WORLD TRADE  
ORGANIZATION  WT/L/802 
11 October 2010 
 (10-5194) 
General Council 
21 October 2010  
 
 
    
 
WTO PENSION PLAN 
 
  
ANNUAL REPORT OF TH E MANAGEMENT BOARD 
 
AND REPORT OF THE EXTERNAL AUDITOR 
 
THEREON FOR THE YEAR ENDING 
 
31 DECEMBER 2009
 WT/L/802 
Page 2  
 
  Message from the Chairman of the Management Board
 
 
  "After the steep decline in the value of the Plan's assets in 2008, 2009 provided not only some welcome relief but also an emphatic endorsement of the philosophy underpinning the investment 
strategy, namely that short-term market fluctuati ons should not be allowed to deflect the Management 
Board from its goal of securing the funding of the Plan over the long term.  The real rate of return on 
the Plan's investments in 2009 was 21.3 per cent, representing a significant rebound from the 2008 result of -37.2 per cent.  The market value of the assets rose from CHF 243.2 million on 31 December 2008 to CHF 312.2 million on 31 December 2009. 
 
 The year 2009 also marked the completion of a major reform designed to restore the actuarial 
balance of the Plan.  The General Council appr oved two amendments to the Plan Regulations 
effective 1 January 2010, as a result of which th e total contribution rate  has been increased to 
23.7 per cent and the normal retirement age for new recruits raised from 62 to 65. 
 
 In addition to the revision of the Plan Regul ations, the Management Board has also pursued 
its review of the investment strategy and its cons ideration of alternative wa ys of covering in-service 
death and disability risks outside the Plan.  It is e xpected that both of these projects will be completed 
in the course of 2010.  
 Last but not least, the Management Board has pursued its efforts to achieve economies in the 
operation of the Plan, particularly through the negot iation of reductions in investment management 
fees and consultancy costs".   WT/L/802 
 Page 3 
 
 
  TABLE OF CONTENTS  
  Page  
 
I. INTRODUCTION 4 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2009 4 
III. MEETINGS OF THE MANAGEMENT BOARD 5 
IV. PARTICIPATION IN THE PENSION PLAN 7 
V. ACCOUNTS 8 
VI. ACTUARIAL POSITION OF THE PLAN 9 
Report of the External Auditor on the Accounts of the WTO Pension 10 
Plan for the Year Ending 31 December 2009 
Opinion of the External Auditor on the Accounts of the WTO Pension 11 
Plan for the Year Ending 31 December 2009 
STATEMENT 1 12 
 Income and Expenditure Statement for the Period 1 January - 31 December 2009 
STATEMENT 2 14  Surplus Account as of 31 December 2009 STATEMENT 3 15  Balance Sheet as of 31 December 2009 
SCHEDULE A 16 
 Source and Application of Funds for the Period 1 January - 31 December 2009 SCHEDULE B 17 
 Investment Mandate Overview as of 31 December 2009 SCHEDULE C 18 
 Asset Allocation as of 31 December 2009 
SCHEDULE D 19 
 Investment Performance SCHEDULE E 20 
 Investment Performance History, since inception to 31 December 2009 SCHEDULE F 21 
 Exchange Rates Used for Closing on 31 December 2009 
 Currency Breakdown as of 31 December 2009, after hedging 
SCHEDULE G 22 
 Structure of the WTO Pension Plan SCHEDULE H 23 
 Glossary of Terms 
 WT/L/802 
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 2009 to 31 December 2009 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, 2005, 2006, 2007 and 2008 were issued 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, WT/L/706, WT/L/736 and WT/L/771, respectively. 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2009 
(a) Management Board
 
 The Management Board was composed as follows on 31 December 2009: 
 
Mr. Nicholas Niggli, Chairman 
Mr. Otto Schneider Mr. John Breckenridge 
Ms Helen Stylianou Mr. Richard Eglin 
Mr. William Tagliani Mr. Anthony Mistri 
Mr. Philip Tissot Members elected 
by the General 
Council 
Ms Paulette Planchette Members appointed 
by the 
Director-General 
Mr. Jean-Marc Mignon Mr. Rolf Adlung 
Mr. Ahmad Mukhtar Mr. Panos Antonakakis 
Mr. Rodney Neufeld Mr. Hubert Escaith 
Mr. Donald Ng Alternates elected 
by the General 
Council 
Mr. Juan Marchetti Alternates 
appointed by the 
Director-General 
Mr. Claude Mercier Observer on behalf of the beneficiaries 
Mr. Paul Rolian Alternate observer on behalf of the beneficiaries 
 
(b) Secretariat  
 Robert Luther, Secretary 
 Jean-Pierre Helary, Assistant Secretary 
 Christine Figuigui, Administrative Assistant  Virginie Guirado, Clerk  
- Outsourced support services 
  Trianon S.A., Lausanne 
  WT/L/802 
 Page 5 
 
 
  (c) Consulting Actuary  
 Cameron Hannah (Mercer HR Consulting S.A.) 
 (d) Medical Adviser
 
Dr Nasser Madi (as from 12 October 2009) 
 
(e) Investment Analyst/Consultant  
 Edouard Stucki (Watson Wya tt) (until 17 December 2009) 
 (f) Global Custodian
 
 The Northern Trust Company 
 (g) Fund Managers
 
 Cohen and Steers1 (European real estate securities portfolio) (until 11 November 2009) 
 Crédit Suisse (Swiss real estate 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
 
 French Court of Audit. 
 5. An organizational chart is reproduced in Schedule G. 
III. MEETINGS OF THE MANAGEMENT BOARD 
6. The Management Board held nine meetings  in 2009.  These took place on 18 February, 
19 March, 12 May, 28 May, 24 June, 26 June, 17  July, 9 September and 14 October 2009.  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 2009. 
(a) Review of investment performance
 
8. After a mixed first quarter, global equities, a nd especially emerging market equities, finished 
2009 up sharply from the beginning of the year. Th e consolidated equities portfolio outperformed the 
custom benchmark by 2.3 per cent. Of particular  note was the performance of the Wellington Global 
Opportunities mandate which yielded an outperfo rmance of 7.5 per cent on the year. The bond 
portfolio underperformed the benchmark in the firs t quarter but then improved to return an overall 
overperformance of 1.9 per cent on the year. The Crédit Suisse mandate underperformed its 
benchmark by 7.6 per cent. In the case of this ma ndate, performance is now measured in terms of 
                                                      
