WORLD TRADE  
ORGANIZATION  WT/L/771 
12 October 2009 
 (09-4946) 
General Council 
20-21 October 2009  
 
 
    
 
WTO PENSION PLAN 
 
  
ANNUAL REPORT OF TH E MANAGEMENT BOARD 
 
AND REPORT OF THE EXTERNAL AUDITOR 
 
THEREON FOR THE YEAR ENDING 
 
31 DECEMBER 2008
 WT/L/771 
Page 2  
 
  Message from the Chairman of the Management Board
 
 
  "As for many pension funds across the globe, 2008 was a turbulent year for the WTO Pension Plan.  The value of the Plan assets was deeply affect ed by the financial and economic crisis.  The real 
rate of return on the Plan's investments was -37.2 per cent, and the result was largely due to the major 
downturn in the global equity markets.  This is not the first time, nor will it be the last, that the Plan is affected  by downturns in the financial markets, in  the same way that it reaps benefits from upturns in 
those same markets.  It is, above all, important to  remember that the fundamental purpose of the Plan 
is to secure the long-term funding of pension liab ilities.  Short-term fluctuations such as those 
observed in 2008 do not jeopardize the capacity of the Plan to meet its long-term objective.  The 
validity of this statement is borne out in the c onclusion of the Consulting Actuary that no specific 
corrective action is required at the present stage.  At the same time, the Management Board decided in 2008 to initiate a review of the Plan's long-term investment strategy.  The detailed work will be 
undertaken in 2009 with a view to launching the revised strategy in 2010. 
 
 In 2008 the Management Board made certain changes to the actuarial assumptions underpinning the valuation methodolog y.  As a result, the required contribution rate resulting from the 
valuation at 31 December 2007 increased to 27.0 per cent.  The Management Board subsequently 
recommended the necessary corrective action to the General Council through the Committee on 
Budget, Finance and Administration. 
 
 As part of its ongoing efforts to streamline the operation of the Plan  and achieve economies, 
the Management Board undertook a study of different  ways in which death and disability risks could 
be covered outside the Plan.  In the same vein, the Board requested the Di rector-General to make 
provision in the WTO budget for the actuarial cost of early separations resulting from a restructuring 
plan." 
  WT/L/771 
 Page 3 
 
 
  TABLE OF CONTENTS  
  Page  
 
I. INTRODUCTION 4 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2008 4 
III. MEETINGS OF THE MANAGEMENT BOARD 5 
IV. PARTICIPATION IN THE PENSION PLAN 8 
V. ACCOUNTS 9 
VI. ACTUARIAL POSITION OF THE PLAN 9 
Report of the External Auditor on the Accounts of the WTO Pension 11 
Plan for the Year Ending 31 December 2008 
Opinion of the External Auditor on the Accounts of the WTO Pension 20 
Plan for the Year Ending 31 December 2008 
STATEMENT 1 21 
 Income and Expenditure Statement for the Period 1 January - 31 December 2008 
STATEMENT 2 23  Surplus Account as of 31 December 2008 STATEMENT 3 24  Balance Sheet as of 31 December 2008 
SCHEDULE A 25 
 Source and Application of Funds for the Period 1 January - 31 December 2008 SCHEDULE B 26 
 Investment Mandate Overview as of 31 December 2008 SCHEDULE C 27 
 Asset Allocation as of 31 December 2008 
SCHEDULE D 28 
 Investment Performance SCHEDULE E 29 
 Investment Performance History, since inception to 31 December 2008 SCHEDULE F 30 
 Exchange Rates Used for Closing on 31 December 2008 
 Currency Breakdown as of 31 December 2008, after hedging 
SCHEDULE G 31 
 Structure of the WTO Pension Plan SCHEDULE H 32 
 Glossary of Terms 
ANNEX 1 34 
 Investment Principles ANNEX 2 35 
 Statement of Significant Accounting Policies WT/L/771 
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 2008 to 31 December 2008 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, and 2007 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 and WT/L/736, respectively. 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2008 
(a) Management Board
 
 The Management Board was composed as follows on 31 December 2008: 
 
Mr Nicholas Niggli, Chairman 
Mr Andrew Johnston Mr John Breckenridge 
Mr William Tagliani Mr Richard Eglin 
Mr Dominic Trindade Mr Anthony Mistri 
Ms Salina Yan Members elected 
by the General 
Council 
Ms Paulette Planchette Members appointed 
by the 
Director-General 
Mr Mathias Francke Mr Rolf Adlung 
Ms Heather Grant Mr Panos Antonakakis 
Mr Jean-Marc Mignon Mr Hubert Escaith 
Mr Alexandre Parola 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/771 
 Page 5 
 
 
  (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) 
 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 2008.  These took place on 31 January and 
1 February, 31 March, 28 April, 19 June, 9 and 10 September, 16 Oc tober, 13 November, 
20 November and 10 December 2008.  The agend as 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 2008. 
(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/771 
Page 6  
 
