DRAFTwelcome to brighter
World Trade Organisation
WTO Pension Plan
September 2020WTOPP(20)37
Issued on 15 September 2020
WT/BFA/W/577 
- 52 -DRAFTContents
1. Executive Summary .......................................................................................................................................... 1
2. Data...................................................................................................................................................................... 5
3. Assumptions ...................................................................................................................................................... 7
Summary of assumptions ......................................................................................................................... 7
Assumptions Description ......................................................................................................................... 8
4. Assets ................................................................................................................................................................ 16
Reconciliation of market value of assets ............................................................................................. 16
Nominal and Real Investment returns ................................................................................................. 17
Smoothed asset value calculation ........................................................................................................ 18
5. Methodology ................................................................................................................................................... 21
Summary .................................................................................................................................................... 21
Methodology Description ...................................................................................................................... 21
6. Results ............................................................................................................................................................... 25
Ongoing or open group valuation ........................................................................................................ 25
Cash flow analysis .................................................................................................................................... 26
Discontinuance basis............................................................................................................................... 27
7. Appendix A: Analysis of participant and beneficiary information ........................................................ 29
8. Appendix B: Cash flow projections ............................................................................................................. 32
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11
Executive Summary
This report sets out the results of the formal actuarial valuation completed as at 31 December 2019
for the World Trade Organization Pension Plan (WTOPP). This is the eighth formal actuarial
valuation of the WTOPP, the previous formal actuarial valuations completed effective 31 December
2016, 31 December 2013, 31 December 2010, 31 December 2007, 31 December 2004, 31 December
2001 and 1 January 1999.
During the inter-valuation period since the previous formal actuarial valuation at 31 December
2016, the WTOPP Management Board established the Actuarial Study Working Group (ASWG) to
review the assumptions of the triennial actuarial valuation.  Throughout the period from July 2019
until January 2020, the ASWG developed an understanding of the assumptions examining each of
the principle internal and external assumptions and conducted benchmarking exercises and data
analysis. Mercer was involved throughout this period showing historical experience and trends
over the past 10 years and comparing them to the assumptions.  Mercer also supported the ASWG
in modelling different scenarios and put forth considerations and options for the ASWG to
consider. In February 2020, the ASWG made recommendations that were endorsed by the WTOPP
Board. The endorsed actuarial assumption revisions were the following:
1. Decrease long term future price inflation in Switzerland from 2% to 1%;
2. Reduce the real investment rate of return for 10 years from 1 January 2020 from 3.5% to 2.7%
until 2029 and revert to a 3.5% real rate of return thereafter;
3. Revision of merit and promotion-based pensionable salary increases reflective of past
experience;
4. Amendments to the withdrawal and retirement probabilities to reflect past experience of the
plan;
5. Replacement of previous mortality and disability tables with more recent tables published and
widely used in Switzerland (BVG2015);
6. Adjustment to the profile of future cohorts of new joiners to the pension plan, specifically
related to age, pensionable salary and gender distribution; and
7. Reduction in the assumed percentage of pension amount chosen by members to be converted
to a lump sum at retirement from 50% of accrued pension down to 25%. This reduction is based
on past experience of the plan.
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2The results of the valuation at 31 December 2019 include revisions in the assumptions
recommended by the ASWG.  This report summarizes the individual impact the revisions have
made to the long-term normal contribution rate of the plan.
We have summarized the development in the long-term normal contribution rate of the plan from
31 December 2016 to 31 December 2019 as follows:
Changes in Long Term Contribution Rate (before assumption changes)
Long term normal contribution rate as at 31 December 2016 24.2%
Investment (gain)/loss on smoothed asset value in years 2017-2019 (0.1%)
Demographic changes and experience in years 2017-2019   0.1%
Expenses met from the plan   0.2%
Long term normal contribution rate as at 31 December 2019 24.4%
Changes in Long Term Contribution Rate (after assumption changes)
Changing external financial assumptions  3.1%
Changing external demographic assumptions (0.4%)
Changing internal active participant assumptions  1.9%
Changing internal retirement assumptions  0.5%
Long term normal contribution rate as at 31 December 2019 29.5%
The long term cost of the plan has increased since the previous formal funding valuation at 31
December 2016 due primarily to the revision of the actuarial assumptions recommended by the ASWG.
As a result, the long term cost at 31 Dec 2019 of 29.5% is higher than the actual contribution rate of
23.7%. We therefore recommend that the WTOPP Board consider how to bring the long term normal
contribution rate of the plan in line with the cash contribution rate paid to the plan.
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3The long term funding principle is to establish a stable long term contribution rate that is sufficient to
finance the benefits promised to current, former and future members of the plan. It is noted that from
one valuation to the next, the actuarially calculated normal contribution rate may vary due to changes
in asset values, or other changes such as benefit provisions or valuation assumptions.
The security of benefits in the event of dissolution of the WTO is governed by Article 21 of WTOPP
Regulations which states that:
“In the event of dissolution of the WTO, the General Council shall take the necessary steps to guarantee
the benefits acquired under these Regulations by participants and beneficiaries at the date of
dissolution”
We are available to answer any questions on the material contained in this report or to provide
explanations or further details, as may be appropriate.