1 Previously known as Houlihan Rovers. WT/L/802 
Page 6  
 
  market prices and no longer net asset value as ha d previously been the case. The Warburg Henderson 
mandate, whose performance is measured against an  absolute return benchmark of 6.5 per cent, 
underperformed by – 6.4 per cent over the year, du e principally to the downward adjustment in 
market value of three properties and the depreciation of the Euro against the Swiss franc. Overall, the 
investment portfolio produced an annual return of 22.1 per cent, against a custom benchmark return of 
24.2 per cent. 
9. An overview of the different investment mandates is to be found in Schedule B. 
10. The details of the asset allocation at 31 December 2009 are given in Schedule C. 
11. A detailed breakdown of investment perform ance is provided in Schedules D and E. 
(b) Measures to redress the actuarial deficit at 31 December 2007
 
12. In the light of comments made by the Committee on Budget, Finance and Administration, the 
Management Board agreed to revise its initia l recommendations and proposed the following: 
- an increase in the normal retirement age to 65 for staff recruited on or after 
1 January 2010, with existing staff being en titled to exercise the option to remain in 
service beyond the current age of 62; 
- an increase in the overall contribution rate  to 23.7 per cent, raising the participant 
contribution rate from 7.5 per cent to 7.9 per cent and the WTO contribution rate from 15 per cent to 15.8 per cent. 
13. The above proposals were endorsed by the CBFA and approved by the General Council. 
(c) Review of the investment strategy
 
14. In February 2009 the Management Board launched a review of the investment strategy.  As a 
first step, a mix of five different banks and invest ment consultants were invited to contribute to an 
asset optimization study, the purpose of which was to determine the range of investment options 
available to the Management Board in order to fund be nefits in the long term.  The results of the study 
were analysed with the assistance of Ms Haury von Siebenthal, chief investme nt officer of the Swiss 
federal pension fund, acting as a "Friend of the Bo ard".  The Management Board decided to adopt a 
revised investment strategy based on the follo wing combination of asset classes and bandwidths: 
Asset class 
 Allocation Bandwidth 
Equities 
(Global/emerging markets in a 3 : 1 ratio)  40 per cent 30 per cent – 50 per cent 
Bonds 
 40 per cent 30 per cent – 50 per cent 
Real estate 
 20 per cent 15 per cent – 25 per cent 
 
15. The Management Board will pursue its work with  a view to selecting managers for each of 
the above asset classes, choosing benchmarks and initia ting the transition to the new strategy in the 
middle of 2010.  WT/L/802 
 Page 7 
 
 
  (d) Appointment of a medical adviser  
16. Following the reorganization of  the WTO medical service early in 2009, it became necessary 
to select a medical adviser for the Plan.  A series of  candidate interviews resulted in the selection of 
Dr. Nasser Madi, a consultant physician in Geneva  with extensive experience as an expert for the 
"Office fédéral de l'assurance invalidité." 
(e) Contractual arrangements with service providers  
17. In September 2009, as part of its continuing revi ew of contractual arrangements with service 
providers, the Management Board decided to give no tice to Watson Wyatt that its current contract as 
investment analyst/consultant would not be ex tended beyond 17 December 2009 and that a call for 
tenders would be issued for investment  advisory/consulting services to the Plan. 
18. At the same time, the Management Board decided to enter into negotiations with Mercer with 
a view to establishing a fixed-rate fee structure for 2010 and to inform Mercer that a call for tenders 
for actuarial services would be issued at the end of 2010. 
19. In October 2009, the Management Board decide d to terminate the Management Agreement 
with Cohen and Steers in view of the disappointing performance of that manager.  The decision took 
effect on 11 November 2009, and the resulting asset s were partly used to purchase an additional 
holding in the Warburg Henderson mandate and par tly held in cash in order to fund further 
acquisitions under that mandate. 
(f) Attendance of Management Board representatives at outside meetings  
20. Throughout 2009, representatives of the Mana gement Board attended various outside 
meetings in order to keep abreast of recent deve lopments in pension-related matters.  The Chairman 
regularly attended meetings of the European Pens ion Fund Investment Forum and the Institutional 
Investor Institute. 
IV. PARTICIPATION IN THE PENSION PLAN 
21. The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2009. 
 2009 2008 
Active Members  719 716 
Pensioners  164 154 
 
Participants in the Pension Plan in 2009  
 
Total number on 1 January 2009 
 Movements in 2009 
  - Entries  - Re-entries under the terms of Art. 15(b) of the   Regulations 
 - Separations 716 
  
 
49 
2 
 
48 WT/L/802 
Page 8  
 
  Total number on 31 December 2009 
 
Breakdown of separations in 2009 
  - Retirement 
 - Early retirement 
 - Deferred retirement  - Withdrawal settlement  - Transfer to UNJSPF  - Deferment of decision 
 - Death 
 - Disability  Total separations  
719 
 
  
12 
7 
- 
16 
1 
12 
- 
0 
 
48 
 
Benefits paid by the Pension Plan  
 
Type of benefit At 31/12/2008 New benefits 
in 2009 Benefits ended 
in 2009 At 31/12/2009 
Retirement 66 13 - 79 
Early retirement 44 7 - 51 
Deferred retirement 8 0 1 7 
Surviving spouse's benefit 5 0 - 5 
Partial/total disability benefit 13 0 - 13 
Child's benefit 18 1 3 16 
Total benefits 154 21 4 171 
 
V. ACCOUNTS 
22. A statement of significant accounting policies is reproduced in Annex 2. 
23. The income and expenditure statement fo r the period 1 January-31 December 2009 and 
surplus account as at 31 December 2009 are reproduced in Statements 1 and 2, respectively. 
24. The balance sheet as at 31 December 2009 is reproduced in Statement 3. 
25. The source and application of funds for the period 1 January-31 December 2009 is 
reproduced in Schedule A. 
26. Details of the exchange rates used for closing the accounts on 31 December 2009 and the 
currency breakdown as of 31 December 2009, after hedging, are provided in Schedule F. 
27. A glossary of terms to facilitate an understandi ng of the tables is reproduced in Schedule H.  WT/L/802 
 Page 9 
 
 
  VI. ACTUARIAL POSITION OF THE PLAN 
28. Effective 31 December 2009, the Consulting Actuary to the WTOPP completed an interim 
actuarial assessment of the Plan.  The interim actuarial assessment was carried out using the full 
membership data provided by the WTOPP as at 31  December 2009.  Based on the results of this 
interim actuarial assessment, the C onsulting Actuary confirms that the actuarial position of the plan 
has deteriorated relative to the fo rmal actuarial valuation as at 31 D ecember 2007.  This is mostly due 
to the poor investment return over the two year  period to 31 December 2009.  No specific action is 
recommended to be taken on the basis of this interi m actuarial assessment, rather any action should be 
assessed as part of the formal actuarial valuation due as at 31 December 2010. 
 
