RESTRICTED  
  
WT/L/925  
11 July 2014  
(14-3997)  Page: 1/12  
 Original: French  
 
  LETTER OF FINAL COMMENTS ON THE FINANCIAL STATEMENTS 
OF THE WTO'S PENSION PLAN FOR THE FINANCIAL YEAR  
ENDED 31 DECEMBER 2013 
CONTENTS 
1  OBJECTIVES AND SC OPE OF THE AUDIT ....................................................................... 2  
2  LIST OF RECOMMENDATIONS ....................................................................................... 2  
3  COMMENTS AND RE COMMENDATIONS ......................................................................... 2  
3.1  Follow-up to previo us recommend ations ........................................................................ 2  
3.1.1  Recommendations of the auditor ................................................................................ 2  
3.2  Internal au dit's comme nts ........................................................................................... 3  
3.3  Overview of the Plan's financial situation ........................................................................ 3  
3.4  Actuarial analys es of the Plan ....................................................................................... 4  
3.5  Studies of the working groups on the viability of the Pension Plan ...................................... 5  
3.6  Reserve fund for operating costs ................................................................................... 6  
3.7  Reimbursement of  withholding tax ................................................................................ 7  
3.8  Investment policy ....................................................................................................... 8  
4  ACKNOWLEDGEMENTS ................................................................................................. 9  
5  OPIN ION ....................................................................................................................  10 
6  ANNEX: INTRODUCTION TO THE PENS ION PLAN........................................................ 11  
6.1  Back ground .............................................................................................................. 11 
6.2  Management  procedures ............................................................................................ 11 
6.3  Technical characte ristics of the Plan ............................................................................. 11 
 WT/L/925 
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  1  OBJECTIVES AND SCOPE OF THE AUDIT 
1.1.  Pursuant to our notification dated 19 December 2013, an external auditor undertook 
an assignment within the Secretariat of the Management Board of the WTO Pension Plan (WTOPP), 154 rue de Lausanne, Geneva, from 19 to 22 May 2014. The audit's objective was to prepare the 
certification of the WTOPP's financial statements for the financial year ended 31 December 2013. 
1.2.  The audit was conducted in accordance with international auditing standards ( International 
Standards on Auditing - ISA), the Regulations of the Pension Plan and its Administrative Rules. 
1.3.  The purpose of the audit was to determine with  reasonable certainty whether the financial 
statements as a whole did not contain any significant anomalies, either as a result of fraud 
o r  e r r o r s ,  s o  a s  t o  g i v e  a n  o p i n i o n  a s  t o  w h e t h e r  t h e y  h a v e  b e e n  d r a w n  u p ,  a s  f a r  a s  a l l  their important elements are concerned, in accordance with the applicable financial reporting framework and the Plan’s Regulations and Administrative Rules. 
1.4.  Each comment and recommendation was discussed with the persons concerned. The audit's 
closing meeting was held with Mr John Breckenridge, Secretary of the Pension Plan, on 22 May 2014. The Secretariat acknowledged the relevance of our remarks. This letter takes fully into account its comments and replies. 
1.5.  Our opinion on the financial statements of the WTOPP is given unreservedly. 
2  LIST OF RECOMMENDATIONS 
 Recommendation No. 1. The WTO should  take measures to ensure the 
long-term viability of its Pension Plan, following the in-depth studies initiated 
by the Management Board (confirmation of last year's Recommendation No. 1). 
 Recommendation No. 2. It is recommended  that the Plan's Regulations should 
be updated by specifying the accountin g treatment of its operating costs in 
the new context created by the inclusion of Plan data in the WTO accounts in 
line with IPSAS. 
 Recommendation No. 3. It is recommended  that the Secretariat make further 
efforts to recover the debts due corresponding to withholding tax not reimbursed by the tax authorities of the countries concerned (confirmation 
of recommendations in our previous reports). 