  9. The nominal rate of return in 2008 on the Plan's  investments was -36.7 per cent.  Taking into 
account Swiss realized inflation of 0.8 per cen t in 2008 (source:  Consumer Price Index, 
Federal Statistical Office), the real rate of re turn on the Plan's investments was -37.2 per cent. 
10. The return on the Plan's investments was -0.7 per cent lower than the custom benchmark.  The 
underweight in equities was the main positive contri butor to total portfolio performance (+2.0 per 
cent).  Investment managers detracted from value a dded this year and underperformed their respective 
benchmarks in aggregate by -2.7 per cent. 
11. An overview of the current investment managers is to be found in Schedule B.  The 
Management Board decided on 20 November 2008 to  invest in Swiss real estate through the 
Credit Suisse Immo 1a PK institutional fund. 
12. Schedule C represents the strategic asset allocati on together with the effective allocation as of 
31 December 2008.  Following the sharp decrease in equity markets, the Management Board decided 
during the second semester not to mechanically reba lance the portfolio and to allow equity and bond 
allocations to breach minimum and maximum tactical bandwidths.  Global equities were underweighted by 13.3 per cent with regard to their st rategic weight of 70 per cent, while international 
bonds were overweighted by 13.5 per cent with regard to their strategic weight of 20 per cent.  The 
effective real estate allocation was close to its strate gic weight, i.e. 8.8 per cent versus 10 per cent.  
Cash represented 1 per cent of the total portfolio. 
13. Investment performance is summarized in a table in Schedule D and is graphically 
represented in Schedule E.  The return of -36.7 per cent on the Plan's investments in 2008 was largely 
impacted by the severe downturn in equity markets.   The MSCI World index declined by -44.3 per 
cent in Swiss franc terms, and both Wellington mandates underperfo rmed their benchmark (-1.7 per 
cent for Intersection and -3.2 per cent for Opport unities).  Emerging market equities declined by 
-56.1 per cent as measured by the MSCI Emerging Markets Free index, with the investment manager Pictet underperforming the benchmark by -4.1 per cen t.  Fixed income was the only asset class in the 
Plan's portfolio to finish the year in positive territory, i.e. 7.9 per cent for the Citigroup World 
Government Bond Index.  As the investment manager Rogge invested  in investment grade corporate 
bonds in accordance with the updated mandate gui delines (maximum limit of 15 per cent), Rogge 
underperformed its benchmark by -2 .2 per cent due to the considerab le increase in credit spreads.  
Consolidated real estate delivered -45.3 per cen t over the year with the bulk of the negative 
performance coming from the exposure to European r eal estate securities (-54.4 per cent) managed by 
Cohen and Steers.  The Warburg Henderson invest ment fund returned -8.0 per cent in 2008 in 
Swiss franc terms against 2.9 per cent in Euro term s, reflecting the depreciation of the Euro.  The 
investment in the new Credit Suisse real estat e institutional fund occurred in two tranches in 
November and December 2008 and delivered -8.0  per cent over these two months.  The manager 
underperformed its benchmark mainly because of th e decrease of the fund's premium on NAV and the 
timing of the cash flows which was not to the advantage of the Plan. 
14. The currency breakdown of the total portfolio is to be found in Schedule F.  As is common in 
times of crisis, the Swiss franc proved to be a sa fe haven for risk-averse investors and accordingly 
appreciated against nearly all currencies.  Th e Euro decreased by 10 .6 per cent against the 
Swiss franc, while the US Dollar lost 6.0 per cent in  2008.  As 41 per cent of the Plan's investments 
are denominated in these two currencies and not hedg ed back to Swiss francs, portfolio performance 
in Swiss francs was lower than  in local currency terms. 
15. In 2009 the Management Board w ill be conducting a full review of  its investment strategy 
with the aim of improving the viability and financial stability of the Plan.  WT/L/771 
 Page 7 
 
 
  (b) Alternative to the Wellington Global Intersection global equity mandate 
16. The Management Board pursued its examination of alternative managers to take over the 
Wellington Global Intersection mandate.  It was ultim ately decided not to make a transition to a 
different manager at the present time owing to  the prevailing difficult financial situation. 
(c) Measures to redress the actuarial deficit 
17. The regular actuarial valuation at 31 December  2007 had revealed an actuarial deficit.  The 
long-term cost of the Plan had increased to approxi mately 27.0 per cent of pensionable remuneration, 
to be compared with the current cash contribution rate  of 22.5 per cent.  The deficit had its origins in 
the decision by the Management Board to adjust  two key assumptions underpinning the valuation 
methodology, namely the assumed rate of mortality  improvement and the assumed rate of general 
salary inflation.  The Management Board devoted  a considerable amount of time in 2008 to the 
examination of possible options to redress that defic it.  As provided for unde r Article 9 of the Plan 
Regulations, the Management Board considered adjust ments both to benefits a nd to contributions and 
ultimately decided to recommend the following tw o measures to the General Council through the 
Committee on Budget, Finance and Administration (CBFA): 
 - An increase in the normal retirement ag e to 65 for staff recruited on or after 
1 January 2010; 
  - an increase in the total contribution ra te from 22.5 per cent to  24.3 per cent with 
effect from 1 January 2009, whilst maintaining the current two:one 
employer:participant sharing ratio. 
 
18. The CBFA took note of the recommendations by the Management Board and agreed to 
continue its consideration of the matter in early 2009. 
(d) Protection of the Plan against adverse actu arial consequences of management decisions 
19. The CBFA considered the draft amendment to Ar ticle 9 of the Plan Regulations which had 
been proposed by the Management Board in order to protect the Plan against adverse actuarial 
consequences of certain management decisions take n, for instance, in the context of a Secretariat 
restructuring exercise.  The CBFA was not in a pos ition to approve the proposal by the Management 
Board. 
20. The Chairman subsequently wrote to the Direct or-General advising him of the concern of the 
Management Board with respect to the potential cost  to the Plan of the restructuring plan being 
envisaged and asking him to make provision for that cost in the overall budget envelope.  The 
necessary provision was subsequently included in  the overall cost of the restructuring plan. 
(e) Investment governance 
21. The Management Board devoted some considerable  time to the consideration of this item in 
2008, its main concern being to strengthen the go vernance capacity of the Bo ard in readiness for the 
review of the investment strategy in 2009.  It wa s agreed that efforts should be made to identify 
experts in the field of pension fund management in  the public sector who could serve as "friends of 
the Management Board" and advise the Board on the definition and implementation of a revised investment strategy. WT/L/771 
Page 8  
 
