WORLD TRADE  
ORGANIZATION  WT/L/736 
24 November 2008 
 (08-5755) 
General Council 
18-19 December 2008  
 
 
    
 
WTO PENSION PLAN 
 
 
 
ANNUAL REPORT OF THE MANAGEMENT BOARD 
 
AND REPORT OF TH E EXTERNAL AUDITOR 
 
THEREON FOR THE YEAR ENDING 
 
31 DECEMBER 2007 WT/L/736 
Page 2  
 
Message from the Chairman of the Management Board
 
 
  "As the Pension Plan enters the tenth year of  its existence, it gives me much pleasure to 
present to you the Annual Report for 2007.  The Ma nagement Board devoted a considerable amount 
of time in the course of the year to reviewing th e actuarial assumptions underpinning the design of the 
Plan.  As is the case for other national and inte rnational pension funds, improvement in life 
expectancy is a challenge that the Plan will have to face.  The Management Board will be considering 
the necessary adjustments in the course of 2008.  On the investment side, 2007 was a difficult year 
with the strategy yielding a real rate of return of 1. 7 per cent.  As this report goes to print, it is obvious 
that 2008 will prove to be an even more difficult and challenging year for the Plan." 
  WT/L/736 
 Page 3 
 
 
  TABLE OF CONTENTS  
  Page  
 I. INTRODUCTION 4 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2007 4 
III. MEETINGS OF THE MANAGEMENT BOARD 5 
IV. PARTICIPATION IN THE PENSION PLAN 7 
V. ACCOUNTS 8 
VI. ACTUARIAL POSITION OF THE PLAN 8 
Report of the External Auditor on the Accounts of the WTO Pension 10 
Plan for the Year Ending 31 December 2007 
Opinion of the External Auditor on the Accounts of the WTO Pension 13 
Plan for the Year Ending 31 December 2007 
 STATEMENT 1 14 
 Income and Expenditure Statement for the period 1 January – 31 December 2007 
 STATEMENT 2 15  Surplus account as of 31 December 2007  
STATEMENT 3 16 
 Balance Sheet as of 31 December 2007  SCHEDULE A 17 
 Source and Application of Funds for the Period 1 January – 31 December 2007  
SCHEDULE B 18 
 Investment Mandate Overview and Asset Allocation  SCHEDULE C 19 
 Investment Performance 
 
SCHEDULE D 20 
   Exchange rates used for closing on 31 December 2007  Currency Breakdown as of 31 December 2007, after hedging 
 
SCHEDULE E 21 
 Structure of the WTO Pension Plan  SCHEDULE F 22 
 Glossary of terms 
 
ANNEX 1 24 
 Statement of Investment Principles  ANNEX 2 25 
 Statement of Significant Accounting Policies WT/L/736 
Page 4  
 
 
I. INTRODUCTION 
1. The WTO Pension Plan was established on 1 January 1999 following the decision by the 
General Council on 16 October 1998 (WT/L/282) to te rminate the membership of ICITO in the 
United Nations Joint Staff Pension Fund on 31 Dece mber 1998 and to adopt the Regulations and 
Administrative Rules of the Plan. 
2. The Management Board of the Plan was duly constituted by the General Council in 
accordance with Article 4 of the Regulations on 26 March 1999. 
3. The General Council approved the Rules of Procedure of the Management Board on 
8 May 2001 (WT/L/402). 
4. The present report for the period from 1 January 2007 to 31 December 2007 has been 
prepared by the Management Board in accordance with  Article 5 of the Regulations of the Plan for 
presentation to the General Council and to Plan participants.  The annua l reports for 1999, 2000, 
2001, 2002, 2003, 2004, 2006 and 2007 were issu ed under cover of documents WT/GC/W/426, 
WT/GC/W/463, WT/L/497, WT/L/546, WT/L/583, WT/L/628, WT/L/663 and WT/L/706, 
respectively. 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2007 
(a) Management Board
 
 The Management Board was composed as follows on 31 December 2007: 
Mr. Nicholas Niggli, Chairman 
 
Mr. Andrew Johnston Mr. Jean-Pierre Lapalme 
Mr. Pornvit Sila-On Mr. Anthony Mistri 
Mr. William Tagliani Mr. Adrian Otten 
Mr. Dominic Trindade  
Members elected 
by the General 
Council Ms Paulette Planchette  
Members 
appointed by the 
Director-General 
Mr. Mathias Francke Mr. Rolf Adlung 
Ms Heather Grant Ms Monette David 
Mr. Jean-Marc Mignon Mr. Juan Marchetti 
Ms Salina Yan  
Alternates 
elected by the 
General Council Mr. Shishir Priyadarshi  
Alternates 
appointed by the 
Director-General 
Mr. Jan-Eirik Sørensen Observer on behalf of the beneficiaries 
Mr. Claude Mercier Alternate observe r on behalf of the beneficiaries 
 
