WORLD TRADE  
ORGANIZATION  WT/L/583 
14 October 2004  
 
(04-4327) 
General Council 
20-21 October 2004  
 
 
 
 
 
WTO PENSION PLAN 
 
  
ANNUAL REPORT OF THE MANAGEMENT BOARD 
 
AND REPORT OF TH E EXTERNAL AUDITOR 
 
THEREON FOR THE YEAR ENDING 
 
31 DECEMBER 2003
1 
                                                      
1 This Report is published in accordance with  Article 5 of the Regulations of the Plan. WT/L/583 
Page 2  
 
 
TABLE OF CONTENTS  
 
  PAGE  
 
I. INTRODUCTION 3 
II. STRUCTURE OF THE PENSION PLAN 3 
III. MEETINGS OF THE MANAGEMENT BOARD 4 
IV. PARTICIPATION IN THE PENSION PLAN 6 
V. ACCOUNTS 7 
VI. ACTUARIAL POSITION OF THE PLAN 7 
 
Report of the External Auditor on the Accounts of the WTO Pension 9 
Plan for the Year Ending 31 December 2003 
Opinion of the External Auditor on the Accounts of the WTO Pension 11 
Plan for the Year Ending 31 December 2003 
  STATEMENT 1 12 
 Income and Expenditure Statement for the period 1.1.2003 – 31.12.2003 
 STATEMENT 2 13  Surplus account as of 31 December 2003  STATEMENT 3 14 
 Balance Sheet as of 31 December 2003 
 SCHEDULE A 15  Source and Application of Funds for the Period 1.1.2003 – 31.12.2003  
SCHEDULE B 16 
 Return on portfolios in 2003  SCHEDULE C 17  Exchange rates used for the valuation of assets in 2003 
 
SCHEDULE D 18  Structure of the WTO Pension Plan  SCHEDULE E 19  Glossary of terms 
 
ANNEX 1 20 
 Statement of Investment Principles  ANNEX 2 21 
 Statement of Significant Accounting Policies 
    WT/L/583 
 Page 3 
 
 
I. INTRODUCTION 
1. The WTO Pension Plan was established on 1 January 1999 following the decision by the 
General Council on 16 October 1998 (WT/L/282) to terminate the membership of ICITO in the United Nations Joint Staff Pension Fund on 31 December 1998 and to adopt the 
Regulations and Administrative Rules of the Plan. 
2. 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. 
3. The present report for the period from 1 January 2003 to 31 December 2003 has been 
prepared by the Management Board in accordan ce with Article 5 of th e Regulations of the 
Plan for presentation to the General Council and to  Plan participants.  The annual reports for 
1999, 2000, 2001 and 2002 were issued under cover of documents WT/GC/W/426, 
WT/GC/W/463, WT/L/497 and WT/L/546, respectively. 
II. STRUCTURE OF THE PENSION PLAN 
4. (a) Management Board
 
 
 The Management Board was composed as follows on 31 December 2003: 
 
Ambassador Stefán Jóhannesson, Chairman 
Mr Thomas Chan Mr Jean-Pierre 
Lapalme 
Mr Andrew Johnston Mr Hector Millan 
Mr Iba Mar Oulare Mr Anthony Mistri 
Mr Terry Collins-
Williams Members elected 
by the General 
Council 
Mr Paul Rolian Members appointed 
by the Director-
General 
Mr Mathias Francke Mr Jacques E. Chabert 
Mr Jean-Marc Mignon Ms Monette David 
Ms Rachel Shub Mr Zdenek Drabek 
Ms Lai-Peng Yap Alternates elected 
by the General 
Council 
Mr Shishir Priyadarshi Alternates appointed 
by the Director-
General 
Mr Jan-Eirik Sørensen Observer on behalf of the beneficiaries 
 
(b) Investment Committee  
 
Members to be appointed. 
 
(c) Secretary  
 
Robert Luther 
   - Support services
 
    Jean-Pierre Helary 
   Christine Dresti 
 WT/L/583 
Page 4  
 
(d) Consulting Actuary
 
 
Cameron Hannah (Mercer HR Consulting S.A.). 
 