3  COMMENTS AND RECOMMENDATIONS 
3.1  Follow-up to previous recommendations 
3.1.1  Recommendations of the auditor 
3.1.  The three recommendations made in 2013 regarding the 2012 accounts are in the process 
of being implemented. WT/L/925 
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  Table 1 Summary of implementation of th e recommendations in our report on the 
WTOPP's financial statements for the fi nancial year ended 31 December 2012 
Subject Implemented  Being 
implemented Not 
implemented  Total Paragraph 
nos. in the 
original 
report 
No. 1. The WTO should take 
measures to ensure the 
long-term viability of its Pension Plan, following the in-depth studies recently initiated by the Management Board.  x   18—29 
No. 2. The working groups 
on the Pension Plan 
should address the question 
of the Plan's Regulations, 
paying particular attention 
to the need for separate 
financial statements for the 
Plan and the consequences.   X   31—39 
No. 3. Further efforts should 
be made to recover the 
withholding tax due and not yet reimbu rsed by the 
tax authorities of the countries concerned.   X   41—46 
      
Total number 0 3 0 3  
Percentage of total  100%  100%  
3.2  Internal audit's comments 
3.2.  The WTO's internal audit service has no t conducted an audit of the WTOPP. 
3.3  Overview of the Plan's financial situation 
3.3.  The operating account of the Pension Plan1 ("the statement of income and expenditure") 
shows a surplus of CHF 43,827,000, CHF 3,892,000 lower than that for 2012 (CHF 47,719,000). 
3.4.  This change results from the increase from one year to the next of CHF 3,307,000 
to CHF 5,268,000 in lump sum payments2, together with the decrease from CHF 34,843,000 
to CHF 33,803,000 in investment income.  These changes are not offset by the decrease 
in operating costs, from CHF 664,000 to CHF 661, 000, and the increase in transfers of pension 
rights from other organizations (which rose from CHF 163,000 to CHF 313,000).  
3.5.  The net actuarial rate of return on investment  (8.23%) was again positive and, while lower 
than in 2012 (10.10%), largely exceeds the Plan's target (3.5%, net of inflation).  
                                               
1 Annex A contains an updated version of the outline of the Pension Plan's organization and parameters 
given in the external auditors' previous reports. 
2 This increase cannot be foreseen: upon retire ment, staff members may decide to take up to 
a maximum of 33% of their pension in a lump sum. A varying number of them use this possibility each year. Transfers of pension rights to other organizations when staff move to them are likewise unpredictable. WT/L/925 
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  Table 2 Calculation of the actuar ial rate of return (in CHF) 
Actuarial rate of return 2011 2012 2013 
a. Value of assets as at 1 January 339,988,075 348,800,016 396,539,355 
b. Value of assets as at 31 December 348,800,016 396,539,355 440,342,527 
i. Investment income -3,795,659 34,489,624 33,480,802 
Average assets = (a+b-i)/2 346,291,875 355,424,874 401,700,540 
Actuarial rate of return in nominal terms = 
i/average assets -1.10% 9.70% 8.33% 
Consumer price index for Switzerland3  -0.70% -0.40% 0.10% 
Actuarial rate of return, net of inflation -0.40% 10.10% 8.23% 
Source: External auditor, on the basis of in formation provided by the WTOPP Secretariat. 
Table 3 Trend in actuarial rates of return in nominal terms (%) 
2006 2007 2008 2009 2010 2011 2012 2013 
+9.01% +3.48% -36.53% +21.29%  +3.52% -1.10% +9.70% +8.33%  
Source: External auditor, on the ba sis of WTOPP Secretariat statistics. 
3.6.  The presentation of the Plan's balance sheet is based on that for Swiss pension plans: 
the capital of CHF 395,270,000 recorded in the balance's liabilities, an increase of 13.73%, 
corresponds to the net assets in an IPSAS-co nsistent statement of financial position. 
3.7.  The surplus in the balance sheet (CHF 440,342,000) represents an increase of 11.04% 
in comparison with 2012 because of the 11.00% in crease in the value of the Plan's portfolio 
and the 13.53% increase in its liquidity. 
3.8.  In addition to the aforementioned surplus of  CHF 43,827,000, the liabilities include accrued 
expenses at the end of the financial year (CHF 297,000) and a provision for irrecoverable taxes (CHF 698,000), all of which are lower than in 2012. 