 
 
       
  ___________________________ __________________________ 
  Nicholas Niggli Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan  WT/L/802 
Page 10  
 
  Report of the External Auditor on the Accounts of the WTO Pension Plan
 
for the Year Ended 31 December 2009  
 
  The report of the External Auditor on the A ccounts of the WTO Pension Plan for the year 
ended 31 December 2009 is reproduced in Annex 3. 
   WT/L/802 
 Page 11 
 
 
  Opinion of the External Auditor on the Accounts of the WTO Pension Plan  
for the Year Ended 31 December 2009  
 
  We have examined the financial statements of the WTO Pension Plan for the year ended 
31 December 2009, which comprise the income and expenditure statement, the surplus account, the 
balance sheet and the note on source and applicati on of funds.  These financial statements were 
prepared under the responsibility of the Secretariat of the WTO Pension Plan Management Board.  It 
falls to us, on the basis of our audit, to express an opinion on the financial statements. 
 
 We conducted our audit in accordance with inte rnational auditing standards.  These standards 
require that our work be organized  and implemented in such a way as to obtain a reasonable assurance 
that the financial statements contain no significant inaccuracy.  An audit consists, inter alia , in 
randomly reviewing the documents submitted in sup port of the amounts and other data shown in the 
financial statements.  It also involves evaluating the accounting principles applied and the significant 
estimates made by the management, and assessing the overall presentation of the financial statements.  
We consider that the audit that we have c onducted constitutes a reasonable foundation on which to 
base our opinion.   Our opinion is that the financial statements  present fairly the financial position of the 
WTO Pension Plan as at 31 December 2009 and its fi nancial performances, changes in the yield from 
investments and cash flows for the financial year en ded on that date, in accordance with international 
accounting standards.  These standards were applie d in the same manner as in the preceding financial 
year.   
 
 
________________________________ 
Didier Migaud 
PRESIDENT OF THE FRENCH COURT OF AUDIT 
  
 
    
  WT/L/802 
Page 12 STATEMENT 1  
 
Income and Expenditure Statement 
(Expressed in Swiss francs)  
Expenditure at 31.12.2009 at 31.12.2008 Income at 31.12.2009 at 31.12.2008 
Benefits    Contributions    
   Participants, regular contributions 9,103,524 8,928,646 
Lump sum    Organization, regular contributions 18,207,100 17,857,295 
Withdrawal settlement - Art. 26 398,969 658,477 Organization, additional contributions 197,500  
Commutation - Art. 23(c) & Art. 24(c) 3,338,512 5,174,069 Interest on validations 798 1,612 
Transfer to other organizations  309,148 - Restorations - Article 18 - - 
Interest on transfers 22,658 - Interest on restorations - - 
 4,069,287 5,832,546  27,508,922 26,787,553 
      
Periodic benefits    Transfer values    
Retirement benefit - Art. 23 5,408,261 4,191,807    
Early retirement benefit - Art. 24 2,897,039 2,292,712 Transfer from other organizations 1,646,405 80,940 
Surviving spouse benefit - Art. 29  291,545 232,070  1,646,405 80,940 
Child benefit - Art. 30 81,029 81,709    
Disability benefit - Art. 28 678,678 401,347    
 9,356,552 7,199,645    
  
   WT/L/802
 Page 13 
STATEMENT 1 (Cont'd)  
 
Income and Expenditure Statement (Cont'd) 
(Expressed in Swiss francs)  
Expenditure at 31.12.2009 at 31.12.2008 Income at 31.12.2009 at 31.12.2008 
Investment and Other Admin. expenses    Investment Income    
   Profit on securities 54,925,815 - 
   Currency revaluation - - 
Loss on securities - 134,030,180 Credit interest 21,697 199,940 
Currency revaluation 98,828 387,916  54,947,512 199,940 
Bank charges 7,135 5,734    
Audit costs 2,431 4,119    
Management fees (see Schedule A for 
breakdown) 1,315,590 1,734,555    
Consultancy fees 77,681 172,765    
Actuarial expenses 92,227 97,952    
Legal fees - 26,310    
Administrative costs 164,484 163,648 Other income   - 
 1,758,376 136,623,179    
      
Excess income over expenditure  68,918,624 - Excess expenditure over income   122,586,937 
 84,102,839 149,655,370 84,102,839 149,655,370 
 
 
 
 
_________________________ 
Nicholas Niggli  
Chairman  
WTOPP Management Board  
 
 
 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  
  WT/L/802 
Page 14   STATEMENT 2  
 
 
Surplus Account 
(expressed in Swiss francs)  
Debit at 31.12.2009 at 31.12.2008 Credit at 31.12.2009 at 31.12.2008 
Excess expenditure over income  - 122,586,937 Excess income over expenditure  68,918,624  
   
   
   
   
   
Profit 68,918,624 - Loss 122,586,937 
     
 68,918,624 122,586,937 68,918,624 122,586,937 
 
  
 
_________________________ 
Nicholas Niggli 
Chairman 
WTOPP Management Board  
  
 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  
   WT/L/802
 Page 15STATEMENT 3  
 
 
Balance Sheet 
(expressed in Swiss francs)  
Assets at 31.12.2009 at 31.12.2008 Liabilities at 31.12.2009 at 31.12.2008 
   
Securities 301,885,221 240,816,819 Capital 1.1  242,426,825 365,013,762 
Current accounts  10,303,182 2,373,977    
 312,188,403 243,190,796   
 Reserve funds    
 Operating cost 250,000 250,000 
    
Current assets    Current liabilities    
Withholding taxes to be recovered  7,594 70,231 Accrued expenses  632,873 584,595 
Contributions receivable  498 393    
Validation amounts receivable 31,827 -    
 39,919 70,624   
     
     
  Profit / Loss (-)  68,918,624 - 122,586,937 
 312,228,322 243,261,420 312,228,322 243,261,420 
 
 
  
_________________________ 
Nicholas Niggli 
Chairman 
WTOPP Management Board  
 
  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan WT/L/802 
Page 16  
 
  SCHEDULE A
 
Source and Application of Funds 
 (expressed in Swiss francs)  
Source  1.1.2009-31.12.2009 1.1.2008-31.12.2008 
   
Funds as at 1.1 243,261,420  365,933,216 
Receipt of contributions 27,508,922 26,787,553 
Transfer values 1,646,405 80,940 
Profit on securities 54,848,684 - 
Increase in current liabilities 48,278 - 
Other income - - 
 327,313,709 392,801,709 
Less:   
Application    
   
Settlement of benefits 13,425,839 13,032,191 
Loss on investments - 134,218,156 
Expenditure* 1,659,548 2,205,083 
Decrease in current liabilities - 84,859 
 15,085,387 149,540,289 
Funds as at 31 December  312,228,322 243,261,420 
 
