consolidated securities  11.3% 9.2% 5.7%   2.99% -0.32 
Added valueb 0.7% -1.0% -0.2%    
EQUITY       
Consolidated equities  17.2% 14.7% 8.7%   0.53% -0.18 
Added value  0.3% -0.1% 0.4%   
Developed markets  21.6% 15.7% 9.2%   
Added value  -0.2%  -0.2%  -0.2%    
Emerging markets  -0.2% 7.6% 8.7%   
Added value  -0.7% -0.5% 0.1%   
Small Caps  19.5%     
Added value  0.2%     
FIXED INCOMEc      
Consolidated fixed incomed   0.4% 4.1% 2.9%   2.39% 0.14 
Added value  0.5% 0.3%  0.1%    
Emerging countries bonds  -2.0% 3.7% 4.1%   
Added value  1.0% 0.0% 0.4%   
Senior loans  4.3% 2.6% 2.1%   
Added value  -0.2% -1.0% -0.7%   
CHF Bonds   -0.5%      
Added value  -0.1%      
REAL ESTATE       
Consolidated real estate  12.2% 5.2% 4.5%   ‑‑‑ ‑‑‑ 
Added valueb        
Warburg Henderson  -5.5% -2.5% 3.4%   ‑‑‑ ‑‑‑ 
Added valueb        
CBRE  5.4% 2.3% 1.1% ‑‑‑ ‑‑‑ 
Added valueb      
Prisa  24.6% 6.0% 6.6% ‑‑‑ ‑‑‑ 
Added value  -1.3%  -0.4%  -2.6%    
Credit Suisse  11.0% 7.0% 4.6%   ‑‑‑ ‑‑‑ 
Added value  3.7% -5.4% -2.0%   
OTHER INVESTMENTS       
Insurance linked Securitiesc 3.5%     
Added value  -0.5%     
Note:  Performances are presented net of fees and costs. Consolidated performances (over 1 year, 3 years 
and since inception in August 1999) are calculated taking into account previous investment vehicles, 
which were liquidated prior to this reporting exercise and do not appear separately in the table.  
a TE = tracking error over 3 years, IR = information ratio over 3 years  
b Added value compares the performance to benchmarks, except when there is no formal benchmark 
(Warburg Henderson and CBRE), as specified in Schedule C.  
c In line with its investment pri nciples, the Plan minimizes currency risk on its fixed income and 
ILS investments by investing in CHF -denominated instruments, or by hedging investments 
denominated in currencies other than CHF. In the latter case, the hedging instruments' gains, 
losses, a nd costs are embedded in the asset class' performance, which is consistent with the 
fact that the return target expected out of these instruments is being considered in CHF terms 
when making investment decisions.   
d In addition to the bonds' performance, the consolidated fixed income performance also includes the 
interest paid on the Plan's cash.  WT/BFA/W/597 • WT/L/1150  
 
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 9.9  Schedule F: Investment performance history from inception to 31  December  2021 
 
 
9.10  Schedule G: Exchange rates used for closing on 31  December  2021  
Currency  pair Exchange rates  
CHF per 1 EUR  1.0362  
CHF per 1 USD  0.9112  
JPY per 1 CHF  126.3842  
CHF per 1 GBP  1.2341  
Figure 6 : Currency breakdown as of 31 December 202 1 after hedging  
 
WT/BFA/W/597 • WT/L/1150  
 
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 9.11  Schedule H: Participation in the Pension Plan  
The following tables show the trends in the numbers of participants and beneficiaries in  the 
Pension  Plan in the course of 202 1. 
Number of participants and beneficiaries on 31 December 20 21 
 2020 2021 
Active members  709 716 
Beneficiaries  408 427 
Participants in the Pension Plan in 202 1 
  
Total number on 31 December 20 20 709 
Movements in 20 21  
  
- Entries  122 
- of which re -entries under the terms of Art.  15(b) of the Regulations  48 
- Separations  115  
   
Total number on 31  December  2021 716   
Breakdown of separations in 20 21    
- retirement  14 
- early retirement  3 
- deferred retirement  1 
- withdrawal settlement  26 
- transfer out  0 
- deferment of decision  69 
- death  2 
- disability  0  
 