3.9.  The increase in the value of the net assets in the balance sheet (its capital) is a positive 
development, but this balance sheet is not co nsistent with IPSAS as it does not mention 
the actuarial value of pension commitments. This is an essential element in assessing the situation of a pension plan and is now included in the WTO's financial statements. 
3.4  Actuarial analyses of the Plan 
3.10.  Two kinds of valuation are made of the Plan. On the one hand, the IPSAS 25-consistent 
estimates provide the figures to be included in the annual financial statements (furnishing a snapshot of commitments at any given moment), whereas the purpose of the valuations 
appearing in the in-depth triennial reports and the annual interim reports is to estimate the Plan's 
charges over time and compare them to its resource s in order to ensure the Plan's viability in the 
long term. These latter projections take into acco unt, for example, the rate of return expected 
from the Plan's assets. 
3.11.  The actuarial valuation submitted to the WTO
4 to enable it to bring its financial statements 
into line with IPSAS 25 shows an amount for the Plan's long-term pension commitments of CHF 852,696,000, and an amount for the Plan's financial assets estimated at their "fair value"
5 
of CHF 441,268,000. 
                                               
3 Rate of variation in the Consumer Price In dex (CPI) for December compared to December 
of the previous year, as reported by the Swiss Federal Office of Statistics. 
4 Reports of the actuary Mercer  dated 9 April and 20 May 2014, "actuarial valuation report under 
International Public Sector Accounting Standard 25".  
5 The fair value valuation of assets, as explained on page 7 of the actuary's reports, differs from 
the market price of assets : in particular, it takes into account the expected return on the assets and 
the amount of contributions and of pensio ns for the year, in line with IPSAS 25. WT/L/925 
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  3.12.  The in-depth triennial actuarial valuation as at 31 December 2013 submitted to the Plan 
Secretariat6 takes account of the new actuarial parameters proposed by the working groups set up 
by the Plan’s Management Board and accepted by the Board (see below). It also adopts a nominal 
discount rate of 5.5%, rather than the 6.5% rate used in the last in-depth actuarial evaluation, 
carried out in 2011 on the situation of the Plan as at 31 December 2010. Consequently the amount 
of the Plan's long-term commitments in this valuation is not very different from that 
in the aforementioned report, which is IPSAS cons istent, unlike the situation found last year: 
the Plan's commitments are valued at CHF 843 milli on.  In the present report, the value of the 
Plan's financial assets corresponds to their market price (CHF 440 million). 
3.13.  The report also indicates that the cost of pensions will be covered:  
 until 2019 by the pension contributions (employer and employee) alone; 
 then, as from 2020 and until 2048, by contributions plus the Plan's investment income; 
 and finally, as from 2049 and until 2066, by a combination of contributions, investment 
income and sale of assets, the Plan being no longer capable of funding pensions after 
2066 without reforming its operating modalities. 
3.14.  Finally, the actuary indicates that the total contribution rate needed to ensure the long-term 
equilibrium of the Plan is 24.9%, which is higher  than the current rate (23.7%), and therefore 
recommends that the Management Board should actively look at ways to bring the Plan's 
long-term costs into balance with its contributions. 
3.5  Studies of the working groups on the viability of the Pension Plan 
3.15.  Mindful of the risks weighing upon the Plan's long-term future, in 2013 the Management 
Board set up three working groups on, respectively, the Plan's actuarial parameters, governance 
and investment policy. The purpose of these groups  is to put forward solutions aimed at ensuring 
the Plan's long-term sustainability.  
3.16.  With the actuary's help, one of the groups undertook an in-depth study of the Plan's 
actuarial parameters, but has only just begun its consideration of the reforms to be proposed 
in order to ensure the Plan's long-term viability. 