Respectfully submitted,
Cameron Hannah
FIADate
Mazen Abukhater Date
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4FSA, FCIA
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52
Data
A summary of data used for the valuation at 31 December 2019 and the previous formal valuation
date (31 December 2016) is set out below. The data was provided directly by WTOPP staff. All
figures are in CHF.
Date 31 Dec 2019 31 Dec 2016
Participants
Number 714 695
Average age 46.3 45.5
Average adjusted credited service 12.6 11.9
Average annual pensionable
earnings173,300 172,400
Beneficiaries receiving payments *
Number 370** 307
Average age 65.5 63.3
Average pension 68,777 64,700
*  Excluding deferred retirees
**Includes four retirement cases that retired effective 31 December 2019
The number of active participants in the plan since 1999 is shown below:
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6The number of beneficiaries receiving payment from the plan since 1999 is shown below:
Tables providing further analysis of participant and beneficiary information as well as membership
reconciliations for each group are included in Appendix A of this report.
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73
Assumptions
Summary of assumptions
The table below provides a summary of the actuarial assumptions used at this actuarial assessment
and the previous actuarial valuation. An Actuarial Study Working Group (ASWG) was set up by the
Board of the WTOPP to analyse and propose amendments to the actuarial assumptions. The Board of
the WTOPP endorsed the revisions to actuarial assumptions at its Board meetings in April and June
2020.
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8Assumptions Description
Rate of inflation
The ASWG reviewed the assumed rate of inflation. It acknowledged that it is very difficult to anticipate
future inflation in the medium to long term and considered the following elements:
 The "Swiss National Bank (SNB)" forecasts inflation to remain at around 0.8% in the next 3 to 5
years;
 Over the past 30 years, Swiss annual inflation was on average at 1.1%;
 Swiss inflation is consistently about 1% below the Eurozone inflation rate. The target of the
European Central bank remains at 2% and the Swiss National Bank's objective refers to price
stability of no more than 2% inflation
The ASWG proposed to revise the assumed rate of inflation down from 2% to 1%. This amendment was
endorsed by the Board of the WTOPP.
Recommendations
We support the recommendation put forwards by the ASWG and endorsed by the Board.
General salary increase rates
General salary increase is the base for overall wage growth of the membership as a result of the WTO
salary scale indexation, before considering any performance-related adjustments including annual
increments and employee promotions. It includes an inflationary component plus a WTO-specific
adjustment for real wage growth across all salaries.  Promotion/performance-related increases are
covered in a subsequent section of this report.
In the previous actuarial valuation, the general salary inflation assumption was 0.0% plus assumed
inflation until 2023 and then 0.5% plus inflation thereafter. Experience of the plan from 1999-2009
indicates that actual salary growth (excluding promotion and performance-related increases) has been
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9higher than price inflation by approximately 1.3% points. However and due to a negative inflation
environment in Switzerland since 2010, the WTO has adopted a policy of freezing salaries.  As a result,
future salary real growth is nil over a period of time until the internal indexation formula catches up.
Furthermore and taking into account the current context of zero-nominal growth for WTO budget, the
ASWG considers that the period in which WTO indexation will not exceed Swiss inflation is likely to be
longer than expected. The new salary growth assumption is therefore expected to be 0.0% plus
inflation until 2029, increasing to 0.5% plus inflation thereafter. This revision was endorsed by the
Board of the WTOPP.
Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
Discount rate / expected rate of return
At the last formal valuation dated 31 December 2016, consultations with the Plan's consulting actuary
and investment adviser had identified that the Plan's strategic allocation was likely to deliver less than
the expected 3.5% real return on a seven to ten-year horizon, the farthest point in the future where
anticipations can be made on investment returns.  With the understanding that return over the
medium term would probably be less than expected, the Board considered both that actuarial
assumptions were set with a long term perspective of over 70 years, that an annual real return of 3.5%
was attainable in the long term despite lower expectations for the medium term, and that it was
important for the robustness of successive actuarial valuations to consider carefully any change to the
model. At the 2016 formal valuation, the Board decided to maintain the assumption on expected real
rate of return at 3.5% (5.5% nominal return) and decided to closely monitor the balance of discount
rate and expected rate of financial return.
The ASWG has thoroughly reviewed anticipated return with the Plan's Investment adviser and the
consulting actuary. Projections on future market returns are based the assumption that they tend to
reflect the assets' economic achievements. They take into account interest rates and anticipated
defaults for debt investments, rents and inflation for real estate investment, and anticipation for
equities are based on dividends, growth in companies' earnings, and assessments on how recent
speculative returns are affecting the valuation of equities.
The analysis of investment return projections showed that the current asset allocation of the WTOPP
may be expected to deliver 3.7% nominal return on average over the coming decade for a projected
inflation rate of 1% in Switzerland. This represents 2.7% in real terms. The Board also considered that
the Plan's cash flow situation would be reversed in ten to fifteen years, which will require a change in
strategic asset allocation to reduce the overall volatility of the portfolio, and by way of consequence
will also reduce its growth potential.
