WORLD TRADE  
ORGANIZATION  WT/L/628 
21 November 2005 
 (05-5490) 
General Council 
1- 2  December 2005  
 
 
    
 
WTO PENSION PLAN 
 
 
 
ANNUAL REPORT OF THE MANAGEMENT BOARD 
 
AND REPORT OF TH E EXTERNAL AUDITOR 
 
THEREON FOR THE YEAR ENDING 
 
31 DECEMBER 20041 
                                                      
1 This Report is published in accordance with  Article 5 of the Regulations of the Plan. WT/L/628 
Page 2  
 
 Message from the Chairman of the Management Board
 
 
  "The Management Board of the WTO Pensi on Plan has pleasure in presenting its Annual 
Report for 2004 and apologises for the late publication which is due to delays in the submission of 
data required to close the accounts and complete th e three-yearly actuarial valuation. The Annual 
Report shows that this has been another busy year for the Pension Plan and for the Board.   The Pension Plan is there to provide benefits  to the WTO staff and their dependants over a 
very long time.  The Plan may be paying benefits to  current participants and/or their dependants in 
70 years' time.  The main challenge in managi ng a pension plan is to balance these long-term 
considerations against the short-term events whic h may deflect the Plan from its charted course from 
time to time.     Please allow me to highlight one or two of th e key events which are covered in greater depth 
in this year's Annual Report: 
   The number of participants and beneficiari es has continued to grow and now stands at 
710 and 59, respectively; 
   assets have grown over the year and now stand at CHF 223,344,222; 
 
  the Management Board has devoted a considerable amount of time with the 
investment advisers on the review of the i nvestment strategy and selection of fund 
managers.  At the end of 2004, this process was almost complete.  The Board is confident that the Plan has a robust investme nt policy to protect the assets of the Plan 
over the years to come;   
  If you have any thoughts, comments or con cerns, please feel free to raise them with 
Bob Luther, the Plan Secretary".   WT/L/628 
 Page 3 
 
 
 TABLE OF CONTENTS  
 
  PAGE  
 
I. INTRODUCTION 4 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2004 4 
III. MEETINGS OF THE MANAGEMENT BOARD 5 
IV. PARTICIPATION IN THE PENSION PLAN 11 
V. ACCOUNTS 13 
VI. ACTUARIAL POSITION OF THE PLAN 13 
Report of the External Auditor on the Accounts of the WTO Pension 14 
Plan for the Year Ending 31 December 2004 
Opinion of the External Auditor on the Accounts of the WTO Pension 16 
Plan for the Year Ending 31 December 2004 
 
STATEMENT 1 17  Income and Expenditure Statement for the period 1 January – 31 December 2004  STATEMENT 2 18 
 Surplus account as of 31 December 2004 
 STATEMENT 3 19  Balance Sheet as of 31 December 2004  SCHEDULE A 20 
 Source and Application of Funds for the Period 1 January – 31 December 2004 
 SCHEDULE B 21  Manager Line-up  
SCHEDULE C 22 
 Exchange rates used for the valuation of assets in 2004  SCHEDULE D 23  Structure of the WTO Pension Plan 
 
SCHEDULE E 24  Glossary of terms  ANNEX 1 26 
 Statement of Investment Principles 
 
ANNEX 2 27 
 Payment of pension be nefits under article 32 
 of the Regulations of the WTO Pension Plan  
ANNEX 3 30 
 Statement of Significant Accounting Policies WT/L/628 
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 terminate the membership of ICITO in the United Nations Joint Staff Pension Fund on 31 December 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 2004 to 31 December 2004 has been 
prepared by the Management Board in accordan ce with Article 5 of th e Regulations of the 
Plan for presentation to the General Council and to  Plan participants.  The annual reports for 
1999, 2000, 2001, 2002 and 2003 were issued  under cover of documents WT/GC/W/426, 
WT/GC/W/463, WT/L/497, WT/L/546 and WT/L/583, respectively. 
II. STRUCTURE OF THE PENSION PLAN ON 31 DECEMBER 2004 
5. (a) Management Board
 
