RESTRICTED  
 
WT/L/952  
15 July 2015  
(15-3642)  Page: 1/32  
  
 
   
  
 
  
 
   
 
 
WTO PENSION PLAN 
 
ANNUAL REPORT OF THE MANAGEMENT BOARD 
AND REPORT OF THE EXTERNAL AUDITOR 
THEREON FOR THE YEAR ENDING 
31 DECEMBER 2014 
 WT/L/952 
- 2 - 
  CONTENTS 
MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD ....................................... 3  
1   HIGHLIGHTS ............................................................................................................... 4 
1.1   Investme nt Retu rn .................................................................................................... 4  
1.2   Asset Allocation ......................................................................................................... 4  
1.3   Participants an d Beneficiar ies 2014 .............................................................................. 5  
2   SUMMARY OF MANAGEME NT BOARD ACTIVITIES ........................................................ 7  
3   REVIEW OF INVE STMENT STRATEGY ........................................................................... 7  
4   WORKING GROUPS ...................................................................................................... 8  
5   RECOVERY OF WITHHOLDING TAX ON PLAN INVESTMENTS ....................................... 8  
6   ORGANIZATION AND STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 
2014 .......................................................................................................................... ...... 9 
7   ACCO UNTS ................................................................................................................ 1 0 
8   ACTUARIAL POSITI ON OF THE PLAN ......................................................................... 10  
9   IPSAS ACCRUED LIABIL ITIES OF TH E PLAN .............................................................. 11  
10   EXTERNAL AUDITOR ................................................................................................ 12  
11   FINANCIAL STATEMENTS ........................................................................................ 13  
11.1   Management Letter of Representation ........................................................................ 13 
11.2   Statement 1: Income and Expenditur e Statement ....................................................... 14 
11.3   Statement 2:  Balance Sheet ..................................................................................... 15 
11.4   Schedule A: Source and Applicatio n of F unds .............................................................. 15 
11.5   Schedule B: Breakdown of Expenditures ..................................................................... 16 
11.6   Schedule C: Invest ment Mandate Overview ................................................................ 16 
11.7   Schedule D: Asset Alloca tion as of 31 December 2014.................................................. 17 
11.8   Schedule E: Investment Performance as of 31 December 2014 ...................................... 17 
11.9   Schedule F: Investment Performance History, Since Inception to 
31 December  2014  .......................................................................................................... 18 
11.10   Schedule G: Exchange Rates Used for Closing on 31 December 2014 ............................ 18 
11.11   Schedule H: Particip ation in the Pe nsion Plan ............................................................ 19 
11.12   Schedule I: Structure of the WTO Pension Plan .......................................................... 20 
11.13   Schedule J: Glossary of  Terms ................................................................................ 21 
ANNEX 1: NOTES TO THE FINANCIAL STATEMENTS ........................................................ 24  
ANNEX 2: INVESTMENT PRINCIPL ES OF THE PENS ION PLAN ......................................... 26  
ANNEX 3: WTOPP CODE OF CONDUCT GUIDANCE FOR MEMBERS OF THE WTOPP 
MANAGEMENT BOARD .................................................................................................... 29  
 WT/L/952 
- 3 - 
  MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD 
1.1.  The Management Board of the World Trade Or ganization Pension Plan (WTOPP) is pleased to 
present to you its 2014 Annual Report. 2014 was another good year for the WTOPP's investment portfolio. The Management Board's investment strategy followed closely its benchmark and 
delivered a nominal rate of return of 8.1% (ver sus 8.6% for the benchmark). In real terms this 
represents 8.4% which is above the long-term target  rate of return of 3.5% used in the actuarial 
assumptions of the Plan. More information on the investment philosophy and strategies of the 
Management Board and details on the allocati on of assets can be found in the report. 
1.2.  In 2014, the principal focus of the Manageme nt Board was the triennial actuarial report as 
at 31 December 2013. In 2014 the Management Board met five times in formal meetings, ten times in working group meetings and additiona lly in informal sessions of these working groups. 
Four of the 2014 working group meetings were devoted to the actuarial review. The working 
groups also convened to study investment recommendations prior to formal Board decisions and review general governance issues. For example, e fforts of the working group on governance led to 
the Board adopting a code of conduct for me mbers of the Management Board, and further 
reviewing procedures for the management of disability claims. 
1.3.  In 2014 new transfer agreements were established with three international organizations, 
namely the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT), 
the European Institute for Securities Studies (ISS) and the European Union Satellite Centre (Satcen), and the transfer agreement with the North Atlantic Treaty Organization (NATO) was updated.  
1.4.  The actuarial working group was focused on considering actions to address the funding 
imbalance identified in the full actuarial valuation of the Plan based on its position at the end of 2013. By the end of 2014, the working group had submitted a package of recommendations to 
the Management Board. These were under review as of the end of the year. It is expected that 
a process of consultation with stakeholders will be followed in 2015 with a view of eventually making recommendations to the General Council through the Committee on Budget, Finance 
and Administration. 
1.5.  As introduced in the 2012 Annual Report , the International Public Sector Accounting 
Standards (IPSAS) applied by the WTO bring new dimensions and increased interest from stakeholders in monitoring and evaluating the long-term viability of the Plan. IPSAS valuations 
make different assumptions than those used to ma nage the Plan on an on-going basis and thus 
provide a different perspective on the liabilities of  the Plan. In general, IPSAS assumptions lead to 
higher liability estimates. These different perspe ctives on the liabilities of the Plan provide 
additional information to stakeholders that, when well understood, can be useful. However, 
the introduction of the IPSAS also raises questions and poses challenges for both the Plan and the Organization. In 2013, the WTO began to consolidate the assets and liabilities of the WTO Pension 
Plan into its financial reporting. This consolidat ion was further refined in 2014 and will continue to 
be reviewed in the coming year. 
1.6.  It is helpful to keep in mind that the WTOPP is a relatively young plan. It has a modest 
(but growing) number of beneficiaries claiming benefits from the Plan and continues to be in a 
solidly cash-flow positive position (meaning that the contributions to the Plan each month exceed 
the benefits paid out). This status means that the Plan can take a long-term view on managing its assets and estimated liabilities. Important decisions about the management of the Plan can be 
carefully deliberated and thoughtfully implemented. 
1.7.  The Management Board is fully engaged in ensuring the continued good governance of 
the WTO Pension Plan and is pleased to share this annual report with you. 
1.8.  The present report for the period from 1 January 2014 to 31 December 2014 has been 
prepared by the Management Board in accordance wi th Article 5 of the Regulations of the Plan for 
presentation to the General Council and to Plan participants. 
Johannes, Rühl, Chair of the Management Board 
 WT/L/952 
- 4 - 
  1  HIGHLIGHTS 
1.1  Investment Return Table 1: Investment Return 
 Net Real 
2014 8.1% 8.4% 
2013 8.4% 8.3% 
2012 10.0% 10.4% 
Figure 1: Historical Returns Net of Inflation and Fees 
 
 
1.2  Asset Allocation 
Figure 2: Asset Allocation - Actual vs. Strategy 2014 
 WT/L/952 
- 5 - 
  Figure 3: Detailed 2014 Asset Allocation by Value (MCHF) 
International  
Equities, 162.1
Emerging 
Markets Equities, 
42.8Swiss 
Confederation  
Bonds, 49.0Emerging 
Countries  Bonds, 
67.1Senior Loans, 
35.4Euro 
Government  
Bonds, 27.8Euro Real Estate, 
30.2Swiss Real 
Estate, 46.2Cash, 25.7
 
1.3  Participants and Beneficiaries 2014 
Figure 4: Plan Membership by Type 
 
(1) including deferred retirement benefits 
 WT/L/952 
- 6 - 
  Table 2: Plan Membership 
Membership Year 2013 Year 2014 
Number of Participants 7321 721 
Number of Beneficiaries 245 261 
Table 3: Types of Benefits 
Types of benefits Total Number  Average Monthly Benefit 
Year 
2013 Year 
2014  Year 
2013 Year 
2014 
Retirement Benefits 109 120  CHF 6,400 CHF 6,600  
Early Retirement Benefits 72 79  CHF 4,900 CHF 5,100  
Disability Benefits 18 18  CHF 4,900 CHF 4,900  
Surviving Spouse's Benefits 8 9  CHF 3,500 CHF 4,000  
Child's Benefits 24 20  CHF 430 CHF 430  
Deferred Retirement Benefits 14 15  - - 
Figure 5: Contribution Income and Benefit Expenditure 
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,00022,00024,00026,00028,00030,00032,00034,00036,00038,00040,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Thousands
of Swiss Francs
Periodic Benefits
 Lu mp sum payments *
 Contributions received **
 