The Board endorsed the ASWG proposal to reduce the assumption on real anticipated rate of real
return from 3.5% to 2.7% until 2029 and to revert to a 3.5% real rate of return thereafter. It will be
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10necessary to continue closely monitoring the expected rate of financial return assumption over the
medium to long term.
The table below provides a summary of the expected investment return assumption used at this
actuarial valuation and the previous actuarial valuation.
Assumption used in the previous formal actuarial
valuation as at 31 December 2016Assumption used in the actuarial valuation as at
31 December 2019
5.50% per annum which is equivalent to inflation
(2.0%) plus a real return of 3.5%For 10 years starting in the year 2020, the
expected nominal return is 3.7%, equivalent to
inflation (1.0%) plus a real return 2.7%.
After 2029, the expected nominal return is 4.5%,
equivalent to inflation (1.0%) plus a real return of
3.5%.
Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
Death and disability
Rates of mortality for current and future pensioners of the Plan, and their dependents, determine how
long benefits will be paid. Lower mortality rates result in higher life expectancy and a longer payment
period. Probabilities of mortality during service also determine in-service death benefits. The EVK2000
table was adopted has been used since the plan’s inception. In 2007, a 2.0% annual improvement in life
expectancy was introduced in line with actuarial best practice reflecting numerous studies conducted
by actuarial associations around the world showing that people were living longer due to improved
lifestyles and medical advancements. Mortality improvements (or annual decreases applied to
projected mortality rates of the EVK2000 table) were expected to continue from the baseline year of
2000 until the year 2020, after which mortality rates were expected to remain constant.
The ASWG studied the most recent Swiss mortality and disability tables. The ASWG proposed adopting
the BVG2015 mortality tables and to continue applying future mortality improvements.
The ASWG also proposed that the disability rates adopted for the valuation (EVK1990 rates) be
updated using the latest BVG2015 disability tables. The ASWG reviewed experience in the past ten
years and noted that the number of disability cases was less than projected by both the BVG2015 rates
and the EVK1990 rates - 12 actual disability cases compared with 19 projected under the BVG2015
table and 34 under the EVK1990 table. Although the size of the Plan is too small to use past experience
as a basis for future projection, the ASWG also noted that some of the Swiss-based entities using
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11BVG2015 rates were applying reduction adjustment factors resulting in lower disability projections
ranging from 15% to 25% less than the original rates. The ASWG, taking into account past experience,
considered that it would not be unreasonable to adopt BVG2015 rates with a 25% reduction factor.
These amendments were endorsed by the Board of the WTOPP.
The table below provides a summary of the death and disability assumptions for this actuarial
valuation and the previous actuarial valuation.
Assumption 31 December 2016 31 December 2019
MortalityEVK 2000 with 2%
improvement per year until
2020BVG 2015 with following improvements:
Projection
periodMale Female
2012 - 2020 1.50% 0.75%
2021 - 2035 0.75% 0.50%
2036+ None None
Disability EVK 1990 75% of BVG 2015
Recommendations
We support the recommendations put forwards by the ASWG and endorsed by the Board.
Withdrawal / termination
The ASWG analysed the experience of the WTOPP during the past 10 years. Based upon this analysis,
the ASWG proposed amendments to the withdrawal rates. These amendments were endorsed by the
Board of the WTOPP. The table below provides a summary of the WTOPP active group termination
assumption used at this actuarial valuation and the previous actuarial valuation.
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12Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
Retirement
The ASWG analysed the experience of the WTOPP. Based upon this analysis, the ASWG proposed
amendments to the early retirement assumptions. Due to the limited number of historical data points,
analysis by gender would not be considered credible and so no distinction would be made between
different gender retirement behaviour. These amendments were endorsed by the Board of the WTOPP.
The table below provides a summary of the WTOPP active group retirement assumption used at this
actuarial valuation and the previous actuarial valuation.
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13Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
Lump sum commutation at retirement
At retirement, members have the option of commuting a portion of their pension into cash paid as a
lump-sum.  The remaining percentage (i.e. Non-commuted portion) would be paid as a monthly
annuity.  The commutation calculation is equal to the percentage of the annual pension commuted
multiplied by a pre-determined commutation factor. The maximum pension amount commuted
according to the plan rules is 50%.   Two assumptions are required in the context of this commutation
exercise:
1. The percentage of retirees that choose to commute a portion of their pension at retirement; and
2. The percentage of the pension commuted into a lump sum
Experience of the plan shows that the proportion of retirees who elected to commute a portion of their
pension was in line with the last actuarial valuation assumption; namely that 50% of members would
choose to commute a portion of their pension. However, analysis of historical experience of the plan
over the past few years shows that the portion of the pension commuted has been lower than the
previous valuation’s assumption which expects that for those members that choose to commute, on
average the percentage of their pension converted would be 50%.
The ASWG recommended maintaining the assumption of 50% of members electing to commute a
portion of their pension at retirement and reduce the assumption for the commuted portion of the
member’s pension from 50% to 25%. This amendment was endorsed by the Board of the WTOPP.