(b) Secretariat  
 Robert Luther, Secretary  
Jean-Pierre Helary, Assistant Secretary 
 Christine Figuigui, Administrative Assistant  Virginie Guirado, Clerk    WT/L/736 
 Page 5 
 
 
   - Outsourced support services  
  Trianon S.A., Lausanne (c) Consulting Actuary
 
 Cameron Hannah (Mercer HR Consulting S.A.) (d) Medical Adviser
 
 Dr. Catherine Mazeyrac 
(e) Investment Analyst/Consultant  
 Edouard Stucki (Watson Wyatt) (f) Global Custodian
 
 The Northern Trust Company 
(g) Fund Managers  
 Cohen and Steers1 (European real estate securities portfolio) 
 Pictet (actively managed emerging market equity portfolio)  Rogge Global Partners PLC (activ ely managed global bond portfolio) 
 Warburg Henderson (European real estate portfolio) 
 Wellington Management International (two actively managed global equity portfolios) 
  (h) External Auditor
 
 Austrian Court of Audit. 5. An organizational chart is reproduced in Schedule E. 
III. MEETINGS OF THE MANAGEMENT BOARD 
6. The Management Board held four meetings  in 2007.  These took place on 23 February, 
21 May, 5 and 6 July and 19 October 2007.  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. 
7. Regular progress reports were made available to the Plan participants and beneficiaries.  The 
remainder of this section of the Annual Report is de voted to a summary of th e main items of business 
dealt with by the Management Board in 2007. 
(a) Review of investment performance
 
8. The Management Board devoted the majority of its time to monitoring and reviewing 
investment management. The Management Boar d had regular briefings from its investment 
consultant. 
                                                      
1 Previously known as Houlihan Rovers WT/L/736 
Page 6  
 
9. The nominal rate of return in 2007 on the Plan’s  investments was 4.4 per cent and the real rate 
of return 1.7 per cent. These are positive contributi ons in what has been a difficult year in the 
investment markets.  Since inception the nominal rate of return of the total portfolio has been 3.1 per 
cent and the real rate of return 1.4 per cent, in othe r words 2.1 percentage points below the target real  
rate of return of 3.5 per cent. 
10. An overview of the current investment strategy  and asset allocation is to be found in Schedule 
B. A table summarizing investment perf ormance is reproduced in Schedule C. 
11. Against the background of sharp falls in devel oped equity markets during the second half of 
the year, the return on the Plan's assets substan tially exceeded the market benchmarks set by the 
Board for the portfolio in 2007. The appointed investment managers in aggregate produced a strong 
performance achieving an outperformance of 2 per cent over these benchmarks.  
12. Currency was an important factor. The US dolla r exchange rate declined against the Swiss 
Franc by 9.2 per cent in 2007, reflecting the decline of the interest rate differential and the economic 
growth slowdown that has now been confirmed. The dollar decline is estimated to have reduced total 
portfolio return by around 2.5 per cent, as approximate ly one quarter of the total portfolio is invested 
in US equities. The fixed income allocation (Rog ge mandate) returned 1.6 per cent (nominal) and 
contributed marginally to total portfolio return. Had the portfolio been invested in Swiss franc 
denominated bonds and not in currency-hedged global  bonds the fixed income nominal return would 
have been close to zero for 2007. 
13. In 2009 the Management Board w ill be conducting a full review of its investment strategy and 
portfolio structure in the light of the outcome of  the actuarial valuation as at 31 December 2007 with 
the aim of improving the viability and financial stability of the Plan. 
(b) Alternatives to the Wellington global equity mandates
 
14. Owing to the continuing poor performance of th e two Wellington global equity mandates, the 
Management Board examined possible alternative ma nagers to take over the Plan's global equity 
portfolio.  Five candidate manage rs were invited to present proposals to the Management Board. 
Following the appointment of a new portfolio manager for the Wellington Global Opportunities 
mandate and the imminence of the i nvestment review, it was decided to stay with that mandate for the 
time being. 
(c) Working Group on the funding position of the Plan  
15. The Management Board considered the report of the working group at three separate meetings 
in the course of the year.  The working group made specific recommendations to adjust the actuarial 
assumptions with respect to mortality improvement, r eal earnings growth and the administrative cost 
of the Plan.  The Management Board noted that  those adjustments would increase the required 
contribution rate from 23 per cent to 27.3 per cent.  It was agreed that the proposed adjustments 
should be used as a working hypothesis and that th e Secretariat should examine alternative ways in 
which the resulting increase in the required contri bution rate could be absorbed by the Plan. 
(d) Protection of the Plan against adverse actu arial consequences of management decisions  
16. The Management Board considered the possible adverse actuarial consequences for the Plan 
of certain management decisions taken, for instan ce, in the context of a Secretariat restructuring 
exercise.  The Management Board concluded that the present drafting of Article 9 of the Plan Regulations did not adequately cove r the situation where an unexpectedly high rate of early retirement 
resulted from a management plan to reorganize the sta ffing of the Secretariat.  It was agreed that a  WT/L/736 
 Page 7 
 