Total separations  115 
Benefits paid by the Pension Plan  
Type of benefit  At 31 
December 
2020 New benefits  
in 20 21 Benefits ended  
in 20 21 At 31 
December 
2021 
Retirementa 182 14 -2 194 
Early retirementb 136 3 -1 138 
Deferred retirementc 24 1 0 25 
Surviving spouse's benefit  26 3 0 29 
Partial /total disability benefit  22 0 0 22 
Child's benefit  18 2 -1 19 
Total benefits  408 23 -4 427 
a  Includes no deferred benefit that commenced being paid in 202 1. 
b  Includes no deferred benefits that commenced being paid in 202 1. 
c  Includes only deferred pension benefits not yet in payments, for former staff members who made that 
choice on their sepa ration and those who made the choice later, after initially deferring their decision. 
Deferred pensions in payments are classified as retirement or early retirement benefits.  
 WT/BFA/W/597 • WT/L/1150  
 
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 9.12  Schedule I: Structure of the WTO Pension Plan  
 
 
9.13  Schedule J: Glossary of terms  
Accrued expenses  include expenses incurred but not paid in the current accounting year.  
Accrued income includes income which has been earned but not yet received in the current 
accounting year.  
Active investment management  is a form of portfolio management whereby the portfolio 
manager invests the assets in a manner different from the benchmark in an attempt to produce 
higher returns than the benchmark. The disadvantages of such a management styl e are 
characterized by higher management fees, higher trading costs as well as the risk of significantly 
underperforming.   
Actuarial expenses  include expenses charged by the consulting actuary for the provision of 
actuarial services.  
Administrative costs  include costs incurred in the general administration of the Pension Plan. They 
do not include the costs for the Plan's Secretariat, which are borne by the WTO (Article 5(f) of the 
Plan Regulations).  
Commutation  refers to retirement benefits, early retiremen t benefits and deferred retirement 
benefits commuted at the request of the participant, into a lump sum not exceeding 1/2 of the 
actuarial equivalent of the benefit or the amount of the participant's own contributions, whichever 
is the larger.  
Consultancy fees include the fees charged by the investment analyst/consultant.  
Contributions  refer to sums payable for restoration, validation and benefit as detailed in Art.  20 of 
WTOPP  Regulations . 
Contributions receivable  refers to contributions due in respect of contributory service in the 
accounting year but received after 31  December of the accounting year.  
WT/BFA/W/597 • WT/L/1150  
 
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 Currency hedging. In line with the Plan's investment principles, the Plan seeks to limit exposure 
to currency risk on debt instruments because they bear a currency risk that is theoretically not 
compensated in the long term, and because they play a stabilizing role to regulate the portfolio's 
short term volatility and allow rebalancing gains. When investing in debt assets denominated in 
currencies other than  CHF, the Plan therefore hedges the currency risk. Technically, this involves 
the use of forward contracts, in which two parties agree to exchange a set amount of one currency 
for another at a predetermined exchange rate at some future date.  If the curren cy of the investment 
depreciates causing losses on the portfolio, the hedging instruments will offset some of these losses. 
Hedging can have a cost, largely based on differences between lending and borrowing interest rates 
of the respective currencies.  
 
Currency revaluation  represents the adjustment of foreign currency -denominated bank account 
balances at 31  December  2021 to the exchange rate for that day. This adjustment reflects the 
variation in the exchange rate applicable to foreign currency -denominated  bank account balances at 
the beginning of the year and in the exchange rates applicable to movements in the same accounts 
during the year, at the time each transaction took place.  
Indexed management  is a form of portfolio management that attempts to deli ver the returns of 
the underlying benchmark by replicating exactly or by getting as close as possible to the composition 
of the benchmark at any point in time. It differs from active management in that it is significantly 
less costly and does not reflect t he views, forecasts or opinions of the investment manager.  
IR or Information Ratio  is defined as the outperformance of the investment manager above the 
index divided by the portfolio's tracking error. The information ratio is used to represent a manager's 
skill. Generally, any ratio over 0.30 is thought of as demonstrating skill. IR refers to the information 
ratio over three years.  
Insurance Link Securities (ILS)  are financial instruments whose values are driven by insurance 
premiums and loss events. ILS en able re/insurance companies to enter into a risk transfer contract 
with investors in the capital markets,  where the investor puts a collateral in exchange for a  premium. 
Depending on whether the risk happens, the collateral will be drawn or returned to the  investor, and 
the premium adjusted for the next term.  
Interest on validations  and interest on restorations  refer to interest payments made under 
Articles 20(d) and 20(e) of the Plan Regulations.  
Management fees  include fees paid for the management of WTO portfolios.  
Organization, additional contributions  refers to the additional contributions paid by the 
Organization to compensate for the additional actuarial cost generated by the early separation of 
participants in the context of restructuring exercises.  
 