(e) Medical Adviser  
 
United Nations Joint Medical Service. 
 
(f) Investment Analyst/Consultant  
 
Watson Wyatt. 
 
(g) Global Custodian  
 
The Northern Trust Company. 
 
(h) Fund Manager  
 
Barclays Global Investors (BGI) (passive portfolios)2. 
Wellington Management Intern ational (active portfolio)3. 
 
(i) External Auditor  
 
Austrian Court of Audit 
 5. An organizational chart is reproduced in Schedule D. 
 
III. MEETINGS OF THE MANAGEMENT BOARD 
 
6. The Management Board held seven meetings in 2003.  These took place on 17 January, 7 
April, 4 June, 10 and 11 July, 23 July, 3 October and 12 November 2003.  The agendas included as a standing item the review of invest ment performance.  Other items considered 
during 2003 included the appointment of an inv estment analyst/consultant, the functioning of 
the Investment Committee, stop-lo ss insurance cover for the Plan, the recognition of different 
forms of partnership structure under the Plan, th e adjustment of benefits under Article 32 of 
the Plan Regulations and transfer agreements.  These items are dealt with in greater detail 
below. 
 
7. Regular progress reports were made av ailable to the Plan participants. 
 Review of Investment Performance
 
 8. As required under Article 5(d)(iv) of the Plan Regulations, a statement of the investment 
principles currently being followed by the Ma nagement Board is reproduced in Annex 1. 
 9. Reports on investment performance were submitted to the Management Board at each 
meeting. 
 
                                                     
 
2 A "passive" fund manager manages a portfolio by linking the investments to a given index so that the 
portfolio value moves with that index. 
 
3 An "active" fund manager manages a portfolio by selecting investments in a manner designed to 
achieve outperformance of a benchmar k (i.e. reference index) overtime.  WT/L/583 
 Page 5 
 
 
10. In January 2003 representatives of BGI a nd Wellington attended a meeting of the 
Management Board in order to present a progress report. 
 11. In June 2003 the Management Board decided to close the money market account with Pictet 
in order to eliminate any risk of loss on the c ontributions being deposited in that account.  The 
balance of the Pictet account was transferred to  the current account with Crédit Suisse.  In 
October 2003, the cash balance in the current account, less an amount required to cover current commitments, was swept into the Wellingt on mandate.  Similar action was also taken 
in December 2003. 
 
12. In June 2003 the Management Board was informed  by BGI that it intended to close its Swiss 
Bond Index Fund.  The Management Board s ought and obtained quotations from four 
alternative managers for this passive portfo lio and decided to appoint Pictet as manager 
subject to the conclusion of a satisfactory contract. 
 
13. In July 2003, the Management Board decided to terminate the management agreement with 
ING with immediate effect in view of the c onsistently poor performance of that manager and 
to transfer the assets from the ING account w ith Northern Trust to the Wellington account. 
 14. The performance of the BGI passive portfolios and the Wellington active portfolio over the 
period ending 31 December 2003 is summarized in Schedule B. 
 
15. The Plan achieved a nominal rate of return of 10 .01% in 2003, corresponding to a real rate of 
return of 9.41%  after deduction of the moveme nt of 0.60% in the Swiss cost-of-living index 
in 2003.  It is recalled that the long-term target of the Plan is a real rate of return of 3.5%. 
 
Appointment of an Investment Analyst/Consultant
 
 16. The Management Board decided to appoint an investment analyst/consultant in order to 
provide advice on the investment strategy and consequent investment mandates, to monitor 
the performance of fund managers and their co mpliance with their respective mandates, to 
prepare monthly reports on the status of investments and to advise on risk control and its 
impact on performance. 
 17. A request for expressions of interest was plac ed in the press in April 2003 and elicited 56 
responses.  Each of the respondents was invited to tender, and a short list of four candidates 
was invited to make a presentation to the Management Board. 
 