*Breakdown of expenditures : 
 
Management fees  
Northern Trust 292,762 
Pictet 154,055 
Rogge 246,272 
Wellington 622,501 
Total: 1,315,590 
 
Consultancy fees  
Watson & Wyatt 77,681 
 
Actuarial expenses  
Mercer 92,227 
 
Administrative costs  
Trianon 152,654 
  
Other Expenses   
(including bank charges, travel costs, external audit and miscellaneous charges) 21,396 
 
Grand Total: 1,659,548  
   WT/L/802
 Page 17SCHEDULE B  
  
Investment Mandate Overview 
Asset class Fund Manager Benchmark Ex-ante 
tracking error Inception Location Website 
Global Equities Wellington Intersection MSCI World 1.5% - 2.5% May 2000 Boston, Massachusetts
London, England wellington.com 
Global Equities Wellington Opportunities MSCI World 3% - 6% May 2005 Boston, Massachusetts
London, England wellington.com 
Emerging 
Markets Equities Pictet & Cie MSCI Emerging Markets 
Free 6% - 9% January 2005 Geneva, Switzerland pictet.ch 
International Bonds Rogge Citigroup World Gov. 
Bond 
(hedged in CHF) 1% - 2% February 2005 London, England rogge.co.uk 
European 
Real Estate Cohen & Steers2 EPRA Europe 3% - 4% March 2005 Brussels, Belgium cohenandsteers.com 
European 
Real Estate Warburg Henderson 6.5% p.a. -- December 2006  Hamburg, Germany wa rburg-hende rson.com 
Swiss Real Estate Credit Suisse SWX Immofonds -- No vember 2008 Zürich, Switz erland credit-suisse.com 
 
                                                      
2 Mandate terminated on 11 November 2009  
  WT/L/802 
Page 18 SCHEDULE C  
  
Asset Allocation as of 31 December 2009  
Assets Mio. 
CHF Current 
Weights Strategy Tactical 
Bandwidths Deviation from 
the strategy Deviation outside 
bandwidths 
          
Global Equities 185.8 59.5% 70.0% 62.5% - 77.5% -10.5% -3.0% 
  Well (Intersection) 90.5 29.0% 39.0% 35.5% - 42.5% -10.0% -6.5% 
  Well (Opportunities) 69.7 22.3% 21.0% 19.0% - 23.0% 1.3% - 
  Pictet (Em. Mkts) 25.6 8.2% 10.0% 8.0% - 12.0% -1.8% - 
International Bonds 83.5 26.7% 20.0% 18.5% - 21.5% 6.7% 5.2% 
Real Estate 32.7 10.5% 10.0% 8.5% - 11.5% 0.5% - 
  Cohen & Steers3 0.00 0.0% 2.5%  -  -2.5%  
  Warburg Henderson 13.0 4.2% 2.5%  -  1.7% - 
  Credit Suisse 19.7 6.3% 5.0%  -  1.3% - 
Cash 10.3 3.3% 0.0%  -  3.3% - 
Total 312.2 100.0% 100.0%    0.0%  
                                                      
3 Mandate terminated on 11 November 2009  WT/L/802 
 Page 19 
 
     SCHEDULE D  
 
 
Investment Performance  
(expressed in nominal terms) 
 Over 1 year p.a. Over 3 years p.a. Since inception TE IR 
      
TOTAL      
      
Consolidated Securities 22.1% -6.9% 0.0% 2.4% 0.0 
Added value -2.1% -0.2% -0.1%   
      
EQUITY      
      
Consolidated Equities 34.6% -9.1% -1.6% 2.5% -0.2 
Added value 2.3% 0.1% -0.6%   
      
Wellington Intersection 27.1% -11.8% -4.8% 3.0% 0.1 
Added value 0.8% -1.1% 0.2%   
      
Wellington Opportunities 33.8% -7.8% 1.6% 4.0% 0.5 
Added value 7.5% 2.9% 1.8%   
      
Pictet Emerging Markets 74 .1% -4.1% 11.1% 5.4% -0.4 
Added value 0.7% -3.5% -2.2%   
      
FIXED INCOME      
      
Consolidated Fixed Income 2.3% 3.2% 2.9% 1.1% -0.1 
Added value 1.9% -0.4% -0.1%   
      
Rogge Global 2.3% 3.2% 2.2% 1.4% -0.1 
Added value 1.9% -0.4% -0.2%   
      
REAL ESTATE      
      
Consolidated Real Estate 16.6% -20.5% -1.3% --- --- 
Added value -2.1% -11.4% -9.0%   
      
Cohen & Steers4 37.1% -19.9% -2.7% --- --- 
Added value 4.4% 0.8% 0.3%   
      
Warburg Henderson 0.1% 0.4% -0.4% --- --- 
Added value -6.4% -6.1% -6.9%   
      
Credit Suisse 12.0% --- 7.2% --- --- 
Added value -7.6% --- -11.5%   
      
 
TE = ex-post tracking error, since inception 
IR = ex-post information ratio, since inception 
 
                                                      
4Performance calculated at the date of termination of the mandate, on 11 November 2009  
  WT/L/802 
Page 20  
SCHEDULE E  
 
Investment Performance History, Since Inception to 31 December 2009  
 
Total Portfolio
506070809010011012013014015008/199
9
08/2000
08/
2001
08/2002
08/200
3
08/200
4
08/
2005
08/2006
08/2007
08/200
8
08/2009Total Portfolio Benchmark Equitie s
506070809010011012013014015008/1999
08/2000
08/200
1
08/200
2
08/2003
08/2004
08/2005
08/200
6
08/20
07
08/20
08
08/2009Equities Benchmark
Fixed Income
506070809010011012013014015008/1999
08/2000
08/200
1
08/200
2
08/2003
08/2004
08/2005
08/2006
08/2007
08/2008
08/2009Fixed income Benchmark Real Estate
506070809010011012013014015016017018019020021002/2005
02/2006
02/2007
02/2008
02/2009Real Estate Benchmark
  WT/L/802 
 Page 21 
 
 
  SCHEDULE F  
 
Exchange rates used for closing on 31 December 2009  
 
Currency Exchange rates 
(indirect quotation) 
EUR 0.674 
USD 0.967 
JPY 90.056 
GBP 0.599 
AUD 1.076 
CAD 1.014 
HKD 7.501 
SGD 1.358 
   
Currency Breakdown as of 31 December 2009, after hedging
 
 
 
CHF, 36%
EUR, 14% JPY, 3%USD, 25%Rest, 16%
GBP, 6%
 
 
   
 
 