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14Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
New entrants
The ASWG analysed the experience of the WTOPP over the last 10 years. Based upon this analysis, the
ASWG proposed amendments to the new entrant assumptions.
The table below provides a summary of the new joiner profile used at this actuarial valuation and the
previous actuarial valuation. Note when projecting future expected cash flows, the average
pensionable remuneration listed in the table below is subject to projected general salary inflation,
which is meant to reflect indexation of salary scales at the WTO.
These amendments were endorsed by the Board of the WTOPP.
Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
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15Performance and Competition based salary increase rates
The ASWG analysed the experience of the WTOPP over the last 10 years. Based upon this analysis, the
ASWG proposed amendments to the performance and competition based salary increase rates. The
table below provides a summary of the performance and competition based salary increase rates used
at this actuarial valuation and the previous actuarial valuation.
Age 2016 (%) 2019 (%) Age 2016 (%) 2019 (%)
35 1.6 3.8 51 0.6 1.4
36 1.5 3.8 52 0.6 1.3
37 1.4 3.6 53 0.6 1.2
38 1.3 3.5 54 0.6 1.1
39 1.2 3.4 55 0.6 1.0
40 1.2 3.1 56 0.5 0.9
41 1.1 2.9 57 0.4 0.7
42 1.1 2.6 58 0.4 0.6
43 1.0 2.3 59 0.3 0.5
44 1.0 2.1 60 0.2 0.4
45 0.9 2.0 61 0.1 0.3
46 0.9 1.9 62 0.0 0.3
47 0.8 1.8 63 0.0 0.3
48 0.8 1.7 64 0.0 0.3
49 0.7 1.6 65 0.0 0.3
50 0.7 1.5
These amendments were endorsed by the Board of the WTOPP.
Recommendation
We support the recommendation put forwards by the ASWG and endorsed by the Board.
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16[Grab your reader’s attention with
a great quote from the document4
Assets
Reconciliation of market value of assets
The table below provides a reconciliation of market value of assets of the WTOPP since inception
(all amounts are shown in CHF millions):
YearMarket value at
start of yearContributionsBenefit
payments &
expensesNet Investment
income &
unrealised gainsMarket value at
end of year
A B C D A+B-C+D
2000 170.6 16.8 0.6 7.3 194.1
2001 194.1 17.7 2.9 (26.4) 182.5
2002 182.5 19.2 3.9 (34.9) 162.9
2003 162.9 21.0 5.2 17.0 195.7
2004 195.7 22.8 4.7 9.2 223.0
2005 223.0 24.8 7.2 55.9 296.5
2006 296.5 24.9 9.9 27.5 339.0
2007 339.0 25.6 11.0 12.3 365.9
2008 365.9 26.8 15.2 (134.2) 243.3
2009 243.3 27.5 15.1 55.6 311.3
2010 311.3 29.6 14.6 12.7 339.0
2011 339.0 30.2 18.4 (2.0) 348.8
2012 348.8 30.0 17.3 35.0 396.5
2013 396.5 30.1 20.4 34.1 440.3
2014 440.3 29.6 19.4 36.1 486.7
2015 486.7 29.0 21.2 (1.5) 493.1
2016 493.1 33.0 24.9 34.4 535.5
2017 535.5 28.8 28.6 59.8 595.6
2018 595.6 28.7 26.9 (32.6) 564.8
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17YearMarket value at
start of yearContributionsBenefit
payments &
expensesNet Investment
income &
unrealised gainsMarket value at
end of year
A B C D A+B-C+D
2019 564.8 30.6 29.7 71.6 637.3
Nominal and Real Investment returns
The table below provides a summary of the investment returns since the WTOPP was established.
Year Investment return Price inflation Real return
A B C = A - B
2000 4.7% 1.5% 3.2%
2001 (10.1%) 0.3% (10.4%)
2002 (18.3%) 0.9% (19.2%)
2003 10.0% 0.6% 9.4%
2004 4.5% 1.4% 3.1%
2005 23.7% 1.0% 22.7%
2006 9.0% 0.6% 8.4%
2007 3.5% 2.0% 1.5%
2008 (36.5%) 0.8% (37.3%)
2009 22.3% 0.3% 22.0%
2010 4.0% 0.5% 3.5%
2011 (0.6%) (0.7%) 0.1%
2012 9.9% (0.4%) 10.3%
2013 8.5% (0.1%) 8.6%
2014 8.1% (0.3%) 8.4%
2015 (0.3%) (1.3%) 1.0%
2016 6.9% 0.0% 6.9%
2017 11.2% 0.8% 10.3%
2018 (5.5%) 1.0% (6.5%)
2019 12.7% 0.1% 12.6%
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18Smoothed asset value calculation
An asset smoothing method was first adopted as part of the actuarial valuation as at 31 December
2007. The objective of using a smoothing method is to allow investment gains and losses to be
recognized over a duration of time hence removing the volatility in the asset value used in
calculating the long term contribution rate.
The smoothing method was used for determining the actuarial value of assets as at 31 December
2019.