3.17.  On 27 September 2013, this working group proposed to the Management Board that 
the following three parameters be revised downwards: 
 the projected Swiss inflation rate, to be reduced from 3% to 2% per annum; 
 the assumptions relating to the indexation of salaries to inflation: no inflation-related 
increase should be taken into account for the next ten years (instead of the 1% per year so far), and then the increase to be limited to 0.5% per year; 
 the incidence of staff merit-related increase s to be reduced by 50% per year compared 
with the current model. 
3.18.  These recommendations correspond to the trends observed in recent years
7 and are clearly 
justified and explained in the working group repo rts. The latter propose maintaining the Plan's 
other parameters, in particular the discount rate which would remain the expected net return 
on financial assets, i.e. 3.5% net of inflatio n (and 5.5% taking into account the projected 
Swiss inflation rate used by the working groups). All these proposals were adopted by the Management Board on 27 September 2013. 
3.19.  In early 2014 the WTO actuary submitted to the working group a number of measures 
aimed at toughening the Plan's modalities to ensure its long-term viability. These measures concern the whole set of the Plan's parameters (retirement age, pension calculation and annual discount rate, survivor’s pension and deferred pensio n rules, division of the pension between lump 
sum and annual payments, death and disability benefits, etc.). 
                                               
6 Report of the actuary Mercer  of 20 May 2014, "actuarial valuation report as at 31 December 2013. 
World Trade Organization Pension Plan". 
7 See our report on the WTO's 2013 accounts and th e performance audit on WTO staff management. WT/L/925 
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  3.20.  The external auditor wishes to draw attention to the fact that a transfer of benefits from the 
Pension Plan to the WTO (envisaged in some cases in the above-mentioned list) would be a measure without any real effect as, in conf ormity with IPSAS, the WTO's financial statements 
must indicate the value of all the Organization's long-term commitments as estimated by an actuary. It is therefore important not to consider the consequences of reforms simply on the 
Plan's financial statements but also on those of the WTO (which henceforth also include data 
relating to the Plan). 
3.21.  It is important for the working groups to st udy the measures put forward by the actuary 
and propose various reforms to the Management Bo ard aimed at prolonging the Plan's viability, 
and thereafter that a series of reforms be effectively adopted by all the competent bodies. 
It is better to act swiftly by moderate reforms rather  than having to take more drastic action later. 
3.22.  Recommendation No. 1. The WTO should ta ke the necessary me asures to ensure 
the long-term viability of its Pension Plan, following the in-depth studies initiated 
by the Management Board (confirmation of last year's Recommendation No. 1). 
3.6  Reserve fund for operating costs 
3.23.  The liability side of the balance sheet still includes a reserve of CHF 250,000 for operating 
costs potentially invoiced by the WTO in respect of the staff made available to the Plan by the Organization. This reserve, which was established pursuant to recommendations by the 
previous external auditors, has never been revalu ed, although the actual value of the operating 
costs concerned has been estimated to be CHF 537,000 (according to the latest estimate made on 14 May 2013). 
3.24.  The solution, pursuant to Article 5(f) of the Regulations
8, would be for the WTO to invoice 
the Plan's actual operating costs borne by the Organization each year. The aforementioned reserve 
could be used to pay some of these costs in the first year. 
3.25.  In accordance with our recommendations for previous years, in 2011 and 2013 
the WTO Secretariat submitted proposals on the payment of the Plan operating costs to the 
WTO Budget Committee, which has not taken a decision on them. 
3.26.  The transition to IPSAS does away with the problem raised here. The IPSAS rules, which the 
WTO henceforth applies, oblige the Organization to include the financial data concerning its Pension Plan in its accounts and, in particular, its pension commitments and the value 
of its financial assets. In these circumstances, the presentation of separate financial statements for 
the Plan is no longer necessary and the divisi on of costs between the two bodies and their 
respective accounts becomes a secondary matter. 
3.27.  To continue presenting separate financial statements for the WTOPP is, however, not 
contrary to IPSAS and can be useful in confirming to staff and retired staff that the Organization 
does not intend to use the financial assets for purposes other than to cover pension commitments
9, as all the WTO bodies wish. 