    
  WT/L/802 
Page 22  
SCHEDULE G  
 
STRUCTURE OF THE WTO PENSION PLAN  
 
 
PARTICIPANTS  
GENERAL COUNCIL
 
CONSULTING ACTUARY 
 
ASSET MANAGEMENT SERVICES  
DIRECTOR-GENERAL 
 
MEDICAL ADVISER 
 
FRIENDS OF THE BOARD ADMINISTRATIVE 
SERVICES 
 
MANAGEMENT BOARD  
EXTERNAL AUDITOR 
INVESTMENT 
ANALYST/CONSULTANT  WT/L/802 
 Page 23 
 
 
  SCHEDULE H  
 
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 2009 accounts.  
Consultancy fees  includes the fees charged by the investment analyst/consultant. 
 Contributions receivable  refers to contributions due in respect of contributory service in 2009 but 
received after 31 December 2009.  
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. 
 Organization, additional contributions  refers to the additional contributions paid by the 
Organization to compensate for the additional actua rial cost generated by the early separation of 
participants in the context of restructuring exercises.  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 Pl an 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. WT/L/802 
Page 24  
 
   
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. 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.  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 2009.   WT/L/802 
 Page 25 
 
 
  ANNEX 1  
 
Investment Principles  
 
 
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 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 a nd the maintenance of a reasonable level of risk.  
The strategy is geared to achieve a target rate of r eal return of 3.5 per cent, 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 global 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/802 
Page 26  
 
  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 shall 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    
 
 
   WT/L/802 
 Page 27 
 
 
  ANNEX 3  
   
 Auditors of the 
World Trade Organization 
WTO 
 WTO PENSION PLAN 
RÉGIME DES PENSIONS DE L'OMC 
PLAN DE PENSIONES DE LA OMC 
 
 
 
    
 
    
 
  
REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR 
ENDED 31 DECEMBER 2009 
 WT/L/802 
Page 28  
 
  I. INTRODUCTION 
1. In order to prepare the certified accounts of the World Trade Organization Pension Plan 
(WTOPP) for the financial year 2009, an audit of  the Plan was conducted between 3 and 6 May 2010 
at the Plan's Secretariat.  The audit focused on: 
(a) Maintenance of the Pension Plan accounts a nd linking of operations to the financial 
year; 
(b) calculation of benefits paid; 
(c) asset-management; 
(d) actuarial monitoring of assets and liabilities; 
(e) adjustment of the Plan to the financial crisis. 
2. The audit was conducted in accord ance with the Regulations and Administrative Rules of the 
WTO Pension Plan and the contract conclude d between the WTO and the Court of Audit. 
3. The auditor confirms that he had access to the accounts, supporting documents and all other 
relevant documentation. 
4. Every observation and recommendation was discuss ed with the officials concerned.  The 
closing conference took place on 6 May.  The provisi onal observations were am ended in the light of 
written comments submitted by the Secretariat of the WTO Pension Plan on 7 May 2010. 
II. LIST OF RECOMMENDATIONS 
5. Recommendation No. 1:  the operating costs of th e Plan borne by the Organization should be 
reimbursed annually to the WTO, in accordance with the Plan Regulations (renewal of a 
recommendation made in the previous audit). 
6. Recommendation No. 2:  The sum of 22,345.51 Swiss francs should be deducted from both 
the amount shown for bank charges and the amount  shown for profits on shares included under 
expenditure and income, respectively, in the income  and expenditure statement for 2009, owing to an 
allocation error. 
7. Recommendation No. 3:  the reconciliation of the bank account statements and the Plan's 
accounts should be carried out monthly. 
8. Recommendation No. 4:  the actuary to the Plan should be requested to prepare long-term 
forecasts comparing, year by year, the respective chan ges in the actuarial value of the Plan's liabilities 
and assets.  WT/L/802 
 Page 29 
 
 
  III. OBSERVATIONS 
A. THE FINANCIAL STATEMENTS FOR THE YEAR 2009 
1. Overview of the accounts 
9. The operating account of the Pension Plan5, otherwise known as the "income and expenditure 
statement", shows a surplus of CHF 68,918,624, following the deficit of CHF 122,586,937 recorded 
in 2008. 
10. This spectacular recovery is attributable, firstly , to the improvement in financial markets:  
management of the Plan's assets resulted in a su rplus of CHF 54,948,159 in profits on securities 
compared with a loss on securities of CHF 134,030,180 in 2008.  In addition, transfers from other 
international organizations6 were much higher in 2009 (CHF 1,646,405) than in 2008 (CHF 80,940), 
lump sum payments by the Pl an decreased (from CHF 5 832 546 in 2008 to CHF 4 069 287 in 2009) 
and the WTOPP reduced its portfolio manage ment costs (from CHF 1,734,555 in 2008 to 
CHF 1,315,590 in 2009) by renegotiating the fees paid to its two asset managers ( Pictet and 
Wellington ).  These developments more than made up fo r the 30 per cent increase in periodic benefits 
paid by the Plan (from CHF 7,199,645 to CHF 9,356,552)  as a result of the net rise in the number of 
beneficiaries (+17) in 2008. 
11. The actuarial rate of return on investments tu rned positive, as it had been from 2003 to 2007. 
Calculation of the actuarial rate of  return in 2008 and 2009 (Swiss francs ) 
 
Actuarial rate of return 2008 2009 
a. value of assets as of 1 January  365,933,216  243,261,420 
b. value of assets as of 31 December  243,261,420  312,228,322 
i. investment income  (136,131,210)  53,448,278 
Average assets = (a + b - i)/2  372,662,923  251,020,732 
Actuarial rate of return in nominal term s = i/average assets  (36.53%)  21.29% 
Consumer price index for Switzerland7  0.8%  0.2% 
Actuarial rate of return, net of inflation  (37.33%)  21.09% 
 
Trends in actuarial rates of return, inflation-adjusted  
 
2002 2003 2004 2005 2006 2007 2008 2009 
-18.31% +10.01% +4.47% +23.71% +9.01% +3.48% -36.53% +21.29% 
Sources:  Court of Audit, on the basis of  WTOPP Secretariat statistics.  
 
