WORLD TRADE  
ORGANIZATION  WT/L/706 
29 November 2007 
 (07-5246) 
General Council 
18-19  December 2007  
 
 
    
 
WTO PENSION PLAN 
 
 
 
ANNUAL REPORT OF THE MANAGEMENT BOARD 
 
AND REPORT OF TH E EXTERNAL AUDITOR 
 
THEREON FOR THE YEAR ENDING 
 
31 DECEMBER 20061 
                                                      
1 This Report is published in accordance with  Article 5 of the Regulations of the Plan. WT/L/706 
Page 2  
 
Message from the Chairman of the Management Board
 
 
  " The Management Board of the WTO Pension Plan has pleasure in presenting its Annual Report for 2006.  A fourth consecutive year of positiv e equity returns has yielded another favourable 
investment result, with a nominal time-weighted rate of return of 9.7 per cent.  The annualized rate of 
nominal time-weighted return over those four years has been 10.5 per cent. T
he effect of the bear 
market from 2000 through to 2003 continues to show in the annualized rate of nominal time-weighted 
return of 2.9% since inception in 1999.   The Plan has continued to grow in size, numbering 684 active 
participants and 101 beneficiaries on 31 Decemb er 2006, as against 552 active participants and 4 
beneficiaries on the same date in 1999.  
 In 2006 the Management Board focussed its a ttention on a number of important issues facing 
the Plan, including in particular the establishment of a working group to review the funding position 
of the Plan and the relevant assumptions used for the actuarial valuation.   Should you wish to share any thoughts or comments with the Management Board, please do not hesitate to contact Bob Luther or Jean -Pierre Helary in the Plan Secretariat." 
  WT/L/706 
 Page 3 
 
TABLE OF CONTENTS  
  PAGE  
 
I. INTRODUCTION 4 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2006 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 10 
Plan for the Year Ending 31 December 2006 
Opinion of the External Auditor on the Accounts of the WTO Pension 13 
Plan for the Year Ending 31 December 2006 
 STATEMENT 1 14  Income and Expenditure Statement for the period 1 January – 31 December 2006 
 
STATEMENT 2 15  Surplus account as of 31 December 2006  STATEMENT 3 16 
 Balance Sheet as of 31 December 2006 
 SCHEDULE A 17  Source and Application of Funds for the Period 1 January – 31 December 2006  SCHEDULE B 18 
 Investment Mandate Overview 
 SCHEDULE C 19  Performance and asset allocation  
SCHEDULE D 20 
 Investment performance since inception  SCHEDULE E 21  Exchange rates used for the valuation of assets in 2006 
 
SCHEDULE F 22  Structure of the WTO Pension Plan  SCHEDULE G 23  Glossary of terms 
 
ANNEX 1 24 
 Statement of Investment Principles  ANNEX 2 25 
 Statement of Significant Accounting Policies WT/L/706 
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 2006 to 31 December 2006 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 and 2005 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, and WT/L/663, respectively. 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2006 
(a) Management Board
 
 The Management Board was composed as follows on 31 December 2006: 
Mrs. Esra Demir, Chairman 
 
Mr. Andrew Johnston Mr. Jean-Pierre Lapalme 
Mr. Nicholas Niggli Mr. Anthony Mistri 
Ms Rachel Shub Ms Paulette Planchette 
Mr. Pornvit Sila-On  
Members elected 
by the General 
Council Mr. Paul Rolian  
Members 
appointed by the 
Director-General 
Mr. Mathias Francke Mr. Rolf Adlung 
Ms Heather Grant Ms Monette David 
Mr. Jean-Marc Mignon Mr. Juan Marchetti 
Ms Salina Yan  
Alternates 
elected by the 
General Council Mr. Shishir Priyadarshi  
Alternates 
appointed by the 
Director-General 
Mr. Jan-Eirik Sørensen Observer on behalf of the beneficiaries 
Mr. Claude Mercier Alternate observe r on behalf of the beneficiaries 
 
(b) Investment Committee  
 Please see paragraph 21, below. 
(c) Secretary  
 Robert Luther  - In-house support services
 
  Jean-Pierre Helary 
  Christine Figuigui 
     WT/L/706 
 Page 5 
 
 - Outsourced support services  
  Trianon S.A., Lausanne (d) Consulting Actuary
 
 Cameron Hannah (Mercer HR Consulting S.A.) (e) Medical Adviser
 
 Dr. Catherine Mazeyrac 
(f) Investment Analyst/Consultant  
 Edouard Stucki (Watson Wyatt) (g) Global Custodian
 
 The Northern Trust Company (h) Fund Managers
 
 Cohen and Steers2 (European real estate securities portfolio) 
 Pictet (actively managed emerging market equity portfolio)  Rogge Global Partners PLC (activ ely managed global bond portfolio) 
 Warburg Henderson (European real estate portfolio)  Wellington Management International (two actively managed global equity portfolios) 
  