 The Management Board was composed as follows on 31 December 2004: 
 
Mr Terry Collins-Williams, Chairman 
Mr Thomas Chan Mr Jean-Pierre Lapalme 
Mr Andrew Johnston Mr Anthony Mistri 
Mr Nicholas Niggli Mr Yves Renouf 
Mr Iba Mar Oulare Members elected by 
the General Council 
Mr Paul Rolian Members appointed 
by the Director-
General 
Mr Mathias Francke Mr Jacques E. Chabert 
Mr Jean-Marc Mignon Ms Monette David 
Ms Rachel Shub Mr Zdenek Drabek 
Ms Lai-Peng Yap 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 
 
(b) Investment Committee  
 
Please see paragraph 29, below. 
 
(c) Secretary  
 
Robert Luther 
 - In-house support services
 
    Jean-Pierre Helary    Christine Figuigui  WT/L/628 
 Page 5 
 
 
  
   - Outsourced support services
 
    Trianon S.A., Lutry 
 
(d) Consulting Actuary
 
 
Cameron Hannah (Mercer HR Consulting S.A.). 
 
(e) Medical Adviser  
 
Dr Catherine Mazeyrac. 
 
(f) Investment Analyst/Consultant  
 
Watson Wyatt. 
 
(g) Global Custodian  
 
The Northern Trust Company. 
 
(h) Fund Managers  
 
Barclays Global Investors (BGI) (passively managed portfolios). Pictet & Cie (actively managed emerging market equity portfolio) 
Rogge Global Partners PLC (activel y managed global bond portfolio). 
Wellington Management Internationa l (actively managed portfolio). 
 
(i) External Auditor
 
 
Austrian Court of Audit 
 
6. An organizational chart is reproduced in Schedule D. 
III. MEETINGS OF THE MANAGEMENT BOARD 
7. The Management Board held five meetings in 2004.  These took place on 3 and 4 March, 
26 and 27 April, 12 and 13 July, 20 and 21 September and 26 October 2004.  The agendas 
included as standing items the review of i nvestment performance and a report by the 
Secretary on matters arising since the previous meeting of the Management Board. 
8. Regular progress reports were made available to the Plan participants and beneficiaries.  The 
remainder of this section of the Annual Report is  devoted to a summary of the main items of 
business dealt with by the Management Board in 2004. 
Review and modification of the investment strategy  
9. In the course of the year the Management Bo ard undertook a comprehensive review of the 
investment strategy which had been in place si nce the inception of the Plan in 1999.  The 
review was carried out in close coordina tion with Watson Wyatt, the investment 
analyst/consultant.  The review was based on an asset/liability study conducted by Watson 
Wyatt.  After detailed discussions extending over two two-day meeti ngs, the Management WT/L/628 
Page 6  
 
 Board decided to adopt a number of important ch anges to the investment strategy.  The key 
changes were a move from a predominantly passively managed domestic portfolio to a 
predominantly actively managed global portfolio .  In addition, new asset classes were 
introduced:  real estate and emerging markets e quities, both of which are expected to better 
diversify risk within the portfolio. 
10. The main advantages of emerging markets include: 
- Diversification benefits; 
- potential for economic outperformance; 
- growth prospects and improving qualit y of capital markets and opportunities 
for institutional investing. 
 
11. The real estate allocation has been divided betw een two styles, indirect and quasi-direct.  The 
indirect investment in real estate equity secu rities attempts to capture the return of the 
European real estate market, though the returns w ill be more volatile than the direct real estate 
investment due to the equity nature of the as set class.  The direct real estate investment 
attempts to capture the return of  the Swiss real estate market.  The investment will be made in 
a Swiss Foundation which directly invests in h ousing and other real estate assets.  The main 
advantage of real estate investments are: 
- A bond-like return, albeit one that follows a different economic cycle when 
compared to either equities or bonds; 
- diversification benefits. 
 