  (f) Disability coverage 
22. In the course of 2008, the Management Boar d approved 4 new cases of total disability and 
2 cases of partial disability.  Against that backgrou nd, the Management Board requested the Plan 
Secretariat to examine ways in which service-in curred and non-service-incu rred death and disability 
risks could be satisfactorily covered outside the Pl an.  The Board agreed that alternative death and 
disability coverage should be a prio rity item on its 2009 agenda.  
IV. PARTICIPATION IN THE PENSION PLAN 
23. The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2008. 
 2008 2007 
Active Members  716 710 
Pensioners  154 129 
 
Participants in the Pension Plan in 2008  
 
Total number on 1 January 2008 
 Movements in 2008 
  - Entries  - Re-entries under the terms of Art. 15(b) of the   Regulations  - Separations 710 
 
 
 
51 
1 
 
46 
Total number on 31 December 2008 
 Breakdown of separations in 2008 
  - Retirement  - Early retirement  - Deferred retirement 
 - Withdrawal settlement 
 - Transfer to UNJSPF  - Deferment of decision  - Death  - Disability 
 
Total separations 716 
 
  
9 5 2 
18 
- 
8 
- 
4 
 
46 
  WT/L/771 
 Page 9 
 
 
  Benefits paid by the Pension Plan  
 
Type of benefit At 31/12/2007 New benefits 
in 2008 Benefits ended 
in 2008 At 31/12/2008 
Retirement 58 9 1 66 
Early retirement 39 5 - 44 
Deferred retirement 6 2 - 8 
Surviving spouse's benefit 4 1 - 5 
Partial/total disability benefit 7 6 - 13 
Child's benefit 15 3 - 18 
Total benefits 129 26 1 154 
 
V. ACCOUNTS 
24. A statement of significant accounting policies is reproduced in Annex 2. 
25. The income and expenditure statement fo r the period 1 January-31 December 2008 and 
surplus account as at 31 December 2008 are reproduced in Statements 1 and 2, respectively. 
26. The balance sheet as at 31 December 2008 is reproduced in Statement 3. 
27. The source and application of funds for the period 1 January-31 December 2008 is 
reproduced in Schedule A. 
28. A glossary of terms to facilitate an understandi ng of the tables is reproduced in Schedule H. 
VI. ACTUARIAL POSITION OF THE PLAN 
29. The Consulting Actuary completed the four th official actuarial valuation at 
31 December 2007.  The Board formally adopted  the following amendments to the actuarial 
assumptions and calculations of the Plan: 
• That the assumption for future general salar y inflation be increased by 0.5 per cent 
per annum to 4.0 per cent per annum; 
 
• that an explicit allowance be made for futu re improvement to mortality over a 20-year 
period to reflect increasing life expectancy; 
 
• that an asset smoothing method be adopted for the assessment of the assets, the 
method adopted being the same as that used by the UNJSPF; 
 
• that the pensionable remuneration at entry for future new entrants be increased to 
reflect the actual experience of the Plan. 
 30. The effect of adopting the four amendments is to increase the long-term cost of the Plan to 
approximately 27.0 per cent of pensionable remune ration.  The current cash contribution rate to the 
Plan is 22.5 per cent of pensionable remuneration.   The consulting actuary has recommended that the 
Management Board formulate its position on how to bri ng the long-term cost of the Plan into balance 
with the actual cash contributions payable to the Plan. WT/L/771 
Page 10  
 
  31. Effective 31 December 2008, the Consulting Actuary completed an interim actuarial 
valuation.  Due to the significant deterioration in th e value of the assets of the Plan, the long-term cost 
of the Plan has increased from 27.0 per cent to 29.0 per cent of pensionable remuneration.  It must be 
noted that 2008 was an extremely poor year fo r investment performance for all pension plans 
globally.  No specific action is recommended as part of  the interim actuarial valuation.  Rather, this 
aspect will be reviewed formally as part of the regular actuarial valuation at 31 December 2010. 
 
   
 
      ___________________________ __________________________   Nicholas Niggli Robert Luther   Chairman Secretary 
  WTOPP Management Board WTO Pension Plan 
  WT/L/771 
 Page 11 
 
 
  Report of the External Auditor on the Accounts of the WTO Pension Plan  
for the Year Ended 31 December 2008  
 
 A. I
NTRODUCTION  
32. In order to prepare the certified accounts of the World Trade Organization Pension Plan 
(WTOPP) for the financial year 2008, an audit of th e Plan and of the enterprise partially delegated 
with responsibility for its management was conduc ted between 8 and 12 Ju ne 2009.  The audit 
focused on: 
(a) Maintenance of the Pension Plan accounts a nd linking of operations to the financial 
year; 
(b) calculation and disbursement of the contributions by which the Plan is funded; 
(c) calculation of benefits paid; 
(d) asset management; 
(e) audit of all transactions under the Plan; 
(f) actuarial monitoring of assets and liabilities; 
(g) adjustment of the Plan to the financial crisis. 
33. 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. 
34. The auditor confirms that he had access to the accounts, supporting documents and all other 
relevant documentation. 
35. Every observation and recommendation was discuss ed with the officials concerned.  The 
closing conference took place on 12 June.  The provisi onal observations were amended in the light of 
written comments submitted by the Secretariat of the WTO Pension Plan on 7 July 2009. 
B. LIST OF RECOMMENDATIONS  
36. 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. 
37. Recommendation No. 2:  the actuarial value of the Pension Plan's long-term liabilities should 
be published in a note to the financial statements. 
38. Recommendation No. 3:  a new asset allocation policy should be adopted rapidly. 
39. Recommendation No. 4:  the actuary to the Plan should be requested to prepare long-term 
forecasts showing the dates up to which benefits are covered by staff contributions alone, and 
subsequently by the Plan's asset s, in the absence of any reform of the Plan's parameters. 
40. Recommendation No. 5:  rapid reform of the para meters of the Pension Plan so as to ensure 
that it remains in balance over the long term. WT/L/771 
Page 12  
 