(i) External Auditor
 
 Austrian Court of Audit. 5. An organizational chart is reproduced in Schedule F. 
III. MEETINGS OF THE MANAGEMENT BOARD 
6. The Management Board held six meetings in 2006.  These took place on 17 February, 5 April, 
21 July, 4 October, 20 November and 19 December 2006.  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 2006. 
(a) Review of investment performance
 
8. An overview of the current investment strategy is to be found in Schedule B. 
9. For the fourth year in a row, positive equity market returns were recorded. The total Plan 
portfolio yielded a nominal return of 9.7 per cent (9.0 per cent after cost) in 2006, to be compared with 11.8 per cent for the custom benchmark. The main reason for the lag behind the custom 
benchmark was the underperformance  of the Wellington global equity  mandates and the Rogge bond 
mandate. The total annualized rate of nominal return over the past four years was 10.5 per cent, and 
                                                     
 
2 Previously known as Houlihan Rovers WT/L/706 
Page 6  
 
the annualized rate of nominal return since inception in 1999 was 2.9 per cent, due largely to the bear 
market situation that prevailed from the summer of 2000 to the spring of 2003. 
10. The actuarial rate of return net of inflation was 8.41 per cent in 2006, and 1.88 per cent since 
inception, in other words 1.62 percentage points below the long-term target of 3.5 per cent. 
11. A table summarizing investment performance and asset allocation is reproduced in 
Schedule C.  A graph of investment performan ce since inception is reproduced in Schedule D. 
(b) Working Group on the funding position of the Plan
 
12. The Working Group set up by the Management Board in 2005 met on four occasions during 
the year.  The Working Group focussed its atten tion on the assumptions underpinning the actuarial 
valuation and the sensitivity of the Plan to changes in those assumptions, particularly with respect to 
improvements in mortality.  The Working Group al so examined the extent  to which current assets 
would cover current liabilities on a discontinuance basi s.  The Working Group will submit its report to 
the Management Board in the course of 2007. 
(c) Stop-loss insurance  
13. The Management Board examined a proposal to  insure the Plan against major death and 
disability risks.  The Management Board noted th at such risks, including, for instance, the 
concentration of significant numbers of staff on a si ngle flight or in one location, were generally 
associated with official business a nd the cost of such insurance should, therefore, be covered by the 
WTO. 
(d) Actuarial implications of agreed separation programmes  
14. In the course of 2006, the Management Board considered the implications for the Plan of the 
possible implementation of a staff severance plan by the Organization.  The Management Board 
expressed concern lest such a plan have an impact  on the actuarial balance of the Pension Plan and 
decided that its concern should be conveyed to the senior management of the WTO and to the Committee on Budget, Finance and Administration, emphasizing that the WTO should cover all related costs. 
(e) Recognition of same-sex spouses
 
15. The Management Board had begun its considera tion of this matter in 2005 and continued to 
examine the related policy and legal implications in  2006.  After extensive discussion in the course of 
three meetings and having considered an outside  legal opinion on the matter, the Management Board 
agreed to strictly align the practice of the Pensi on Plan with that followed under the Staff Regulations 
and Staff Rules, and to treat same-sex marriages in  the same way as heterosexual marriages insofar as 
Article 29 ("Surviving spouse's benefit") of the Plan Regulations was concerned.   
(f) Transfer arrangement with the European Communities (EC) pension scheme  
16. On the basis of consultations between the secretariats of the two pension schemes, an 
exchange of letters constituting a transfer arra ngement between the WTO Pension Plan and the EC 
Pension Scheme was appr oved by the Management Board and endorsed by the General Council in 
May 2006.  The arrangement entered into force on 1 July 2006.  WT/L/706 
 Page 7 
 
(g) Currency risk management  
17. The Management Board considered the possibilit y of introducing a currency overlay mandate.  
It was noted that such a mandate would add to the demands on plan governance and to the 
management costs whilst at the same time offering  the possibility of an additional return.  The 
Management Board decided not to pursue currency risk management for the time being but reserved 
the possibility of returning to the subject at a later date. 
(h) Rebalancing  
18. The investment analyst / consultant presented to the Management Board a possible approach 
for rebalancing the investment portfolio, with the ai m of ensuring that the proportional weights of the 
various mandates remained within predefined tac tical bandwidths.  New cash would similarly be 
invested in such a way as to maintain these proportio nal weights.  The Management Board has not yet 
taken a decision on this matter but has continued to monitor the balance of the investment strategy on 
a regular basis. 
(i) Warburg Henderson  
19. The management agreement with the Warbur g Henderson European r eal estate fund was 
signed in June 2006, and the first transfer of assets was made in December 2006 in respect of 
properties acquired in France, Germany and the Unite d Kingdom.  Further transfers up to the target 
amount of CHF 14.8 million will be drawn from acc umulated contributions as and when properties 
are acquired by the fund. 
(j) Staffing of the Plan Secretariat  
20. During 2006, the Management Board noted the ur gent need to strengthen the resources of the 
Plan Secretariat.  Given the fact that the external  auditor had once again drawn attention to the fact 
that the costs of administering the Plan should be charged fully to the Plan, in accordance with 
Article 5(f) of the Plan Regulations, the Management  Board agreed to take up the question of human 
and financial resources for the Secretariat as a priority item in 2007. 
(k) Investment Committee  
21. The Management Board decided not to make  appointments to the Investment Committee 
during the year.  The Management Board was advised by its investment analyst / consultant and will 
be considering the future of the Inv estment Committee over the coming year.  WT/L/706 
Page 8  
 