12. Having decided on a revised investment strategy, the next step was the selection of fund 
managers for the new portfolios.  A short list of candidates for each mandate was drawn up by 
a working group of the Management Board, agai n in close consultation with Watson Wyatt.  
Each of the shortlisted managers was inv ited to make a written submission and oral 
presentation, on the basis of which the Management Board made its final selection. 
13. By the end of 2004, satisfactory contracts had b een negotiated and concluded with Pictet and 
Rogge for the emerging market equity and gl obal bond mandates, respectively.  Discussions 
were continuing with Houlihan Rovers for th e European real estate mandate.  A search is 
currently under way for a second global equity ma nager.  In the case of Crédit Suisse (Swiss 
indirect real estate), where the funds are intended to be invested in a foundation under Swiss 
law, the negotiation of the management agre ement remains pending since there is a waiting 
list of clients wishing to join the foundation. 
14. The following table provides a comparative summa ry of the original and revised investment 
strategies by asset class, together with th e names of the corresponding fund managers. 
Asset class Original strategy 
% Fund manager Revised strategy 
% Fund manager 
Passively managed 
Swiss bonds 16 BGI 0 - 
Passively managed 
foreign bonds, unhedged 16 BGI 0 - 
Actively managed 
foreign bonds, hedged 0 - 20 Rogge 
Passively managed 13 BGI 0 -  WT/L/628 
 Page 7 
 
 
 Asset class Original strategy 
% Fund manager Revised strategy 
% Fund manager 
Swiss equities 
Enhanced managed 
global equities 55 Wellington 39 Wellington2 
Actively managed 
global equities 0 - 21 To be determined-
selection in 
process 
Actively managed 
emerging market 
equities 0 - 10 Pictet 
Actively managed real 
estate Switzerland, 
indirect investment 0 - 5 Credit Suisse3 
Actively managed real 
estate Europe, indirect investment 0 - 5 Houlihan Rovers
3 
 
15. As a consequence of the decision no longer to maintain a Swiss bond mandate in the strategy, 
the Management Board cancelled its earlier decisi on to award that mandate to Pictet, subject 
to the negotiation of a satisfactory contract.  Pictet was informed accordingly, and the 
corresponding assets were invested in a Euro money market fund with the global custodian, 
pending the implementation of the revised investme nt strategy.  By the end of February 2005, 
implementation of the new strategies had been completed with the exception of the Credit Suisse and active global equity mandates.  More  details on the new structure are shown below 
in Schedule B. 
Review of investment performance
 
 16. As required under Article 5(d)(iv) of the Plan Regulations, a statement of the investment 
principles currently being followed by the Ma nagement Board is reproduced in Annex 1. 
17. Reports on investment performance were submitted to the Management Board at each 
meeting. 
18. Cash balances corresponding to accrued contri butions were swept by decision of the 
Management Board into the Wellington mandate in various instances.  During the fourth 
quarter of 2004, the Management Board decided to hold such balances in  cash until such time 
as all elements of the revised investment strategy were in place. 
19. In April 2004 representatives of BGI and Wellingt on attended a meeting of the Management 
Board in order to present a progress report on the execution of their respective mandates.  The 
Board retained their confidence in the investme nt process of both managers.  However, due to 
the move from a passively managed portfolio to  a more actively managed portfolio, BGI was 
no longer in a position to offer sufficiently actively managed mandates and the Board subsequently decided to replace BGI's services. 
                                                     