Smoothed asset value = MV – (80% × E1) – (60% × E2) – (40% × E3) – (20% × E4)
Where:
− MV = Market value at the valuation date
− E1 to E4 are the excess / (deficiency) in the amount of the investment earnings over that
expected according to the nominal long term return on assets assumption (see table
below)
− Apply a cap of 115% and collar of 85% (i.e. 15% either side of market value)
YearExpected rate of
return
(ER)Expected
Investment Income*
(CHF m)Actual Investment
income & unrealised
gains (CHF m)Actual less expected
income (CHF m) - E
X Y Z Z – Y
2000 6.5% 11.6 7.3 (4.3)
2001 6.5% 13.1 (26.4) (39.5)
2002 6.5% 12.4 (34.9) (47.3)
2003 6.5% 11.1 17.0 5.9
2004 6.5% 13.3 9.2 (4.1)
2005 6.5% 15.1 55.9 40.8
2006 6.5% 19.8 27.5 7.7
2007 6.5% 22.5 12.3 (10.2)
2008 6.5% 24.3 (134.2) (158.5)
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19YearExpected rate of
return
(ER)Expected
Investment Income*
(CHF m)Actual Investment
income & unrealised
gains (CHF m)Actual less expected
income (CHF m) - E
X Y Z Z – Y
2009 6.5% 16.2 55.6 39.4
2010 6.5% 20.7 12.7 (8.0)
2011 6.5% 22.4 (2.0) (24.4)
2012 6.5% 23.1 35.0 11.9
2013 6.5% 26.1 34.1 8.0
2014 5.5% 24.5 36.1 11.6
2015 5.5% 27.0 (1.5) (28.5)
2016 5.5% 27.3 34.4 7.1
2017 5.5% 29.5 59.8 30.3
2018 5.5% 32.8 (32.6) (65.4)
2019 5.5% 31.1 71.6 40.5
*Expected Investment Income each year is calculated using the following formula A + 0.5 *(B-C)] * X. Where A is
the beginning of year market value of assets, B is the total contribution paid to the plan during the year, C is the
total benefit payment plus expenses paid by the plan during the year, and X is Expected Rate of Return.
Based on the results in the two previous tables, the smoothed asset values are as follows:
(CHF
million)MV E1 E2 E3 E4Smoothed
value85%
Collar115%
CapAsset
value
31 Dec 2007 366 (10) 8 41 (4) 354 311 421 354
31 Dec 2008 243 (159) (10) 8 41 365 207 279 279
31 Dec 2009 311 39 (159) (10) 8 377 265 358 358
31 Dec 2010 339 (8) 39 (159) (10) 387 288 390 387
31 Dec 2011 349 (24) (8) 39 (159) 389 297 401 389
31 Dec 2012 397 12 (24) (8) 39 397 337 457 397
31 Dec 2013 440 8 12 (24) (8) 438 374 506 438
31 Dec 2014 487 12 8 12 (24) 473 414 560 473
31 Dec 2015 495 (29) 12 8 12 506 421 570 506
31 Dec 2016 536 7 (29) 12 8 541 456 616 541
31 Dec 2017 596 30 7 (29) 12 576 506 685 576
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20(CHF
million)MV E1 E2 E3 E4Smoothed
value85%
Collar115%
CapAsset
value
31 Dec 2018 565 (65) 30 7 (29) 602 480 650 602
31 Dec 2019 637 41 (65) 30 7 631 542 733 631
The graph below illustrates the effect of adopting a smoothed value approach relative to the
volatility of a market value approach.
Smoothed vs market value of assets (2002-2019)
Recommendation: Continue to use a smoothed asset value approach0100200300400500600700
2002
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019CHF millions
Market v
alue of assets Smoot
hed value of assets
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215
Methodology
Summary
The approach used to complete this actuarial valuation is summarised below:
Phase 1 Phase 2 Phase 3 Phase 4
Collection of data Decision on
assumptions,
methodologyProducing draft results
(discontinuance) and
open group basis
(ongoing).Presentation and
discussion of results
Outputs
Reconciliation of data Setting up valuation
modelValuation runs on
different basesFinal report
Methodology Description
The valuation process is based on standard actuarial processes and the assumptions set out in Section
3. The valuation is performed on two scenarios: firstly, on an ongoing basis (that is where the pension
plan is assumed to continue) and on a ‘discontinuance basis’ which tests whether there are sufficient
funds to meet the liabilities of the plan if it were to close on the valuation date.
Ongoing method (open group valuation)
We have performed the actuarial valuation for the ongoing method on an “open group” basis; this
approach assumes that there is a steady flow of new entrants into the plan in the future, who replace
those expected to leave the plan through retirement, withdrawal, disability, or death. The assumption
on the profile of these new entrants is set out in Section 3.