IV. PARTICIPATION IN THE PENSION PLAN 
22. The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2006. 
 2006 2005 
Active Members  684 695 
Pensioners  101 85 
 
 Participants in the Pension Plan in 2006  
 
 
Total number on 1 January 2006 
 
Movements in 2006 
  - Entries  - Re-entries under the terms of Art. 15(b) of the 
Regulations 
 - Separations 
  
695 
  
 
49 
1 
 
61 
 
Total number on 31 December 2006  
 
Breakdown of separations in 2006  
 - retirement 
 - early retirement  - deferred retirement  - withdrawal settlement  - deferment of decision  - death 
            -            disability 
 Total separations   
    
9 
4 
- 
30 17 
1 
- 
 
61 
 Benefits paid by the Pension Plan
 
 
 
Type of benefit At 31/12/2005 New benefits 
in 2006 Benefits ended 
in 2006 At 31/12/2006 
Retirement 36 9 - 45 
Early retirement 28 4 - 32 
Deferred retirement 4 1 - 5 
Surviving spouse's benefit 2 1 - 3 
Partial /total disability benefit 6 - - 6 
Child’s benefit 9 4 3 10 
Total benefits 85 19 3 101 
  WT/L/706 
 Page 9 
 V. ACCOUNTS 
23. A statement of significant accounting policies is reproduced in Annex 2. 
24. The income and expenditure statement for the period 1 January – 31 December 2006 and 
surplus account as at 31 December 2006 are reproduced in Statements 1 and 2, respectively. 
25. The balance sheet as at 31 December 2006 is reproduced in Statement 3. 
26. The source and application of funds for the period 1 January – 31 December 2006 is 
reproduced in Schedule A. 
27. A glossary of terms to facilitate an understanding of the tables is reproduced in Schedule G.   
VI. ACTUARIAL POSITION OF THE PLAN 
  
28. The Consulting Actuary to the WTO Pension Plan has completed an interim actuarial 
assessment of the WTO Pension Plan effective 31 December 2006.  The interim assessment was 
carried out using the full membership data provided by the WTO Pension Plan as at 
31 December 2006.  Based on the results of this act uarial assessment, the consulting actuary confirms 
that the actuarial position of the plan has improved relative to the formal actuarial valuation as at 
31 December 2005.  This is mostly due to the fact th at the market value of the investments of the plan 
has increased significantly. 
 
    
    
  ___________________________ __________________________   Esra Demir Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan 
 WT/L/706 
Page 10  
 
Report of the External Auditor on the Accounts of the WTO Pension Plan
 
for the Year Ended 31 December 2006  
 
 Rates of return
 
 
29. After negative nominal rates of return in 2001 (–10.13%) and 2002 (–18.31%) the 
WTO Pension Plan (WTOPP) achieved positive nom inal rates of return in 2003 (10.01%), 2004 
(4.47%), 2005 (23.71%) and 2006 (9.01%). A comparison of the investment portfolios for the years 2005 and 2006 is given in the following table: 
 
ACTUARIAL RATE OF RETURN  2005  2006  
a. value of assets as of  01 Jan 223, 344,222 296,529,427 
b. value of assets as of  31 Dec 296, 529,427 338,979,917 
i. investment income 55,098,041 27,401,161 
Average assets = (a+b-i)/2 232,387,804 304,054,092 
Actuarial rate of return in nominal terms  
= i / average assets 23.71% 9.01% 
CPI for Switzerland 1.00% 0.60% 
Actuarial rate of return, net of inflation 22.71% 8.41% 
 
 
30. The External Auditor noted that the actuarial ra te of return in nominal terms decreased by 
more than 60% in 2006 compared to 2005. Investme nt and other administrative expenses increased 
from CHF 2.02 million to CHF 2.22 million or by 10% (Statement 1). In  2006 management and 
consultancy fees of CHF 2.02 million accounted for a pproximately 51% of the investment and other 
administrative expenses, compared to the periodic benefits of CHF 4.37 million. 
Advisors to the Management Board  
 