 
2 Continuation of existing mandate. 
3 Will be funded in 2005. WT/L/628 
Page 8  
 
 Investment results as of year end 2004
 
 
Return Statistics (* annualized)
over over over since
Consolidation 1 year* 2 years* 3 years* incept*
Consolidated Securities 5.2% 8.1% -1.5% -2.1%
Custom Benchmark 5.5% 10.0% -1.5% -1.1%
Equities
Consolidated Equities 7.1% 12.7% -4.4% -4.7%
Custom Benchmark 6.7% 13.5% -4.2% -3.7%
     Wellington 6.0% 11.9% -5.6% -8.5%
     MSCI World ex CH 5.3% 12.2% -5.6% -10.2%
     BGI Europe ex CH 11.9% 18.1% -1.8% -2.3%
     MSCI Europe ex CH 11.9% 18.0% -2.3% -2.6%
     BGI Swiss 6.9% 13.3% -1.0% -2.0%
     MSCI CH 5.7% 12.6% -1.8% -2.2%
Fixed Income
Consolidated Fixed Income 2.0% 2.0% 2.8% 3.1%
Custom Benchmark 2.8% 2.5% 3.3% 3.5%
     BGI Global ex CH 1.4% 2.1% 1.2% 2.5%
     Citi WGBI ex CH 1.4% 2.1% 1.2% 2.6%
     NT € Cash * 2.5% 2.0% 4.4% 3.8%
     SBI 4.2% 2.9% 5.3% 4.4%
* Was previously the BGI Swiss Bond mandate 
20. Results with the exception of last quarter ar e shown on an annualized basis (geometric 
average).  "Over 1 Year" shows performance fo r 2004 and "over 2 years" shows performance 
for 2003 and 2004 on an annualised basis - same for the last 3 and 5 years.  Performance for Wellington is reflected gross of fees, performance for BGI is shown net of fees. 
21. Custom benchmarks shown above are composed  by creating a weighted composite of the 
underlying benchmarks shown.  Where "ex CH" is shown, it indicates an index with no Swiss 
franc exposure.  For clarification, MSCI is a pr oducer of mainly equity benchmarks.  The Citi 
WGBI ex CH refers to the Citi World Govern ment Bond Index excluding Swiss franc bonds.  
The SBI refers to the Swiss Bond Index, com posed of both foreign and domestic issuers of 
Swiss franc bonds. 
22. The Northern Trust (NT) Euro Global Cash  fund is the remainder from the Swiss bond 
account which was liquidated from Barclays Global Investors (BGI).  WT/L/628 
 Page 9 
 
 
 Performance Graphs: Rolling Performance Since In ception of Total Mandate, Equities and Bonds  
 
 
23. The solid black line shows the performance of the entire mandate since inception; the dotted 
black line shows the performance of the total fund's benchmark.  Underperformance of the 
total portfolio to the benchmarks is due to th e fund being underweighted in equities during the 
rising market of late 1999/early 2000 and the underperformance of a previous global equity 
manager, ING.  Up to the end of the year, the portfolio was predominantly invested in passive 
strategies—a slight detractor from performan ce of both the equity and fixed income 
composites.  Please see the glossary for a more detailed definition of active and passive management.  The total equity return (shown by the solid red line)  underperformed its 
benchmark due to the performance of ING as we ll.  The returns of the other manager, 
Wellington, have had a positive effect on return s.  The composite portfolio of both fixed 
income (FI) mandates (represented by the solid gr een line) is slightly below the benchmark. 
Risk and efficiency measures
 
 
Tracking Information
Error (TE) Ratio (IR)
Consolidated Securities 2.6 -0.4
Consolidated Equities 2.2. -0.5
Wellington 2.4 0.7BGI Europe ex CH 0.6 --BGI Swiss 0.6 --Consolidated Fixed Income 0.9 --
BGI Global ex CH 0.2 --
NT EURO Cash 1.8 --
 
 
 50 60 70 80 90 100 110 120 130 
 Aug 
1999  Jan 
2000  Jun 
2000  Nov 
2000  Apr
2001  Sep
2001  Feb
2002  Jul
2002  Dec
2002  May
2003  Oct 
2003  Mar 
2004  Aug 
2004 
Total  Composite Benchmark Equity Total  
Equity Benchmark  Fixed Income Total Fixed Income Benchmark  WT/L/628 
Page 10  
 
 24. The BGI funds are managed passively, hence th e low tracking error (see glossary).  An 
information ratio (see glossary) is not meaningf ul for passive mandates and is not shown.  
The assets within the Northern Trust Euro Cash fund used to be a part of the BGI passive 
Swiss fixed income account before they were li quidated into Euros.  As the assets are still 
benchmarked versus the Swiss Bond Index, though not being invested in these assets, the 
tracking error is thus somewhat higher than for the other passive mandates. 
Asset allocation as of 31 December 2004
 