*   Including transfer values received from other Organizations 
**  Including transfer values paid to other Organizations 
 
                                               
1 Including one additional active member on special leave without pay that had not been accounted for 
in the total 731 active members published in the annual report 2013. WT/L/952 
- 7 - 
  2  SUMMARY OF MANAGEME NT BOARD ACTIVITIES 
2.1.  The Management Board held five meetings in 2014. These took place on 28 February, 9 May, 
4 July, 19 September and 28 November. The agendas included as standing items the review of investment performance and a report by the Secretary on matters arising since the previous 
meeting of the Management Board. Additionally , working groups of the Management Board met 
ten times to address specific points on the actuarial review, investment decisions and other general governance issues such as disability case management and review. 
2.2.  Members of the Management Board appointed by the Director-General reported to the Staff 
Council General Assembly on 3 April 2014. The information session covered WTO Pension Plan in the first quarter of 2014 plus the latter part of 2013. The WTOPP Secretariat also published on 5 May a "News from the Pension Plan" document to update staff on relevant activities 
and development during the year. Retiree Observ ers to the Board also reported regularly to 
the beneficiaries. 
3  REVIEW OF INVESTMENT STRATEGY 
3.1.  The investment portfolio had a real return of 8.1% in 2014, slightly below the 8.6% achieved 
by the pension plan's benchmark. All the investme nt categories included in the pension plan's 
portfolio generated positive returns in 2014. 
3.2.  Government bond yields fell to new historical lows by the end on 2014. The average yield 
offered to investors by Swiss Government bonds stands just above 0%. The current level of yields on these bonds guarantees mediocre returns in the medium term. 
3.3.  The Plan's portfolio gained CHF 36.2 million during the year, for which equity investments 
contributed more than 70%. 
3.4.  Equity investments, which represent 40% of the pension plan's target asset allocation, 
had a return of 14.4% against 13.1% for the benchmarks. The outperformance came from the 
emerging market equities portion of the portfolio, which outperformed its benchmark by 6.3%. 
The dividend yield of the Pension Plan's equity po rtfolio stood at 2.8% at the end of 2014 vs. 3.0% 
at the beginning of the year and 3.2% the previous year. 
3.5.  The fixed income investments (40% of the Pension Plan's target asset allocation) 
returned 3.8% vs. 3.9% for the plan's benchm ark. This was however lower than the return 
achieved by Swiss Government bonds which gained 4.2% in 2014, thanks to yields falling to 0. 
3.6.  In general, the fixed income investments portions of the portfolio are likely to see modest 
returns in the future. Effectively, recent gains in bonds were made at the expense of future yields. 
Low current yields make these investments more susceptible to the risk of potential rising yields and potential credit deterioration. 
3.7.  Real Estate Funds represent 20% of the target  asset allocation. The return on this portion of 
the portfolio was modestly positive in 2013. The Swiss real estate fund had a return of 4.6% in 2014. The SXI index, which tracks the return of Swiss publicly traded real estate funds, 
had a return of 15.0% in 2014, courtesy of falling bond yields. 
3.8.  The pension fund's portfolio has gained 28. 8% in nominal terms over the last three years, 
while the Swiss inflation has been -0.5%. In other words, the plan's real return has been nearly 9% per year vs. the targeted 3.5%. A signif icant part of these gains is due to higher asset 
valuations, particularly in bonds. Furthermore, massive central bank injections have dampened 
market volatility and pushed interest rates to historically low levels. The European Central Bank (ECB) has just started its Quantitative Easing (QE) programme, which consists of purchasing more 
than €1,100 billion of bonds on the open market. This programme will likely keep rates very low, 
or push them even lower. 
3.9.  Higher valuations and lower yields have reduced potential future returns of the plan. 
But, central banks' injections will eventually come to an end. The end of various QE programmes, WT/L/952 
- 8 - 
  or the anticipation thereof, could be a source of higher volatility and possibly better investment 
opportunities in the coming years. 
4  WORKING GROUPS 4.1.  The Management Board working groups met ten times in 2014. Three times on governance 
issues, three times on investment related issues and four times on the actuarial review process. 
4.2.  The focus of the governance meetings was on developing a Code of Conduct for members of 
the Management Board (and the WTOPP Secretariat)  that was adopted by the Board at its meeting 
on 19 September 2014. The Code of Conduct can be found in Annex 3 at the end of this report. 
The governance working group also continued its efforts to review how disability requests and 
reviews are managed. Sets of standard questi ons for medical experts, the WTO and potential 
beneficiaries of disability benefits were review ed to help ensure these cases can be handled 
efficiently and to ensure that the Board has the in formation it needs to deliberate effectively on the 
requests. Work on this area will continue in 2015. 
4.3.  The investment working group focused in 2014 on reviewing the investment portfolio and 
potential recommendations for changes in the portfolio prior to them being submitted to the full 
Board for decision. These sessions provide time for Board members to delve into the details of portfolio management and raise technical questions to the attention of the investment consultant 
so as to ensure that the most relevant information is made available to the full Board before 
decisions are taken. 
4.4.  The actuarial working group transitioned fr om the review of assumptions undertaken in 2013 
to reviewing how best to take action to addres s the actuarial imbalance identified in the 2013 
triennial actuarial valuation. At the end of 2014 the working group submitted a report including 
proposals for addressing the imbalance to the full Board which then took over further deliberations on the issues. These deliberations continued into 2015. More information on the actuarial position 
of the Plan can be found in Section 8 of this report. 
5  RECOVERY OF WITHHOLDING TAX ON PLAN INVESTMENTS 5.1.  The Management Board continued to monitor the recovery of withholding tax on Plan 
investments from national tax authorities. An important development in this area was, with the 
help of the French Mission to th e WTO, the Plan's tax exempt status was officially recognized by 
the French authorities and taxes withheld back to 2005 were recovered, representing a total amount of about €300,000. The Board noted that  the situation was satisfactory, with the 
remaining exception of Canada, and Italy where, despite continuing efforts by the Secretariat, 
significant amounts still remained to be recovered. Encouraging and active discussions with Canadian authorities continued in 2014. 
 WT/L/952 
- 9 - 
  6  ORGANIZATION AND STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2014 
6.1.  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. 
6.2.  The Regulations and Administrative Rules of the WTO Pension Plan were adopted by the 
General Council on 16 October 1998 (WT/L/282). The Regulations of the WTO Pension Plan were 
amended by the General Council on 1 December 2005, on 28 July 2009 and on 26 October 2011. 
6.3.  The General Council approved the Rules of Procedure of the Management Board 
on 8 May 2001 (WT/L/402). 
6.4.  Key components of the governance and administrative structure of the Pension Plan included 
the following on 31 December 2014. 
Mr Krzysztof Trepczy ński, Chairman 
Mr Till Gerards 
Members elected by 
the General Council Ms Victoria Donaldson 
Members appointed by 
the Director-General Mr Robert Prochazka Mr Anthony Mistri 
Mr Felipe Sandoval Ms Paulette Planchette 
Mr Ken Schagrin Mr Antony Taubman 
Mr James Baxter 
Alternates elected by 
the General Council Ms Antonia Carzaniga 
Alternates appointed 
by the Director-General  Mr Ken Chen Mr Pablo Jenkins 
Ms Annie Ouellet Mr Evan Rogerson 
Mr Johannes Rühl Mr Raymundo Valdes 
Mr Claude Mercier Observer on  behalf of the beneficiaries 
Mr Paul Rolian Alternate observer  on behalf of the beneficiaries 
 