12. The balance sheet of the Plan shows the a bove-mentioned surplus of CHF 68,918,624 and a 
25 per cent increase in the value of its i nvestment securities (from CHF 240,816,819 to 
CHF 301,885,221), although not back to the level of 31 December 2007 (CHF 361,837,480), and a 
                                                      
5 Annex A contains an updated version of the outline of the Pension Plan organization and parameters 
given in the external auditors' report on the accounts for 2008. 
6 When an official moves to the WTO from another international organization, the latter pays to the 
WTOPP the accumulated amount accruing to the official in its pension scheme. 
7 Rate of change in the Consumer Price Index (C PI) for December compared to December of the 
previous year, as reported by the Swiss Federal Office of Statistics. WT/L/802 
Page 30  
 
  fourfold increase in the value of its bank curre nt accounts (from CHF 2,373,977 to CHF 10,303,182), 
on which we comment below. 
2. Provision for operating costs 
13. The liability side of the balance sheet conti nues to include a provision of CHF 250,000 for 
operating costs (salaries, provision of office space, ancillary costs) potentially invoiced by the WTO 
in respect of the above-mentioned staff made ava ilable to the Plan by the Organization.  This 
provision, which was established pursuant to recomme ndations by the Austrian external auditors, has 
never been reassessed, while the real value of the operating costs concerned amounts to approximately 
CHF 500,000, and the WTO has never requested paymen t or posted a receivables entry in this respect 
in its accounts. 
14. The solution recommended in the 2008 audit would be to cancel this provision and arrange 
for the yearly invoicing by the WTO of the actual operating costs of the Plan borne by the Organization, in accordance with Article 5(f) of the Regulations, which provides that "all expenses 
incurred in administering the Plan … shall be borne by the Plan". 
15. This has not been done owing to the additi onal cost that would ensue for the Plan. 
Recommendation No. 1.  The operating costs of the Plan borne by the Organization should be 
reimbursed annually to the WTO, in accordance  with the Plan Regulations (renewal of a 
recommendation made in the previous audit). 
 
3. Bank charges 
16. The draft income and expenditure statement pr esented during the audit shows a fivefold 
increase in the Plan's bank charges (from CH F 5,734 in 2008 to CHF 29,479 in 2009). 
17. This apparent increase stems from an allocati on error:  an amount of CHF 22,343.51 was 
wrongly allocated to account 48200 (bank charges) instead of account 41107 ( Cohen and Steers  
performance).  This amount corresponds to  the application by the asset manager Cohen and Steers  of 
a contractual reimbursement fee at the rate of 0.2 per cent
8 when it returned to the Plan the value of 
the shares in the real estate SICAV (variable-cap ital investment company) it managed (see below). 
18. The figure for bank charges in 2008 therefore in fact amounts to CHF 7,135.07 (rather than 
CHF 29,478.58) and the figure for "investment inco me" in the income and expenditure statement 
amounts to CHF 54,925,815.61 (instead of CHF 54,948,159.12). 
Recommendation No. 2.  The sum of 22 345.51 Swiss francs should be deducted from both the 
amount shown for bank charges and the amount  shown for profits on shares included under 
expenditure and income, respectively, in the inco me and expenditure statement for 2009, owing 
to an allocation error. 
 
This recommendation was accepted by the Secretariat of the Plan during the audit and the statements 
have been corrected accordingly. 
 
                                                      
8 0.2 per cent of 7,383,262.79 euros amounts to 14,766.52 euros, or CHF 22,343.51.  WT/L/802 
 Page 31 
 
 
  4. Bank reconciliation 
19. The Trianon  company, which keeps the accounts of the Plan, only reconciles the bank 
accounts and Plan accounts at the end of each quarter, whereas the WTO, like all other international organizations, carries out such reconc iliation at the end of each month. 
20. While the financial regulations of the Plan are silent on this point, it is good practice to 
reconcile the accounts at the end of each month so that any anomaly detected may be corrected 
immediately. 
Recommendation No. 3:  the reconciliation of the bank account statements and the Plan's 
accounts should be carried out monthly. 
 
5. Notes to the financial statements 
21. At the time of the audit the notes, annexes and comments traditionally published together with 
the financial statements had not yet been completed.   A paragraph on the actuarial trend of the Plan 
was foreseen in accordance with recommendation No. 2 of the previous audit, but had not yet been 
written by the Consulting Actuary to the Plan, the Mercer  company. 
22. According to the latest interim report prepared by Mercer , dated 9 February 2010, the 
actuarial value of the liabilities of the WTOPP amounted to CHF 1,517 million at 31 December 2008, as against CHF 1,408 million at 31 December 2007. 
23. When the WTO presents its acc ounts in accordance with the I PSAS standards, as the General 
Council has decided should be done, it will have to s how the long-term actuarial value of its liabilities 
relating to staff pensions. 
B. I
NVESTMENT POLICY  
24. The Plan's investment policy, as defined in 2004 and implemented since 2005, seeks to 
achieve a high net rate of return of 3.5 per cen t by emphasizing equities, which are pegged at 70 per 
cent of the portfolio (with 10 per cent to be invest ed in emerging markets), in preference to bonds 
(20 per cent) and real estate (10 per cent). 
25. In 2008, at the height of the financial crisis, the Plan's Management Board decided to adjust 
this policy in order to limit losses on equities.  As a result, at 31 December 2008 the portfolio 
breakdown was as follows:  56.7 per cent in equiti es (6 per cent of which in emerging markets), 
33.5 per cent in bonds, 8.8 per cent in real estate and 1 per cent in cash (money-market) instruments. 
26. In 2009, the share of equities rose to 59.5 per cent (CHF 185.8 million), at the expense of 
bonds (26.7 per cent and CHF 83.5 million) owing to  the large difference in yield between these 
two asset classes (see table below). 
27. The share of real estate increased to 10.5 per cent of the portfolio (CHF 32.7 million) and that 
of cash instruments likewise increased  (3.3 per cent and CHF 10.3 million) .  This was the result of the 
following developments: 
 - The investment made in 2008 in a Crédit Suisse  real estate foundation was not 
modified; 
  - the Plan terminated its contract with Cohen & Steers , whose product (a specialized 
SICAV (investment company with variable capital) had a performance similar to that WT/L/802 
Page 32  
 
  of equities, contrary to the objective pursue d by real estate investment;  the company 
therefore returned to the WTOPP the value of the assets under management, i.e. €7,368,496.27 (CHF 11,149,419.08) on 19 November 2009;  it should be noted that this amount is CH F 1,876,237.92 smaller than the purchase price of these assets 
(CHF 13,025,657)
9; 
 