31. Pursuant to Article 7 of the Regulations of the WTOPP, the Director-General shall appoint 
advisors upon the recommendation of the Management  Board.  Accordingly, the Management Board 
decided at its 18th meeting in January 2001 to estab lish an Investment Committee on a cost-free basis.  
However, the committee ceased to function at the beginning of 2003.  Since then the advisory 
function of the committee has been taken over by Watson Wyatt AG against fees. 
Internal audit  
 32. The external audit together with the internal aud it forms part of the audit function of an entity. 
As WTO will introduce an internal oversight function, the External Auditor recommends extending responsibilities of this unit to the WTOPP. 
33. The External Auditor was inform ed that a vacancy notice for th e internal auditor position in 
WTO is foreseen to be issued in July 2007. 
Operating costs
 
 34. According to Article 5(f) of the Regulations  of the WTO Pension Plan  "All expenses 
incurred in administering the plan … shall be borne  by the Plan." The Balance Sheet of the WTOPP  WT/L/706 
 Page 11 
 
includes since 2004 a reserve of CHF 250,000 relati ng to operating costs potentially invoiced by 
WTO.  However, the External Auditor noted that since the establishment of the WTOPP no costs have 
been charged to WTOPP from WTO with respect to personnel resources and office space provided by 
WTO.  The External Auditor recommended to comp ly with the above-mentioned regulation and to 
determine the cost elements which are to be charged to WTOPP. 
35. In the course of the year-end audit of WTO (WT/BFA/W/157), the External Auditor was 
informed that the WTOPP Management Board ha d established a working group with the task of 
reviewing the actuarial assumptions underpinning the Plan and that the working group would be making recommendations with regard to the fu ll charging of operational costs to the Plan. 
Financial Rules and Regulations
 
 
36. The Regulations of the WTOPP do not refer to any financial rules and regulations governing 
the Plan.  The External Auditor reiterates the reco mmendations raised in thei r previous reports, that 
the WTO Financial Rules and Regul ations should apply mutatis mutandis in cases where no specific 
rules in the Regulations of WTOPP are defined. 
37. The External Auditor recommends that the a pplied accounting procedures should be disclosed 
in the "Statement of Significant Accounting Polici es" contained in an Annex of the Annual Report. 
International Public Sector Accounting Standards (IPSAS)  
 
38. The adoption of IPSAS can be seen as one of  the challenges WTOPP has to face in the 
coming years.  
39. As a matter of fact e.g. all UN related organisations are currently in a process of 
implementing the IPSAS. They have committed themsel ves to be fully compliant with IPSAS as of 
2010. It has to be noted that in case no relevant I PSAS has been defined the relevant International 
Financial Reporting Standard / Inte rnational Accounting Standard (IFR S / IAS) has to be applied. 
40. Although IPSAS have to be applied as a whol e as no exemption exists, the following IPSAS 
and IFRS / IAS will have the most impact on the accounting of the WTOPP: 
• IPSAS 1  – Presentation of Financial Statements 
• IPSAS 15 – Financial Instruments: Disclosure and Presentation 
• IFRS 7 – Financial Instruments: Disclosure 
• IAS 19 – Employee Benefits 
• IAS 39 – Financial Instruments:  Recognition and Measurement 
 
41. The External Auditor recommends to: 
• establish a roadmap for the implementation of IPSAS; 
• when introducing Financial Rules and Re gulations in WTOPP (see recommendation 
above) the compulsory application of IPSAS should be referred to; 
• co-operate with the responsible departme nt for the implementation of IPSAS at 
WTO; and 
• involve Trianon S.A., Lausanne, to  ensure a coordinated approach. 
 
Budget  
 42. As already mentioned in the previous year’s reports, the legal framework of the WTOPP 
(Regulations, Administrative Rules and Rules of Procedures) does not foresee any specific regulation WT/L/706 
Page 12  
 
regarding the preparation of budget estimates as  defined for WTO in their Financial Rules 
(WT/L/157) and Regulations (WT/L/156). 
43. The External Auditor recommends implementi ng an appropriate budgetary process in the 
WTOPP. 
Fluctuation reserve
 