3.28.  Our Recommendation No. 2 last year suggested  that the working groups on the Pension 
Plan should address this question, and they have done so but without reaching specific conclusions 
for the time being. We advise them to complete  their work on this issue and that the Plan's 
Regulations be updated accordingly. 
3.29.  Given the attachment of the WTO bodies to maintaining separate financial statements 
for the Plan, it would suffice for the Plan's Regulations to specify the accounting treatment 
                                               
8 Article 5(f) of the WTOPP's Regulations: " All expenses incurred in administering the Plan […] shall 
be borne by the Plan ". 
9 The OECD, for example, has chosen such a solution for its oldest pension plan (which manages 
the smallest funds), the Staff Providen ce Fund. The financial data on the latter are included in the OECD's 
accounts, but financial statements specific to the Fund are still submitted and audited separately by the Organization's auditor. WT/L/925 
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  of the Plan's operating costs in the current cont ext where the WTO’s financial statements include 
all the information relating to the Plan.10 
3.30.  Recommendation No. 2. It is recommended  that the Plan's Regulations should 
be updated by specifying the accounting tr eatment of its operating costs in the new 
context created by the inclusion of Plan da ta in the WTO accounts in line with IPSAS.  
3.7  Reimbursement of withholding tax 
3.31.  Dividends earned from the WTOPP's securities  are subject to fiscal levies at source 
and the Plan requests their reimbursement from the tax authorities in the countries concerned because the WTO is exempt from tax pursuant to the 1994 Marrakesh Agreement, which established it, and the 1947 Convention on the Privileges and Immunities of the 
United Nations and Specialized Agencies, which is referred to in the Marrakesh Agreement. 
3.32.  In practice, the WTOPP authorizes the two banks that are the custodians of its investments, 
Northern Trust and Pictet
11, to obtain reimbursement of withholding taxes, but Northern Trust  has 
difficulty in obtaining reimbursement of its long-outstanding claims. The following table shows 
all the Plan's claims in respect of withholding tax at 31 December 2013, including those for which 
reimbursement presents no problem. 
Table 4 The WTOPP's claims for reimbursemen t of withholding tax at 31 December 2013 
(in CHF) 
Debtor country Custodian bank concerned WTOPP claim 
Austria Pictet  582.60 
Canada Northern Trust 107,282.29 
Denmark Pictet 
Northern Trust  2,240.50 
12,408.17 
France Northern Trust  334,671.19 
Germany Pictet 656.36 
Greece Northern Trust  1,965.67 
Ireland Pictet  110.05 
Israel Northern Trust  618.99 
Italy Northern Trust  236,282.32 
Luxembourg Northern Trust  3,947.56 
Poland Northern Trust  8,105.23 
Portugal Pictet  1,360.55 
Spain Pictet 2,722.05 
Switzerland Pictet 
Crédit Suisse/PostFinance  112,000.85 
10,833.42 
Other countries Northern Trust 2,954.91 
Total Pictet : 119,672.96 
Northern Trust  : 708,236.32 
Crédit Suisse /PostFinance  : 10,833.4212 
Overall total : 838,742.70 
Source: External auditor, based on data  provided by the WTOPP Secretariat. 
                                               
10 In this case it is perfectly possible to envisage maintaining the current reserve of CHF 250,000 
or even remove any obligation to invoice operating costs for the WTO. 
11 Pictet became a custodian bank in 2011 (see below). 
12 Crédit Suisse  is not a custodian bank. The Plan has a modest claim with it and reimbursement 
does not raise any problem. WT/L/925 
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  3.33.  Pursuant to Recommendation No. 3 in our report on the 2010 accounts, the Secretariat has 
included in its balance sheet all the amounts ou tstanding in this respect, a total of CHF 838,743 
(instead of the CHF 924,694 at 31 December 2012). It has also included a "reserve fund" in the balance sheet liabilities amounting to CH F 698,000 (instead of the CHF 712,000 in 2012), 
corresponding to the part of this claim that ma y be irrecoverable. The assessment of this risk 
is reasonable because the claims that may lapse pursuant to each national legislation were 
considered as potentially irrecoverable.