 
  draft amendment to Article 9 of the Plan Regul ations should be proposed to the General Council 
through the Committee on Budget, Finance and Administration. 
(e) Staffing of the Plan Secretariat  
17. During 2007, the Management Board continued to explore ways in which the resources 
available to the Plan Secretariat could be stre ngthened.  An additional support position was provided 
which has been filled on a short-term basis pending the issuance of a vacancy notice.  
IV. PARTICIPATION IN THE PENSION PLAN 
18. The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2007. 
 2007 2006 
Active Members  710 684 
Pensioners  129 101 
 
 Participants in the Pension Plan in 2007  
 
 
Total number on 1 January 2007 
 Movements in 2007   - Entries  - Re-entries under the terms of Art. 15(b) of the 
Regulations 
 - Separations 
  
684 
 
  
62 
5 
 
41 
 Total number on 31 December 2007  
 
Breakdown of separations in 2007  
 - retirement 
 - early retirement  - withdrawal settlement  - deferment of decision             -            disability 
 
Total separations   
    
14 
7 
11 
8 1 
 
41 
  
 WT/L/736 
Page 8  
 
Benefits paid by the Pension Plan
 
 
Type of benefit At 31/12/2006 New benefits 
in 2007 Benefits ended 
in 2007 At 31/12/2007 
Retirement 45 14 1 58 
Early retirement 32 7 - 39 
Deferred retirement 5 1 - 6 
Surviving spouse's benefit 3 1 - 4 
Partial /total disability benefit 6 1 - 7 
Child’s benefit 10 5 - 15 
Total benefits 101 29 1 129 
 
V. ACCOUNTS 
19. A statement of significant accounting policies is reproduced in Annex 2. 
20. The income and expenditure statement for the period 1 January – 31 December 2007 and 
surplus account as at 31 December 2007 are reproduced in Statements 1 and 2, respectively. 
21. The balance sheet as at 31 December 2007 is reproduced in Statement 3. 
22. The source and application of funds for the period 1 January – 31 December 2007 is 
reproduced in Schedule A. 
23. A glossary of terms to facilitate an understanding of the tables is reproduced in Schedule F.   
VI. ACTUARIAL POSITION OF THE PLAN 
  
24. The fourth triennial actuarial valuation of the Plan was completed with effect on 
31 December 2007.  Prior actuarial valuations have been completed effective 31 December 2004, 
31 December 2001 and 1 January 1999.  The secr etariat provided indivi dual member data and 
information on the assets of the Plan as at 31 Dece mber 2007 to the Consulting Actuary in order to 
complete the valuation. 
25. Using the same actuarial assumptions and method as was adopted at 31 December 2004, the 
main findings are that there has been a large incr ease in both the assets and the liabilities of the Plan 
during the inter-valuation period.  The two main reas ons for the increase in the assets of the Plan are, 
firstly, that investment performance over the inter-v aluation period has been si gnificantly higher than 
the actuarial assumption and secondly due to the fact th at the Plan is relatively young and thus there is 
a strong positive cash flow into the Plan from contribu tions.  The liabilities in the Plan have increased 
principally due to two factors, firstly a doublin g in the number of beneficiaries and secondly the 
increase in the pensionable salary of both current  participants and new entrants over the inter-
valuation period. 
26. During the inter-valuation period, a working gr oup of the Management Board was established 
to review the actuarial assumptions.  The Consultin g Actuary was invited to attend and to participate 
in the working group meetings.  The working gr oup proposed two amendments to the actuarial 
assumptions which the Consulting Actuary fully su pports.  The two amendments are as follows: 
− the assumption for future general salary infl ation was increased by 0.5% per annum; 
− an explicit allowance for future improvement to mortality over a 20-year period to reflect 
increasing life expectancy. 
  WT/L/736 
 Page 9 
 
 
  27. These two assumptions were adopted for th e formal actuarial valuation as at 
31 December 2007. 
28. Effective 31 December 2008, the Consulting Ac tuary recommended for further adjustments: 
− firstly, that an asset smoothing method be adopted for the assessment of the assets.  The 
approach recommended follows the approach adopted by the United Nations Joint Staff 
Pension Fund (UNJSPF) and was accepted by the Management Board; 
− secondly, that the pensionable remuneration at en try for future new entrants be increased to 
reflect the actual experience of the Plan. 
 29. The effect of adopting the two amendments to the actuarial assumptions and the asset 
smoothing approach is to increase the long-term co st of the Plan to approximately 27.0% of 
pensionable salaries.  The change to the future new entrant salary has no material effect on the results.  
The current cash contribution rate to the Plan is  22.5% of pensionable salaries.  The Consulting 
Actuary has recommended that the Management Bo ard formulate its position on how to bring the 
long-term cost of the Plan into balance with the actual cash contributions payable to the Plan. 
 