  C. O
BSERVATIONS  
1. Introduction to the Pension Plan 
(a) Background 
41. Both the informal international Organizati on which managed the General Agreement on 
Tariffs and Trade (GATT) 1947 and the Organizati on 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. 
42. As from 1 January 1999, the WTO launched its  own Pension Plan and implemented an 
overall reform of its human resources management, including the adoption of a remuneration system 
different from that of the United Nations and more a dvantageous than the latter to some of its staff. 
(b) Management procedures 
43. The Plan is governed by Regulations adopted by the WTO General Council on 
16 October 1998.  It is supplemented by Administra tive Rules and by the Rules of Procedure of the 
Pension Plan Management Board, which were  adopted by the latter and approved by the 
WTO General Council. 
44. Article 4 of the Regulations entrusts manageme nt of the Pension Plan to the Management 
Board composed of a Chairman, four members and f our 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. 
45. Management Board decisions are implemented by its 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. 
46. Under the responsibility of the Management Board,  the Secretariat directly managed the Plan 
for two and a half years, apart from asset manageme nt 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.2 (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. 
47. In the aforementioned area of activity, the Management Board defines the policy for 
distributing funds accumulated by pension contri butions among different categories of securities 
                                                      
2 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/771 
 Page 13 
 
 
  (equities, emerging country stocks, bonds and real estate securities) 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 company Watson & Wyatt , based in Zurich, monitors 
the performance of these managers (see below).  The Trianon  company is responsible for the general 
accounting of the Plan and prepares the financial statements. 
(c) Technical characteristics of the Plan 
48. The Pension Plan is a contributory defined-bene fit scheme with a reserve fund to supplement 
the yield from contributions.  Its operating rules ar e laid down by its Regulations and Administrative 
Rules, referred to above. 
49. The pension contribution rate stands at 22. 5 per cent of the so-called "pensionable" 
remuneration3, 7.5 per cent of which is paid by the em ployees and 15 per cent by the Organization 
(Article 20 of the Regulations).  Retirement may be taken by any staff member who has paid at least 
five years of contributions and has reached the " normal retirement age", set at 62 years (or 60 years 
for staff who began working in the GATT or the WTO before 1990).  The amount of the retirement 
benefit is established by reference to the "final  average remuneration (FAR)" constituted by the 
36 months of highest pensionable rem uneration 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 year s) by one per cent of the FAR (Article 23 of the 
Regulations). 
50. The benefit may be commuted, "at the request of the participant, into a lump sum not 
exceeding one-third of the actuarial equivalent of the benefit or the amount of the participant's own 
contributions, whichever is the larg er" (Article 23 of the Regulations).   This option is used frequently 
by staff members at the time of retirement. 
51. An early retirement benefit may be claimed during the five years preceding the normal 
retirement age:  it is reduced by three per cent du ring the years preceding that age;  the rate of 
reduction is lowered to one per cent if the particip ant has completed at least 30 years of contributory 
service (Article 24 of the Regulations). 
52. The Plan is still young and faces no risk of financial imbalance in the short term:  indeed, at 
31 December 2008, it covered only 154 retirees, compared to 716 contributors.  It needs to be reformed, however, to keep it in balance over th e long term, in accordan ce with the recommendation 
made by the actuary, the Mercer  company, in the context of the actuarial valuation of its assets at 
31 December 2007. 
2. The Financial Statements for the Year 2008 
(a) Overview of the accounts 
53. The operating account of the Pension Plan fo r 2008, otherwise known as the "income and 
expenditure statement", shows a serious deteriora tion in performance as a result of the crisis on the 
financial markets;  a deficit of CHF 122,586,937 replaces the surplus of CHF 26,738,535 recorded in 
2007. 
                                                     
 
3 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 retir ees, unlike serving WTO staff, are subject to income tax. WT/L/771 
Page 14  
 
  54. Income decreased by almost one-third (-32.23 per cent) between 2007 and 2008 (from 
CHF 39,986,985 to CHF 27,068,433) because of the collap se in investment income (from 
CHF 14,381,994 to CHF 199,940) , whereas the costs of the Plan ha ve increased more than tenfold 
(from CHF 13,248,450 to CHF 149,655,370) as a result of losses on securities alone of 
CHF 134,030,180 in 2008.
4  Other investment costs and admini strative costs were stabilized (at a 
level of CHF 2,592,999 in 2008 compared with CHF 2,574,711 in 2007), as a result of the active 
savings policy conducted by the Management Board Secretariat. 
55. The yield on investments is once again negative, as it had been in 2001 and 2002 during the 
previous financial crisis, but the scale of the ne t loss (CHF 136 million) on investments reflects the 
seriousness of the crisis compared with the crisis of 2001 and 2002. 
Calculation of the actuarial rate of  return in 2007 and 2008 (Swiss francs ) 
 
Actuarial rate of return 2007 2008 
a. value of assets as of 1 January 338, 979,917 365,933,216 
b. value of assets as of 31 December 365,933,216 243,261,420 
i. investment income 12,042,267 (136,131,210) 
Average assets = (a + b - i)/2 346,435,433 372,662,923 
Actuarial rate of return in nominal terms = i/average assets 3.48% (36.53%) 
Consumer price index for Switzerland5 2% 0.8% 
Actuarial rate of return, net of inflation 1.48% (37.33%) 
 
Trends in actuarial rates of return, inflation-adjusted  
 
2001 2002 2003 2004 2005 2006 2007 2008 
-10.13% -18.31% +10.01% +4.47% +23.71% +9.01% +1.48% -37.33% 
 