44. The purpose of a fluctuation reserve in pension funds is to ensure that liquid assets are 
available in the occurrence of e.g. unexpected ca sh needs. The External Auditor noted that the 
implementation of a fluctuation reserve is mandato ry for pension funds in a number of European 
countries and consequently specific accounting standa rds have been developed to determine the value 
of the fluctuation reserve. 
45. Therefore, the External Auditor recommends to  WTOPP considering the implementation of a 
fluctuation reserve to be able to react on liquidity  needs and to avoid short-term adaptations of WTO 
pension contributions.  
Financial impact of a WTO Staff Severance Plan  
46. As mentioned under paragraph 14 of the WTOPP Annual Report, the Management Board 
considered the implication of a possible implemen tation of a staff severance plan by the WTO. 
47. The External Auditor highlighted that if WTO decides on a measure of personnel policy, 
whose implementation would affect the long-term stability of the WTOPP, the resulting cost should 
be compensated by WTO. 
48. The External Auditor recommends requesting th e actuary to assume, as a working hypothesis, 
the financial consequences of such a policy. 
Personnel issues  
49. As already mentioned in the report of the Ex ternal Auditor in the Director General’s 
Budgetary and Financial Report for 2006 (WT/BFA/ W/157) the Director of Administration and 
General Services Division acts also as Secretary of WTOPP.  As Director of Administration and General Division, he reports to the Deputy Directo r-General.  However, as Secretary of the WTOPP 
he acts under the authority of the Management Board of WTOPP (WTOPP(05)3/Rev.1).  The 
External Auditor suggests a segregation of duty between those two functions to avoid a potential 
conflict of interest. 
50. As mentioned under paragraph 20 of the WTOPP Annual Report, the Management Board 
noted the need to strengthen the resources of the Pl an Secretariat. The Exte rnal Auditor highlighted 
the necessity of a back-up function for the Assistant Secretary of WTOPP. 
 
 
(signed) 
________________________________ 
Josef Moser 
President of the Austrian Court of Audit 
  WT/L/706 
 Page 13 
 
Opinion of the External Auditor on the Accounts of the WTO Pension Plan  
for the Year Ended 31 December 2006  
 
 51. The representatives of the Austrian Court of A udit have examined the appended Financial 
Statements contained in the Annual Report for 200 6, comprising Statements 1 to 3 and Schedules A 
and B of the WTO Pension Plan for the year ending 31 December 2006.  As a result of the 
examination, the opinion is given that these statements, which were prepared in conformity with the accounting policies described in Annex 2 of th e Annual Report for 2006 and applied on a basis 
consistent with that of the preceding financial period, present fairly the financial position of the 
WTO Pension Plan as at 31 December 2006 and the operations for 2006. 
52. The accounting system of the WTO Pension Plan was outsourced to Trianon
3, which prepared 
the accounts for 2006.  Trianon provided the report of  its external auditor including the financial 
statements for the year 2006 for information.  Trianon also provided the accounting transactions for 
the year 2006 to the representatives of the Austrian Court of Audit for examination.  This examination 
included a general review of the accounting procedur es and such tests of the accounting records and 
other supporting evidence as were feasible in the circumstances. 
 
 
(signed) 
________________________________ 
Josef Moser 
President of the Austrian Court of Audit 
 
   
 
                                                     
 
3 Trianon Conseils SA, Lausanne, Switzerland  WT/L/706 
Page 14 STATEMENT 1  
 
Income and Expenditure Statement 
(Expressed in Swiss francs)  
Expenditure at 31.12.2006 at 31.12.2005 Income at 31.12.2006 at 31.12.2005 
Benefits    Contributions    
Lump sum    Participants 8,208,003 7,882,842 
Withdrawal settlement – Art. 26 905,909 938,669 Organization 16,415,999 15,765,658 
Commutation – Art. 23(c) & Art. 24(c) 3,891,157 1,988,002 Interest on validations 1,156 1,293 
Transfer to other organizations  438,243 288,721 Restorations – Article 18 30,418 4,313 
Interest on transfers 10,050 12,948 Interest on restorations 503 232 
 5,245,359 3,228,340  24,656,079 23,654,338 
      
Periodic benefits    Transfer values    
Retirement benefit – Art. 23 2,356,241 1,895,920    
Early retirement benefit – Art. 24 1,558,329 1,365,751 Transfer from other organizations 274,960 1,296,563 
Surviving spouse benefit – Art. 29  124,249 103,905  274,960 1,296,563 
Child benefit – Art. 30 62,372 29,764    
Disability benefit – Art. 28 265,647 243,213    
 4,366,838 3,638,553    
      
Investment and Other Admin. expenses    Investment Income    
Currency revaluation - - Profit on securities 29,309,220 56,859,698 
Bank charges 815 1,107 Currency revaluation  47,613 334 
Audit costs 5,603 5,524 Interest on current accounts  65,281 37,083 
Management fees (see Schedule A, 
footnote 2 for breakdown) 1,903,092 1,595,582    
Consultancy fees 117,046 202,385    
Actuarial expenses 29,875 98, 660  29,422,114 56,897,115 
Administrative costs 167,978 117,011    
 2,224,409 2,020,269 Other income  - 11,875 
      
Excess income over expenditure  42,516,547 72,972,729 Excess expenditure over income    
 54,353,153 81,859,891  54,353,153 81,859,891 
 
_________________________ 
Esra Demir  
Chairman  
WTOPP Management Board  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
   WT/L/706
 Page 15  STATEMENT 2  
 