 
 
        ___________________________ __________________________   Nicholas Niggli Robert Luther 
  Chairman Secretary 
  WTOPP Management Board WTO Pension Plan  WT/L/736 
Page 10  
 
Report of the External Auditor on the Accounts of the WTO Pension Plan
 
for the Year Ended 31 December 2007  
 
 Rates of return
 
 
30. After negative nominal rates of return in 2001 (–10.13%) and 2002 (–18.31%) the 
WTO Pension Plan (WTOPP) achieved positive nom inal rates of return in 2003 (10.01%), 2004 
(4.47%), 2005 (23.71%), 2006 (9.01%) and 2007 (3.48%). A comparison of the investment portfolios for the years 2006 and 2007 is given in the following table: 
ACTUARIAL RATE OF RETURN 2006  2007  
a. value of assets as of  01 Jan 296, 529,427 338,979,917 
b. value of assets as of  31 Dec 338, 979,917 365,933,216 
i. investment income 27,401,161 12,042,267 
Average assets = (a+b-i)/2 304,054,092 346,435,433 
Actuarial rate of return in nominal terms  
= i / average assets 9.01% 3.48% 
CPI for Switzerland 0.60% 2.00% 
Actuarial rate of return, net of inflation 8.41% 1.48% 
 
31. The External Auditor noted that the actuarial ra te of return in nominal terms decreased by 
more than 62% in 2007 compared to 2006. By cont rast, investment and other administrative expenses 
increased from CHF 2.22 million to CHF 2.57 million or by 16% (Statement 1). Most of these 
expenses refer to management and consultancy fees totalling CHF 2.34 million which correspond to 
40% (2006: 46%) of the total of peri odic benefits of CHF 5.79 million.  
Advisors to the Management Board  
32. Pursuant to Article 7 of the Regulations of the WTOPP, the Director-General shall appoint 
advisors upon the recommendation of the Management  Board.  Accordingly, the Management Board 
decided at its 18th meeting in January 2001 to estab lish an Investment Committee on a cost-free basis.  
However, the committee ceased to function at the beginning of 2003.  Since then the advisory 
function of the committee has been taken over by Watson Wyatt AG against fees. 
Internal audit  
33. After introduction of an internal audit function in WTO in early 2008, the External Auditor 
noted with satisfaction that this post has been fille d.  The External Auditor was informed that it is 
foreseen to involve the internal audito r also in the audit of the WTOPP. 
Operating costs  
34. According to Article 5(f) of the Regulations  of the WTO Pension Plan  "All expenses 
incurred in administering the plan … shall be borne  by the Plan." The Balance Sheet of the WTOPP 
includes since 2004 a reserve of CHF 250,000 relati ng to operating costs potentially invoiced by 
WTO.  However, the External Auditor noted that since the establishment of the WTOPP no costs have 
been charged to WTOPP from WTO with respect to personnel resources and office space provided by 
WTO.  The External Auditor recommended to co mply with above-mentioned regulation and to 
determine the cost elements which are to be charged to WTOPP.  WT/L/736 
 Page 11 
 
 
  35. In the course of the year-end audit of WTO (WT/BFA/W/157), the External Auditor was 
informed that the WTOPP Management Board ha d established a working group with the task of 
reviewing the actuarial assumptions underpinning the Plan and that the working group would be making recommendations with regard to the fu ll charging of operational costs to the Plan. 
Financial Rules and Regulations
 
36. The Regulations of the WTOPP do not refer to any financial rules and regulations governing 
the Plan.  The External Auditor reiterates the reco mmendations raised in thei r previous reports, that 
the WTO Financial Rules and Regul ations should apply mutatis mutandis in cases where no specific 
rules in the Regulations of WTOPP are defined. 
37. The External Auditor recommends that the a pplied accounting procedures should be disclosed 
in the "Statement of Significant Accounting Polici es" contained in an Annex of the Annual Report. 
International Public Sector Accounting Standards (IPSAS)  
38. The adoption of IPSAS can be seen as one of  the challenges WTOPP has to face in the 
coming years. 
39. As a matter of fact e.g. all UN related organisations are currently in a process of 
implementing the IPSAS. They have committed themsel ves to be fully compliant with IPSAS as of 
2010. It has to be noted that in case no relevant I PSAS has been defined the relevant International 
Financial Reporting Standard / Inte rnational Accounting Standard (IFR S / IAS) has to be applied. 
40. Although, IPSAS have to be applied as a whol e as no exemption exists, the following IPSAS 
and IFRS / IAS will have the most impact on the accounting of the WTOPP: 
 IPSAS 1 - Presentation of Financial Statements; 
 IPSAS 15 – Financial Instruments: Disclosure and Presentation; 
 IFRS 7 – Financial Instruments: Disclosure; 
 IAS 19 – Employee Benefits; and 
 IAS 39 – Financial Instruments:  Recognition and Measurement. 
41. The External Auditor recommends to 
 establish a roadmap for the implementation of IPSAS; 
 when introducing Financial Rules and Regul ations in WTOPP (see recommendation 
above) the compulsory application of IPSAS should be referred to; 
 co-operate with the responsible department  for the implementation of IPSAS at WTO; 
and 
 involve Trianon S.A., Lausanne, to  ensure a coordinated approach. WT/L/736 
Page 12  
 
