RESTRICTED  
  
WT/BFA/W/426  
 
11 September 2017  
(17-4764) Page: 1/25 
Committee on Budget, Finance and Administration    
 
 
ACTUARIAL POSITION O F THE WTO PENSION PL AN1 
NOTE BY THE CHAIRMAN  OF THE WTOPP MANAGEM ENT BOARD  
1. In accordance with Article 9(a) of the Plan Regulations, regular actuarial valuations are  carried 
out by the consulting actuary of the Plan at three -yearly intervals. The most recent valuation was 
carried out based on 31 December 2016 data and reviewed by the Management Board at its June 
2017 meeting.  
2. In order to prepare for the new valuation exercise, the WTOPP Management Board convened an 
Actuarial Working Group (AWG) to review the parameters that were used for the previous 2013 full 
actuarial valuation. The AWG consulted closely with the Plan actuary and investment advisor to 
review the rece nt actuarial experience and the evolution of the funding position since 2013. Based 
on the work and recommendations of the AWG, the WTOPP Management Board decided to 
maintain all previous actuarial assumptions as there were no compelling justifications for  
modifications and stability of assumptions help to make the valuations comparable over time.  
3. The new report indicates that the long term cost of the plan has decreased since the previous 
formal funding valuation at 31 December 2013 due primarily to the am endments to the Plan 
regulations that took effect 1 January 2016. Those amendments were partially offset by 
demographic trends and less -than-projected investment returns on a smoothed basis.  
4. The long -term estimated contribution rate remains slightly higher  than the actual contribution 
rate of 23.7%. However, the new report does not recommend taking any further action as there is 
no significant gap at this point. The current contributions rate is considered to be within the 
margin of error for the calculated  contribution rates.  
5. Nonetheless the investment performance as well as the demographic experience must be 
monitored over the coming years in order to identify any persistent trends that would require the 
Management Board to recommend actions to address an  actuarial imbalance.  
 
 
 
_______________  
 
 
  
                                                           
    1 Annex f rom page 2 provided by Mercer  is available in English only.  WT/BFA/W/426  
 
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ANNEX:  
 
ACTUARIAL VALUATION REPORT AS AT 
31 DECEMBER 2016  
 
WORLD TRADE ORGANIZ ATION  
 
WTO PENSION PLAN  
 
JUNE  2017  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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  TABLE OF CONTENTS  
 
1. Executive summary  ................................ ................................ ................................ ..........  4 
2. Data  ................................ ................................ ................................ ................................ . 7 
3. Assumptions  ................................ ................................ ................................ ....................  8 
Summary of assumptions ................................ ................................ ................................ ........  8 
Demogr aphic assumptions  ................................ ................................ ................................ ..... 9 
4. Assets  ................................ ................................ ................................ ............................. 12 
Reconciliation of market value of assets  ................................ ................................ ............  12 
Investment return  ................................ ................................ ................................ ...................  13 
Smoothed asset value calculation  ................................ ................................ .......................  13 
5. Methodology  ................................ ................................ ................................ ................... 16 
Summary  ................................ ................................ ................................ ................................ . 16 
Methodology  ................................ ................................ ................................ ............................  16 
6. Results  ................................ ................................ ................................ ............................ 19 
Ongoing or open group valuation  ................................ ................................ ........................  19 
Cash flow analysis  ................................ ................................ ................................ .................  20 
Discontinuance basis  ................................ ................................ ................................ .............  21 
7. Appendix A: Analysis of participant and beneficiary information  ................................ ......22 
8. Appendix B: Cash flow projections  ................................ ................................ .................. 24 
 
 
 
 
 
 
 
 
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  1  
Executive summary  
 
This report sets out the results of the formal actuarial valuation completed as at 31 
December 2016  for the World Trade Organization  Pension Plan (WTOPP). This is the 
seventh  formal actuarial valuation of the WTOPP, the previous formal actuarial valuations  
having been completed effective  31 December 201 3, 31 December 2010, 31 December 
2007, 31 December 2004, 31 De cember 2001 and 1 January 1999.  
The long term funding principle is to establish a stable long term contribution rate that is 
sufficient to finance  the benefits promised. 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 beneficiar ies 
at the date of dissolution”  
Over the last 3 years since the last valuation at 31 December 2013, the plan has achieved 
an average annual nominal  return of 4.8%; lower than the expected annual nomin al return of 
5.5%.  However the annual real return achieved over the last 3 years was  5.3% compared to 
the expected annual real investment return of 3.5% . The chart below shows the investment 
return of WTOPP assets since  the year 2000 . 
WT/BFA/W/426  
 