 
Surplus Account 
(expressed in Swiss francs)  
Debit at 31.12.2006 at 31.12.2005 Credit at 31.12.2006 at 31.12.2005 
   Excess income over expenditure   
42,516,547  
72,972,729 
      
      
      
      
      
Profit 42,516,547 72,972,729    
      
 42,516,547 72,972,729  42,516,547 72,972,729 
 
_________________________ 
Esra Demir  
Chairman  
WTOPP Management Board  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  WT/L/706 
Page 16 STATEMENT 3  
 
 
Balance Sheet 
(expressed in Swiss francs)  
Assets at 31.12.2006 at 31.12.2005 Liabilities at 31.12.2006 at 31.12.2005 
      
Securities 337,134,000 294,198,432 Capital 1.1  295,758,680 222,785,951 
Current accounts  1,823,062 2,316,881    
 338,957,062 296,515,313    
   Reserve funds    
   Operating cost 250,000 250,000 
      
Current assets    Current liabilities    
Withholding taxes to be recovered  22,855 9,717 Accrued expenses  454,690 520,747 
Contributions receivable  - 988    
Restoration amounts r eceivable - 3,409    
 22,855 14,114    
      
      
   Profit  42,516,547 72,972,729 
 338,979,917 296,529,427  338,979,917 296,529,427 
 
_________________________ 
Esra Demir  
Chairman  
WTOPP Management Board  
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan  WT/L/706 
 Page 17 
 
 
SCHEDULE A  
 
 
Source and Application of Funds  
(expressed in Swiss francs ) 
 
Source  1.1.2006-31.12.2006 1.1.2005-31.12.2005 
   
Funds as at 1.1 296,529,427 223,344,222 
Receipt of contributions 24,656,079 23,654,338 
Transfer values 274,960 1,296,563 
Profit on securities 29,422,114 56,897,115 
Increase in current liabilities - 212,476 
Other income - 11,875 
 350,882,580 305,416,589 
Less:   
Application    
   
Settlement of benefits 9,612,197 6,866,893 
Expenditure4 2,224,409 2,020,269 
Decrease in current liabilities 66,057 - 
 11,902,663 8,887,162 
Funds as at 31 December  338,979,917 296,529,427 
 
                                                      
4 Including management fees totalling CHF 1,903,092 and broken down as follows: 
 
Northern Trust   CHF 378,713 Pictet    CHF 389,505 
Rogge    CHF 189,671 
Wellington   CHF 945,203 WT/L/706 
Page 18  
 
SCHEDULE B
 
 
Investment Mandate Overview  
 
Fund Manager Assets 
(in m 
CHF) % of 
Assets SAA* Asset Class Index 
Wellington Mgmt. 
Intl. Ltd (Opportunities) 71.4 21.1% 21.0% Actively managed global 
equities MSCI World 
Developed 
Wellington Mgmt. 
Intl. Ltd 
(Intersection) 131.5 38.8% 39.0% Enhanced managed global 
equities MSCI World 
Developed 
Pictet & Cie 41.7 12.3 % 10.0% Actively managed 
emerging market equities MSCI Emerging 
Markets 
Rogge Global 
Partners PLC 65.2 19.2% 20.0% Actively managed foreign 
bonds, hedged Citigroup World 
Govt. Bond Index 
hedged into 
Cohen & Steers 23.2 6.9% 5.0% Actively managed 
European real estate 
securities EPRA Europe 
Warburg 
Henderson** 4.0 1.2% 5.0% Actively managed 
European real estate 6.5% p.a. 
Cash 1.8 0.5%     - 
Total 339.0 100% 100%  
 
 
Fund Manager Ex-
post 
TE* Expected 
TE* Added-
Value 
since 
inception IR since 
inception * Location Website 
Wellington 
Mgmt. Intl. Ltd 
(Opportunities) - 1.5 – 2.5% -0.9% -0.4 Boston, 
MA; 
London 
England wellington.com 
Wellington 
Mgmt. Intl. Ltd 
(Intersection) 2.3 3 – 6% 0.9% 0.4 Boston, 
MA; 
London 
England wellington.com 
Pictet & Cie 4 6 – 9 % 0.6% 0.2 London, 
England pictet.ch 
Rogge Global 
Partners PLC - 1 – 2% 0.2% 0.9 London, 
England rogge.co.uk 
Cohen & Steers - 3 – 4% -1.0% -0.4 Brussels, 
Belgium cohenandsteers.com 
Warburg 
Henderson** - - - - Hamburg, 
Germany Warburg-
henderson.com 
 * TE = Tracking Error  IR = Information Ratio 
 SAA = Strategic Asset Allocation 
 **  First capital call December 2006 ,, target return 6.5% p.a.  WT/L/706 
 Page 19 
 