13 The amount of the potentially irrecoverable claims 
should, however, be classified as a provision rather than a reserve fund  because these 
sums do in fact constitute a potential risk for the Plan whose amount can be reliably estimated. 
3.34.  The Plan and its custodian banks should pursue their efforts with debtor countries. 
They obtained an exemption from withholdin g tax from France as of 1 January 2011. 
However, despite letters sent by the WTOPP Secret ariat to the ministry responsible for the budget 
and the French delegation to the WTO, France still has to reimburse CHF 334,67114 for the years 
after 2010.15 
3.35.  Pursuant to the suggestions made in our previous report, contacts with the delegation 
of Canada to the WTO were followed up by a letter to the Canadian delegation to the WTO, but no steps were taken vis-à-vis  other debtors, notably Italy, which owes over CHF 236,000. 
It is therefore important for the Secretar iat to resume its efforts and to ask the 
mandated banks to intensify their efforts to ob tain satisfaction. The threat of initiating 
legal proceedings should not be excluded.  
3.36.  The risk of a statutory limitation period  should not put an end to attempts 
to recover debts : taxes should not be considered as time-barred, in implementation of general 
legal principles, if their reimbursement was requested within the legal time-limit and if the fiscal service concerned is solely responsible for the failure to reimburse. 
3.37.  Recommendation No. 3. It is recommended  that the Secretariat make further 
efforts to recover the debts due corresponding to withholding tax not reimbursed by the tax authorities of the countries concerned (c onfirmation of previous recommendation). 
3.8  Investment policy 
3.38.  The Plan's investment policy, defined in 2004 and implemented from 2005 onwards, sought 
to achieve a high net rate of return of 3.5% by emphasizing equities, pegged at 70% 
of the portfolio (with 10% invested in emergi ng markets), in preference to bonds (20%) 
and real estate (10%). 
3.39.  In 2008, at the height of the financial crisis, the Plan's Management Board adjusted this 
policy by decreasing the share of equities in order to limit losses on those investments. 
On 14 October 2009, after having consulted five specialist firms, the Management Board confirmed 
this more prudent approach by adopting the foll owing new portfolio breakdown, while at the same 
time maintaining the target of 3.5% net rate of return, not including inflation: 
 equities: 40% (of which 32% in develope d market and 8% in emerging market 
securities); 
 bonds: 40% (of which 29% in Swiss francs and 11% in euros); 
 real estate: 20% (of which half in Swiss securities and half in securities of other 
European countries). 
                                               
13 If the claim lapses after two years in a particular  country, provision is made in connection with 
the country for all claims owing for more than two years. 
14 The difference between the amounts recoverable from France and Italy compared with last year 
comes solely from the movement in the Euro-Swiss fra nc exchange rate and not from any partial payment 
of their debts by the two countries. The same factor  accounts for the reduction in the reserve fund for 
irrecoverable claims between 2012 and 2013. 
15 The ongoing negotiations also give grounds for ho ping that the claims covering the period 2006-2010 
may also be recovered, but no t the earlier claims because Northern Trust  did not carry out the necessary 
formalities in good time. WT/L/925 
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  3.40.  This modified asset allocation policy was implemented in January 2011, following a call 
for bids completed in 2010 in order to choose asset managers. In 2013, the Plan sold its Swiss Confederation bonds because of their lack of return, and retained the proceeds as liquidity.  It also 
bought back CHF 7,542,436 in real estate shares of the company Warburg Henderson . 
3.41.  The breakdown of the Plan's portfolio is close to the targets: 41.6% in equities (of which 
34% in developed market and 7.6% in emerging market securities), 37.9% in bonds (of which 
26.8% in Swiss bonds and 11.1% in other European bonds); 17.0% in real estate, and 3.6% of liquidity. 
3.42.  Taking into account the trend in financial markets in 2013, nominal performance was lower 
than that for the previous year (8.4% as against 10% for the portfolio as a whole), but 1.3% 
higher than the benchmark, except in the case of bonds, for which the overall result was 0.3% below the benchmark. 