Secretariat John Breckenridge, Secretary 
Jean-Pierre Helary, Assistant Secretary 
Yann Marcus, Pensions Officer 
Virginie Guirado, Pension Specialist 
Outsourced support services 
Trianon S.A., Lausanne 
Consulting Actuary Cameron Hannah (Mercer HR Consulting S.A.) 
Medical Adviser Vacant 
Investment Analyst/Consultant MBS Capital Advice SA 
Global Custodians  The Northern Trust Company 
Pictet Asset Management S.A. 
Fund Managers 
 Babson Capital (senior loans portfolio hedged in CHF) 
Comgest (emerging market equities portfolio) 
Crédit Suisse (Swiss real estate portfolio and senior loans 
portfolio hedged in CHF) GMO (emerging market bonds portfolio hedged in CHF) HSBC (emerging market bonds portfolio hedged in CHF) 
ING (senior loans portfolio hedged in CHF) 
Lombard Odier (euro government bonds portfolio) MFS (emerging market bonds portfolio hedged in CHF) 
Pictet (global equities indexed portfolio) 
Warburg Henderson (European real estate portfolio) 
External Auditor Bundesrechnungshof 
Supreme Audit Institution of Germany  
 6.5.  An organizational chart is reproduced in Schedule I. WT/L/952 
- 10 - 
  7  ACCOUNTS 
7.1.  The financial statements and schedules are presented in Section 11 of this Report. The notes 
to the financial statements are found in Section 11 and include important additional explanations 
about the accounts. These notes are integral to understanding the accounts and the financial 
position of the Plan. 
7.2.  The income and expenditure statement for the period 1 January-31 December 2014 
is reproduced in Statement 1. 
7.3.  The balance sheet as at 31 December 2014 is reproduced in Statement 2. 
7.4.  The source and application of funds for the period 1 January-31 December 2014 
is reproduced in Schedule A. 
7.5.  Details of the exchange rates used for closing the accounts on 31 December 2014 and the 
currency breakdown as of 31 December 2014, af ter hedging, are provided in Schedule G. 
7.6.  A glossary of terms to facilitate an understan ding of the tables is re produced in Schedule J. 
7.7.  Explanations of significant events in the 2014 accounts can be found in the notes in Annex 1. 
8  ACTUARIAL POSITION OF THE PLAN 
8.1.  Effective 31 December 2013, the consulting actuary completed a formal actuarial valuation. 
The prior formal valuation was completed effective 31 December 2010. At that time, the consulting 
actuary recommended that no amendments be made to actuarial assumptions, benefit provisions 
or contributions payable. However, in the last interim valuation report from 2012 the actuary recommended that the Management Board be prepared to consider actions to ensure the long-term actuarial balance of the Plan once the results of the 2013 formal valuation were known. 
8.2.  This most recent formal actuarial valuation report includes updated assumptions based on 
a comprehensive review of expected versus actual  experience of the Plan and expectations for 
the future across the key variables in the actuarial model used to estimate the long-term 
costs of the Plan. 
8.3.  The participant contribution rate is 7.9% and the Organization contribution rate 15.8% giving 
a total contribution rate of 23.7% of pensionable remuneration. The long-term cost of the 
Plan as at 31 December 2013, excluding any allowance for expenses was estimated to 
be 24.9%. This compares with 25.6% at the last formal valuation at 31 December 2010. The changes in the estimated long-term cost are due to two factors: changes in actuarial assumptions used in the valuation methodology and the actual investment and demographic 
experience of the Plan compared to expected ex perience. Revisions to the actuarial assumptions 
included reducing the expected rate of inflatio n, reducing expected average salary growth and 
reducing the expected rate of promotions. The di fference between actual experience and expected 
experience is mostly due to the delayed recognition of the investment return which is part of the 
asset smoothing method. The actual demographic experience is close to that expected. 
8.4.   In the light of the review of actuarial assumptions and subsequent full actuarial valuation 
report consistent with Article 9, the Consulting Actuary recommended that the Board actively 
consider actions on how to bring the long-term cost of the plan and the total cash contribution rate into alignment. 
8.5.  The Regulations of the Plan allow for a conservative approach to recommending amendments 
to the Plan when a potential actuarial imbalance emerges is that actuarial valuations are 
long-term, uncertain and susceptible to large variation as key variables change even modestly. Therefore, it is important to not overreact at ea ch instance when the estimated long-term costs of 
the plan deviate from the actual contribution rate. The Plan is still young and due to its positive 
cash flow situation a significant portion of future actuarial assets has not yet been invested. Even with the current estimated actuarial imbalance, the Plan is projected to be able to continue to 
pay benefits without having to sell assets for 20 or more years. A few carefully considered WT/L/952 
- 11 - 
  adjustments to the trajectory of the Plan are preferable to frequent reactions to short-term 
volatility that may not be well understood. 
8.6.  As the recently identified imbalance has pers isted over two full actuarial valuations and based 
on the recommendation of the consulting actuary that the Board take action, the actuarial working 
group met four times during 2014 to consider option s and test, with the further assistance of the 
consulting actuary, various scenarios for changes in the Plan's benefit structure in order to identify specific measures that could be recommended to the Board. The working group's 
recommendations were submitted to the Board at the end of 2014 and at the time of the report 
were actively being considered by the full Management Board. 
9  IPSAS ACCRUED LIABILITIES OF THE PLAN 9.1.  In 2012, the WTO began reporting based on International Public Sector Accounting Standards 
(IPSAS). To conform to these standards the Organiza tion is obligated to report on its actuarially 
estimated accrued liabilities for employee benefits . The most significant among these are for the 
Pension Plan and for After-Service Health Insurance. As the WTO Pension Plan also produces 
an actuarially derived estimate of its long-term obligations and funding costs there are now 
two different actuarial reports, albe it based on different assumptions. 
9.2.  The purpose of these two valuations is diffe rent. Without trying to elaborate all the technical 
details of these valuations, it is important to put each in its context so as to help stakeholders 
reconcile and understand the relevance of each. 
9.3.  The purpose of the IPSAS valuation is to cr eate a set of numbers for disclosure purposes in 
the accounts of the WTO. The intention of the IPSAS valuation is to provide a financial accounting 
entry for the financial statements showing the accrued actuarial position of the Plan at one point in 
time based on a closed group (only current participants and retirees). It also assumes the assets are invested exclusively in high-quality fixed income securities (for setting the discount rate). 
The specific actuarial method and assumption  setting process are dictated by IPSAS 25. 
9.4.  The purpose of the valuation prepared for the WTOPP Management Board is to assess 
the long-term cost of the Plan and whether the cash contribution rate is sufficient to ensure 
the long-term sustainability of the Plan. This valuation is fully reviewed and updated at least once 
every three years and unlike the IPSAS version takes into consideration past and future service accrual and assumes an open group. (That new entrants will come into the plan to replace those who depart due to retirement, death in service, pe rmanent disability or termination.) It also takes 
into consideration the investment strategy adopted by the Plan in setting the long-term assumed 
rate of return (for setting the discount rate). 
9.5.  It is principally the different discount rates, closed versus open group, and past versus future 
service assumptions that explain the different valuations. Both valuations are shown together with 
the balance sheet, in Statement 2. 
 WT/L/952 
- 12 - 
  10  EXTERNAL AUDITOR 
10.1.  The report of the External Auditor on th e Accounts of the WTO Pension Plan for the Year 
Ended 31 December 2014 is produced separately from the Annual Report. 
10.2.  Opinion of the External Auditor on the A ccounts of the WTO Pension Plan for the Year Ended 
31 December 2014 
OPINION  OF THE EXTERNAL  AUDITOR  
 
Identification of the Financial Statements 
 
I have audited the financial statements of the World Trade Organization Pension Plan (hereinafter "WTOPP") for the financial year ended 31 December 2014, comprising: 
 the income and expenditure statement, 
 the surplus account, 
 the balance sheet, 
 and supporting notes and annexes to the financial statements. 
Statement of Responsibilities 
 
In accordance with WTOPP's Rules and Regulations, the Management Board is responsible for 
preparing the financial statements.  My responsibility is to express an opinion on these financial statements based on my audit. 
 
Basis of Opinion 
 
I conducted my audit in conformity with Internat ional Standards on Auditing (ISA) as adopted and 
expanded by the International Organization of Su preme Audit Institutions (INTOSAI) and issued as 
International Standards for Supreme Audit Instit utions (ISSAIs). These standards require that 
I plan and perform the audit to obtain reasonable assurance about whether the financial 
statements are free from material misstatement. An audit includes assessing the accounting principles used and significant estimates made by the Management Board, as well as evaluating the overall financial statement presentation. I beli eve that my audit provides a reasonable basis 
for the audit opinion. 
 Opinion 
 As a result of my audit, I am of the opinion that the financial statements present fairly, in all material respects, the financial position as at 31 December 2014, that they have been 
prepared according to WTOPP´s stated accounting policies, and that the transactions have been in 
accordance with the Regulations of the Pension Plan and its Rules and Procedures.  I have placed an unqualified audit opinion on the Financial Statements of WTO´s Pension Plan for 
the Year Ended 31 December 2014. 
 Report Reference 
 I have also prepared a long-form report on the WTOPP's financial statements.  
 
_______________ 
 
Christian Ahrendt 
Vice-President of the Bundesrechnungshof 
Supreme Audit Institution of Germany 
External Auditor 
 
 
Bonn, 02 June 2015 WT/L/952 
- 13 - 
  11  FINANCIAL STATEMENTS 
11.1  Management Letter of Representation 11.1.  The Management Board of the WTO Pension Plan is responsible for these financial 
statements, which have been prepared in accord ance with the Plan's Regulations and Rules. 
The financial disclosures in this report are intended to fairly present the Plan's financial results in 
a manner that is complete and understandable. 
11.2.  The Management Board is responsible for establishing and maintaining adequate internal 
control over financial reporting so as to provide reasonable assurance regarding the reliability of 
these financial statements for external purposes. This includes policies and procedures that 1) provide for the maintenance of records that accurately and fairly reflect the transactions of the Plan, 2) provide reasonable assurance that transactions are authorized and recorded in 
compliance with the Plan's Regulations and Rules and 3) provide reasonable assurance regarding 
the prevention or timely detection of unauthorized acquisition, use or disposition of the Plan's assets. However, due to the inherent limitations of internal control over financial reporting, these 
controls may not prevent or detect all misstatements. 
11.3.  Based on the above, the Management Board has concluded that these financial statements 
present fairly the Plan's financial position and performance as of 31 December 2014. 
 