56. The balance sheet of the Plan shows the a bove-mentioned deficit of  CHF 122,586,937 and a 
33.52 per cent reduction in its assets (from CHF 365,933, 216 to CHF 243,261,420), attributable to the 
decline in the value of inv estment securities and current accounts (from CHF 365,901,341 to 
CHF 243,190,796), not offset by a doubling in the amount of receivables (from CHF 31,875 to 
CHF 70,624). 
57. Recorded losses relate to certain categories of assets and certain managers (see below).  They 
are particularly serious because the asset allocati on strategy adopted by the Management Board in 
2004 gave more weight to the riskiest investments:  the Plan's portfolio has to be made up of 70 per 
cent equities, including 10 per cent of emerging mark et equities, compared with 20 per cent bonds and 
10 per cent real estate securities.  The losses were mitigated, in practice, by a change in the asset 
allocation policy decided in the midst of the cris is by the Management Board, which redirected 
investments into bonds, low risk real estate secu rities and money market investments, while seeking 
to define a new and more ca utious investment strategy. 
                                                      
4 Profit on securities amounted to CHF 14,254, 220 in 2007. 
5 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/771 
 Page 15 
 
 
  (b) Provision for operating costs 
58. The liability side of the balance sheet has si nce 2004 included 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. 
59. It would appear that the most satisfactory solution 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". 
60. Recommendation No. 1:  the operating cost s of the Plan borne by the Organization 
should be reimbursed annually to the WTO, in accordance with the Plan Regulations. 
(c) Notes to the financial statements 
61. The financial statements and the notes appende d thereto give no indication of the Plan's 
long-term liabilities vis-à-vis  pension beneficiaries and participan ts who will benefit in the future.  
This information is, however, essential for an apprai sal of the long-term equilibrium of a retirement 
scheme, based on a comparison of the actuar ial value of its assets and its liabilities. 
62. The liabilities were calculated by the Mercer  company at 31 December 2007, at which date 
they amounted to CHF 1,408 million. 
63. Moreover, the WTO has recently decided, as a ma tter of principle, to present its accounts in 
accordance with the International Public Sect or Accounting Standards (IPSAS):  under these 
standards, it will be required to indicate the actuar ial value of its long-term  liabilities in respect of 
staff benefits. 
64. Recommendation No. 2:  the actuarial value of the Pension Plan's long-term liabilities 
should be published in a note to the financial statements. 
3. Investment Policy 
65. The results of the Plan's investment policy in 2008 show a concentration of losses on the 
riskiest assets together with a reduction in the proportion of such assets, due to the immediate 
redirection of investments decided by the Mana gement Board as an emergency measure.  Thus, 
equities accounted for only 56.7 per cent of the Plan's portfolio, or CHF 138 million, whereas they 
had previously been pegged at 70 per cent of the portfolio, since 2004.  Shares recorded a loss of 
48.2 per cent, 2.2 per cent more than the benchmar k model (46 per cent).  The two funds managed by 
the Wellington  company , "Wellington Intersections" (CHF 71.2 million) and "Wellington 
Opportunities"  (CHF 52.1 million) sustained losses of similar magnitude, 46 per cent and 47.5 per 
cent respectively. 
66. The proportion of emerging market shares was onl y 6 per cent, whereas the target for this 
sector is 10 per cent;  these instruments are managed by the Pictet  company, which recorded a loss of 
60.2 per cent, or 4.1 per cent more than its benc hmark model (56.1 per cent), mainly because of its 
exposure to the Russian financial markets. WT/L/771 
Page 16  
 
  67. The proportion of real estate securities (8.8 per cen t) fell below the Plan's target (10 per cent).  
This was involuntary, as the Management Board had sought to purchase securities from low-risk real 
estate foundations and had only belatedly succeeded in doing so.  In overall terms, real estate securities showed a loss of 45.3 per cent, or 18.3 per cent more than the benchmark model (-27 per 
cent).  The investment of CHF 7.9 million in i nvestment companies with variable capital (SICAV) 
under Cohen & Steers  management showed a loss of 54.4 per cent, as a result of the wholesale sell-off 
of such securities by companie s in difficulty.  A loss of 8 per cent was recorded on the 
CHF 4.6 million under management by Warburg Henderson .  In November 2008, the Management 
Board succeeded in investing CHF 8.8 milli on in a real estate foundation managed by Crédit Suisse , 
which owns a well profiled group of  apparently low-risk buildings. 
68. The Plan raised the level of its bond investment s to 33.5 per cent, compared to a 20 per cent 
target, and achieved a positive yield of 5.7 per cen t, although this was 2.2 per cent lower than the 
benchmark model (7.9 per cent).  All bond investments are managed by the Rogge  company. 
69. Lastly, roughly 1 per cent of the Plan's asset s (CHF 2.4 million) were invested in cash 
instruments, which explains the increase in inte rest income observed on the operating account (from 
CHF 75,134 to CHF 199,940). 
70. It is important to note that investment perform ance in the first quarter of 2009 has outstripped 
the benchmark model, unlike what happened in 2008:  the Plan's overall portfolio loss is only 1.8 per 
cent in relation to the previous quarter, compared with a 3.1 per cent loss for the benchmark model;  
this figure rises to 25 per cent in relation to the 12  previous months, compared with 26.7 per cent for 
the benchmark model. 
71. The Management Board's first reaction to the cr isis was to seek to reconstitute the list of 
investment managers and subseque ntly, in view of the scale of the crisis, to rethink the asset 
allocation strategy.  With this aim in view, the Secretary of the Board requested five specialized 
companies
6 to submit proposals that would yield a long-term rate of return, adjusted for inflation, of 
2.5 per cent, 3 per cent and 3.5 per cent.  A wide va riety of proposals were received:  in order to 
obtain the 3.5 per cent yield desired by the Manageme nt Board, they provided for investments ranging 
from 0 to 40 per cent in equities;  from 31.75 to 85 per cent in bonds;  and from 10 to 15 per cent in real estate securities. 
72. It is considered important for the Management  Board to adopt a new asset allocation policy 
quickly and to adhere to that strategy by once ag ain engaging in investment instead of tying up liquid 
assets in low yield cash instruments. 
73. Recommendation No. 3:  rapid adoption of a new asset allocation policy 
4. Reform of the Plan's Parameters 
74. Following the triennial actuarial valuation of the Plan conducted by the Mercer  company on 
the basis of data at 31 December 2004, the Management Board set up a working group to weigh the consequences of the reforms advocated by the actuary.  The group submitted its report on 
16 May 2007. 
                                                     