This approach determines whether the contribution rate set out in the WTOPP Regulations is sufficient
to meet future liabilities of the plan. The approach is summarized below:
− Determining the total projected benefits of all current employees based on past service and
projected future service
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22− Determining the total projected benefits to current pensioners
− Determining the total projected benefits for future new entrants
− Calculating the present value of benefit obligations for existing and future members
− Calculating the present value of future remuneration for existing and future members
− Deriving the contribution rate for the employer as follows
Contribution rate =
𝑇𝑜𝑡𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑏𝑙𝑖𝑔𝑎𝑡𝑖𝑜𝑛𝑠 𝑓𝑜𝑟𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 𝑎𝑛𝑑𝑓𝑢𝑡𝑢𝑟𝑒 𝑚𝑒𝑚𝑏𝑒𝑟𝑠 − 𝐴𝑠𝑠𝑒𝑡𝑠
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓𝑓𝑢𝑡𝑢𝑟𝑒 𝑟𝑒𝑚𝑢𝑛𝑒𝑟𝑎𝑡𝑖𝑜𝑛
Over time, the real cost to the WTOPP is the excess of expenditure over contributions and investment
earnings. So we have prepared projections of revenue (member plus WTO contributions and
investment income) and benefits over a period until the year 2069, 50 years after the valuation date.
Detailed cash flow figures are shown in Section 6.
Future contributions to the plan are obtained by applying the contribution rate (23.7%) to total
expected pensionable earnings of existing and future members. Investment income is projected on the
basis of the existing portfolio of assets, projected net cash flows (contributions less expenditures), and
the assumption regarding the future return on investments. As mentioned above, the projection of
total benefits includes the continuation of benefits already in payment at the valuation date, expected
benefits paid to members in service at the valuation date and benefits to members that are expected
to join in the future.
The reserve (or projected future assets) of the plan is the difference between the end of the previous
year’s market value of assets and the current year expenditures increased by the contributions and
investment earnings. The projected lifetime of the plan considers how expected expenditure will
increase relative to income and the resulting impact the difference will have on the assets of the plan.
To measure the sustainability of the plan, we considered pivotal or “breaking” points in time. The first
point is when annual contributions are not sufficient to cover annual benefits. The second breaking
point occurs when annual benefits are greater than annual contributions plus investment income, an
indication that the reserve has started to decrease. The third and final breaking point is when the
reserve is exhausted and there are no assets left to pay the plan’s expenditure.
Discontinuance method (closed-group valuation)
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23In order to determine the position on a ‘discontinuance basis’, a closed group valuation is performed.
This looks at the position of the plan based only on service accrued to date by current participants (and
beneficiaries' liabilities). The participant liabilities are calculated as follows:
− For participants eligible for early retirement, it is assumed that the early retirement pension
would commence immediately
− For all other participants, the maximum of the withdrawal settlement and value of deferred
pension (where applicable) is valued
The current beneficiary liabilities are calculated using the same approach as for the ongoing method.
The underlying assumption with the discontinuance valuation is that the plan would continue to
provide benefits to its existing beneficiaries and convert active members into beneficiaries by ceasing
future benefit accrual and converting their past service accrual into either an immediate pension,
deferred pension or withdrawal lump sum. We would envisage that the WTOPP’s investment strategy
would subsequently be converted to a more conservative approach investing in bonds with a goal of
immunizing the assets in line with the plan’s benefits outlay reflecting the fact that future
contributions would not be received and that the plan would need to be managed in a conservative
manner.
The financial assumptions used for the discontinuance valuation are consistent with the assumptions
used in closed group actuarial valuations for private sector companies (i.e. liabilities are calculated
using market long term interest rate and inflation expectations). The assumptions are set out in the
table below:
Date Swiss Interest rate Price inflation
1 January 1999 4.50% 1.00%
31 December 2001 4.10% 1.00%
31 December 2004 4.80% 1.00%
31 December 2007 3.50% 1.00%
31 December 2008 3.50% 1.00%
31 December 2009 3.50% 1.00%
31 December 2010 2.80% 1.10%
31 December 2011 2.90% 1.00%
31 December 2012 2.10% 0.60%
31 December 2013 2.60% 0.80%
31 December 2014 1.10% 0.80%
31 December 2015 1.00% 0.60%
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24Date Swiss Interest rate Price inflation
31 December 2016 0.70% 0.60%
31 December 2019* 0.40% 0.70%
*a discontinuance valuation was not performed in 2017 and 2018
We have not taken into consideration:
− The cost of “buying out” beneficiaries' liabilities with an insurance company which may
significantly exceed the calculated value
− The capitalisation of the costs of future expenses of operating a discontinued plan
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256
Results
Ongoing or open group valuation
CHF Millions 31 Dec 2019 31 Dec 2016 31 Dec 2013
A Assets 631 541 438
BPresent value of total projected benefits
a) Beneficiaries 414 317 232
b) Current participants 812 655 645
c) Future new entrants 428 351 402
d) Total [a + b + c] 1,654 1,323 1,279
CPresent value of future remuneration
a) Current participants 1,335 1,210 1,251
b) Future new entrants 2,149 2,020 2,130
c) Total [a + b] 3,484 3,230 3,381
DContribution requirement
[(B - A) / C] 29.3% 24.2% 24.9%
E Expenses 0.2% 0.2% 0.2%
FTotal normal contribution rate
[D + E] 29.5% 24.4% 25.1%
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26Cash flow analysis
Based on the membership at 31 December 2019 and the assumptions adopted, Mercer has projected
the cash flows of the plan for the next 50 years.  Future contributions were based on the total
contribution rate of 23.7% of projected pensionable salaries and future benefit payments were
projected based on existing beneficiary payments as well as future payments made to members at
retirement or termination of service.  Based on these projections, benefit payments are expected to
exceed contributions starting in the year 2020.