   
 
  
 
  
 
   
 
  
 
  
 
   
 
  
 
  
 
(signed) 
____________________ (signed) 
____________________ 
Johannes Rühl  
Designated Chairman 
WTOPP Management Board John Breckenridge 
Secretary 
WTO Pension Plan WT/L/952 
- 14 - 
  11.2  Statement 1: Income and Expenditure Statement 
INCOME AND EXPENDITURE STATEMENT 
(Expressed In Swiss Francs)  
Income 2014  2013  
Investment Income   
Profit on securities 36,503,921  33,794,604  
Currency revaluation 321,383  1,717  
Credit interest 26,714  7,164  
 36,852,018  33,803,485  
Contributions   
Organization, regular contributions 19,694,429  19,994,883  
Participants, regular contributions 9,847,219  9,997,447  
Interest on validations 228 200 
Restorations 0 142,704  
Interest on restorations 0 2,740  
Transfer from other organizations 88,472  313,138  
 29,630,348  30,451,112  
Other Income 37,563  0 
Total Income 66,519,929  64,254,597  
Expenditure   
Periodic benefits   
Retirement benefit – Art. 23 9,093,591  7,605,839  
Early retirement benefit – Art. 24 4,571,896  4,141,082  
Surviving spouse benefit – Art. 29 1,067,673  1,063,104  
Child benefit – Art. 30 391,011  344,609  
Disability benefit - Art. 28  103,609  120,279  
 15,227,780  13,274,913  
Lump sum benefits   
Withdrawal settle ment - Art. 26 1,882,618  4,190,201  
Commutation – Art. 23(c), Art. 24(c) and 25(c) 671,940  643,875  
Residual settlement – Art. 33 68,231  0 
Transfers to other organizations 0  419,616  
Interest on transfers 0 15,073  
 2,622,789  5,268,765  
Participants' death and disability coverage  1,106,145  1,222,662  
Investment and Other admin. expenses   
Management Fees 354,199  313,431  
Trianon and other administrative costs 191,932  183,821  
Consultancy Fees 120,000  96,000  
Actuarial expenses 60,000  45,500  
Legal Fees 23,830  9,833  
Bank Charges 11,589  9,252  
Audit Costs 2,991  3,231  
 764,541  661,068  
Total Expenditure 19,721,255  20,427,408  
Profit / Loss (-) for the period 46,798,674  43,827,189  WT/L/952 
- 15 - 
  11.3  Statement 2: Balance Sheet 
Balance Sheet 
(expressed in Swiss Francs) 
Assets At 
31.12.2014 At 
31.12.2013 Liabilities At 
31.12.2014 At 
31.12.2013 
Investments    Current liabilities     
Securities  464,498,839 423,596,324  Accrued expenses 172,331  297,328  
Cash and cash 
equivalents 21,601,084  15,907,460   172,331  297,328  
 486,099,923  439,503,784  Reserves    
Current assets    Operating cost  250,000 250,000  
Withholding taxes 
to be recovered 597,281 838,743  Unrecoverable withholding taxes 379,000  698,000
 
 597,281  838,743   629,000  948,000  
   Capital   
   Capital as at 
1 January 439,097,199 395,270,010  
   Profit / Loss (-) 46,798,674 43,827,189  
    485,895,873 439,097,199  
Total Assets  486,697,204  440,342,527  Total Liabilities  486,697,204  440,342,527  
 
11.4.  In the WTO's financial statements, the Pension Plan's asset value of CHF 487 million and 
liabilities estimated at CHF 1,210 million are reflected, resulting in a net estimated accrued liability for employee benefits of CHF 723 million calculated according to IPSAS accounting rules. 
This value represents the hypothetical liability  of the Organization to cover all its current 
employees and retirees' acquired benefit entitlements  as at 31 December 2014. It differs from the 
long-term valuation used in managing the Plan mainly in that it does not consider future pension contributions receivable from current and future staff, and assumes the assets are invested 
exclusively in high-quality fixed income securities. 
11.5.  On the other hand, the actuarial model used in managing the Plan takes into account future 
pension contributions and benefits for an open group of participants, and a projected real return 
rate of 3.5% for the plan's assets. This model es timates the present value of future benefits at 
CHF 1,326 million which will be met over the long run by future staff's pension contributions and 
the Plan's assets and their future returns. 
11.4  Schedule A: Source and Application of Funds 
Source and Application of Funds 
(expressed in Swiss Francs)  
 2014 2013 
Source    
Funds as at 1 January 440,342,527 396,539,355 
Receipt of contributions 29,630,348 30,451,112 
Investment Income 36,852,018 33,803,485 
Increase in other income 37,563 - 
Total 506,862,456 460,793,952 
Less: 
Application    
Settlement of benefits 17,850,569 18,543,678 
Participants' death and disability coverage2 1,106,145 1,222,662 
Expenditure 764,541 661,068 
Reduction in short-term commitments 124,997 10,017 
Changes in reserves 319,000 14,000 
Total 20,165,252 20,451,425 
Funds as at 31 December 486,697,204 440,342,527 
 
                                               
2 The 9.53% decrease in Participants' death and di sability coverage compared to 2013 was mainly due 
to the decrease of the premium rates paid. WT/L/952 
- 16 - 
  11.5  Schedule B: Breakdown of Expenditures3 
Expenditures 
 2014 2013 
Management Fees   
Lombard Odier 30,066 28,429 
MFS 121,794 75,075 
Northern Trust 62,894 64,100 
Pictet - International Equities 132,867 141,954 
Pictet - High Yields 536  
Pictet - Swiss Bonds 6,015 3,873 
Total 354,199  313,431  
Consultancy fees   
 MBS Capital Advice 120,000 96,000 
Actuarial expenses   
 Mercer 60,000 45,500 
Legal fees   
Akin Gump 23,830  
Lenz & Staehelin  9,832 
Administrative costs   
 Trianon and other administrative costs  191,932 164,308 
Other Expenses   
 (bank charges and external audit) 14,579 31,997 
Grand Total: 764,541 661,068 
11.6  Schedule C: Investment Mandate Overview 
Investment Mandate Overview 
Asset 
class Fund 
Manager Benchmark Ex-ante 
tracking 
error Inception  Location Website 
Global  
Equities Pictet & Cie  40% MSCI 
Europe, 
40% MSCI 
North America, 
20% MSCI Pacific  Indexed January  
2011 Geneva, 
Switzerland pictet.com 
Emerging 
Markets Equities Comgest 
SA MSCI Emerging 
Markets Free 6%-9% January
 
2011 Paris, 
France comgest.com 
Emerging 
Market 
Bonds HSBC JP Morgan EMBI 
hedged in CHF 2%-3% January  
2011 London, 
England hsbc.com 
Emerging 
Market Bonds MFS JP Morgan EMBI 
hedged in CHF 2%-3% January
 
2011 Boston, 
United States mfs.com 
Emerging 
Market 
Bonds GMO JP Morgan EMBI 
hedged in CHF 3%-5% January  
2011 Boston, 
United States gmo.com 
Senior Loans Babson 
Capital CS Loans index 
hedged in CHF 3%-5% October  
2012 New York, 
United States babsoncapital.com 
Senior Loans Credit 
Suisse CS Loans index 
hedged in CHF 2%-4% October  
2012 New York, 
United States credit-suisse.com 
Senior Loans ING CS Loans index 
hedged in CHF 2%-4% October  
2012 Phoenix, 
United States Inginvestment.com 
Euro Bonds Lombard 
Odier Citigroup Euro 
GBI ex-AAA 3-7Y  Indexed January  
2011 Geneva, 
Switzerland lombardodier.com 
European 
Real Estate Warburg- 
Henderson 6.5% p.a. - December  
2006 Hamburg, 
Germany warburg-henderson.com  
Swiss Real 
Estate Credit 
Suisse SWX Immofonds - November  
2008 Zürich, 
Switzerland credit-suisse.com 
 
