RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/W/162 
5 November 2007 
 (07-4820) 
Committee on Budget, Finance and Administration  
  
 
POSSIBLE ADVERSE IMPACT OF MANAGEMENT DECISIONS 
ON THE ACTUARIAL BALANCE OF THE WTO PENSION PLAN 
 
Communication from the Management Board
 
 
 
1. The Management Board of the WTO Pension Plan  (WTOPP) has considered the issue of the 
possible adverse impact of certain management deci sions on the actuarial balance of the WTOPP.  In 
particular, the Management Board is conscious of th e fact that the early separation of staff in, for 
instance, the context of a restructuring exercise, w ould add to the early retirement costs under the Plan 
and could hence adversely affect the actuarial position. 
2. The Management Board sought the advice of th e Plan's consulting actuary who confirmed 
that recourse to early retirement as a means of rest ructuring the Secretariat could increase the actuarial 
value of the liabilities of the Plan. 
3. The Management Board also noted that, at a national level, occupa tional pension schemes 
included provisions to protect them against sp ecific actions by the employer which would create 
additional liability for the scheme falling outside th e normal financing arrangements.  The decision on 
such specific actions should take into account all th e financial consequences, including paying for the 
consequence on the scheme. 
4. On 13 October 2006, the Chairman of the Management Board wrote to the Chairman of the 
Committee on Budget, Finance and Administration ( CBFA), requesting that the Management Board 
be consulted on the implications of any restruct uring plan prior to its implementation (Annex 1). 
5. Mindful of its responsibility under Article 5(a) of the Plan Regulations for the management 
and administration of the Plan, with particular rega rd to its actuarial balance, the Management Board 
has considered whether an amendment to the Plan Re gulations might be necessary in order to ensure 
that the Plan is adequately protected against th e possible adverse actuarial consequences of such 
management decisions.  After extensive discussion, the Management Board has agreed to propose an 
amendment to Article 9 of the Plan Regula tions ("Actuarial valuation of the Plan"). 
6. In drafting this amendment, the Management Bo ard has taken care to ensure that the potential 
additional liability that the WTO may be asked to c over is carefully defined on the basis of expert 
advice from the consulting actuary. 
7. The proposed amendment is set out in Annex 2 to the present document. Pursuant to 
Article 43(a) of the Plan Regulations and subject to the concurrence of th e CBFA, the Management 
Board wishes to recommend this amendm ent to the General Council for approval. WT/BFA/W/162 
Page 2  
 
  ANNEX 1
 
 
 
 
  WT/BFA/W/162 
 Page 3 
 
 
  ANNEX 2  
  
AMENDMENT TO ARTICLE 9 OF THE PLAN REGULATIONS
1 
 
Article 9 
Actuarial valuation of the Plan  
 
(a) The Management Board shall have an actuarial valuation made of the Plan at least once every 
three years by the consulting actuary. 
 
(b) The report on the actuarial valuation shall explain the assumptions on which the calculations 
are based, describe the method of valuation used, and state the results and conclusions. 
 (c) The Management Board shall, in the light of the report of the consulting actuary, recommend 
such action as it deems desirable to the Ge neral Council through the Committee on Budget, 
Finance and Administration, which shall both be  provided with copies of the report.  In 
making its recommendations, the Management Bo ard shall provide a best estimate of the 
possible implications for the funding of benefits  of maintaining contributions at the existing 
level, and for the funding of contributions of maintaining benefits at the existing level. 
 
(d) In the particular case of an actuarial defi cit or surplus, the Management Board shall 
recommend to the General Council any necessary co rrective action.  Such action may include 
an adjustment to contributions and/or benef its or any other measure which the Management 
Board deems appropriate to restore an actuarial balance. 
 (e) Notwithstanding the provisions of paragraph (d), if a participant is awarded benefits 
under Article 24 as a consequence of the term ination of that participant's employment 
by, or with the inducement of, the WTO,  then the WTO shall cover the additional contributions necessary to meet any conseque ntial increase in the actuarial value of the 
liabilities of the Plan.  The Management Board shall determine the additional contributions in the light of a report from the Consulting Actuary. 
  
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1 Amended text in bold