18. After a thorough analysis of the bids and presentations, the Management Board selected 
Watson Wyatt as the investment analyst/consultant , and the contract entered into force on 
17 December 2003. 
 Functioning of the Investment Committee
 
 
19. Following the resignation of two of its three members, the Investment Committee effectively 
ceased to function at the beginning of 2003.  The Management Committee decided to focus 
its attention on the selection of an investment  analyst/consultant (see paragraphs 16 - 18, 
above) and revert to the role and compos ition of the Investment Committee once the 
consultant had been appointed. 
 Stop-loss insurance cover for the Plan
 
 20. The Management Board considered the possibilit y of taking out stop-loss insurance in order 
to protect the Plan against death and disability risks.  After surveying the market with the WT/L/583 
Page 6  
 
assistance of the consulting actuary, the Manage ment Board noted that the cost of such 
insurance had doubled in recent years and that a cost-effective solution for the Plan might not 
be available. 
 Recognition of different forms of partnership structure
 
 
21. The Management Board received a request fro m the Chairman of the Joint Advisory 
Committee (JAC) to consider aligning WTOPP polic y with a proposal from the JAC to revise 
the definition of spouse under the Staff Regulations and Rules. 
 
22. The Management Board decided not to pursue c onsideration of the issue unless and until the 
Director-General submitted a formal request to  that effect through his representatives on the 
Management Board. 
 Adjustment of benefits under Ar ticle 32 of the Plan Regulations
 
 
23. The Management Board considered a request by the observer representing the beneficiaries 
that the Board define the procedure to be followed in application of Article 32 of the 
Regulations concerning the calculation and cost-o f-living adjustment of benefits paid in 
currencies other than the Swiss franc. 
 
24. The Management Board agreed to set up a work ing group to prepare a set of proposals for its 
consideration.  The Management Board decided to suspend the six-month time limit set in 
Article 32(e) of the Plan Regulations un til those procedures had been established. 
 Transfer agreements
 
 
25. The attention of the Management Board was dr awn to difficulties being experienced with the 
transfer agreement with the United Nations  Joint Staff Pension Fund (UNJSPF).  The 
Management Board noted that the agreement did not appear to be serving the purpose for 
which it had been intended, namely to facilitate the mobility of staff.  The Secretary subsequently met with representatives of the UNJ SPF who agreed that the present agreement 
should be suspended and all pending cases held in abeyance pending the negotiation of a new 
agreement at an early date. 
 
IV. PARTICIPATION IN THE PENSION PLAN 
 26. The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2003. 
  WT/L/583 
 Page 7 
 
 
Participants in the Pension Plan in 2003  
Total number on 1 January 2003* 
Movements in 2003 
  - entries 
 - reentry under the terms of Article 15(b) of the 
Regulations 
 - separations  668 
   
61 
 
1 
36 
Total number on 31 December 2003 
Breakdown of separations in 2003 
 
 - retirement 
 - early retirement  - deferred retirement  - withdrawal settlement  - transfer to UNJSPF 
 - deferment of decision 694 
  
 
4 4 
 
20 
 
8 
 *Two persons who are both participants and r ecipients of partial disability benefits were 
omitted as active participants in  the annual report for 2002. 
 Beneficiaries of the Pension Plan on 31 December 2003
 
Type of benefit 
 At 31 December 2002 New beneficiaries in 
2003 At 31 December 2003 
Retirement 9 4  13 
Early retirement 15 4  19 
Deferred retirement 4   4 
Partial disability 
benefit 2 1  3 
Total benefits 30 9  39 
 
V. ACCOUNTS  
 
27. A statement of significant accounting policies is reproduced in Annex 2. 
 
28. The income and expenditure for the period 1. 1.2003 – 31.12.2003 and surplus account as at 
31.12.2003 are reproduced in Statements 1 and 2, respectively. 
 29. The balance sheet as at 31.12.2003 is reproduced in Statement 3. 
 