 
6 Crédit Suisse, Mercer, Pictet, Morgan Stanley  and Watson Wyatt .  WT/L/771 
 Page 17 
 
 
  75. The report's first recommendation concerns the adoption of two new Plan data calculation 
methods advocated by Mercer :  one would amend the Swiss "EVK 2000" mortality table that has 
been used up to now, in the light of an expected in crease in life expectancy of 2 per cent per year;  the 
other assumes an increase in WTO staff pay, net of infl ation, of 4 per cent per year instead of 3.5 per 
cent per year, taking account of the observed rates of increase.7 
76. The report notes that the Pension Plan cannot be brought into balance if it retains the current 
contribution rate of 22.5 per cent:  the two proposed changes would entail a revision of the parameters 
of the Plan.  A note of 17 November 2008 addressed to the WTO Budget Committee by the Chairman of the Management Board indicates that the changes in  the Plan's parameters needed to ensure balance 
would amount to a 4.5 per cent increase, to 27 per cent , in the contribution rate, whereas a 0.6 per cent 
increase and a rate of 23.1 per cent would have sufficed in 2004. 
77. In order to achieve this result, the above -mentioned note proposes two reforms selected from 
among the alternative scenarios considered by the working group:  (a) raising the normal retirement 
age from 62 to 65 years for all WTO staff, while au thorizing staff already in service to extend their 
period of service up to the age of 65, which would produce a 2.8 per cent increase in contributions;  
and (b) a 1.8 per cent increase in the contribution rate , which would rise to 24.3 per cent (8.1 per cent 
for staff and 16.2 per cent for the Organization, so as to maintain the existing breakdown of staff and 
employer contributions). 
78. These proposals were submitted to the WTO B udget Committee but have not yet achieved 
consensus on account of opposition by two delegations which are a pprehensive about the budgetary 
implications of increasing the employer contribution rate.  However, the impact on the Organization 
of a 1.8 per cent increase in the contribution rate would be limited to CHF 1.35 million. 
79. In order to make delegations aware of the importance of the reform, the Plan's firm of 
actuaries could usefully submit actuarial projections showing by what date, in the absence of reform, 
benefits will cease to be covered by  contributions, and by what subse quent date all the Plan's assets 
will have had to be sold off in order to service  benefits.  Indeed, the data available to the 
above-mentioned working group and th e Management Board are not backed up by a precise timetable 
of forecast trends in the parameters of the Plan. 
80. Any postponement of the reforms increases their co st, as is shown by the fact that the scale of 
the increase needed to bring the Pl an into balance in 2008 is greater  than the increase estimated in 
2004.  Moreover, the deteriorating performance of the Pl an in 2008 is an argument in favour of reform 
to secure a rapid increase in its income. 
81. Recommendation No. 4:  request the actuary to the Plan to prepare long-term forecasts 
showing the dates up to which benefits cover age is provided by contributions alone, and 
subsequently by the Plan's assets, in the absence of any reform of the Plan's parameters. 
82. Recommendation No. 5:  rapid reform of the Pension Plan's parameters so as to ensure 
that it remains in balance over the long term. 
                                                     
 
7 This assumption takes account of sa lary increases as such and the effects of early seniority and staff 
promotion. WT/L/771 
Page 18  
 
  5. Follow-up to Previous Recommendations 
 
Follow-Up to the Recommendations of the Au strian External Auditors for the Year 2007
 
 
Recommendations Implementation Comments 
Pension Plan to assume 
responsibility for the cost of staff and office space made available to the Plan by the 
WTO. Recommendation 
not implemented. Recommendation conf irmed above. 
The "statement of significant 
accounting policies" should 
contain an indication of the 
accounting procedures applied. Recommendation 
implemented. The 2008 "statement of significant accounting 
policies" refers to the accounting policies of the WTO. 
Preparation of a road map for the application of IPSAS. Recommendation 
not implemented. Even the OECD, which applies the IPSAS, does not 
apply them to its Staff Provident Fund.  The transition to IPSAS would appear to be less urgent for the Plan 
than for the WTO, which recently decided to move in 
that direction.  On the other hand, there would appear to be an urgent need to publish the amount of the Plan's 
long-term liabilities, in accordance with 
Recommendation No. 2 above. 
Implementation of a budgetary process. Recommendation 
not implemented. Preparation of a budget woul d give the Plan Secretariat 
the opportunity to carry out the following evaluations, for the benefit of the Management Board: 
  • Forecast the number of new retirements each 
year, in liaison with the Human Resources Division of the WTO; 
  • forecast the level of reimbursement to the 
WTO of Plan administrative costs; 
  • assess the amount of income obtained by each 
of its asset managers, so as to facilitate the 
monitoring of their performance. 
Establishment of a fluctuation 
reserve to meet liquidity needs and avoid short-term adjustments to pension 
contributions. Recommendation 
not implemented. In the present context, it would appear to be more 
important to modify the parameters of the Plan in order to prevent the emergence of  an actuarial discrepancy 
between its liabilities and its assets 
(see Recommendation No. 4). 
Separate the tasks of the 
Pension Plan Secretariat from 
those of the Director of 
Administration and General Services, in order to prevent 
any conflict of interest. Recommendation 
not implemented. This recommendation could be implemented swiftly, 
given the consent of the persons concerned. 
  WT/L/771 
 Page 19 
 