 
SCHEDULE C  
 
Performance and Asset Allocation  
 
Return Statistics 
(annualized)*                   
Consolidation  last 
quarter ytd over 
1 year over 
2 
years over 
3 
years since 
incept TE**  IR** market value 
% of total 
Consolidated Securities 5.5% 9.7% 9.7% 17.5% 13.2% 2.9% 2.3 -0.4 339.0 
Custom Benchmark 5.9% 11.8% 11.8% 17.8% 13.5% 3.7% -- -- 100% 
          
Equities                   
Consolidated Equities 6.2% 9.8% 9.8% 20.8% 16.0% 1.7% 2.0 -0.5 244.7 
Custom Benchmark 6.8% 12.8% 12.8% 21.5% 16.3% 2.6% -- -- 72.2% 
          
     Wellington (Intersection) 4.5% 7.0% 7.0% 17.3% 13.4% -1.4% 2.4 0.4 131.5 
     MSCI World  5.5% 11.2% 11.2% 18.8% 14.2% -2.3% -- -- 38.8% 
          
     Wellington (Opportunities) 5.0% 8.7% 8.7% -- -- 21.1% 2.3 -0.4 71.4 
     MSCI World  5.5% 11.2% 11.2% -- -- 22.0% -- -- 21.1% 
          
     Pictet Emerging Markets 14.4% 21.7% 21.7% -- -- 38.5% 4.1 0.2 41.7 
     MSCI EM 14.5% 22.4 % 22.4% -- -- 37.9% -- -- 12.3% 
          
Fixed Income                   
Consolidated Fixed Income -0.8% -1.3% -1.3% 1.8% 1.8% 2.8% 1.2 0.2 67.1 
Custom Benchmark -0.3% -0.6% -0.6% 0.9% 1.6% 2.8% -- -- 19.8% 
          
     Rogge Global -0.8% -1.3% -1.3% -- -- 0.7% 1.5 0.9 65.2 
     Citi World Govt Hedged -0.3% -0.6% -0.6% -- -- 0.5% -- -- 19.2% 
          
     NT € Cash         0.0 
         0 . 0 %  
          
     Credit Suisse Cash***       1.8 
         0 . 5 %  
          
Real Estate                   
Consolidated Real Estate 18.1% 55.9% 55.9% -- -- 41.2% 2.9 -0.4 27.2 
Custom Benchmark 18.5% 54.6% 54.6% -- -- 42.2% -- -- 8.0% 
          
     HR European Real Estate 18.1 % 55.9% 55.9% -- -- 41.2% 2.9 -0.4 23.2 
     Benchmark 18.5% 54.6% 54.6% -- -- 42.2% -- -- 6.9% 
          
    WH European Real Estate    -- --  -- -- 4.0 
     Benchmark    -- -- -- -- -- 1.2% 
 
* All other mandates are calculated gross of fees (before fees), with the exception of HR (now Cohen & 
Steers) and WH, which are calculated net of fees. 
** TE = Tracking error    IR = Information Ratio. 
   TE and IR shown for complete investment period. 
* * * Although CSAM cash is shown for the total asset allo cation, it is not used in the performance calculation. WT/L/706 
Page 20  
 
SCHEDULE D
 
 
 
Investment Performance Since Inception  
 
5060708090100110120130140
 Aug
1999  Feb
2000  Aug
2000  Feb
2001  Aug
2001  Feb
2002  Aug
2002  Feb
2003  Aug
2003  Feb
2004 Aug
2004 Feb
2005 Aug
2005 Feb
2006 Aug
2006
Total Benchm ark Eq. Total
Eq. Benchm ark FI Total FI Benchm ark
 
 
53. The underperformance of the equity allocation as indicated in the graph above reflects the 
underperformance of one of the initial global equity managers whose contract has since been 
terminated.  Both of the Wellington mandates unde rperformed their benchmarks in 2006. Since 
inception, however, the Wellington mandates in aggregate outperformed their benchmarks. 
 54. The real estate allocation is reflected in the total return graph. It includes the Warburg 
Henderson European real estate fund which made its first capital call in December 2006 and the 
Cohen & Steers European real estate securities mandate.  55. With the selection of Rogge, the aggregate performance of the fixed income component 
exceeds its benchmark since inception.  WT/L/706 
 Page 21 
 
 
SCHEDULE E  
  
Exchange rates used for the valuation of assets in 2006
 
 
Currency Rate used for closing 
on 31.12.2006 
EUR 0.621 
USD 0.819 
JPY 97.612 
GBP 0.419 
AUD 1.039 
CAD 0.953 
HKD 6.371 
SGD 1.257 
   
 
Currency Breakdown as of 31 December 2006  
 
WTOPP: Currency Exposure as of 31.12.2006
CHF
20.8%
EUR
21.6%HKD
0.7%USD
30.0%
Emerging Markets
12.3%AUD
0.4%CAD
1.7%
GBP
4.5%JPY
7.8%SGD
0.2%
 