                                               
3 Management fees for mutual fund  investment vehicles are frequently imbedded in  the reported value 
of the holdings. These fees are not presented sepa rately in the statement of expenditure and total 
CHF 1,565,913 for 2014. Fund fees have decreased by 17.2% between 2013 and 2014. This decrease can be explained by the following factors: 1) Swiss bonds Neuberger Berman  High Yield (annual cost of 0.75%) and 
International Bonds Bluebay (annual cost of 1.36%) were  both sold in March 2014. 2) Real Estate Fund 
Warburg-Henderson estimate d annual cost was 2.03% in 2013 against 0.87% in 2014. WT/L/952 
- 17 - 
  11.7  Schedule D: Asset Allocation as of 31 December 2014 
Asset Allocation  
as of 31 December 2014 
Assets MCHF  Current  
weightings Strategy  Deviation from  
the strategy 
Global Equities 204.9  42.1%  40.0%  +2.1% 
Developed Markets 162.1 33.3% 32.0% +1.3% 
Emerging Markets 42.8 8.8% 8.0% +0.8% 
CHF Bonds4 151.5 31.2% 34.0% -2.8% 
CHF Short-term investment5 49.0 10.1% 12.0% -1.9% 
Emerging Countries Bonds 67.1 13.8% 14.0% -0.2% 
Senior Loans 35.4 7.3% 8.0% -0.7% 
Euro Bonds 27.8  5.7%  6.0%  -0.3%  
Euro Government Bonds 27.8 5.7%  6.0%  -0.3%  
Real Estate 76.4  15.7%  20.0%  -4.3%  
Warburg-Henderson 30.2 6.2% 10.0% -3.8% 
Credit Suisse 46.2  9.5%  10.0%  -0.5%  
Cash 25.7 5.3%  0.0%  +5.3%  
Total6 486.2     
11.8  Schedule E: Investment Performance as of 31 December 2014 
Investment Performance as of 31  December  2014  
(expressed in nominal terms) 
 Over  
1 year p.a. Over  
3 years p.a. Since 
inception p.a. TE7 
 IR8 
 
TOTAL      
Consolidated Securities 8.1%  8.8%  1.9% 0.7% 0.2  
Added value -0.5%  +0.1%  +0.1%   
EQUITY      
Consolidated Equities 14.4%  15.7%  1.5% 1.1% 0.7 
Added value +1.3%  +0.8%  -0.1%   
Developed Markets9 13.9%      
Added value -0.3%      
Emerging Markets10 15.6%      
Added value +6.3%      
FIXED INCOME      
Consolidated Fixed Income  3.8%  5.0%  3.4% 0.6% -0.4  
Added value -0.2%  -0.3%  -0.1%   
CHF Short Term Investment11 0.0     
      
Emerging Countries Bonds  6.9     
Added value +0.1%      
Senior Loans  1.1     
Added value -0.8%      
Euro Government Bonds  8.0     
Added value -0.3%      
REAL ESTATE      
Consolidated Real Estate 4.2%  3.3%  1.0%12 --- --- 
Added value13      
Warburg-Henderson  3.3%  0.8%  -0.3%14 --- --- 
Added value15      
Credit Suisse  5% 5.6%  6.2%16 --- --- 
Added value17 -10.0%  -0.3%  -1.4%   
                                               
4 Bonds hedged in CHF. 
5 PostFinance cash account held in lieu of Swiss Government bonds. In the current environment these 
bonds have lower yield and higher risk than holding cash . Hence there is no opportunity cost to substituting 
short-term cash for this  asset category pending a change in conditions. 
6 Minor differences can exist between this total and the Balance Sheet's total of securities and current 
account due to slight differences in methodologies used  by the Plan's investment adviser in preparing this 
schedule, and the Plan's accountant, for example exchange rate differences. 
7 Tracking Error. 
8 Information Ratio. 
9 Inception in January 2011. 
10 Inception in January 2011. 
11 PostFinance cash account held in lieu of Swiss Government bonds. In the current environment these 
bonds have lower yield and higher risk than holding cash . Hence there is no opportunity cost to substituting 
short-term cash for this  asset category pending a change in conditions. 
12 Inception in February 2005. 
13 There is no formal benc hmark for this investment. 
14 Inception in December 2006. Euro investment not hedged in CHF. Performance in Euro is 3.2% p.a. 
since inception. 
15 There is no formal benc hmark for this investment. 
16 Inception in November 2008. WT/L/952 
- 18 - 
  11.9  Schedule F: Investment Perfor mance History, Since Inception to 
31 December 2014  
 
5060708090100110120130140150Total PortfolioTotal Portfolio Benchmark
5060708090100110120130140150Equitie sEquities Benchmark
5060708090100110120130140150160170180Fixed IncomeFixed income Benchmark
5060708090100110120130140150160170180190200Real EstateReal Estate
 
 
11.10  Schedule G: Exchange Rates Used for Closing on 31 December 2014 
Currency Exchange rates 
CHF per 1 EUR 1.2024 
CHF per 1 USD 0.9936 
CHF per 1 JPY18 0.0082 
CHF per 1 GBP 1.5494 
Figure 6: Currency Breakdown as of 31 December 2014, after Hedging 
CHF, 41.0%
EUR, 18.9%GBP, 4.0%JPY, 4.2%USD, 19.6%Emerging  
Markets,  8.8% Other, 3.5%
 
                                                                                                                                               
17 Benchmark: SXI Real Estate. 
18 JPY per 1 CHF: 122.259 WT/L/952 
- 19 - 
  11.11  Schedule H: Participation in the Pension Plan 
The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2014. 
Number of participants and beneficiaries in 2014 
 2014 2013 
Active Participants 721  73219  
Beneficiaries 261 245 
Participants in the Pension Plan in 2014 
Total number on 31 December 2013 732 
Movements in 2014   
 
- Entries 45 
- Of which re-entries under the terms of Art. 15(b) of the 
Regulations  2 
- Separations  56 
  
Total number on 31 December 2014 721 
  
Breakdown of separations in 2014   
- retirement 12 
- early retirement20 7 
- deferred retirement 1 
- withdrawal settlement 24 
- transfer of pension rights 0 
- deferment of decision 12 
- death 0 
- disability 0 
Total separations 56 
Benefits Paid by the Pension Plan 
Type of benefit 
 At 31/12 
2013 New 
benefits 
in 2014 Benefits 
ended in 
2014 At 31/12 
2014 
Retirement 109 12 1 120 
Early retirement 72 7 0 79 
Deferred retirement 14 1 0 15 
Surviving spouse's benefit 8 1 0 9 
Partial/total disability benefit 18 0 0 18 
Child's benefit 24 1 5 20 
Total benefits 245 22 6 261 
                                               
19 Including one additional active member on special leave without pay that had not been accounted for 
in the total 731 active members published in the annual report 2013. 
20 Retirement prior to normal reti rement age, as per Article 24 of  the Pension Plan's Regulations. WT/L/952 
- 20 - 
  11.12  Schedule I: Structur e of the WTO Pension Plan 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 DIRECTOR-GENERAL PARTICIPANTS GENERAL COUNCIL 
ADMINISTRATIVE 
SERVICES 
CONSULTING ACTUARY 
MEDICAL ADVISER 
FRIENDS OF THE BOARD 
INVESTMENT 
ANALYST/CONSULTANT  
MANAGEMENT BOARD 
ASSET 
MANAGEMENT SERVICES EXTERNAL AUDITOR 
 