30. The source and application of funds for the period 1.1.2003 – 31.12.2003 is reproduced in 
Schedule A. 
 31. A glossary of terms to facilitate an understandi ng of the tables is reproduced in Schedule E. 
 
VI. ACTUARIAL POSITION OF THE PLAN 
 
32. The Consulting Actuary to the WTO Pension Plan completed an interim actuarial assessment 
of the WTO Pension Plan as at 31 December 2003.  This assessment was calculated using WT/L/583 
Page 8  
 
individual membership data.  The interim actuarial assessment shows that the long term funding position of the Plan improved during th e year under review mostly due to the positive 
real investment return referred to in paragra ph 15.  The Consulting Actuary confirmed that no 
action need be taken as a consequence of  this interim actuarial valuation. 
 
 
      
  (signed) (signed) 
 ______________________________ ______________________________   Terry Collins-Williams Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan 
  WT/L/583 
 Page 9 
 
 
Report of the External Auditor on the Accounts of the WTO Pension Plan  
for the Year Ended 31 December 2003  
 
 
According to Rule C.1 of the Rules of Proce dure of the Management Board, the External 
Auditor of the WTO is also appointed as Exte rnal Auditor of the WTO Pension Plan.  The 
Austrian Court of Audit was appointed as External Auditor of the WTO and WTO Pension Plan for the financial years 2002 to 2006. 
 
After two years of significant negative nominal rates of return (2001: -10.13%; 2002: -
18.31%) the Plan achieved a positive rate of retu rn of 10.01% in 2003.  This corresponds to a 
real rate of return of 9.41% (2001: -10.43; 2 002: -19.21%) mainly due to the recovery of 
capital markets.  Details of the return of the categories of  portfolios are given in Schedule B. 
 Investment Committee
 
 
Pursuant to Article 7 of the Regulations of th e WTO Pension Plan, the Director-General shall 
appoint advisors upon the recommendation of th e Management Board.  Accordingly, the 
Management Board decided at  its eighteenth meeting in January 2001 to establish an 
Investment Committee.  Following the resignation of two of its three members, the Investment Committee effectively ceased to func tion at the beginning of 2003.  To comply 
with the Regulations, the Management Board in itiated  a call for bids for an Investment 
Analyst/Consultant, and a contract with Wats on Wyatt AG was concluded at the end of 2003 
for an initial period of one year. 
 
With regard to the fact that the Investment Analyst/Consultant took over most of the duties 
and responsibilities of the Committee the future of  this body remains unclear.  The  External 
Auditor recommends, therefore, that the n eed for an Investment Committee should be 
reconsidered. 
 Financial Rules and Regulations
 
 
The Regulations of the WTO Pension Plan do not  refer to the application of any financial 
rules and regulations governing the Plan.  The auditor recommends, therefore, that the WTO 
Financial Rules and Regul ations should apply, mutatis mutandis  and as far as applicable if 
there are no specific rules in the Regulations of the Pension Plan.  This reference should also 
be included in the Statement of Significan t Accounting Policies (Annex 2 of the Annual 
Report). 
 Operating Costs
 
 
According to Article 5(f) of the Regulations of the WTO Pension Plan " ... all expenses 
incurred in administering the plan ... shall be borne by the Plan." 
 
With reference to the preceding Auditor's Re port and upon its recommendation, the reserve 
amounting to CHF 750,000 was wound up and transf erred to the surplus account in 2003.  
The remaining reserve of CHF 250,000 represents  a provision to cover the expenses of WTO, 
such as personnel and premises, for the year 2003.  The Auditor noted that WTO did not 
charge the Plan for any operational costs. 
 Administration of the Plan
 
 
The External Auditor recommended  in its preceding report to review the investment 
principles of the WTO Pension Plan adopted at its sixth meeting in June 1999.  The External WT/L/583 
Page 10  
 
Auditor was informed that a revision of the i nvestment principles was initiated in the context 
of the appointment of the Investment Adviser/Consultant. 
   