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  Since the previous v aluation at 31 December 2013, the WTOPP Board amended the 
regulations of the plan effective 1 January 2016. The following four amendments were 
adopted:  
1. For current staff and new joiners, the lump -sum maximum conversion portion of the 
pension at retirement increased from one third to 50%;  
2. For new joiners only, the calculation of the final average remuneration increased from 
the three -year average of highest remuneration to the five -year average of highest 
remuneration;  
3. For new joiners, the early retirement b enefit reduction increased to 6% per year of early 
retirement for those with less than 30 years of service. The reduction for greater than 30 
years of service would increase to 3 % per year ; and  
4. For new joiners, reducing the pre -retirement cost -of-living in dexation on deferred pension 
at termination from 100%  to one third.  
 
In late 2016 , the WTOPP Management Board established the Actuarial Study Working 
Group (ASWG) to review the assumptions of the triennial actuarial valuation.  Throughout this 
period , Mercer was involved in modelling different scenarios in order for the ASWG to 
formulate its views and present its recommendations to the WTOPP Board. In January 2017, 
the ASWG made recommendations to maintain all actuarial assumptions adopted at the 
previous formal valuation at 31 December 2013 . 
We have summarized the development in the long term normal contribution rate of the plan 
(excluding expenses) from 31 December 2013  to 31 December 2016  as follows:  
Changes in Long Term Contribution Rate  (excluding  expenses)  
Long term normal contribution rate as at 31 December 2013  24.9%  
Investment (gain)/loss on smoothed asset value in years 2014 -2016  0.2%  
Demographic changes and experience in years 2014 -2016 * 0.2% 
Amendments to the WTOPP  effective 1 January 2016  (1.1%)  
Long term normal contribution rate as at 31 December 2016  24.2%  
*Change in projected total active head count from 730 to 700 employees  
The long term cost of the plan has decreased since the previous formal funding valuation at 
31 December 2013  due primarily to the amendments effective 1 January 2016; those 
amendments were partially offset with less -than-expected investment return  and 
demographic  experience.  
Even though  the long-term contribution rate remain s higher than the actual contribution rate 
of 23.7%, we do not recommend the WTOPP Board take any further action  at this point to 
bridge the gap . In our view, the actuarial ass umptions include a margin for caution and  
conservatism that would otherwise reduce the contribution rate . For example,  actual 
disability cases in the pa st have been lower than assumed and actual withdrawal/ termination 
rates have been higher than assumed . We have also observed the decrease in the total 
active membership in the past 3 years and this is due to the lag time in f illing job vacancies WT/BFA/W/426  
 
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  at the WTO.  Had we adopted these experiences and reflected them in the assumptions, the 
resulting contribution rat e would have been lower . 
Considering  the inherent uncertainty in the actuarial estimates, we feel the current 
contribution rate  is well within the margin of error for the calculated contribution rates . 
However, experience must be monitored over the coming years in order to identify an y 
persistent trends.  
Finally and over the past 3 years, n on-investment -related  expenses made up 0.2% of total 
annual pensionable earnings, which is in line with our assumption of 0.2% of pensionable 
earnings. Given these costs are paid directly from the plan’s assets, we recommend that the 
Board formulate its official position on how costs associated with the operat ion of the plan 
will be funded.  
Professional q ualifications  
 
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,  
 
  
(signed)   
Cameron Hannah  
FIA Date  
  
(signed)   
Mazen Abukhater  
FSA, FCIA  Date  
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 2  
Data  
 
A summary of data used for the valuation at 31 December 2016  and the previous formal 
valuation date (31 December 2013 ) is set out below. The data was provided by Trianon, the 
WTOPP  administrator. All figures are in CHF.  
 
Date  31 Dec 2016  31 Dec 2013  
Participants  
Number * 695 731 
Average age  45.5 45.6 
Average adjusted credited service  11.9 11.4 
Average annual pensionable  earnings  172,400 174,600 
Beneficiaries  receiving payments  
Numbe r 307 231 
Average age  63.3 60.3 
Average pension  58,501  61,589  
* Active Participants at 31 December 2016 exclude 8 staff members who retired on 31 December 2016 following 
a restructuring exercise. These individuals were included as beneficiaries.  
Tables providing further analysis of participant and beneficiary information as well as 
membership  reconciliation are included in Appendix A.  
 