Budget 
42. As already mentioned in the previous year’s reports, the legal framework of the WTOPP 
(Regulations, Administrative Rules and Rules of Procedures) does not foresee any specific regulation 
regarding the preparation of budget estimates as  defined for WTO in their Financial Rules 
(WT/L/157/Rev.1) and Regulations (WT/L/156/Rev.2). 
43. The External Auditor recommends implementi ng an appropriate budgetary process in the 
WTOPP. 
Fluctuation reserve
 
44. The purpose of a fluctuation reserve in pension funds is to ensure that liquid assets are 
available in the occurrence of e.g. unexpected ca sh needs. The External Auditor noted that the 
implementation of a fluctuation reserve is mandato ry for pension funds in a number of European 
countries and consequently specific accounting standa rds have been developed to determine the value 
of the fluctuation reserve. 
45. Therefore, the External Auditor recommends to  WTOPP considering the implementation of a 
fluctuation reserve to be able to react on liquidity  needs and to avoid short-term adaptations of WTO 
pension contributions. 
Personnel issues  
46. As already mentioned in the report of the Ex ternal Auditor in the Director General’s 
Budgetary and Financial Report for 2006 (WT/BFA/ W/168) the Director of Administration and 
General Services Division acts also as Secretary of WTOPP.  As Director of Administration and General Division, he reports to the Deputy Directo r-General.  However, as Secretary of the WTOPP 
he acts under the authority of the Management Boar d of WTOPP.  The External Auditor suggests a 
segregation of duty between those two functions to avoid a potential conflict of interest. 
 
 
 
________________________________ 
Josef Moser 
President of the Austrian Court of Audit 
  WT/L/736 
 Page 13 
 
 
  Opinion of the External Auditor on the Accounts of the WTO Pension Plan  
for the Year Ended 31 December 2007  
 
 47. The representatives of the Austrian Court of A udit have examined the appended Financial 
Statements contained in the Annual Report for 200 7, comprising Statements 1 to 3 and Schedules A 
and B of the WTO Pension Plan for the year ending 31 December 2007.  As a result of the examination, the opinion is given that these statements, which were prepared in conformity with the accounting policies described in Annex 2 of th e Annual Report for 2007 and applied on a basis 
consistent with that of the preceding financial period, present fairly the financial position of the 
WTO Pension Plan as at 31 December 2007 and the operations for 2007. 
48. The accounting system of the WTO Pension Plan was outsourced to Trianon
2, which prepared 
the accounts for 2007.  Trianon provided the report of  its external auditor including the financial 
statements for the year 2007 for information.  Trianon also provided the accounting transactions for 
the year 2007 to the representatives of the Austrian Court of Audit for examination.  This examination 
included a general review of the accounting procedur es and such tests of the accounting records and 
other supporting evidence, as were feasible in the circumstances. 
 
 
 
________________________________ 
Josef Moser 
President of the Austrian Court of Audit 
 
  
 
 
                                                     
 
2 Trianon Conseils SA, Lausanne, Switzerland  WT/L/736 
Page 14 STATEMENT 1  
 
Income and Expenditure Statement 
(Expressed in Swiss francs)  
Expenditure at 31.12.2007 at 31.12.2006 Income at 31.12.2007 at 31.12.2006 
Benefits    Contributions    
Lump sum    Participants 8,507,109 8,208,003 
Withdrawal settlement – Art. 26 525,388 905,909 Organization 17,013,951 16,415,999 
Commutation – Art. 23(c) & Art. 24(c) 4,362,855 3,891,157 Interest on validations 211 1,156 
Transfer to other organizations  - 438,243 Restorations – Article 18 8,154 30,418 
Interest on transfers - 10,050 Interest on restorations  503 
 4,888,243 5,245,359  25,529,426 24,656,079 
      