 
 Items of minor significance resulting from the External Audit are summarized in a 
Management Letter addressed to the Secretary of  the Plan.  According to internationally 
accepted auditing standards, the Secretary of th e Plan was asked for a letter of representation 
for the Auditor's files to confirm the complete ness, regularity and accuracy of the entries in 
the books.  
     (signed) 
_________________________ 
Josef Moser 
President of the Austrian Court of Audit  WT/L/583 
 Page 11 
 
 
Opinion of the External Auditor on the Accounts of the WTO Pension Plan  
for the Year Ended 31 December 2003  
 
 
The representatives of the Austrian Court of Audit have examined the appende d Financial Statements 
contained in the Annual Report for 2003, comprising Statements 1 to 3 and Schedules A, B and C of 
the WTO Pension Plan for the year ending 31 Decem ber 2003.  As a result of the examination, the 
opinion is given that these statements, which we re prepared in conformity with the accounting 
policies described in Annex 2 of the Annual Report for 2003 and applied on a basis consistent with 
that of the preceding financial period, present fairly  the financial position of the WTO Pension Plan as 
at 31 December 2003 and the operations for 2003. 
 The accounting system of the WTO Pension Plan was outsourced to Trianon
4, which prepared the 
accounts for 2003.  Trianon provided the report of its external auditor including the financial 
statements for the year 2002 for information.  Trianon also provided the accounting transactions for 
the year 2003 to the representatives of the Austrian Court of Audit for examination. This examination 
included a general review of the accounting procedur es and such tests of the accounting records and 
other supporting evidence, as were feasible in the circumstances.    
 
  (signed) 
________________________________ 
Josef Moser 
President of the Austrian Court of Audit 
 
                                                     
 
4 Trianon Conseils SA, Lutry, Switzerland.  WT/L/583 
Page 12   STATEMENT 1  
Income and Expenditure Statement 
(Expressed in Swiss francs)  
Expenditure at 31.12.2003 at 31.12.2002 Income at 31.12.2003 at 31.12.2002 
Benefits    Contributions    
Lump sum    Participants 6,998,404 6,387,831 
Withdrawal settlement – Art. 26 756,068 796,844 Organization 13,996,794 12,775,658 
Commutation – Art. 23(c) & Art. 24(c) 2,534,945 1,777,366 Transfer from other organizations - 19,775 
Transfer to other organizations  - 57,818 Interest on validations - 91 
 3,291,013 2,632,028  20,995,198 19,183,355 
Periodic benefits    Investment Income    
Retirement benefit – Art. 23 763,609 354,066    
Early retirement benefit – Art. 24 915,782 684,878 Profit on securities 17,718,192 - 
Partial disability benefit – Art. 28  73,584 45,627 Interest on current accounts 6,425 3,746 
 1,752,975 1,084,571  17,724,617 3,746 
      
Investment and Other Admin. expenses    Other income  10,099 - 
Loss on securities - 34,306,761    
Currency revaluation 53,439 6,916    
Bank charges 464 641    
Audit fees 6,000 14,900    
Management fees 586,691 616,567    
Actuarial expenses 65,950 105,850    
Administrative costs 118,715 40,175    
 831,259 35,091,810    
      
       
Excess income over expenditure  32,854,667 - Excess expenditure over income  - 19,621,308 
 38,729,914 38,808,409  38,729,914 38,808,409 
(signed) 
_________________________ 
Terry Collins-Williams  
Chairman  
WTOPP Management Board (signed) 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
 
   WT/L/583
 Page 13 
   STATEMENT 2
 
 
Surplus Account 
(expressed in Swiss francs)  
Debit at 31.12.2003 at 31.12.2002 Credit at 31.12.2003 at 31.12.2002 
Excess expenditure over income  -       19,621,308 Excess income over expenditure   
32,854,667  
      
   Dissolution of  provision for  750,000 - 
   administrative fees   
Provision for administration fees - 250,000    
      