 
 
 
 
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  3  
Assumptions  
 
Summary of assumptions  
 
The table below provides a summary of the actuarial assumptions used at this actuarial 
assessment and the previous actuarial valuation.  
 
Date  31 Dec 2016  31 Dec 2013  
Financial  
Discount (interest) rate  5.5%  5.5%  
General salary inflation  2.0% for the first 7 years,  
2.5% thereafter  2.0% for the first 10 years,  
2.5% thereafter  
Promotional increase (based on age)   0.15% to 2.55%  0.15% to 2.55%  
Pension increase rate  2.0%  2.0%  
Consumer price inflation  2.0%  2.0%  
Demographic  
Mortality  EVK 2000  improved*  EVK 2000  improved*  
Disability  EVK 1990  EVK 1990  
Withdrawal  WTO Specific  WTO Specific  
Early retirement  WTO Specific  WTO Specific  
New e ntrants    
Proportion male / female, age, pensionable 
remuneration  M 50%, 35, 135,000  
F 50%, 34, 120,000  M 50%, 35, 135,000  
F 50%, 34, 120,000  
*Assumes a 2% improvement in the EVK 2000 mortality rates for a period of 20 years and that the improvement is maintained 
thereafter  
 
 
 
 
 
 
 
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 Demographic assumptions  
 
Death and d isability  
The table below provides a comparison of actual experience compared with expected 
experience of the WTOPP active group over the last six year p eriod for death and disability:  
Assumption  Expected  Actual  
Disability (EVK 1990)  20 6 
Death in service (EVK  2000 with projected 
mortality improvements to the year 2020)  6 0 
 
Over the last 6 years the actual number of disability cases has been approximately one third 
what was expected and the actual number of death incidences ha s been zero.  As the plan is 
still considered “young” and the overall population quite small with relatively few incidence 
rates, we would suggest retaining  the assumption at this point.  The ASWG , after conducting 
its own analysis,  recommended that the actuarial assumpt ion for the incidence of disability 
and mortality be maintained.  
Recommendation s 
• Retain the EVK 1990 disability inception rates and reassess at the next full valuation  
• Retain the EVK 2000 with improvements to the year 2020 in -service (and post 
retirement) mortality rates and reassess at the next full valuation  
 
Withdrawal / termination  
The table below provides a comparison of actual experience compared with expected 
experience of the WTOPP active group terminations over the last six years:  
Assumption  Expected  Actual  
Withdrawal settlement (WTO rates)  131 211* 
* Includes members who left the WTO and subsequently rehired  
Member terminations, whether voluntary or involuntary, have been higher than expected in 
the last 6 years. After further analysis on staff turnover, the ASWG concluded there was no 
compelling reason to change the currently assumed rates. The ASWG also recommended 
that the current assumption of turnover be maintained but closely monitored in future 
valuat ions.  
Recommendation  
• Retain the current rates used for assuming member withdrawal and reassess at the next 
triennial valuation  
 
Retirement  WT/BFA/W/426  
 
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  The table below provides a comparison of actual experience compared with expected 
experience of the WTOPP  active group retirements  over the last six -year period:  
 
 
Assumption  Expected  Actual  
Retirement  93 107 
 
Key observations made analyzing retirement experience of the WTOPP:  
• Most prevalent retirement age is at 65 (~18% of retirements)  
• Average retirement age was 61.1, the expected retirement age for the same group was 
61.2 
• The total number of retirement cases was 107, the expected number was 93  
 
Recommendation  
• Retain the current rates used for assuming member retirement  
 
  
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 New entrants  
During the three  year period from 2014 -2016 , the average new entrant details are set out in 
the table below.  
Actual new joiner profile over the last 3 years:  
Sex Age Pensionable Salary  Distribution  
M 34 122,700 46% 
F 33 101,300 54% 
 
Expected new entrant profile:  
Sex Age Pensionable Salary  Distribution  
M 35 135,000  50% 
F 34 120,000  50% 
 