Table 5 Trend in the breakdown of assets from 2012 to 2013 and comparative 
performance of the various classes of assets in 2013 (in CHF millions) 
Assets Value of assets 
end of 2012 
(CHF millions) Value of assets  
end of 2013 
(CHF millions)  2013 performance 
(percentage) Difference 
compared to 
benchmark 
Shares 152.8 (38.6%) 182. 6 (41.6%) 18.9% +2.2% 
Developed 
markets   123.8 (31.3%) 149.4 (34.0%) 22.3% -0.3% 
Emerging 
markets   29.0 (7.3%) 33.2 (7.6%) 4.9% +10.2% 
Total bonds 155 (39.2%) 166.3 (37.9 %) 2% -0.3% 
Bonds in 
Swiss francs 110.3 (27.9%) 117.6 (26.8%)   
Short-term 
investment in 
Swiss francs 43.0 (10.9) 48.9 (11.1%)   
High return 
bonds in 
Swiss francs 11 (2.8%) 12.8 (2.9%) 5.8% -1.4% 
Emerging 
country bonds 
in Swiss francs 41.2 (10.4%) 39.0 (8.9%) -5.6% +0.3% 
Loan funds 15.1 (3.8%) 16.9 (3.9%) 5.1% -0.8% 
Bonds in 
euros 44.7 (11.3%) 48.7 (11.1%)   
Government 
bonds in euros 24.5 (6.2%)  26.7 (6.1%) 8.6% -0.4% 
High return 
bonds in euros 20.2 (5.1%)  22.0 (5.0%) 8.6% -2.2% 
Real estate 73.8 (18.6%) 74.6 (17.0%) 1.9%  
Warburg 
Henderson 32.5 (8.2%) Warburg 
Henderson  31.7 
(7.2%) -0.5%  
Crédit Suisse 41.3 (10.4%) Crédit 
Suisse  42.9 
(9.8%) 3.7% +6.5%  
Cash 14.0 (3.5%) 15.9 (3.6%)   
Total 395.86 439.5 (100%) 8.4% +1.3% 
Source: External auditor, based on inform ation provided by the WTOPP Secretariat. 
4  ACKNOWLEDGEMENTS 
4.1.  The external auditor wishes to thank sincerely the Secretary of the Pension Plan and his 
collaborators for their welcome and for the precise information that they supplied to him. WT/L/925 
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  5  OPINION 
5.1.  On the basis of the audit conducted, the ex ternal auditor certifies that, in his view, 
the accounts for the financial year 2013 present fairly the financial position of the WTO Pension Plan as at 31 December 2013. WT/L/925 
- 11 - 
  6  ANNEX: INTRODUCTION TO THE PENSION PLAN 
6.1  Background 
6.1.  Both the informal international organization which managed the General Agreement on Tariffs 
and Trade (GATT) 1947 and the WTO, which succeeded it in 1995, entrusted the United Nations 
Joint Staff Pension Fund with providing retirement, death and disability benefits to their staff 
up until 31 December 1998. 
6.2.  As from 1 January 1999, the WTO launched its own Pension Plan and implemented an overall 
reform of its human resources management, including the adoption of a remuneration system 
different to that of the United Nations and more ad vantageous than the latter to some of its staff. 
6.2  Management procedures 
6.3.  The Plan is governed by Regulations adopted by the WTO General Council 
on 16 October 1998. It is supplemented by Admini strative Rules and by the Rules of Procedure 
of the Pension Plan Management Board, whic h were adopted by the latter and approved 
by the WTO General Council. 
6.4.  Article 5 of the Regulations entrusts management of the Pension Plan to the 
Management Board composed of a Chairman, four members and four alternates appointed 
by the General Council, together with four members and four alternates appointed 
by the WTO Director-General (of whom two members and two alternates are appointed from a list drawn up by the "participants", i.e. by staff memb ers of the WTO). The "beneficiaries" of the Plan, 
that is the persons entitled to receive benefits under the Plan, may also appoint an observer 
and an alternate.  
6.5.  Management Board decisions are implemented by its Secretary, who orders its expenditure. 
The Secretary is appointed by the Director-Gener al of the WTO on the proposal of the Board. 