Profit/loss on securities  is the result of:  
• capital gain/loss realized on securities;  
• profit arising from the distribution of dividends and interest received on investments;  
• revaluation of securities at their market price at 31  December (unrealized profit or loss).  
Rate of return  is the percentage of change in value of the portfolio over a specified period, taking 
into account both the investment income and the change in the market value of the portfolio. It is 
expressed as an equivalent annual rate. The nominal rate of return  is the financial return of the 
assets and is before correction for inflation (measured on the basis of the annual movement of the 
consumer price index in Switzerland). The real rate of return  is calculated by subtrac ting the change 
in the Swiss CPI from the nominal rate of return. The term gross means that the return is calculated 
before the deduction of investment related costs while the term net refers to the return including all 
investment related expenses. The tar get real rate of return  is the long -term real rate of return that 
the Plan needs to achieve in order to meet its liabilities.  
Rebalancing  refers to the realignment of the allocation of the Plan's portfolio with its strategy. 
A predefined process identifies  the triggers and other operational aspects (e.g. timing) of rebalancing 
actions. The rules are approved by the Board and applied automatically. This mechanism takes 
advantage of the inevitable excesses of financial markets.  WT/BFA/W/597 • WT/L/1150  
 
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 Regulations and Administrative Rules  refer to the Regulations and Administrative Rules adopted 
by the General Council on 16  October  1998, as amended by the General Council on 
1 December  2005, on 28  July 2009, on 26  October  2011, on 30  November  2015, on 
7 December  2016 and on 26 July 201 7. 
Restoration  refers to the inclusion in contributory service of the prior contributory service of a 
former participant who again becomes a participant.  
 
Senior loans  are floating rate fixed income instruments, granted to sub investment grade 
borrowers, have the highes t level of seniority in the capital structure of corporate issuers and are 
secured by the assets of the borrowing company.  
Time -weighted return  is a measure of compound return. It reduces the distorting effect of inflows 
and outflows and is used to compare  the returns of investment managers and their respective 
benchmarks. The time -weighted return is very similar to the geometric mean return.  
TE or Tracking error  is defined as the standard deviation of the portfolio's outperformance versus 
the benchmark. It  is used as a measure to determine the risk of the portfolio versus its benchmark. 
This measure should not be confused with absolute risk; even though a portfolio has a very low 
tracking error, it can still be very risky due to the underlying nature of the  market in which it invests. 
For an indexed management mandate, the tracking error would usually be less than 0.8. Anything 
above this would be considered active. TE is over 3 years.  
Validation  is defined in Art. 2(v) of WTOPP Regulations, as the inclusion  in contributory service of 
a period of non -contributory service which occurred prior to the commencement of participation.  
Withholding taxes to be recovered  includes amounts of withholding tax levied by national tax 
authorities and subject to recovery aft er 31  December  2021. Recoverable withholding tax reflects 
the Plan's recognition as a tax -exempt entity due to its connection to the WTO. As an 
International  Organization, the WTO is exempted from most national taxes such as value -added tax 
(VAT), federal stamp duty and tax on the interest earned on investments. Annually the Plan files tax 
reimbursement claims to the Swiss and other authorities. Occasionally the Plan's tax -exempt status 
is not automatically recognized by some national jurisdictions, in whic h case significant 
administrative and political intervention is often required to have this status fully recognized.  
_______________  
  WT/BFA/W/597 • WT/L/1150  
 