 
  D. 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. 
 E. C
ONCLUSION  
 On the basis of the audit conducted, the exte rnal auditors certify that, in their view, the 
accounts for the financial year 2008 present fairly th e financial position of the WTO Pension Plan as 
at 31 December 2008.   WT/L/771 
Page 20  
 
  Opinion of the External Auditor on the Accounts of the WTO Pension Plan
 
for the Year Ended 31 December 2008  
 
  I have examined the financial statements of the WTO Pension Plan for the year ended 
31 December 2008, 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 me, on the basis of my 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.  
I consider that the audit that I have conducted constitutes a reasonable foundation on which to base 
my opinion.   My opinion is that the financial statements  present fairly the financial position of the 
WTO Pension Plan as at 31 December 2008 and its financial 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.   
 
 
________________________________ 
PHILIPPE SÉGUIN 
PRESIDENT OF THE FRENCH COURT OF AUDIT 
  
 
    
   WT/L/771
 Page 21STATEMENT 1  
 
Income and Expenditure Statement 
(Expressed in Swiss francs)  
Expenditure at 31.12.2008 at 31.12.2007 Income at 31.12.2008 at 31.12.2007 
Benefits    Contributions    
Lump sum    Participants 8,928,646 8,507,109 
Withdrawal settlement - Art. 26 658,477 525,388 Organization 17,857,295 17,013,951 
Commutation - Art. 23(c) & Art. 24(c) 5,174,069 4,362,855 Interest on validations 1,612 211 
Transfer to other organizations  - - Restorations - Article 18 - 8,154 
Interest on transfers - - Interest on restorations -  
 5,832,546 4,888,243  26,787,553 25,529,426 
      
Periodic benefits    Transfer values    
Retirement benefit - Art. 23 4,191,807 3,245,746    
Early retirement benefit - Art. 24 2,292,712 1,978,311 Transfer from other organizations 80,940 75,566 
Surviving spouse benefit - Art. 29  232,070 196,863  80,940 75,566 
Child benefit - Art. 30 81,709 54,097    
Disability benefit - Art. 28 401,347 310,479    
 7,199,645 5,785,496    
  
  WT/L/771 
Page 22  
STATEMENT 1 (Cont'd)  
 
Income and Expenditure Statement (Cont'd) 
(Expressed in Swiss francs)  
Expenditure at 31.12.2008 at 31.12.2007 Income at 31.12.2008 at 31.12.2007 
Investment and Other Admin. expenses    Investment Income    
   Profit on securities - 14,254,220 
   Currency revaluation - 52,640 
Loss on securities 134,030,180 - Credit interest 199,940 75,134 
Currency revaluation 387,916 -  199,940 14,381,994 
Bank charges 5,734 2,709    
Audit costs 4,119 5,273    
Management fees (see Schedule A for 
breakdown) 1,734,555 2,180,340    
Consultancy fees 172,765 156,678    
Actuarial expenses 97,952 92,648    
Legal fees 26,310 -    
Administrative costs 163,648 137,063 Other income  - - 
 136,623,179 2,574,711    
      
Excess income over expenditure  - 26,738,535 Excess expenditure over income  122,586,937 - 
 149,655,370 39,986,985 149,655,370 39,986,985 
 
 
 
 
_________________________ 
Nicholas Niggli  
Chairman  
WTOPP Management Board  
 
 
 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  
   WT/L/771
 Page 23  STATEMENT 2  
 
 
Surplus Account 
(expressed in Swiss francs)  
Debit at 31.12.2008 at 31.12.2007 Credit at 31.12.2008 at 31.12.2007 
Excess expenditure over income  122,586,937  Excess income over expenditure  26,738,535 
   
   
   
   
   
Profit - 26,738,535 Loss 122,586,937 - 
      
 122,586,937 26,738,535 122,586,937 26,738,535 
 
  
 
_________________________ 
Nicholas Niggli 
Chairman 
WTOPP Management Board  
  
 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  
  WT/L/771 
Page 24 STATEMENT 3  
 
 
Balance Sheet 
(expressed in Swiss francs)  
Assets at 31.12.2008 at 31.12.2007 Liabilities at 31.12.2008 at 31.12.2007 
   
Securities 240,816,819 361,837,480 Capital 1.1  365,013,762 338,275,227 
Current accounts  2,373,977 4,063,861   
 243,190,796 365,901,341  
 Reserve funds   
 Operating cost 250,000 250,000 
   
Current assets    Current liabilities   
Withholding taxes to be recovered  70,231 26,439 Accrued expenses  584,595 669,454 
Contributions receivable  393 -   
Restoration amounts r eceivable - 5,436   
 70,624 31,875  
   
   
 Profit  - 122,586,937 26,738,535 
 243,261,420 365,933,216 243,261,420 365,933,216 
 
 
  
_________________________ 
Nicholas Niggli 
Chairman 
WTOPP Management Board  
 
  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan  WT/L/771 
 Page 25 
 
 
  SCHEDULE A  
Source and Application of Funds  
(expressed in Swiss francs ) 
Source  1.1.2008-31.12.2008 1.1.2007-31.12.2007 
   
Funds as at 1.1 365,933,216 338,979,917 
Receipt of contributions 26,787,553 25,529,425 
Transfer values 80,940 75,566 
Profit on securities - 14,381,994 
Increase in current liabilities - 214,764 
Other income -  
 392,801,709 379,181,666 
Less:   
Application    
   