The ASWG has indicated that WTO recruitment strategy which considers merit, gender, and 
nationality distribution will remain consistent with past experiences.  As such the working 
group recommended the assumption for future patterns of gender and age be m aintained.  
Recommendation  
• Maintain the assumed age and % distribution profile for males and females  but monitor 
closely if there is a need for change in the future  
 
Non-investment expenses  
Over the last six years, average non -investment expenses made up 0.2 % of total annual 
pensionable earnings, which is in line with our assumption of 0.2% of pensionable earnings. 
Given these costs are paid directly from the plan’s assets, we rec omm end that the Board 
formulate  its official position on how costs associated with the operation of the plan will be 
funded.  
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  4  
Assets  
 
Reconciliation of market value of assets  
 
The table below provides a reconciliation of market value of asse ts of the WTOPP  since 
inception (all amounts are shown in CHF millions):  
 
Year  Market value at 
start of year  Contributions  Benefit 
payments & 
expenses  Net Investment 
income & 
unrealised 
gains  Market 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  170.6  16.8 0.6 7.3 194.1  
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  
*Excludes receivable contribution of  CHF 2.3M  
**Includes receivable contribution of  CHF 2.3M at 31 Dec 2015, and CHF 2.0M at 31 Dec 2016  
 
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 Investment return   
 
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%  
 
The ASWG  assessed the discount rate by looking at both historical experience and expected 
future trends and the relationship between the discount rate and the other returns, GDP, 
equity returns and inflation. The working group concluded that an annualized real return of 
3.5% is attainable in the long term.  
 
Smoothed 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 recogni zed over a duration of time hence removing the volatility in the asset 
value used in calculatin g the long term  contribution rate.  
The smoothing method was used for determining the actuarial value of assets as at 31 
December 2016 . 
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  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)  
 
Year  Expected rate of 
return   
 (ER) Expected Investment 
Income  
[A + 0.5 * (B -C)] * X  Net Investment 
income & unrealised 
gains  Actual less expected 
income  
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)  
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 
 
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 Based on the results in the two previous tables, the smoothed asset values are as follows:  
(CHF million)  MV E1 E2 E3 E4 Smoothed 
value  85% 
Collar  115% 
Cap Asset 
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 201 4 487 12 8 12 (24) 473 414 560 473 
31 Dec 201 5 495 (29) 12 8 12 506 421 570 506 
31 Dec 201 6 536 7 (29) 12 8 541 456 616 541 
 
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 -2016)  
 
Recommendation:  Continue to use a smoothed asset value approach  
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  5  
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, 
methodology  Producing draft results on 
closed group 
(discontinuance) and open 
group basis (ongoing).  Presentation and 
discussion of results  
Outputs   
Reconciliation of data  Setting up valuation model  Valuation runs on different 
bases  Final report  
Methodology  
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 t he 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  
 
• 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  
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 • Calculating the present value of future remuneration for existing and future members  
 
• Deriving the contribution rate for the employer as follows  
 
Contribution r ate =  
 
𝑇𝑜𝑡𝑎𝑙  𝑣𝑎𝑙𝑢𝑒  𝑜𝑓 𝑏𝑒𝑛𝑒𝑓𝑖𝑡  𝑜𝑏𝑙𝑖𝑔𝑎𝑡𝑖𝑜𝑛𝑠  𝑓𝑜𝑟 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔  𝑎𝑛𝑑  𝑓𝑢𝑡𝑢𝑟𝑒  𝑚𝑒𝑚𝑏𝑒𝑟𝑠 −𝐴𝑠𝑠𝑒𝑡𝑠
𝑉𝑎𝑙𝑢𝑒  𝑜𝑓 𝑓𝑢𝑡𝑢𝑟𝑒  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 i ncome) and benefits over a period until the year 2066, 50 
years after the valuation date . Detailed cash flow f igures are shown in Appendix C.  
Future contributions to the plan are obtained by applying the contribution rate (23.7%) to 
total expected pensiona ble 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 ment ioned 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 p lan 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 po int 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 th ird and 
final breaking point is when the reserve is exhausted and there are no assets left to pay  any 
of the plan’s expenditure.  
Discontinuance method ( closed -group valuation)  
In 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 retir ement, 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  
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  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 ce asing 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 are consistent with the assumptions used for 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:  
 
 Swiss  
Date  Interest rate  Price inflation assumption  
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%  
31 December 2016  0.70%  0.60%  
 