 
* The Rogge global fixed income mandate which comprised 19.2% of total assets hedges foreign 
currency exposure into Swiss Francs, the refere nce currency of the Plan. At year end 2006, the 
mandate was 92% hedged into Swiss Francs and with in guidelines. The pie chart above counts the 
global bond mandate as fully hedged.   WT/L/706 
Page 22 SCHEDULE F  
STRUCTURE OF THE WTO PENSION PLAN  
 
 
  
  
 
  
  
 
  
 
 
 
  
 
  
 
  
PARTICIPANT S  
GENERAL COUNCIL 
 
CONSULTING ACTUARY 
 
ASSET MANAGEMENT SERVICES  
DIRECTOR-GENERAL 
 
MEDICAL ADVISER 
 
INVESTMENT COMMITTEE ADMINISTRATIVE 
SERVICES 
 
MANAGEMENT BOARD  
EXTERNAL AUDITOR 
INVESTMENT 
ANALYST/CONSULTANT  WT/L/706 
 Page 23 
 
 
 SCHEDULE G  
 
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 2006 accounts.  Consultancy fees  includes the fees charged by the investment analyst/consultant. 
 
Contributions receivable  refers to contributions due in respect of contributory service in 2006 but 
received after 31 December 2006.  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. 
 
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. 
 
Tracking error is defined as the standard deviation of the portfolio’s outpe rformance versus the 
benchmark.  It is used as a measure to determine the risk of the portfolio versus its benchmark.  This 
measure should not be confused with absolute risk ; even though a portfolio has a very low tracking 
error, it can still be very risky due to the underlying  nature of the market in which it invests.  A 
tracking error for a passive mandate would be low—dependent upon the mandate, usually less than 
0.8.  Anything above this would be considered active.    Withholding taxes to be recovered  includes amounts of withholding tax levied by the Swiss 
authorities and subject to recovery after 31 December 2006. WT/L/706 
Page 24  
 
 ANNEX 1
 
 
Investment Principles  
 
1. Pursuant to Article 13 of the Regulations of the Pension Plan and Rule A.9 of the Rules of 
Procedure, the Management Board shall be responsib le for the secure investment of all Plan assets, 
the formulation of investment policies after taking appropriate professional advice, and the 
appointment of investment manage rs to implement that policy. 
 2. The investment strategy of the Plan is based  on an asset allocation designed to ensure the 
adequate funding of the Plan's liabilities over the long term.  A careful balance is drawn between 
maximization of returns on the assets of the Plan an d the maintenance of a reasonable level of risk.  
The strategy is geared to achieve a actuarial rate of return of 3.5% net of price inflation, which is the 
assumption on which the feasibility study and contribu tion rates of the Plan were originally based. 
 
3. The WTOPP’s three asset classes are defined by  differences in their expected response to 
economic conditions, such as price inflation or cha nges in interest rates and are weighted in the 
portfolio by considering their expect ed returns, risk and correlations. 
 
4. Derivatives may be used within the globa l hedged fixed income mandate for hedging 
purposes, where they provide the opportunities to ach ieve the objective of the Plan more efficiently 
than would be the case through the direct dealing in  underlying securities.  Derivative instruments for 
this mandate are restricted to forward foreign cu rrency contracts, futures, covered bond options and 
interest rate options.  Leverage and net short positions are not allowed. 
 
 
 
  (signed) (signed)  __________________________ ________________________   Esra Demir Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan  WT/L/706 
 Page 25 
 
 
 ANNEX 2  
 
Statement of Significant Accounting Policies  
 
1. Pursuant to Article 14(a) of the Regulations of  the Pension Plan, the unit of account of the 
Pension Plan is the Swiss franc.  For practical re asons, the current United Nations operational rates of 
exchange are used for the conversion of other currenc ies into the Swiss franc, except in the case of the 
investment portfolios where the rates shown in Schedule C were used for valuation purposes. 
 2. The accounting year is 1 January to 31 December. 
 
3. Pursuant to Article 13 of the Regulations of the Plan and Rule A.8 of the Rules of Procedure, 
the Management Board shall be responsible for the financial security and probity of the Plan and in 
particular the maintenance of its actuarial ba lance and of financial controls and accounts. 
 
4. Pursuant to Article 5(e) of the Regulations of the Plan and Rule C.1 of the Rules of 
Procedure, an audit of the accounts of the Plan sh all be made annually by the External Auditor, 
namely the External Auditor of the WTO.  The provisions of Chapter XI ("External Audit") and the Appendix ("Additional terms of reference governing external a udit") of the WTO Financial 
Regulations shall apply mutatis mutandis  to the audit. 
 
 
     (signed) (signed) 
 ___________________________ ___________________________ 
  Esra Demir Robert Luther   Chairman Secretary   WTOPP Management Board WTO Pension Plan   
__________