 - conversely, the Plan increased its real estate investments in the Warburg-Henderson  
"Pan Europa Fonds Nr.3". 
28. Thus, it met three capital calls by the latter10, on 21 August, 22 September and 
14 December 2009, for a total of €3,595,986 (CHF 5,444,606.51), under its 2006 investment 
commitment for 9.4 million euros (14.8 million Swiss francs);  on 14 December it bought up the 
shares sold by the E.ON  company for €2,340,093 (CHF 3,536,503.38) and on 16 March 2010 it 
signed an additional commitment for 9 million euros ( 13.3 million Swiss francs) with this fund.  At 
31 December 2009, the Plan thus owned shares in this fund amounting to €8,927,290 (CHF 13,268,546,32), including its pre 2009 purchases, and had commitments for a further 
€11,212,803 (CHF 18,151,773.08) (the balance of its  2006 commitment plus the new commitment of 
December 2008). 
29. The remainder of the cash freed up by the sale of the Cohen & Steers  securities has not yet 
been reinvested, pending further investment oppor tunities, and earns a Swiss bank current account 
interest (0.125 per cent for Swiss franc accounts and 0.25 per cent for euro accounts);  this yield is 
now the same as the money-market rates, which have fallen sharply, thus explaining the large 
decrease in credit interest shown in the income and expenditure statement (from CHF 199,940 in 2008 
to CHF 21,697 in 2009). 
30. The performances of the Plan's investment policy in 2009 are practically the opposite of those 
of 2008:  they are positive for all asset classes,  and the highest performances (and the only ones 
outperforming the benchmark models) were those relating to the riskiest assets.  The emerging-market 
equities fund managed by the Pictet  company had a spectacular performance of 74.10 per cent, albeit 
barely above its benchmark model.  In its  report for the last quarter of 2009, the Watson & Wyatt 
company notes that the overall performances of the Plan's portfolio are below the benchmark model 
(by -2.1 per cent) only owing to the smaller share of equities than set in the Plan's 2004 targets (59.5 compared to 70 per cent). 
                                                     
 
9 The Plan invested in the Cohen & Steers  SICAV on 28 February 2005 (€7,348,000), 
29 November 2005 (€774,152) and 31 October 2007 (€313,059), for a total of €,8,435,211 (or CHF 13,025,657, 
at the exchange rate on the date s of the transactions concerned). 
10 The Warburg-Henderson  company issues a capital call for its "Pan Europa Fonds Nr.3" whenever it 
makes a new real estate acquisition in Europe.  WT/L/802 
 Page 33 
 
 
  Comparative performances by asset class  
 
Assets 
Managers Value (millions of 
Swiss francs) 2009 performance, 
percentage Performance of 
benchmark model 
for each fund Difference 
compared to 
benchmark model 
Shares  185.8  34.6%  32.3%  +2.3% 
Wellington11 
Intersection  90.5  27.1%  26.3%  +0.8% 
Wellington 
Opportunities  69.7  33.8%  26.3%  +7.5% 
Pictet  25.6  74.1%  73.4%  +0.7% 
Bonds 
Rogge  83.5  2.3%  0.4%  +1.9% 
Real estate  32.7  16.6%  18.7%  -2.1% 
Warburg Henderson  13  0.1%  6.5%  -6.4% 
Crédit Suisse  19.7  12%  19.6%  -7.6% 
Cash  10.3    
Total  312.2  22.1%  24.2%  -2.1% 
Source :  Court of Audit, based on fourth quarter report by Watson & Wyatt. 
 
31. However, the WTOPP Management Board took a ve ry different direction from that implicitly 
suggested by Watson & Wyatt  by adopting, on 14 October 2009, the following asset allocation 
breakdown: 
 - Equities:  40 per cent (of which a quarter in emerging markets); 
  - bonds:  40 per cent; 
 
 - real estate:  20 per cent.  32. This new asset allocation policy has not yet been pu t into practice:  before giving instructions 
to the asset managers, the Management Board wishes to define the terms of reference for their mandates (which may involve "active" or "passi ve"" management of securities) and choose a new 
consultant.  A call for tenders h as been issued for this purpose. 
33. The adoption of a new asset allocation policy is in principle consistent with the auditors' 
recommendation of the previous year.  The decisi on was taken after consulting five specialized 
companies and the Management Board experts, w ho considered that the proposed allocation would 
achieve the desired target of a real rate of return of  3.5 per cent, net of inflation, retained by the Plan. 
34. The highly cautious nature of this decision may be explained both by the Plan's past 
experience, with unsatisfactory performances over th e last ten years, as well as by the example of the 
biggest Swiss pension fund, Publica , which manages the Swiss Federal civil service pensions, and 
which invests only 22 per cent of its assets in equities. 
35. This orientation contrasts with that of other international organizations.
12  A problem will 
arise when the Plan effectively tri es to reduce the equity share and will have to take the losses equities 
                                                      
11 The Plan's equity investments are made through two funds of the Wellington company:  Wellington 
Intersections  and Wellington Opportunities . WT/L/802 
Page 34  
 
  have suffered, since despite the good performances in 2009 the value of its assets remains below that 
of 2007. 
C. R
EFORM OF THE PLAN'S PARAMETERS  
36. In accordance with the recommendation made in last year's audit, the parameters of the 
WTOPP were modified by decision of the General Council on 29 July 2009, effective as of 
January 2010, in order to absorb the actuarial defi cit to which the actuary has drawn attention since 
2004: 
 - The retirement age for staff recruited as of  1 January 2010 has been raised from 62 to 
65; 
 
 - staff members may remain in service after the age of 62, up to the age of 65; 
  - and the total contribution rate has been raised from 22.5 to 23.7 per cent (rising from 
7.5 to 7.9 per cent for staff and from 15 to 15.8 per cent for the Organization). 
 
37. This increase of 1.2 percentage points in the total contribution rate is smaller than the 
1.8 points proposed on 17 November 2008 by the Chairman of the Management Board to the WTO Budget Committee on the basis of a report dated 16 May 2007 by the ad hoc working group set up by the Management Board.  The lower figure w as proposed in order to gain the support of the 
delegations that opposed the reform, which were  apprehensive about the impact on the WTO budget 
and their contributions. 
38. It will therefore by important periodically to up date the actuarial projections for the Plan in 
order to gauge the trend of the deficit.  To that e nd, the Plan's firm of actuaries could usefully submit 
actuarial projections comparing the respective trends of the actuarial value of the Plan's liabilities and 
assets, and showing by what date, in the absence of  reform, benefits will cease to be covered by 
contributions, and by what subsequent date all the Plan 's assets will have had to be sold off in order to 
service benefits.  The data available to the a bove-mentioned working group and the Management 
Board are not backed up by a precise timetable of fo recast trends in the parameters of the Plan. 
Recommendation No. 4:  the actuary to the Plan  should be requested to prepare long term 
forecasts comparing, year by year, the respective changes in the actuarial value of the Plan's 
liabilities and assets. 
 