 
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  WT/BFA/W/426  
 
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 6  
Results  
 
Ongoing or open group valuation  
 
CHF Mi llions  31 Dec 2016  31 Dec 2013  31 Dec 2010  
A Assets  541 438 387 
B Present value of total projected benefits  
a) Beneficiaries  317 232 168 
b) Current participants  655 645 741 
c) Future new entrants  351 402 697 
d) Total [a + b + c]  1,323 1,279  1,606  
C Present value of future remuneration  
a) Current participants  1,210 1,251  1,546  
b) Future new entrants  2,020 2,130  3,215  
c) Total [a + b]  3,230 3,381  4,761  
D Contribution requirement   
[(B - A) / C]  24.2% 24.9%  25.6%  
E Expenses  0.2%  0.2%  0.2%  
F Total normal contribution rate  
[D + E]  24.4% 25.1%  25.8%  
  
 
 
 WT/BFA/W/426  
 
- 20 - 
 
  Cash flow analysis  
Starting in the year 2017, benefits are expected to exceed contributions.  In the previous 
valuation at 31 December 2013, it was estimated the turning point was expected to occur in 
the year 2020, 3 years later than expected at this valuation.  The fundamental reasons for 
this shift are:  
1. Lower projected active participant head count (700 versus 730 participants) decreasing 
future expected contributions  
 
2. Salary freezes over  the last 3 years reduced contributions  
 
3. Slightly higher number of retirees than assumed  
 
4. Payment of higher lump sums on separation due to the increase in the proportion of the 
pension commuted from 1/3 to 1/2, as permitted in the most recent amendment effective 
1 Jan 2016  
 
 
Comparing the plan’s total 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 40 years.  
 
WT/BFA/W/426  
 
- 21 - 
 
 In 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 Millions  Market Value of 
Assets  Liabilities  Discontinuance 
funding level  Discontinuance 
funding ratio  
A B D 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% 
31 December 2015  495 1,197  -702 41% 
31 December 2016  536 1,458  -922 37% 
The discontinuance basis is not used to determine the long term contribution rate. It is 
recognized  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).  WT/BFA/W/426  
 
- 22 - 
 
  APPENDIX A   
Appendix A: Analysis of participant and beneficiary 
information  
 
The tables below provide a detailed analysis of participant and beneficiary information at 31 
December 2016 . 
Active members (CHF)  Male  Female  Total  
Number  317 378 695 
Total final average annual remuneration   60,300,000   59,509, 300   119,809,200   
Average final average annual remuneration   190,200   157,400   172,400   
Total pensionable remuneration   61,510 ,000   60,771,500    122,281,400   
Average annual pensionable remuneration   194,000   160,800    176,000   
Average age   46.47   44.74   45.53  
Average adjusted credited service   12.33   11.61   11.94  
 
Beneficiaries and Dependents  Male  Female  Total  
Number  
Retirement  127 129 256 
Disability  11 10 21 
Spouse  1 9 10 
Children  6 14 20 
Total  145 162 307 
Average age  
Retirement  68.4 66.2 67.3 
Disability  61.2 52.1 56.9 
Spouse  65.9 67.4 67.2 
Beneficiaries and Dependents (annualised pension in payment in CHF)  
Retirement   9,146, 200   8,813, 700   17,959, 800  
Disability   704,200   653,700   1,357, 900  
Spouse   12,000   448,000   460,000  
Children   28,400   69,000   97,300  
Total   9,890, 700   9,984, 300   19,875, 000  
 
  WT/BFA/W/426  
 
- 23 - 
 
 Deferred Retirees (CHF)  Male  Female  Total  
Number  10 11 21 
Total annual pension at separation   444,400   290,800   735,300  
 