Periodic benefits    Transfer values    
Retirement benefit – Art. 23 3,245,746 2,356,241    
Early retirement benefit – Art. 24 1,978,311 1,558,329 Transfer from other organizations 75,566 274,960 
Surviving spouse benefit – Art. 29  196,863 124,249  75,566 274,960 
Child benefit – Art. 30 54,097 62,372    
Disability benefit – Art. 28 310,479 265,647    
 5,785,496 4,366,838    
      
Investment and Other Admin. expenses    Investment Income    
Bank charges 2,709 815 Profit on securities 14,254,220 29,309,220 
Audit costs 5,273 5,603 Currency revaluation  52,640 47,613 
Management fees (see Schedule A, 
footnote 5 for breakdown) 2,180,340 1,903,092 Interest on current accounts  75,134 65,281 
Consultancy fees 156,678 117,046    
Actuarial expenses 92,648 29,875    
Administrative costs 137,063 167,978  14,381,994 29,422,114 
 2,574,711 2,224,409    
   Other income   - 
      
Excess income over expenditure  26,738,535 42,516,547 Excess expenditure over income    
 39,986,985 54,353,153  39,986,985 54,353,153 
 
_________________________ 
Nicholas Niggli  
Chairman  
WTOPP Management Board  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan  
   WT/L/736
 Page 15  STATEMENT 2  
 
 
Surplus Account 
(expressed in Swiss francs)  
Debit at 31.12.2007 at 31.12.2006 Credit at 31.12.2007 at 31.12.2006 
   Excess income over expenditure  26,738,535 42,516,547 
      
      
      
      
      
Profit 26,738,535 42,516,547    
      
 26,738,535 42,516,547  26,738,535 42,516,547 
 
_________________________ 
Nicholas Niggli  
Chairman  
WTOPP Management Board  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  WT/L/736 
Page 16 STATEMENT 3  
 
 
Balance Sheet 
(expressed in Swiss francs)  
Assets at 31.12.2007 at 31.12.2006 Liabilities at 31.12.2007 at 31.12.2006 
      
Securities 361,837,480 337,134,000 Capital 1.1  338,275,227 295,758,680 
Current accounts  4,063,861 1,823,062    
 365,901,341 338,957,062    
   Reserve funds    
   Operating cost 250,000 250,000 
      
Current assets    Current liabilities    
Withholding taxes to be recovered  26,439 22,855 Accrued expenses  669,454 454,690 
Contributions receivable  - -    
Restoration amounts r eceivable 5,436 -    
 31,875 22,855    
      
      
   Profit  26,738,535 42,516,547 
 365,933,216 338,979,917  365,933,216 338,979,917 
 
_________________________ 
Nicholas Niggli  
Chairman  
WTOPP Management Board  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan WT/L/736 
Page 17 
 
 
  SCHEDULE A  
 
 
Source and Application of Funds  
(expressed in Swiss francs ) 
 
Source  1.1.2007-31.12.2007 1.1.2006-31.12.2006 
   
Funds as at 1.1 338,979,917 296,529,427 
Receipt of contributions 25,529,425 24,656,079 
Transfer values 75,566 274,960 
Profit on securities 14,381,994 29,422,114 
Increase in current liabilities 214,764 - 
Other income  - 
 379,181,666 350,882,580 
Less:   
Application    
   
Settlement of benefits 10,673,739 9,612,197 
Expenditure3 2,574,711 2,224,409 
Decrease in current liabilities - 66,057 
 13,248,450 11,902,663 
Funds as at 31 December  365,933,216 338,979,917 
                                                      
3 Breakdown of expenditures : 
  
Management fees
 
Northern Trust CHF   395,712 
Pictet CHF   506,348 
Rogge CHF   210,293 
Wellington CHF   1,067,987 
Total: CHF   2,180,340 
 
Consultancy fees  
Watson & Wyatt CHF  156,678 
 
Actuarial expenses  
Mercer CHF  92,648 
 
Administrative costs  
Trianon CHF  131,631 
Miscellaneous CHF  5,432 
Total:   CHF  137,063 
  
Other Expenses     CHF  7,982 
 
Grand Total: CHF  2,574,711 
 WT/L/736 
Page 18  
 
SCHEDULE B
 
 
Investment Mandate Overview  
 
 
 
Asset Allocation  
 
 
Asset allocation Mio.  Current Strategy  Tactical  Deviation 
from Deviation  
outside 
as of 31 December 2007 CH F  Weights   Bandwidths  strategy bandwidths
                