Profit 33,604,667 - Loss - 19,871,308 
      
 33,604,667 19,871,308  33,604,667 19,871,308 
(signed) 
_________________________ 
Terry Collins-Williams  
Chairman  
WTOPP Management Board (signed) 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  WT/L/583 
Page 14 STATEMENT 3  
 
Balance Sheet 
(expressed in Swiss francs)  
Assets at 31.12.2003 at 31.12.2002 Liabilities at 31.12.2003 at 31.12.2002 
      
Securities (Schedule B) 195,801,554 162,683,346 Capital 1.1  161,853,561 181,724,868 
Current accounts  180,477 679,602    
 195,982,031 163,362,948    
   Reserve funds    
   Operating cost 250,000 1,000,000 
      
Current assets    Current liabilities    
Withholding taxes to be recovered  3,559 1,311 Accrued expenses  277,857 514,850 
Validation receivable  - 3,240    
Contributions receivable  495 911    
 4,054 5,462    
      
      
Loss - 19,871,308 Profit  33,604,667  
 195,986,085 183,239,718  195,986,085 183,239,718 
(signed) 
_________________________ 
Terry Collins-Williams  
Chairman  
WTOPP Management Board (signed) 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan  WT/L/583 
 Page 15 
 
 
SCHEDULE A  
 
 
Source and Application of Funds  
(expressed in Swiss francs ) 
 
Source  1.1.2003-31.12.2003 1.1.2002-31.12.2002 
   
Funds as at 1.1 163,368,411 183,154,014 
Receipt of contributions 20,995,198 19,183,355 
Profit on securities 17,671,178 - 
Other income 10,099 - 
 202,044,886 202,337,369 
Less:   
Application    
   
Loss on investments - 34,309,931 
Settlement of benefits 5,043,988 3,716,599 
Expenditure 777,820 778,133 
Decrease in current liabilities 236,993 164,295 
 6,058,801 38,968,958 
Funds as at 31.12  195,986,085 163,368,411 
 WT/L/583 
Page 16  
 
SCHEDULE B
 
 
RETURN ON PORTFOLIOS IN 2003 
Portfolio Market value at 
31.12.2003 
(in CHF) Return on 
portfolio in 2003 Movement of 
benchmarks in 2003
Swiss bonds (BGI) 38,272,991 1.37% 1.56% 
Global bonds ex-Switzerland (BGI) 35,431,133 2.81% 2.77% 
Swiss equities (BGI) 22,168,350 20.14% 19.92% 
European equities ex-Switzerland (BGI) 20,437,212 24.70% 24.44% 
Global equities ex-Switzerland (Wellington) 79,475,554 16.71% 19.61% 
Global equities ex-Switzerland (ING)5 16,314   
TOTAL 195,801,554   
 
                                                      
5 Residual balance due to accrued income receive d after the transition of  assets from ING to 
Wellington.  WT/L/583 
 Page 17 
 
 
SCHEDULE C  
 
 
EXCHANGE RATES USED FOR THE VALUATION OF ASSETS IN 2003  
  
Currency Rate used for closing 
on 31.12.2003 
Wellington portfolio EUR 1.5599 
 USD 1.2367 
 JPY 0.0115 
 SEK 0.1718 
 GBP 2.2139 
 AUD 0.9318 
 CAD 0.9570 
 HKD 0.1593 
 NOK 0.1858 
   
BGI portfolios USD 1.2367 
  WT/L/583 
Page 18 SCHEDULE  D 
STRUCTURE OF THE WTO PENSION PLAN  
 