 WT/L/952 
- 21 - 
  11.13  Schedule J: Glossary of Terms 
 Accrued expenses  include expenses incurred but not paid in the current financial year. 
 Active Investment Management is a form of portfolio management whereby the portfolio 
manager invests the assets in a manner different from the benchmark in an attempt to produce 
higher returns than the benchmark. The disa dvantages of such a management style are 
characterized by higher management fees, higher trading costs as well as the chance to significantly underperform the benchmark. 
 Actuarial expenses  include expenses charged by the consulting actuary for the provision 
of actuarial services. 
 Administrative costs  include costs incurred in the general administration of the Pension Plan. 
 Audit costs  include costs (travel, per diem) incurred by the External Auditor in connection 
with the audit of the 2014 accounts. 
 Consultancy fees  include the fees charged by the investment analyst/consultant. 
 Contributions receivable  refers to contributions due in respect of contributory service 
in 2014 but received after 31 December 2014. 
 Contributions  refer to sums payable for benefit, restoration and validation as detailed in 
Article 20 of WTOPP Regulations. 
 Currency revaluation  represents the difference in exchange rates used to convert foreign 
currency financial positions at the end of the year, and to convert foreign currency flows that took place during the year. For the purpose of these statements, foreign currency-denominated assets and liabilities are presented in terms of CHF us ing the exchange rate of 31 December. However, 
the foreign currency flows that have led to changes in the value of these assets and liabilities are 
presented in CHF terms using the exchange rate a pplicable at the time that the transaction took 
place. Thus, when looking at their CHF repres entation, the value of the Plan's USD assets 
on 31 December would differ from the sum of the Plan's USD assets on 31 December of last year 
plus the sum of USD flows during the year, due to  the use of different exchange rates. The item 
"currency revaluation" reflects and balances this difference. Depending on currency volatility, 
this amount might vary widely from one year to another. 
 Indexed management  i s  a  f o r m  o f  p o r t f o l i o  m a n a g e m e n t  t h a t  a t t e m p t s  t o  d e l i v e r  t h e  
returns of the underlying benchmark by replicat ing exactly or by getting as close to the 
composition of the benchmark as possible at any point in time. It differs from active management 
in that it is significantly less costly and does not reflect the views, forecasts or opinions of the 
investment manager. 
 IR or Information Ratio is defined as the outperformance of the investment manager 
above the index divided by the portfolio's tracking error. The information ratio is used to represent 
a  m a n a g e r ' s  s k i l l .  G e n e r a l l y ,  a n y  r a t i o  o v e r  0 . 3 0  i s  t h o u g h t  o f  a s  h a v i n g  s k i l l .  I R  r e f e r s  t o  t h e  information ratio over 3 years. 
 Interest on validations  refers to interest payments made under Article 20(d) of the 
Plan Regulations. 
 Lump Sum  is defined under the WTOPP Rules and Regulations as retirement benefits, 
early retirement benefits and deferred retire ment benefits commuted at the request of the 
participant, into a lump sum not exceeding 1/3 of the actuarial equivalent of the benefit or the 
amount of the participant's own contributions, whichever is the larger. 
 Management fees  include fees paid for the management of WTO portfolios. 
 Operating costs (reserve for) refers to the reserve established to cover operating costs 
not currently charged to the Plan. WT/L/952 
- 22 - 
   Organization, additional contributions  refers to the additional contributions paid by the 
Organization to compensate for the additional actuarial cost generated by the early separation of participants in the context of restructuring exercises. 
 Profit on securities  is the result of: 
a. capital gain/loss realized on securities; 
b. profit arising from the distribution of di vidends and interest received on investments; 
c. revaluation of securities at their market price at 31 December 2014 (unrealized profit 
or loss). 
  Rate of return is the percentage of change in value of  the portfolio over a specified period, 
taking into account both the investment income and the change in the market value of the 
portfolio. It is expressed as an equivalent annual rate. The nominal rate of return is the financial 
return of the assets and is before correction for inflation (measured on the basis of the annual 
movement of the consumer price index in Switzerland). The real rate of return is calculated by 
subtracting the change in the Swiss CPI from the nominal rate of return. The term gross means that the return is calculated before the deductio n of investment related costs while the term net 
refers to the return including all investment relate d expenses. The target real rate of return is the 
long-term real rate of return that the Plan needs to achieve in order to meet its liabilities. 
 Rebalancing  refers to the realignment of the allocation of the Plan's portfolio with its 
strategy. A predefined process identifies the triggers and other operational aspects (e.g. timing) of Rebalancing actions. The rules are approv ed by the Board and applied automatically. 
This mechanism takes advantage of the in evitable excesses of financial markets. 
 Regulations and Administrative Rules  refer to the Regulations and Administrative Rules 
adopted by the General Council on 16 October 1998, as amended by the General Council 
on 1 December 2005, on 28 July 2009 and on 26 October 2011. 
 Restoration  refers to the inclusion in contributory service of the prior contributory service 
of a former participant who again becomes a participant. 
 Senior Loans  are floating rate fixed income instruments, granted to sub-investment grade 
borrowers, have the highest level of seniority in the capital structure of corporate issuers and are secured by the assets of the borrowing company. 
 Time-weighted return  is a measure of compound return. It  reduces the distorting effect of 
inflows and outflows and is used to compare the returns of investment managers and their 
respective benchmarks. The time-weighted return is very similar to the geometric mean return. 
 TE or Tracking error  is defined as the standard deviation of the portfolio's outperformance 
versus the benchmark. It is used as a measure to determine the risk of the portfolio versus its 
benchmark. This measure should not be confused with absolute risk; even though a portfolio has a very low tracking error, it can still be very risky due to the underlying nature of the market 
in which it invests. A tracking error for a passive mandate would be low-dependent 
upon the mandate, usually less than 0.8. Anyt hing above this would be considered active. 
TE is over 3 years. 
 Unrecoverable tax  reports primarily on situations where the Plan has had trouble having 
its tax-exempt status recognized and continues to pursue the recovery of withholding tax on Plan 
investments but the deadline for recovery may have passed. For example, in the cases of Canada and Italy where, despite continuing efforts by the Secretariat, significant amounts still remained to 
be recovered and the deadline for recovery of certain sums had already passed some amounts 
may not be recovered. 
 Withholding taxes to be recovered  includes amounts of withholding tax levied by 
national tax authorities and subject to recovery  after 31 December 2014. Recoverable withholding 
tax reflects the Plan's recognition as a tax-exempt entity due to its connection to the WTO. As an International Organization, the WTO is exempted from most national taxes such as value added tax (VAT), federal stamp duty and tax on th e interest earned on investments. Annually the 
Plan files tax reimbursement claims to the Swiss and other authorities. Occasionally the Plan's WT/L/952 
- 23 - 
  tax-exempt status is not automatically recognized by some national jurisdictions in which 
case significant administrative and political intervention are often required to have this status fully recognized. 
 Validation  is defined in Article 2(v) of WTOPP Regulations, as the inclusion in contributory 
service of a period of non-contributory service which occurred prior to the commencement 
of participation. 
 WT/L/952 
- 24 - 
  ANNEXES 
 
ANNEX 1: NOTES TO THE FINANCIAL STATEMENTS 
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 practical reas ons, the current United Nations operational rates 
of exchange are used for the conversion of ot her currencies into the Swiss Franc, except in 
the case of the investment portfolios where the rates shown in Schedule G were used for 
valuation purposes.  2. The accounting year is 1 January to 31 December. 
 
3. Pursuant to Article 13 of the Regulations of the Plan and Rule A.8 of the Rules of Procedure, 
the Management Board shall be responsible for the financial security and probity of the Plan and, 
in particular, the maintenance of its actuarial balance and of financial controls and accounts. 
 4. Pursuant to Article 5(e) of the Regulations of the Plan and Rule C.1 of the Rules of 
Procedure, an audit of the accounts of the Plan shall be made annually by the External Auditor, 
namely the External Auditor of the WTO. The prov isions of Chapter XI ("External Audit") and the 
Appendix ("Additional terms of reference gove rning external audit") of the WTO Financial 
Regulations shall apply mutatis mutandis  to the audit. 
 
Statement of Income and Expenditure 5. The 50.22% decrease in lump sum benefits  is explained by the sharp decrease 
of commutation of retirement benefits to lump su ms under Articles 23(c), 24(c) and 25(c) and the 
absence of transfers to other organizations.  
6. Insurance premiums are paid for a "death-disability" insurance policy taken out jointly by 
the Plan and the WTO in 2010 to cover serving sta ff. The premium expense reported only concerns 
the Plan's share of the total pr emium. The 9.53% decrease in premiums compared to 2013 was 
mainly due to the decrease in the premium rates paid. Also a number of vacant posts were not 
filled during part of 2014, which caused the staff base to be lower than in 2013. 
 7. Consultant fees in 2014 are solely those paid by the Plan to its investment advisor, 
MBS Capital which receives an annual fee for it s services. The increase from 96,000 to 120,000 
reflects the increase of MBS annual fee as approved by the WTOPP Management Board on 2 February 2014. 
 
8. Actuarial fees are those paid by the Plan to its consulting actuary, Mercer. The 2014 figure 
includes a flat fee of CHF 40,000 corresponding to the formal triennial actuarial evaluation including review of, and advice on actuarial assumptions to be used, plus additional services 
provided by Mercer in 2014 in connection with the review of actuarial assumptions. 
 9. Legal fees reflect payments made when the Plan engages specialized external legal advice. 
The amount of 23,830 was paid to Akin Gump ST RAUSS HAUER & FELD LLP in relation to the 
conduct of a review of investment in PRISA LP.  
10. Administrative fees are primarily those paid by the Plan to its service provider, Trianon S.A. 
for administrative and accounting services.  11. Transfers from and to other organizations reflect the flow of assets into and out of the Plan 
when new and departing plan participants transf er their pension rights from or to another 
organization with which the Plan has a transfer agreement. The fluctuation in amounts represents 
years of service associated with the specific transfers in any given year as well as the number 
of transfers. 
 WT/L/952 
- 25 - 
  12. Other income refers to a reimbursement of an excess of payment in relation to a transfer 
out paid in 2013 and received in 2014.  13. Currency revaluation resulted in an exchange rate gain of 321,383 in 2014, primarily due to 
the depreciation of CHF against the USD during 2014 (on 31 December 2013, 1 USD = 0.887 CHF 
whereas on 31 December 2014, 1 USD = 0.987 CHF) . This gain was primarily achieved by the revaluation of the WTOPP current account at Crédit Suisse in dollars. 
 