Global Equities 264.9 72.4% 70.0% 62.5% - 77.5% 2.4% - 
   Well (Intersection) 131.8 36.0% 39.0% 35.5% - 42.5% -3.0% - 
   Well (Opportunities) 80.1 21.9% 21.0% 19.0% - 23.0% 0.9% - 
   Pictet (Em. Mkts) 53.1 14.5% 10.0% 8.0% - 12.0% 4.5% 2.5% 
International Bonds 75.3 20.6% 20.0% 18.5% - 21.5% 0.6% - 
Real Estate 21.6 5.9% 10.0% 8.5% - 11.5% -4.1% -2.6% 
   Cohen & Steers 17.3 4.7% 5.0%  -   -0.3% - 
   Warburg Henderson 4.3 1.2% 5.0%  -   -3.8% - 
Cash 4.1 1.1% 0.0%  -   1.1% - 
                   
Total 365.9 100.0% 100.0%       0.0%   Benchmark Ex-ante  
tracking 
error Inception Location Website 
MSCI World 1.5% - 2.5%  May 2000 Boston, 
Massachussets London, England wellington.com 
MSCI World 3% - 6% May 2005 Boston, 
Massachussets London, England wellington.com 
MSCI Emerging 
Markets Free 6% - 9% January 2005 Geneva, 
Switzerland pictet.ch 
Citigroup World Gov. 
Bond (hedged in CHF) 1% - 2% February 2005 London, England rogge.co.uk 
EPRA Europe 3% - 4% March 2005 Bru ssels, Belgium cohenandsteers.com
6.5% p.a. -- December 2006 Hamburg, Germany warburg-
henderson.com WT/L/736 
Page 19 
 
 
  SCHEDULE C  
 
Investment Performance  
(expressed in nominal terms)4 
 
 
  Over Over Over Since 
  1 year 2 years p.a. 3 years p.a. Inception TE IR 
TOTAL             
Consolidated Securities 4.4% 7.0% 13.0% 3.1% 2.3% 0.1
Added value 2.2% 0.1% 0.6% 0.3%    
EQUITY             
Consolidated Equities 7.9% 8.8% 16.3% 2.4% 2.1% -0.2
Added value 3.1% 0.1% 0.6% -0.5%    
   Wellington Intersection -0.1% 3.4% 11.2% -1.3% 2.3% 0.3
   Added value -1.2% -2.6% -1.4% 0.6%    
   Wellington Opportunities 11.4% 10.0% -- 17.4% 3.6% 1.1
   Added value 10.3% 4.0% -- 3.7%    
   Pictet Emerging Markets 27.1% 24.4% 34.6% 34.6% 4.0% -0.1
   Added value -1.7% -1.2% -0.2% -0.2%    
FIXED INCOME             
Consolidated Fixed Income 1.6% 0.2% 1.7% 2.6% 0.9% -0.2
Added value  -0.9% -0.7% 0.3% -0.2%    
   Rogge Global 1.6% 0.2% -- 1.0% 0.6% 0.0
   Added value  -0.9% -0.7% -- -0.2%    
REAL ESTATE             
Consolidated Real Estate -22.6% 9.9% -- 14.2% -- --
Added value  -9.4% -5.9% -- -5.2%    
   Cohen & Steers -27.5% 6.3% -- 11.6% 2.3% 0.4
   Added value  2.5% 2.2% -- 0.9%    
   Warburg Henderson 6.5% -- -- 3.1% -- --
   Added value  0.0% -- -- -3.4%    
       
TE = ex-post tracking error, since inception   
IR = ex-post information ratio, since inception   
 
                                                      
4 with the exception of the Cohen & Steers and Warburg Henderson mandates, which are calculated net 
of fees. WT/L/736 
Page 20  
 
SCHEDULE D
 
 
 
Exchange rates used for closing on 31 December 2007  
 
 
Exchange rates
(indirect quotation)
EUR 0.604
USD 0.883
JPY 98.675
GBP 0.444
AUD 1.006
CAD 0.872HKD 6.887
SGD 1.271Currency
 
 
 
 
Currency Breakdown as of 31 December 2007, after hedging  
  
USD
24.7%EUR
17.7%CHF
22.0%
GBP
6.5%JPY
5.0%Rest
24.1%
 
  
   WT/L/736
 Page 21 
SCHEDULE E  
STRUCTURE OF THE WTO PENSION PLAN  
 
  
 
  
   
 
  
  
 
  
  
 
  
 
 
 
  
 
  
 
  
 
 
 
  
PARTICIPANT S  
GENERAL COUNCIL 
 
CONSULTING ACTUARY 
 
ASSET MANAGEMENT SERVICES  
DIRECTOR-GENERAL 
 
MEDICAL ADVISER 
 
INVESTMENT COMMITTEE ADMINISTRATIVE 
SERVICES 
 
MANAGEMENT BOARD  
EXTERNAL AUDITOR 
INVESTMENT 
ANALYST/CONSULTANT WT/L/736 
Page 22  
 
 SCHEDULE F
 
 
GLOSSARY OF TERMS  
  
Accrued expenses  includes expenses incurred but not paid in the current financial year. 
 Active Investment Management is a form of portfolio manageme nt whereby the portfolio manager 
invests the assets in a manner different from the benc hmark in an attempt to produce higher returns 
than the benchmark.  The disadvantages of such a management style are characterised by higher 
management fees, higher trading costs as well as  the chance to significantly underperform the 
benchmark.    Actuarial expenses  includes expenses charged by the consultin g actuary for the provision of actuarial 
services. 
 