The new incumbent is a member of the Administration and General Services Division of the WTO, 
and is assisted by two full-time staff members, a grade 8 official and a grade 4 secretary. 
6.6.  Under the responsibility of the Management Boar d, the Secretariat directly managed the Plan 
for two and a half years, apart from asset management activities, which were originally entrusted to specialized bodies and then subsequently, by contract of 1 June 2001, the administration 
and accounts management of the Plan were entrusted to Trianon S.A.
16, a Swiss company 
specializing in pension scheme management, whose present headquarters are in Renens, a suburb of Lausanne in the canton of Vaud. Since that date, the Secretariat of the Plan has retained responsibility for the preparation and follow-up of Management Board decisions and supervision 
of the activities of Trianon  and of the bodies managing the assets of the Plan or monitoring such 
management. It also plays a key role in relations with the Plan's participants and beneficiaries. 
6.7.  In the aforementioned area of activity, the Management Board defines the policy for 
distributing funds accumulated through pension contributions among different categories 
of securities (equities, emerging country equities, bonds and real estate securities) and selects 
bodies to manage those assets. The London branch of the United States Bank Northern Trust  
and Pictet  act as the custodian bank and monitor the operations of the management bodies. 
The company MBS Capital Advice , based in Geneva, has monitored the performance of these 
managers since October 2010 (when it replaced Wyatt , in place up to December 2009). Trianon  
is responsible for the general accounts of the Plan and prepares the financial statements. 
6.3  Technical characteristics of the Plan 
6.8.  The Pension Plan is a defined benefit scheme with a reserve fund to supplement the yield 
from contributions. Its operating rules are laid down by its Regulations and Administrative Rules, 
referred to above. 
                                               
16 Trianon  manages supplementary pensio n schemes for Swiss companies,  collective supplementary 
schemes for groups of companies and the pension sch emes of three international organizations, namely 
the Olympic Committee, the International Air Transport Association (IATA) and the WTO. WT/L/925 
- 12 - 
  6.9.  The pension contribution rate since 1 January 2010 has stood at 23.7% of the so-called 
"pensionable" remuneration17, 7.9% of which is paid by the employees and 15.8% 
by the Organization (Article 20 of the Regulations). Retirement may be taken by any staff member who has paid at least five years of contributions and has reached the "normal retirement age", set at 65 years (or 62 years for staff recruited before 2010 and 60 years for staff who began 
working in the GATT or the WTO before 1990). The amount of the retirement benefit is established 
by reference to the "final average remuneration (FAR)" constituted by the 36 months of highest 
pensionable remuneration within the last five year s of the staff member's career; it is obtained 
by multiplying the first 30 years of contributory  service by 2% of the FAR and the subsequent 
years (up to a maximum of ten years) by 1% of the FAR (Article 23 of the Regulations). 
6.10.  The benefit may be commuted, "at the request of the participant, into a lump sum not 
exceeding one third of the actuarial equivalent of  the benefit or the amount of the participant's 
own contributions, whichever is the larger" (Artic le 23 of the Regulations). This option is used 
frequently by staff members at the time of retirement. 
6.11.  An early retirement benefit may be claimed during the five years preceding the normal 
retirement age: it is reduced by 3% during the years preceding that age; the rate of reduction 
is lowered to 1% if the participant has completed at least 30 years of contributory service 
(Article 24 of the Regulations). 
6.12.  At 31 December 2013, the Plan had 245 beneficiaries
18, for 731 contributors. 
 
__________  
                                               
17 The "pensionable" remuneration is the net salary of the staff member  increased by a coefficient which 
differs according to the amount of the salary concerned and is calculated on the basis of the Geneva tax rate. 
This increase is intended to offset the fact that retirees, unlike serving WT O staff, are subject to income tax. 
18 These 245 beneficiaries include 109 retirees, 72 who took early retirement, 8 beneficiaries of 
survivor's pensions, 24 orphans and 18 disabled persons.  To these must be added 14 retirees whose deferred 
pensions will begin to be paid after 2013.