14. Investment and other administrative expenses are presented in further details in Schedule B 
"Breakdown of Expenditures".  
Balance Sheet 
15. Cash and cash equivalents represent cash held for managing the operations of the Plan. 
In 2014, the amount is higher than the normal prac tice due to an accumulation of positive cash 
inflows at the end of the year in anticipation of the annual portfolio rebalancing exercise conducted 
in the first quarter 2014 and the pending finalization of investment in a new real estate fund.  
16. The Plan continues to pursue the recovery of withholding tax on Plan investments from 
national tax authorities. In 2014, the plan recovered more than EUR 300,000 in withheld taxes which is reflected by a decrease in the reserve for "unrecoverable withholding taxes". The remaining reserve for unrecoverable withholding taxes (CHF 379,000) is not shown under the 
position "Capital" as it is highly unsure whethe r  t h i s  a m o u n t  w i l l  b e  r e f u n d e d  t o  t h e  W T O P P .  
See the glossary for further explanations.  
Events after the Reporting Date 
17. The WTOPP's reporting date is 31 December 2014. The financial statements were authorized 
for issue on 22 May 2015, the date at which they were submitted to the External Auditor by the 
Management Board. On the date of signing these accounts there has been one material event that 
would have impacted these statements. On 15 January 2015, the Swiss National Bank removed 
the 1.20 EUR/CHF floor which depreciated the non-CHF denominated assets. The portfolio experienced a decline in value of approximately 5% . The portfolio recovered most of its value in 
the following month due to a strengthened USD and strong equity returns. WT/L/952 
- 26 - 
  ANNEX 2: INVESTMENT PRINCI PLES OF THE PENSION PLAN 
1. Pursuant to Article 13 of the Regulations of th e Pension Plan and Rule A.9 of the Rules of 
Procedure, the Management Board shall be responsible for the secure investment of all Plan assets, the formulation of investment policies after taking appropriate professional advice, and the 
appointment of investment managers to implement that policy. 
 2. Derivatives may be used within the global hedged fixed income mandate for hedging 
purposes, where they provide the opportunities to achieve the objective of the Plan more 
efficiently than would be the case through the direct dealing in underlying securities. Derivative instruments for this mandate are restricted to forward foreign currency contracts, futures, covered bond options and interest rate options. Leve rage and net short positions are not allowed. 
 
3. In 2013 the Management Board approved a consolidated set of investment guidelines to 
more precisely articulate the Plan's approach to investment. A summary of these guidelines was 
shared with Plan participants and beneficiaries and can be found below. 
 
Summary of the WTO Pension Plan's Approach to Investment 
Long-Term Investing 
4. The WTOPP is a long-term investor because its commitments are long-term and because 
behaviour and decisions made with a long-term view are more likely to succeed. The long-term focus is rooted in the belief – supported by hist orical analysis – that in the long run, market 
returns will tend to reflect the assets' economic achievements. 
 5. This long-term orientation enables the Management Board to efficiently deploy its time by 
focusing on investment decisions with significant impact on portfolio returns while avoiding time 
spent on issues where the outcome is random or where the long-term impact is negligible.  
6. Cognizant of the unreliable nature of short- or medium-term forecasts and the potential 
losses they may cause, the Management Board will  not engage in "timing" short-term market 
fluctuations. Bets on the short- or medium-term evolution of financial markets may convert temporary losses into permanent impairment of capital. 
 
Investment Risk 7. The WTOPP should be concerned with permanen t capital impairment. Non-recoverable loss 
permanently reduces future earning power. For example, money lent to a borrower that cannot 
fully honour its debt will not only permanently impair capital but also its capacity to generate future earnings. 
 
8. Price volatility is commonly considered as a measure of investment risk. However, volatility 
fails to measure long-term investment risk and is only a threat to long-term investors if they misread its significance. For example, if a company' s share price quickly falls by 50%, its volatility 
will skyrocket. However, if the long-term perspective of the company has not changed, the risk for 
investors has been greatly reduced, not increased. Thus, investors should focus on the long-term perspective not on market driven price volatility. 
 
9. The valuation of an asset affects its future returns. Therefore, the valuation of assets is a 
risk that can produce damages similar to permanent capital loss. This is why it should be 
monitored on an on-going basis. 
 10. Monitoring the valuation does not constitute an attempt to predict the short-term evolution 
of market prices, but to appraise the long-term potential profitability of an investment given its 
current characteristics. 
 
Allocation of Assets 
11. Asset Allocation is the main source of portfolio returns. Particular attention will therefore be 
paid to the definition and implementation of WTOPP's "strategic asset allocation".  WT/L/952 
- 27 - 
  12. Each asset class in the portfolio must generate a measurable income and must contribute to 
increasing the value of the WTOPP's assets. This increase must be driven by reliable, identifiable economic factors. The prospective return potential of each asset class may be assessed on the basis of these appropriate factors. 
 
13. The WTOPP will maintain adequate diversification because expected returns on asset classes 
may take a long time to materialize and because the correlation of different assets helps dampen 
volatility and hence help avoid unconsidered decisions. 
 14. Asset classes and financial structures that do not produce income, lack transparency or use 
significant leverage are not appropriate for WTOPP. Commodities, hedge funds, venture capital, 
as well as structured products are therefor e excluded from WTOPP's investment universe. 
 15. The WTOPP seeks to avoid changes in asset allocation based on short-term views and 
forecasts: all too often such changes only result in increasing costs. Changes in asset allocation 
are only warranted when justified by significant changes in the measurable characteristics of the Plan's investments allocated to an asset catego ry or by fundamental changes in the Plan's 
liabilities or structure. 
 
Style of Management 16. The objective of the implementation process is to execute the investment strategy as closely 
as possible while minimizing costs and avoiding unwanted implementation risks. 
 17. The Management Board implements the WTOPP's strategic allocation predominately through 
indexed vehicles or portfolios.
1 Indices will be selected with utmost care, so that they truly 
represent the asset class in which the WTOPP's strategy intended to invest.  
18. The choice of passive management is motivated by the observation that, over time, active 
management has performed less well, is less diversified, less predictable and more costly. Moreover, active management tends to be base d, in most cases, on short-term views. 
 
19. The WTOPP may use active management when passive management is not feasible or when 
tangible and clearly identifiable reasons lead to believe that active management represents a better path. 
 
20. Overall, the Plan will strive to minimize risks related to the implementation of the 
investment strategy. These risks include, but are not limited to, active management risk, 
unwanted credit risk and legal structure risk. 
 
Rebalancing 21. The WTOPP adopts a counter-cyclical approach through a systematic annual rebalancing 
mechanism whose function is to maintain the weight of the assets aligned with the 
strategic allocation.  
22. The systematic rebalancing is an effective way for the Plan to maintain a stable exposure to 
the market while taking advantage of market volatility.  
Cost & Conflicts of Interest 
23. Cost sensitivity is an integral part of the investment strategy. Costs should be maintained as 
low as possible without hindering the Plan's capacity to achieve its targets.  
                                               
1 Indexed vehicles aim to generate returns th at are equal to those of a market index. WT/L/952 
- 28 - 
  24. The supply of investment services or products is primarily driven by the financial interests of 
providers rather than by investors. The Management Board will therefore be particularly vigilant in 
choosing investment solutions that fit in its strategy and targets. The WTOPP will avoid investment vehicles in which the investment manager is paid a performance based fee.
2 
 
The investment guidelines adopted by the Ma nagement Board are intended to generate 
sustainable returns over time and promote sound decisions even in times of economic stress and 
uncertainty. The guidelines are periodically review ed to ensure they remain appropriate to the 
structure and circumstances of the Plan. 
                                               
2 Such arrangements are unfair for investors be cause of the asymmetry of risk and reward. WT/L/952 
- 29 - 
  ANNEX 3: WTOPP CODE OF  CONDUCT GUIDANCE FOR MEMBERS OF THE WTOPP 
MANAGEMENT BOARD1 
Pursuant to Article A.2 of the Rules of Procedure of the WTOPP Management Board: 
 
"The Chairman, members and alternates appointed or elected to the Management Board […] shall 
act solely with the interests of the Plan in view  and shall observe discretion and confidentiality in 
the exercise of their duties ." 
 