Settlement of benefits 13,032,191 10,673,739 
Loss on investments 134,218,156 - 
Expenditure* 2,205,083 2,574,711 
Decrease in current liabilities 84,859 - 
 149,540,289 13,248,450 
Funds as at 31 December  243,261,420 365,933,216 
 
*Breakdown of expenditures : 
 
Management fees  
Northern Trust CHF 327,820 
Pictet CHF 339,478 
Rogge CHF 232,756 
Wellington CHF 834,501 
Total: CHF 1,734,555 
 
Consultancy fees  
Watson & Wyatt CHF 172,765 
 
Actuarial expenses  
Mercer CHF 97,952 
  
Legal fees   
Lenz & Staehelin CHF 26,310 
 
Administrative costs  
Trianon CHF 147,320 
Miscellaneous CHF 16,328 
Total: CHF 163,648 
  
Other Expenses  CHF 9,853 
 
Grand Total: CHF 2,205,083  
  WT/L/771 
Page 26 SCHEDULE B  
 
Investment Mandate Overview  
 
Asset class Fund Manager Benchmark Ex-ante 
tracking errorInception 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 & Steers EPRA Europe 3% - 4% Marc h 2005 Brussels, Belgium cohenandsteers.com 
European 
Real Estate Warburg Henderson 6.5% p.a. -- December 2006 Hamburg, Germany warburg-henderson.com 
Swiss Real Estate Credit Suisse SWX Immofonds -- November 2008 Zürich, Switzerland credit-suisse.com 
 
  
   WT/L/771
 Page 27SCHEDULE C  
 
Asset Allocation as of 31 December 2008  
 
 
 Mio. 
CHF Current 
Weights Strategy Tactical 
Bandwidths Deviation from 
the strategy Deviation outside 
bandwidths 
          
Global Equities 138.0 56.7% 70.0% 62.5% - 77.5% -13.3% -5.8% 
  Well (Intersection) 71.2 29.3% 39.0% 35.5% - 42.5% -9.7% -6.2% 
  Well (Opportunities) 52.1 21.4%  21.0% 19.0% - 23.0% 0.4% - 
  Pictet (Em. Mkts) 14.7 6.1% 10.0% 8.0% - 12.0% -3.9% -1.9% 
International Bonds 81.6 33.5% 20.0% 18.5% - 21.5% 13.5% 12.0% 
Real Estate 21.3 8.8% 10.0% 8.5% - 11.5% -1.2% - 
  Cohen & Steers 7.9 3.2% 2.5%  -  0.7% - 
  Warburg Henderson 4.6 1.9% 2.5%  -  -0.6% - 
  Credit Suisse 8.8 3.6% 5.0%  -  -1.4% - 
Cash 2.4 1.0% 0.0%  -  1.0% - 
          
          
Total 243.2 100.0% 100.0%    0.0%  
  
  WT/L/771 
Page 28 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 -36.7% -9.8% -2.1% 2.4% 0.0 
Added value -0.7% 0.1% 0.1%   
      
EQUITY      
      
Consolidated Equities -48.2% -15.1% -4.8% 2.4% -0.3 
Added value -2.2% -1.2% -0.8%   
      
Wellington Intersection -46.0% -16.8% -7.9% 2.8% 0.1 
Added value -1.7% -2.4% 0.2%   
      
Wellington Opportunities -47.5% -14.0% -5.8% 4.2% 0.1 
Added value -3.2% 0.4% 0.6%   
      
Pictet Emerging Markets -60.2% -14.9% -0.7% 5.5% -0.5 
Added value -4.1% -3.4% -2.6%   
      
FIXED INCOME      
      
Consolidated Fixed Income 5.7% 2.0% 3.0% 1.1% -0.3 
Added value -2.2% -1.2% -0.3%   
      
Rogge Global 5.7% 2.0% 2.2% 1.5% -0.5 
Added value -2.2% -1.2% -0.7%   
      
REAL ESTATE      
      
Consolidated Real Estate -45.3% -12.9% -5.7% --- --- 
Added value -18.3% -12.2% -10.7%   
      
Cohen & Steers -54.4% -19.8% -11.6% --- --- 
Added value -0.3% 1.0% 0.4%   
      
Warburg Henderson -8.0% --- -0.6% --- --- 
Added value -14.5% --- -7.1%   
      
TE = ex-post tracking error, since inception 
TR = ex-post information ratio, since inception 
  
   WT/L/771
 Page 29SCHEDULE E  
 
Investment Performance History, Since Inception to 31 December 2008  
 
5060708090100110120130140150
Aug 1999 Aug 2000 Aug 2001 Aug 2002 Aug 2003 Aug 2004 Aug 2005 Aug 2006 Aug 2007 Aug 2008Total  Portolio Total Portfolio Benchmark Equities
Equities Benchmark Fixed Income Fixed Income Benchmark
 
 
 WT/L/771 
Page 30  
 
  SCHEDULE F
 
 
Exchange rates used for closing on 31 December 2008  
 
Currency Exchange rates 
(indirect quotation) 
EUR 0.676 
USD 0.94 
JPY 85.169 
GBP 0.653 
AUD 1.348 
CAD 1.16 
HKD 7.282 
SGD 1.354 
   
Currency Breakdown as of 31 December 2008, after hedging
 
 
 
 
   
 
CHF 
38.0%
EUR
17.0%USD 
24.0%  GBP 
4.0% JPY 
4.0% Rest
13.0% 
   WT/L/771
 Page 31 
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/771 
Page 32  
 
  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 2008 accounts.  
Consultancy fees  includes the fees charged by the investment analyst/consultant. 
 Contributions receivable  refers to contributions due in respect of contributory service in 2008 but 
received after 31 December 2008.  
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 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. 
 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/771 
 Page 33 
 
 
  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 2008.  WT/L/771 
Page 34  
 
  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/771 
 Page 35 
 
 
  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   
__________