Administrative costs  includes costs incurred in the general administration of the Pension Plan. 
 Audit costs  includes costs (travel, per diem) incurred by the External Auditor in connection with the 
audit of the 2007 accounts.  
Consultancy fees  includes the fees charged by the investment analyst/consultant. 
 Contributions receivable  refers to contributions due in respect of contributory service in 2007 but 
received after 31 December 2007.  
Currency revaluation  represents exchange rate losses. 
 Information Ratio is defined as the outperformance of the investment manager above the index 
divided by the portfolio’s tracking error.  The inform ation ratio is used to represent a manager’s skill.  
Generally, any ratio over 0.30 is  thought of as having skill. 
 
Interest on validations  refers to interest payments made unde r Article 20(d) of the Plan Regulations. 
 Management fees  includes fees paid for the management of WTO portfolios.   
 Provision for operating costs refers to the reserve established to cover operating costs not currently 
charged to the Plan. 
 Rate of return is the percentage 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 ra te.  The nominal rate of return
 means that the rate is gross of fees 
(including management and consu lting fees) and of inflation (measured on the basis of the annual 
movement of the consumer price index in  Switzerland).  The real rate of return  is calculated as the 
rate of return net of investment re lated fees and costs and net of infl ation.  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.  
 Regulations and Administrative Rules  refers to the Regulations and Administrative Rules adopted 
by the General Council on 16 October 1998. 
 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.  The time-weighted return is 
very similar to the geometric mean return.  WT/L/736 
Page 23 
 
 
 Tracking error is defined as the standard deviation of the portfolio’s outpe rformance 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.  Anything above this would be considered active.   
 Withholding taxes to be recovered  includes amounts of withholding tax levied by the Swiss 
authorities and subject to recovery after 31 December 2007. WT/L/736 
Page 24  
 
 ANNEX 1
 
 
Investment Principles  
 
 
1. Pursuant to Article 13 of the Regulations of the Pension Plan and Rule A.9 of the Rules of 
Procedure, the Management Board shall be responsib le for the secure investment of all Plan assets, 
the formulation of investment policies after taking appropriate professional advice, and the 
appointment of investment manage rs to implement that policy. 
 
2. The investment strategy of the Plan is based  on an asset allocation designed to ensure the 
adequate funding of the Plan's liabilities over the long term.  A careful balance is drawn between 
maximization of returns on the assets of the Plan an d the maintenance of a reasonable level of risk.  
The strategy is geared to achieve a  target rate of real return of 3.5%, which is the assumption on 
which the feasibility study and contribution rates of the Plan were originally based. 
 
3. The WTOPP’s three asset classes are defined by  differences in their expected response to 
economic conditions, such as price inflation or cha nges in interest rates and are weighted in the 
portfolio by considering their expect ed returns, risk and correlations. 
 4. Derivatives may be used within the globa l hedged fixed income mandate for hedging 
purposes, where they provide the opportunities to ach ieve 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 cu rrency contracts, futures, covered bond options and 
interest rate options.  Leverage and net short positions are not allowed. 
 
 
 
       __________________________ ________________________ 
  Nicholas Niggli Robert Luther 
  Chairman Secretary   WTOPP Management Board WTO Pension Plan WT/L/736 
Page 25 
 
 
 ANNEX 2  
 
Statement of Significant Accounting Policies  
  
1. Pursuant to Article 14(a) of the Regulations of  the Pension Plan, the unit of account of the 
Pension Plan is the Swiss franc.  For practical re asons, the current United Nations operational rates of 
exchange are used for the conversion of other currenc ies into the Swiss franc, except in the case of the 
investment portfolios where the rates shown in Schedule C were used for valuation purposes. 
 
2. The accounting year is 1 January to 31 December. 
 3. Pursuant to Article 13 of the Regulations of the Plan and Rule A.8 of the Rules of Procedure, 
the Management Board shall be responsible for the financial security and probity of the Plan and in 
particular the maintenance of its actuarial ba lance 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 sh all be made annually by the External Auditor, 
namely the External Auditor of the WTO.  The provisions of Chapter XI ("External Audit") and the Appendix ("Additional terms of reference governing external a udit") of the WTO Financial 
Regulations shall apply mutatis mutandis  to the audit. 
 
    
    
 ___________________________ ___________________________   Nicholas Niggli Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan  
 
__________