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 ANNEXES  
ANNEX 1 NOTES TO THE FINANCIAL STATEMENTS  
1.  Pursuant to Article 14(a) of the Regulations of the Pension Plan, the unit of account of the 
Pension  Plan is the Swiss franc. For practical reasons, the current United Nations operational rates 
of exchange are used for the conversion of other currencies into the Swiss franc, except in the  case 
of the investment portfolios where the rates shown in Schedule G were used for valuation purposes.  
2.  The accounting year is 1  January to 31  December.  
3.  Pursuant to Article 13 of the Regulations of the Plan and Rule A.8 of the Rules of Procedure, 
the Mana gement Board shall be responsible for the financial security and probity of the Plan and,  in 
particular, the maintenance of its actuarial balance and of financial controls and accounts.  
4.  Pursuant to Article 5(e) of the Regulations of the Plan and Rule C.1 of the Rules of Procedure, an 
audit of the accounts of the Plan shall be made annually by the External Auditor, namely the External 
Auditor of the WTO. The provisions of Chapter XI ("External Audit") and the Appendix ("Additional 
terms of reference gov erning external audit") of the WTO Financial Regulations shall apply mutatis 
mutandis to the audit.  
Statement of income and expenditure  
5.  The Pension Plan registered a profit on securities of CHF 75.4 million.  This represented a 11.3% 
nominal investment ret urn and, taking Swiss inflation into account, 9.7% in real terms. Th is 
performance was significantly higher than the Plan's long -term target of  2.8% over the next ten 
years and  3.5%  thereafter . Notwithstanding this good performance, current economic circum stances 
remain challenging and there is a strong sentiment among investment professionals that earning 
high returns in the current low interest rate environment will be more difficult in the next few years.  
6.  Regular contributions received from the Organiza tion and the participants amounted 
to CHF 29.3 million, up CHF 0.4 million compared with 2020 .  
7.  Both p eriodic benefits and lump sum benefits increased by more than CHF 1.0 million , to 
CHF 27.1 million and CHF  3.3 million respectively .  For the first time i n the history of the Plan, the 
sum of benefits paid out exceeded the total amount of contributions received, by about CHF  1 million. 
This difference will increase as the population of retirees will continue to increase in the coming 
years .  
8.  The Plan received CHF 0.6 million as reimbursements of claims under its death and disability 
insurance coverage , which is comparable to the CHF  0.7 million premium paid for the coverage . 
9.  Investment and  other administrative expenses have slightly increased and exceeded 
CHF 1.0 million , which is  normal as a majority of these fees are linked to the size of the portfolio . 
They are presented in further detail in Schedule B "Breakdown of Expenditures". The costs of 
providing a Secretariat for the Pension Plan are  borne by the WTO and not reflected as a cost to the 
Plan. The Secretariat consists of a part -time Secretary and three full -time staff. In 2021, staff costs 
amounted to CHF  516,928 including salaries and benefits.  Additionally, the Secretariat does not pa y 
rent for office space and computers or phone services.  These are estimated to be CHF  23,365  based 
on the WTO cost accounting methodology.  
Balance sheet  
10.  The value of assets increased mainly due to investment gains registered in 202 1. Cash and cash 
equiva lents amounted to about CHF 3 1.0 million in 202 1.  
11.  Withholding taxes to be recovered amounted to CHF  1.8 million in 202 1, a decrease compared 
to CHF 2. 4 million in 20 20. This decrease was mainly due to a late reimbursement of Swiss taxes 
from previous years but also from recovering taxes paid outside Switzerland. With effective 
assistance from the Plan's custodian banks, t he Pension Plan Secretariat continues to pursue t he 
recovery of all withholding taxes , including taxes over five year old that are written off  from the 
financial statements . WT/BFA/W/597 • WT/L/1150  
 
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 ANNEX 2 INVESTMENT PRINCIPLES OF THE PENSION PLAN  
1.  Pursuant to Article 13 of the Regulations of the Pension Plan and Rule  A.9 of the Rules of 
Procedure, the Management Board shall be responsible for the secure investment of all Plan assets, 
the formulation of investment policies after taking appropriate professional advice, and the 
appointment of investment mana gers to implement that policy.  
2.  Derivatives may be used within the global hedged fixed income mandate for hedging purposes, 
where they provide the opportunities to achieve the objective of the Plan more efficiently than would 
be the case through the direct dealing in underlying securities. Derivative instruments for this 
mandate are restricted to forward foreign currency contracts, futures, covered bond options and 
interest rate options. Leverage and net short positions are not allowed.  
3.  In 2013 the Managemen t Board approved a consolidated set of investment guidelines to articulate 
more precisely the Plan's approach to investment. A summary of these guidelines was shared with 
Plan participants and beneficiaries and can be found below. In 2020 the investment gu idelines were 
revised in order to include the Board's decision on the new strategic asset allocation (50%  equities, 
30% fixed income and 20% real estate) and the new additional rule for rebalancing , however t he 
princip les behind the below summary remain un changed.  
Summary of the WTO Pension Plan's approach to investment  
 
Long -term investing  
 
4.  The WTOPP is a long -term investor because its commitments are long -term and because behavior  
and decisions made with a long -term view are more likely to succeed. The long -term focus is rooted 
in the belief – supported by historical analysis – that in the long run, market returns will tend to 
reflect the assets' economic achievements.  
5.  This long -term orientation enables the Management Board to deploy its time efficiently by 
focusing on investment decisions with significant impact on portfolio returns while avoiding time 
spent on issues where the outcome is random or where the long -term impact is neg ligible.  
6.  Cognizant of the unreliable nature of short - or medium -term forecasts and the potential losses 
they may cause, the Management Board will not engage in "timing" short -term market fluctuations. 
Bets on the short - or medium -term evolution of financia l markets may convert temporary losses into 
permanent impairment of capital.  
Investment risk  
 