Year  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  2016  
Participants  
# at 31 Dec 
previous 
year* 666 694 710 695 684 710 716 719 733 740 728 731 721 699 
New entrants  62 66 51 50 67 52 51 56 48 42 59 44 56 55 
Withdrawals  
Lump sum  (18) (19) (33) (30) (11) (18) (16) (23) (16) (19) (16) (24)  (21) (13)  
Deferred 
pension  - - - - - (2) - - (2) (4) - (1) (2)  (1)  
Undecided  (8) (13) (12) (17) (8) (8) (12) (11) (9) (17) (13) (10) (9)  (13)  
Retired  
Early  (4) (2) (7) (4) (7) (5) (7) (2) (8) (3) (6) (7) (16)  (10)  
Normal  (4) (14) (9) (9) (14) (9) (12) (5) (5) (9) (16) (12) (17)  (12)  
Disabled* * (1) (1) (2) - (1) (4) - (1) (1) (1) (2) -  -  (2)  
Died - (1) (1) (1) - - - - - - - -  -   -  
Restructuring*  - - - - - - - - - - - - (13)  (8) 
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  
Beneficiari es (including deferred retirees)  
# at 31 Dec 
previous year  30 39 59 85 101 129 154 171 186 205 218 245  261  297  
New retirees* * 9 17 19 13 22 20 20 8 16 13 23 20 35   25  
Spouse & 
children  - 4 7 5 6 4 - 7 5 1 6 1  3  4 
Deferred 
retirement  - - - 1 1 2 (1) 2 1 5 - 1 2  5  
Died - (1) - - (1) (1) - (2) (2) (1) - (1) (1)   - 
End of child 
benefit  - - - (3) - - (2) - (1) (5) (2) (5) (3)  (3)  
# at 31 Dec  39 59 85 101 129 154 171 186 205 218 245 261 297  328  
* Participants at 31 Dec ember  2015 and at 31 Dec ember  2016 considered for actuarial valuation purposes 
exclude respectively 13 staff members who retired on 31 December 2015 and 8 staff members who retired on 31  
December 2016 following a restructuring exercise. These were instead 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 . WT/BFA/W/426  
 
- 24 - 
 
  APPENDIX B   
Appendix B: Cash flow projections  
 
The table and chart below set out the expected cash flow of the WTOPP until the year 2066  
on a 5.5% expected return and zero participant growth rate.  
NOMINAL ‘000 CHF  
Total contribution r ate = 23.70%  
Year  Total contributions  Investment return  Benefit pay ments  
2017  29,815  29,439  -30,382  
2018  29,937  30,977  -32,300  
2019  30,141  32,539  -32,945  
2020  30,362  34,051  -37,662  
2021  30,436  35,545  -36,896  
2022  30,733  37,099  -38,832  
2023  31,064  38,580  -43,333  
2024  31,288  39,968  -45,692  
2025  31,529  41,313  -48,174  
2026  31,915  42,627  -50,118  
2027  32,325  43,880  -53,791  
2028  32,704  45,043  -56,727  
2029  33,109  46,122  -59,914  
2030  33,491  47,096  -63,521  
2031  33,859  47,897  -68,873  
2032  34,143  48,568  -70,523  
2033  34,521  49,199  -72,337  
2034  34,985  49,781  -74,421  
2035  35,526  50,227  -79,434  
2036  35,964  50,630  -77,828  
2037  36,651  51,043  -81,051  
2038  37,330  51,396  -82,185  
2039  38,040  51,748  -83,164  
2040  38,833  52,124  -83,530  
2041  39,707  52,594  -82,164  
2042  40,682  53,131  -83,883  
2043  41,637  53,661  -85,449  
2044  42,589  54,242  -84,942  
2045  43,591  54,833  -88,245  
2046  44,520  55,399  -88,938  
2047  45,463  55,979  -90,768  WT/BFA/W/426  
 
- 25 - 
 
 NOMINAL ‘000 CHF  
Total contribution r ate = 23.70%  
Year  Total contributions  Investment return  Benefit pay ments  
2048  46,395  56,463  -95,441  
2049  47,251  56,807  -98,642  
2050  48,086  57,084  -100,231  
2051  48,959  57,341  -101,617  
2052  49,868  57,597  -102,594  
2053 50,807  57,858  -103,794  
2054 51,778  58,119  -104,992  
2055 52,775  58,375  -106,512  
2056 53,794  58,624  -107,733  
2057 54,836  58,877  -108,951  
2058 55,904  59,118  -110,782  
2059 56,986  59,333  -112,518  
2060  58,082  59,529  -114,103  
2061  59,204  59,707  -115,779  
2062  60,351  59,862  -117,532  
2063  61,523  59,999  -119,103  
2064  62,728  60,131  -120,339  
2065  63,976  60,267  -121,664  
2066  65,265  60,401  -123,244  
 
 
 22, Rue François -Perreard  
CH-1225 Geneva  
+41 22 918 1003  
  
 
 
 
 
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