Comparing the plan’s total future projected inflow (contributions + expected investment return)
versus outflow (benefits + administrative expenses) the plan is currently in a net inflow position
and expected to remain so for the next 12 years until the year 2032. This is an indicator that assets
are expected to continue increasing over this period.  In the previous valuation at 31 December
2016, it was estimated the net inflows of the plan would be higher than outflows for 40 years, or
until 2055. The main reason for the shift in the plan’s cash flow position is fundamentally due to the
change in future expected asset returns.20253035404550
2020 2021 2022 2023 2024Millions CHF
Contributions Ben payments
020406080100
2020 2025 2030 2035 2040 2045 2050 2055 2060Millions CHF
Inflow Outflow
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27In Appendix B, we provide a forecast of the expected income and expenditure of the plan over the
next 50 years.
Discontinuance basis
Figures below are in CHF millions:
Valuation Date
CHF MillionsMarket Value of
AssetsDiscontinuance
LiabilityDiscontinuance
funding surplus /
(gap)Discontinuance
funding ratio
A BD F
A - B A / B
1 January 1999 146 151 (5) 97%
31 December 2001 183 267 (84) 69%
31 December 2004 223 433 (210) 52%
31 December 2007 366 447 (81) 82%
31 December 2007* 366 485 (119) 75%
31 December 2008 242 493 (251) 49%
31 December 2008* 242 537 (295) 45%
31 December 2009 311 579 (268) 54%
31 December 2010 339 683 (344) 50%
31 December 2011 349 698 (349) 50%
31 December 2012 397 802 (405) 50%
31 December 2013 440 843 (403) 52%
31 December 2014 487 1,182 (695) 41%
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28Valuation Date
CHF MillionsMarket Value of
AssetsDiscontinuance
LiabilityDiscontinuance
funding surplus /
(gap)Discontinuance
funding ratio
A BD F
A - B A / B
31 December 2015 495 1,197 (702) 41%
31 December 2016 536 1,458 (922) 37%
31 December 2019* 637 1,618 (981) 39%
*a discontinuance valuation was not performed in 2017 and 2018
The discontinuance basis is not used to determine the long term contribution rate. It is recognised that
this ratio may fluctuate over the short term. No acceptable margins within which the discontinuance
funding level can vary without action being taken has been set by the WTOPP Board.
There are two sets of results shown as at 31 December 2007 and 31 December 2008. The second set,
with lower funding level and labelled with an (*), allow for future mortality improvement at 2% per
year until the year 2020. The same basis was used to determine the results for all subsequent
valuations (2009 and thereafter).
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29Appendix A
Appendix A: Analysis of
participant and beneficiary
information
The tables below provide a detailed analysis of participant and beneficiary information at 31
December 2019.
Active members (CHF) Male Female Total
Number 319 395 714
Total final average annual remuneration 59,228,079 62,131,097 121,359,176
Average final average annual remuneration 185,668 157,294 169,971
Total pensionable remuneration  60,307,588  63,409,350  123,716,938
Average annual pensionable remuneration 189,052 160,530 173,273
Average age 47.0 45.8 46.3
Average adjusted credited service 12.7 12.6 12.6
Beneficiaries and Dependents Male Female Total
Number
Retirement 151 154 305
Disability 11 11 22
Spouse 4 20 24
Children 9 10 19
Total 175 195 370
Average age
Retirement 69.6 68.0 68.8
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30Disability 62.1 55.0 58.5
Spouse 64.8 68.7 68.0
Beneficiaries and Dependents (annualised pension in payment in CHF)
Retirement12,189,067 10,530,756 22,719,823
Disability705,156 774,433 1,479,589
Spouse217,140 931,668 1,148,808
Children50,940 48,389 99,328
Total 13,162,303 12,285,246 25,447,548
Deferred Retirees (CHF) Male Female Total
Number 14 13 27
Total annual pension at separation 505,152 417,084 922,236
Year 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Participants
# at 31 Dec
previous year*666 694 710 695 684 710 716 719 733 740 728 731 721 699  695  699 702
New entrants 62 66 51 50 67 52 51 56 48 42 59 44 56 55 52 85 104
Withdrawals
Lump sum (18) (19) (33) (30) (11) (18) (16) (23) (16) (19) (16) (24)  (21) (13) (20) (35) (21)
Deferred