7.  The WTOPP  should be concerned with permanent capital impairment. Non -recoverable loss 
permanently reduces future earning power. For example, money lent to a borrower that cannot fully 
honor  its debt will not only permanently impair capital but also its capacity to generate future 
earnings.  
8.  Price volatility is commonly considered as a measure of investment risk. However, volatility fails 
to measure long -term investment risk and is only a threat to long -term investors if they misread its 
significance. For example, if a company's share price quickly falls by 50%, its volatility will skyrocket. 
However, if the long -term perspective of the company has not changed, the risk for investors has 
been greatly reduced, not increased. Thus, investors should focus on the long -term perspective not 
on market driven price volatility.  
9.  The valuation of an asset affects its future returns. Therefore, the valuation of assets is a risk 
that can produce damages similar to permanent capital loss. This is why it should be monitored on 
an on -going basis.  
10.  Monitoring the valuation does not constitute an attempt to predict the short -term evolution of 
market prices, but to appraise the long -term potential profitability of an investment given its current 
characteristics.  WT/BFA/W/597 • WT/L/1150  
 
- 26 - 
 
  
 Allocation of assets  
 
11.  Asset allocation is the main source of portfolio returns. Particular attention will therefore be paid 
to the definition and implementation of WTOPP's "strategic asset allocation".  
12.  Each asset class in the portfolio must generate a measurable income and must contr ibute to 
increasing the value of the WTOPP's assets. This increase must be driven by reliable, identifiable 
economic factors. The prospective return potential of each asset class may be assessed on the basis 
of these appropriate factors.  
13.  The WTOPP will mai ntain adequate diversification because expected returns on asset classes 
may take a long time to materialize and because the non -correlation of different assets helps dampen 
volatility and hence help avoid ill -considered decisions.  
14.  Asset classes and financ ial structures that do not produce income, lack transparency or use 
significant leverage are not appropriate for WTOPP. Commodities, hedge funds, venture capital, as 
well as structured products are therefore excluded from WTOPP's investment universe.  
15.  The WTOPP seeks to avoid changes in asset allocation based on short -term views and forecasts: 
all too often such changes only result in increasing costs. Changes in asset allocation are only 
warranted when justified by significant changes in the measurable  characteristics of the Plan's 
investments allocated to an asset category or by fundamental changes in the Plan's liabilities or 
structure.  
Style of management  
 
16.  The objective of the implementation process is to execute the investment strategy as closely as  
possible while minimizing costs and avoiding unwanted implementation risks.  
17.  The Management Board implements the WTOPP's strategic allocation predominantly through 
indexed vehicles or portfolios.1 Indices will be selected with utmost care, so that they tr uly represent 
the asset class in which the WTOPP's strategy intended to invest.  
18.  The choice of passive management is motivated by the observation that, over time, active 
management has performed less well, is less diversified, less predictable and more cost ly. Moreover, 
active management tends to be based, in most cases, on short -term views.  
19.  The WTOPP may use active management when passive management is not feasible or when 
tangible and clearly identifiable reasons lead to the belief that active management r epresents a 
better path.  
20.  Overall, the Plan will strive to minimize risks related to the implementation of the investment 
strategy. These risks include, but are not limited to, active management risk, unwanted credit risk 
and legal structure risk.  
Rebalanci ng 
 
21.  The WTOPP adopts a counter -cyclical approach through a systematic annual rebalancing 
mechanism whose function is to maintain the weight of the assets aligned with the strategic 
allocation.  Rebalancing exercises are undertaken at least annually, normall y in February.  Since a 
Board decision in 2020, a rebalancing will also be triggered by changes on financial markets causing 
the weight of equities in the portfolio to deviate by more than 10% from the strategic allocation . 
22.  The systematic rebalancing is an effective way for the Plan to maintain a stable exposure to the 
market while taking advantage of market volatility.  
 
1 Indexed vehicles aim to generate returns that are equal to those of a market index.  WT/BFA/W/597 • WT/L/1150  
 
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 Cost and conflicts of interest  
 
23.  Cost sensitivity is an integral part of the investment strategy. Costs should be maintained as 
low as possible without hindering the Plan's capacity to achieve its targets.  
24.  The supply of investment services or products is primarily driven by the financial interests of 
providers rather than by investors. The Management Board will therefore be particularly v igilant in 
choosing investment solutions that fit in its strategy and targets. The WTOPP will avoid investment 
vehicles in which the investment manager is paid a performance -based fee.2 
25.  The investment guidelines adopted by the Management Board are intende d to generate 
sustainable returns over time and promote sound decisions even in times of economic stress and 
uncertainty. The guidelines are periodically reviewed to ensure they remain appropriate to the 
structure and circumstances of the Plan.  
__________  
 
2 Such arrangements are unfair for investors because of the asymmetry of risk and reward