Pursuant to Articles A.3 and A.4:  "A.3 Members and alternates shall disclose to the Management Board any personal or financial 
interest that they may have that may be construed to be in conflict with the duties and 
responsibilities flowing from their membership of the Management Board.  
A.4 The Management Board shall examine any such disclosure and decide on the action 
to be taken."  
The conduct of those who govern the WTOPP significantly impacts the lives of the people who 
depend (or will depend) on a WTO pension for th eir retirement income. It also has important 
implications for other stakeholders of the Plan. Consequently, it is critical that the WTOPP be overseen by a strong, well-functioning Management Board in accordance with fundamental ethical 
principles of honesty, integrity, independ ence, fairness, transparency and competence. 
 Codes of conduct addressing professional activiti es are standard practice among many public and 
private pension schemes. This Code of Conduct represents widely accepted good practice 
governing board members individually and collectively  when complying with their duties 
to the Plan. 
 
The Code provides guidance to those individuals overseeing the management of the WTOPP 
regarding their duties and responsibilities and is  not meant to replace the overall policies and 
procedures established for the governance of the Plan. Rather, the fundamental ethical principles 
embodied in this Code are intended to enhance those policies and procedures by clearly identifying 
expectations and best practices for Management Board members.  
Code of Conduct
2 
 
PART I 
The following four principles concern primarily the conduct of  individual members of the 
Management Board.  1. Act in good faith and in the best interest of the Plan. 
 
Management Board members have a primary duty to act for the benefit of the Plan's participants and beneficiaries. In discharging their responsibilities, Management Board members recognize that 
the overriding objective of the Plan is to serve as a secure source of retirement income for 
current and future beneficiaries. Therefore, members must give due consideration to the effect of Management Board decisions on the continued financial health and viability of the Plan particularly 
in the long term. 
 In carrying out their responsibilities, Management Board members will:  
 Consider the additional objectives of ensuring an adequate match between plan assets and 
liabilities, maintaining stable funding costs over time and keeping management costs appropriately low. 
                                               
1 These guidelines are understood to apply equally to  Board observers and staff working with the WTOPP 
Secretariat.  
2 Significant portions of this code have been adap ted from the guidelines fo r pension board trustees 
developed by the Chartered Financial Analyst (CFA) Inst itute under their integrity and standards initiative. WT/L/952 
- 30 - 
   Carry out the Plan's activities in a way that does not impose unnecessary financial risk on the 
WTO's Members while serving the interests of the Plan's members. 
2. Act with prudence and reasonable care. 
 
Management Board members will exhibit the care and prudence necessary to meet their 
obligations to the Plan's participants and beneficiaries. The exercise of prudence requires acting with the appropriate levels of care, skill, and dilige nce that a person acting in a like capacity and 
familiar with such matters would use under the same circumstances. 
 When serving as a Board member, prudence requires: 
 Acting in a judicious manner to avoid harming participants and beneficiaries. 
 Acting in good faith, without improper motive or purpose. 
 Exercising diligence in preparing for and attending Management Board meetings, and keeping 
abreast of Management Board activities and documents. 
 Exercising power and discretion consistently. 
 Following the applicable regulations, rules, policies and other guidance set forth by the Plan's 
documents. 
3. Maintain confidentiality of Plan, pa rticipant and beneficiary information. 
 Management Board members hold strictly confidential all information communicated to them in the context of their duty to the Plan, and they take all reasonable measures to preserve this 
confidentiality. While the Management Board has a preference for transparency in the execution of 
its duties, members from time-to-time have access to information, or engage in deliberations where it is in the best interests of the Plan to prohibit, limit or delay the dissemination of such 
information to those outside of the Board. 
 In particular, Management Board members will apply discretion to: 
 
 Information related to individual Plan participants and beneficiaries. 
 Information that, if shared, may affect the Management Board's ability to effectively deliberate 
and take appropriate decisions. 
4. Maintain independence and objectivity by, among other actions, avoiding conflicts of 
interest, refraining from self-dealing, and re fusing any gift that could reasonably be 
expected to affect their loyalty. 
 
Management Board members endeavour to avoid actu al and potential conflicts of interest between 
their work with the Plan and other professional responsibilities and commitments, or personal or 
outside interests. All members of the Board have specific responsibilities to people and entities 
outside the Board, many of whom are also stak eholders of the Plan. It is incumbent upon 
members to be fully cognizant of these dual roles and disclose in which capacity they may be expressing themselves, particularly in the context of Board decisions. 
 
Management Board members:  
 Strive to avoid even the appearance of impropriet y. Outside duties or responsibilities should not 
influence decisions because the member acts primarily for the beneficiaries and participants of the Plan when participating in making those decisions. 
 Take great care to put their duties to the Plan before their loyalty to the stakeholder group from 
which they derive their appointment (i.e. General Council, Director-General or participants) when discharging those duties. WT/L/952 
- 31 - 
   Do not put themselves in a position where their interests and the interests of the Plan conflict. 
 Do not use the prestige or influence of their position for private gain or advantage. 
 Refuse any gift or benefit that could reasonab ly be expected to affect their independence, 
objectivity or loyalty. 
To the extent conflicts may not be avoided, Management Board members recognize and take 
appropriate measures to deal with and manage them, such as:  
 Disclosing all real or perceived conflicts of interests, including in circumstances in which the 
individual concerned considers that there is no  such conflict of interest but, out of an 
abundance of caution, nevertheless chooses to inform other Board members of the relevant 
circumstances. 
 Abiding by any decision that may be taken by the other members of the Management Board 
following such disclosure, for example to abstain from a vote or exclude themselves from Board 
deliberations on matters relating to the disclosed conflict. It is, however, understood that not 
every instance of disclosure will require action by the Management Board. 
The overriding principle is that Management Board members should act in the best interests of the 
participants of the Plan and disclose any conflicts of interest. Therefore it is important that the Plan 
has procedures in place to manage and disclose any such conflicts. 
 
PART II The following three principles concern prim arily the Management Board as a collective 
whole. Acknowledgement and implementation of  these principles by the members of the 
Management Board ensures effect ive governance for the Plan. 
 
 
5. Take actions that are consistent with the established mission of the Plan and the 
policies that support that mission. 
 
The Management Board develops and implements comprehensive written investment and other policies that set forth the mission, beliefs and strategic plans that guide the investment and other decisions of the Board. 
 
Management Board members:  
 Review and approve the Plan's policies as necessary to ensure that the policies remain 
appropriate and current. 
 Only take actions and decisions that are consistent with the stated objectives and constraints of 
these established Plan policies and guidelines. 
 Consider the suitability of investments given the needs of the pension plan, its future 
(or projected) liabilities, risk tolerance and diversification goals. 
 Work to achieve the proper investment blend to reflect the sometimes competing interests 
among the different categories of Plan members while focusing on long-term stability and 
growth. WT/L/952 
- 32 - 
  6. Ensure that decisions of th e Management Board are informed. 
 Management Board members may seek appropriate expert or professional guidance where they consider this to be in the best interests of the Plan. When relying on external third-party service 
providers and professional consultants the Management Board will make reasonable and diligent 
efforts to:  
 Select qualified advisors through competitive processes and review the engagement of expert 
advisors on a regular basis. 
 Ensure that the service providers and consultants act with appropriate skill, competence and 
diligence. 
 Determine that the service providers and consul tants are independent and free of conflicts of 
interest and have the proper incentives to act in the best interests of the Plan. 
 Verify that the recommendations of the service providers and consultants have a reasonable 
and adequate basis and ensure that such bases, as  well as the decision process, are adequately 
documented. 
 Put in place all safeguards necessary to ensure that investment managers, consultants and 
actuaries retained by the Plan adopt and comply with adequate compliance and professional 
standards. 
7. Communicate with participants, beneficiar ies and supervisory auth orities in a timely, 
accurate and transparent manner. 
 
Transparency is a fundamental ethical principle of good governance. Developing and maintaining clear, timely and thorough communication practices is critical to providing high-quality services to 
Plan participants, beneficiaries and other stakeholders. 
 Management Board members recognize that the Management Board has a responsibility to: 
 
 Ensure that the information provided is accurate, pertinent and complete. 
 Not misrepresent any aspect of its services or activities in any communications, including oral 
representations, electronic communications or written materials (whether publicly disseminated 
or not). 
If the Management Board intends to recommend chan ges to the rules or regulations of the WTOPP, 
such as a later retirement age, increasing contributions or modifying future benefits, 
the Management Board will communicate information concerning the proposed changes well in 
advance to allow affected parties the opportunity to provide input.  
The Management Board has a duty to present stakeholders with information that is a fair 
representation of the Plan's assets, liabilities, and investment performance and that includes all relevant factors. Such information must be presented on a regular basis, in plain language, and in a manner designed to effectively communicate the information. 
 
__________