pension- - - - - (2) - - (2) (4) - (1) (2) (1)  (4)  (1) (4)
Undecided (8) (13) (12) (17) (8) (8) (12) (11) (9) (17) (13) (10) (9) (13) (12) (33) (42)
Retired
Early (4) (2) (7) (4) (7) (5) (7) (2) (8) (3) (6) (7) (16) (10) (6) (2) (9)
Normal (4) (14) (9) (9) (14) (9) (12) (5) (5) (9) (16) (12) (17) (12) (5) (10) (15)
Disabled** (1) (1) (2) - (1) (4) - (1) (1) (1) (2) -  - (2) (1) (1) -
Died - (1) (1) (1) - - - - - - - -  -  -   -  - (1)
Restructuring* - - - - - - - - - - - - (13) (8)- - -
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31Year 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Transferred
(to other
Organizations)- (1) (2) - - - (1) - - (1) (3) -  - -  - -  -
# at 31 Dec* 694 710 695 684 710 716 719 733 740 728 731 721  699 695 699 702 714
Beneficiaries (including deferred retirees pre 2018)
# at 31 Dec
previous year30 39 59 85 101 129 154 171 186 205 218 245  261 297 327 327 344
New retirees** 9 17 19 13 22 20 20 8 16 13 23 20 35  25 23 16 26
Spouse &
children- 4 7 5 6 4 - 7 5 1 6 1  3 4 8 8 8
Deferred
retirement- - - 1 1 2 (1) 2 1 5 - 1 2 5 4 - -
Died - (1) - - (1) (1) - (2) (2) (1) - (1) (1)  - (5) (4) (5)
End of child
benefit- - - (3) - - (2) - (1) (5) (2) (5) (3) (3) (5) (3) (3)
# at 31 Dec 39 59 85 101 129 154 171 186 205 218 245 261 297 328 352 344 370
Deferred Vesteds (Pre-2018, they are included in the beneficiary count)
# at 1 Jan 25 25
New Retirees - 4
Deferred
retirement- (2)
# at 31 Dec 25 27
* Participants considered for actuarial valuation purposes exclude respectively 13 and 8 staff members who retired on 31
December 2015 and 31 December 2016, respectively, following a restructuring exercise. These individuals were included as
beneficiaries.
**Partial disability members are included as both participants and beneficiaries. They have not been deducted from the active
headcount but added to the Beneficiaries group
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32Appendix B
Appendix B: Cash flow
projections
The table and chart below set out the expected cash flow of the WTOPP until the year 2069 on a 3.7%
until 2030, 4.5% thereafter, and zero participant growth rate (constant at 700 per year).
NOMINAL ‘000 CHF
Total contribution rate = 23.7%
Year Total contributions Investment return Benefit payments
2020 30,168 23,513 -33,868
2021 29,635 24,195 -36,051
2022 29,622 24,835 -37,036
2023 29,734 25,428 -39,907
2024 29,791 25,963 -41,563
2025 29,866 26,444 -44,013
2026 29,954 26,856 -46,452
2027 30,017 27,183 -49,548
2028 30,044 27,417 -52,222
2029 30,080 27,546 -55,780
2030 30,032 33,512 -58,968
2031 30,075 33,636 -62,644
2032 30,071 33,629 -65,111
2033 30,118 33,509 -67,641
2034 30,204 33,274 -70,143
2035 30,321 32,896 -73,751
2036 30,373 32,412 -74,253
2037 30,608 31,847 -76,632
2038 30,826 31,189 -77,754
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33NOMINAL ‘000 CHF
Total contribution rate = 23.7%
Year Total contributions Investment return Benefit payments
2039 31,086 30,461 -78,910
2040 31,395 29,676 -79,369
2041 31,762 28,855 -79,643
2042 32,168 27,983 -80,740
2043 32,552 27,046 -81,589
2044 32,909 26,057 -81,931
2045 33,258 24,981 -84,144
2046 33,508 23,821 -84,164
2047 33,792 22,580 -85,928
2048 34,002 21,225 -87,244
2049 34,184 19,766 -88,225
2050 34,389 18,208 -89,142
2051 34,617 16,551 -89,920
2052 34,871 14,832 -89,077
2053 35,232 13,064 -89,268
2054 35,603 11,231 -89,132
2055 35,999 9,359 -88,151
2056 36,456 7,446 -88,045
2057 36,896 5,480 -87,579
2058 37,345 3,464 -87,186
2059 37,747 1,390 -87,036
2060 38,159 -747 -86,619
2061 38,600 -2,942 -86,217
2062 39,045 -5,200 -85,884
2063 39,496 -7,521 -85,438
2064 39,956 -9,908 -85,042
2065 40,424 -12,363 -84,641
2066 40,894 -14,892 -84,327
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34NOMINAL ‘000 CHF
Total contribution rate = 23.7%
Year Total contributions Investment return Benefit payments
2067 41,364 -17,501 -84,109
2068 41,827 -20,199 -83,981
2069 42,284 -22,998 -84,134
WT/BFA/W/577 
- 88 -DRAFTMercer Consulting Middle East Limited
Registered with DIFC, License No. CL0897Mercer Financial Services Middle East Ltd.
Office 01B, Level 5
Gate Precinct Building 2
Dubai International Financial Centre
P.O. Box 215306, Dubai, UAE
www.me.mercer.com
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