                                                                                                                                                                    
 
12 The share of equities in the UN pension fund is 60 per cent.  The OECD pension fund budget and 
reserve fund has updated its asset allocation targets for 2010 as follows:  62 per cent equities (of which 8 per 
cent in emerging markets), 28 per cent bonds and 10 per cent other securities (of which 7 per cent in real estate).  WT/L/802 
 Page 35 
 
 
  D. FOLLOW -UP TO PREVIOUS RECOMMENDATIONS  
Follow-up to the Recommendations of the External Auditors for the Year 2008  
 
Recommendations Implementation 
Recommendation No. 1.  The operating costs of the 
Plan borne by the Organization should be reimbursed 
annually to the WTO, in accordance with the Plan 
Regulations Recommendation not implemented, renewed for 
2009. 
Recommendation No. 2:  the actuarial value of the 
Pension Plan's long-term liabilities should be published in a note to the financial statements. Recommendation accepted, not yet implemented at 
the time of the audit. 
Recommendation No. 3:  a new asset allocation policy should be adopted rapidly. Recommendation implemented. 
Recommendation No. 4:  the actuary to the Plan 
should be requested to pr epare long-term forecasts 
showing the dates up to which benefits coverage is 
provided by staff contributions alone, and 
subsequently by the Plan's assets, in the absence of 
any reform of the Plan's parameters. Recommendation accepted but not yet implemented 
by the actuary to the Plan, renewed (in updated 
form) for 2009. 
Recommendation No. 5:  rapid reform of the 
parameters of the Pension Plan so as to ensure that it 
remains in balance over the long term. Recommendation implemented 
 
IV. ACKNOWLEDGEMENTS 
 We thank the members of the Secretariat and the staff of the WTO Pension Plan for their 
warm welcome and the precise information they supp lied to us in the context of our enquiries. 
 
V. CONCLUSION 
 On the basis of the audit conducted, the exte rnal auditors certify that, in their view, the 
accounts for the financial year 2009 present fairly th e financial position of the WTO Pension Plan as 
at 31 December 2009. WT/L/802 
Page 36  
 
  VI. ANNEX A:  INTRODUCTION TO THE PENSION PLAN 
1. Background 
Both the informal international Organization wh ich managed the General Agreement on Tariffs and 
Trade (GATT) 1947 and the Organization by which it was succeeded in 1995, the WTO, provided 
retirement, death and disability benefits to their staff under the management of the United Nations 
Joint Staff Pension Fund, up until 31 December 1998. 
As from 1 January 1999, the WTO launched its own Pension Plan and implem ented an overall reform 
of its human resources management, including the a doption of a remuneration system different from 
that of the United Nations and more advantage ous than the latter to some of its staff. 
Management procedures 
The Plan is governed by Regulations adopted by the WTO General Council on 16 October 1998.  It is 
supplemented by Administrative Rules and by th e Rules of Procedure of the Pension Plan 
Management Board, which were adopted by the latter and approved by the WTO General Council. 
Article 4 of the Regulations entr usts 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 lis t drawn up by the "participants", i.e. by staff 
members of the WTO).  The "beneficiaries" of the Pl an, that is, the persons entitled to receive benefits 
under the Plan, may also appoint an observer and an alternate.  The presiding Chairman is a 
representative of the Swiss delegation, from the Swiss Ministry of the Economy.  His personal role is 
an important one. 
Management Board decisions are implemented by it s Secretary, who orders its expenditure.  The 
Secretary is appointed by the Director-General of the WTO on the proposal of the Board.  The 
incumbent is the present Director of the Administ ration and General Services Division of the WTO, 
assisted by two full-time staff members, a grade 8 o fficial and a grade 4 secretary.  The administrative 
assistant of the Division also devotes part of her time to the requirements of the Plan. 
Under the responsibility of the Management Board, th e Secretariat directly managed the Plan for two 
and a half years, apart from asset management activities, which were originally entrusted to 
specialized bodies.  Subsequently, by contract of 1 June 2001, the ad ministration and accounts 
management of the Plan were entrusted to Trianon Conseil S.A .
13 (hereinafter Trianon ), a Swiss 
company specializing in pension scheme management , whose present headquarters are in Renens, a 
suburb of Lausanne in the canton of Vaud.  Since th at date, the Secretariat of the Plan has retained 
responsibility for the preparation and follow up of Management Board decisi ons 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. 
In the aforementioned area of activity, the Mana gement Board defines the policy for distributing 
funds accumulated by pension contributions amo ng different categories of securities (equities, 
emerging country equities, bonds and real estate secu rities) and selects bodies to manage those assets.  
The London branch of the US Bank Northern Trust  acts as custodian bank and monitors the 
operations of the management bodies.  The Watson & Wyatt  company, based in Zurich, monitored the 
                                                      
13 The Trianon company manages supplementary pension schemes for Swiss companies, collective 
supplementary schemes for groups of companies and the pension schemes of three international organizations, 
namely the Olympic Committee, the International Air Transport Associatio n (IATA) and the WTO.  WT/L/802 
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  performance of these managers until 31 December 2009.  The Trianon  company is responsible for the 
general accounting of the Plan and prepares the financial statements. 
Technical characteristics of the Plan 
The Pension Plan is a contributory defined benefit scheme with a reserve fund to supplement the yield 
from contributions.  Its operating rules are laid dow n by its Regulations and Administrative Rules, 
referred to above. 
The pension contribution rate since 1 January 2010 stands at 23.7 per cent of the so-called 
"pensionable" remuneration14, 7.9 per cent of which is paid by the employees and 15.8 per cent by the 
Organization (Article 20 of the Regulations).  Retir ement 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 be nefit is established by reference to the "final 
average remuneration (FAR)" constituted by the 36 months of highest pensionable remuneration 
within the last five years of the staff member's career;  it is obtained by multiplying the first 30 years 
of contributory service by two per cent of the FAR and the subsequent years (up to a maximum of 
ten years) by one per cent of the FA R (Article 23 of the Regulations). 
The benefit may be commuted, "at the request of th e 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" (Article 23 of the Regula tions).  This option is used frequently by staff 
members at the time of retirement. 
An early retirement benefit may be claimed during th e five years preceding the normal retirement age:  
it is reduced by three per cent during the years precedi ng that age;  the rate of reduction is lowered to 
one per cent if the participant has completed at least  30 years of contributory service (Article 24 of the 
Regulations). 
The Plan is still young and faces no risk of financia l imbalance in the short term:  at 31 December 
2009, it covered only 14815 retirees, compared to 719 contributors.  It has just raised the retirement 
age for new staff and the pension contribution rate in order to absorb the actuarial deficit noted by the 
actuary to the Plan between the actuarial value of its long-term liabilities and that of its assets. 
__________  
 
                                                      
14 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 WTO st aff, are subject to income 
tax. 
15 There are also seven retirees whose deferred pensions will begin to be paid after 2009.