 
PARTICIPANTS  
GENERAL COUNCIL
 
CONSULTING ACTUARY 
 
ASSET MANAGEMENT SERVICES  
DIRECTOR-GENERAL
 
MEDICAL ADVISER 
 
INVESTMENT COMMITTEE ADMINISTRATIVE 
SERVICES 
 
MANAGEMENT BOARD  
EXTERNAL AUDITOR 
INVESTMENT 
ANALYST/CONSULTANT  WT/L/583 
 Page 19 
 
 
SCHEDULE E  
 
GLOSSARY OF TERMS  
 
 
Accrued expenses  includes expenses incurred but not paid in the current financial year. 
 Actuarial expenses  includes expenses charged by the consultin g actuary for the provision of actuarial 
services.  
Administrative costs  includes costs incurred in the general administration of the Pension Plan. 
 Audit fees  includes fees charged by the External Audito r in connection with the audit of the 2002 
accounts.  
Contributions receivable  refers to contributions due in respect of contributory service in 2003 but 
received after 31.12.2003.  Currency revaluation  represents the exchange rate losses on the Crédit Suisse US$ account. 
 Interest on validations  refers to interest payments made unde r Article 20(d) of the Plan Regulations. 
 
Management fees  includes fees paid to fund managers for the management of WTO portfolios.  In 
2003 these fees amounted to CHF 121,655 for BGI, CHF 44,318 for ING, CHF 231,208 for Wellington and CHF 189,508 for Northern Trust.  
Provision for operating costs refers to the reserve established to cover operating costs not currently 
charged to the Plan.  Transfer from other organizations refers to an amount received in 2002 in application of the 
transfer agreement with the United Nations Joint Staff Pension Fund.  
Validation receivable  refers to an amount due in respect of  a validation elected in 2002 but received 
after 31.12.2002. From 2003 onwards, these amounts are included in the accounts for the year of  payment.  Withholding taxes to be recovered  includes amounts of withholding tax levied by the Swiss 
authorities and subject to recovery after 31.12.2003. WT/L/583 
Page 20  
 
ANNEX 1
 
 
 
Investment Principles  
 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 res ponsible for the secure investment of all Plan 
assets, the formulation of investment policies af ter taking appropriate professional advice, and 
the appointment of investment managers to implement that policy. 
 
2. The investment strategy of the Plan is b ased on asset allocation designed to ensure the 
adequate funding of the Plan's liabilities over the long term.  A careful balance is drawn 
between maximization of returns on the assets of the Plan and the maintenance of a reasonable level of risk.  The strategy is geared to achieve a long-term rate of return of 3.5% 
net of price inflation, which is the assumpti on on which the feasibility study and contribution 
rates of the Plan were originally based. 
 3. Given that the Plan is expected to enjoy great er freedom in its investment strategy over the 
medium term, during which peri od contributions are expected to exceed benefit payments, 
and given that achievement of the objectives of the Plan can be facilitated by investing in 
foreign as well as Swiss assets, the Manageme nt Board has adopted the following breakdown 
of assets as set out in document WTOPP(99)14, Section 1: 
 
0% - 15% in Swiss bonds, 15% - 20% in foreign bonds, 10% - 15% in Swiss equities, 
50% - 70% in foreign equities. 
 4. At its sixth meeting held on 29 June 1999 (d ocument WTOPP(99)26/Re v.2, paragraph 18), 
the Management Board also adopted the following investment strategy: 
 
 
Bonds 
CHF Bonds 
Global Equities 
CHF Equities 
Global 
including 
Europe Equities 
Europe 
Relative 
allocation 16% 16% 13% 42% 13% 
Absolute 
allocation (in million CHF)  25 25 20 65 20 
Active mandate - - - 2 - 
Passive 
mandate 1 1 1 - 1 
 
    (signed) (signed)  __________________________ ________________________ 
  Terry Collins-Williams Robert Luther 
  Chairman Secretary   WTOPP Management Board WTO Pension Plan  WT/L/583 
 Page 21 
 
 
ANNEX 2  
Statement of Significant Accounting Policies  
 
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 practi cal 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 C 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 Management Board shall be responsible for the financial security and probity of the Plan 
and in particular the maintenance of its actua rial 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 WT O.  The provisions of Chapter XI ("External 
Audit") and the Appendix ("Add itional terms of reference govern ing external audit") of the 
WTO Financial Regulations shall apply mutatis mutandis  to the audit. 
 
    
  (signed) (signed) 
 ___________________________ ___________________________   Terry Collins-Williams Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan  
 
__________