 
Cash
40.9m
19%
EM Equities  
23.7m
11%G lobal Bonds 
35.9m
16%
Europe ex CH Eq. 
22.9m
10%Global Equities 
94.8m
44%
 
 
 The total market value of the assets as at the end of 2004 was CHF 218.2 million (does not 
include the CHF 5.1 million in the cash acc ount).  The relatively large proportion in cash 
(CHF 40.9 million or 18.7% of the total market va lue) is explained by the fact that a Euro 
cash deposit with Northern Trust was opened at the end of 2004 (see paragraph 14, above), 
pending the implementation of the revised investment strategy.  
Cost of living adjustment of benefits  
25. The Management Board approved the recommend ations of the working group which had 
been originally set up in 2003 to define the procedure to be followed in application of 
Article 32 of the Regulations concerning the calculation and cost-of-living adjustment of 
benefits paid in currencies other than the Swiss franc.  The procedure is reproduced in 
Annex 2. 
Revised transfer agreement with the Un ited Nations Joint Staff Pension Fund  
 
26. In the course of 2004, the Secretariat held consultations with representatives of the United 
Nations Joint Staff Pension Fund on the replacem ent of the existing transfer agreement in 
light of the difficulties which had been experi enced with its implementation.  A revised 
transfer agreement was subsequently draw n up and approved by the WTO General Council 
and United Nations General Assembly.  Th e new agreement entered into force on 
1 January 2005. 
   WT/L/628 
 Page 11 
 
 
 Procedure for the consideration of disability cases  
 27. In October 2004, the Management Board decided to set up a working group to draft a set of 
procedures to govern the consideration of requests for determination of incapacity and 
inability to engage in gainful employment unde r Article 28 of the Regulations.  The working 
group is expected to submit its final report in th e early part of 2005.  It was agreed that the 
mandate of the working group should also incl ude the drafting of an amendment to Article 
28(d) of the Regulations in order to provide fo r the granting of a partial disability benefit not 
only in cases of assignment to duties at a lower gr ade but also in cases of assignment to part-
time working at the same grade. 
Introduction of a self-service facility for participants
 
 28. In September 2004 the Management Board a pproved a proposal by Trianon S.A. for the 
introduction of a web-based self-service facility  for participants.  Once it is operational 
in 2005, the facility will permit participants to  access their individual files and make their 
own pension estimates.  Confidentiality will be ensured through encryption and the use of a 
user ID and passphrase. 
Purchase of additional years of contributory service
 
 29. At the request of the participants' representa tives, the Management Board initiated a study of 
the possible implications for the Plan of introducing a provision which would allow 
participants to purchase additional years of contributory service.  The Management Board 
sought the views of the consulting actuary on th e matter and noted that the potential benefits 
for interested participants should be carefully weighed against the potential risks for the Plan.  
Consideration of this matter by the Ma nagement Board will continue in 2005. 
Investment Committee
 
 
30. The Management Board decided not to make  appointments to the Investment Committee 
during the year.  The Management Board was a dvised by its investment analyst/consultant 
and will be considering the future of the Investment Committee over the coming year. 
Appointment of the Secretary of the Plan  
 
31. In the course of 2004 the Management Board ag reed to recommend to the Director-General 
that the appointment of Mr Robert Luther as S ecretary of the Plan should be continued for a 
further period of three years. 
IV. PARTICIPATION IN THE PENSION PLAN 
32. The following table shows the trends in the numb ers of participants and beneficiaries in the 
Pension Plan in the course of 2004. 
 2004 2003 
Active Members  710 694 
Pensioners  59 39 
 
 WT/L/628 
Page 12  
 
 Participants in the Pension Plan in 2004
 
 
Total number on 1 January 2004 
 
Movements in 2004 
 
 - Entries  - Re-entries under the terms of 
Art. 15(b) of the Regulations 
 - Separations 
 694 
  
 
64 
 
2 
50 
Total number on 31 December 2004  
 
Breakdown of separations in 2004   - retirement  - early retirement 
 - deferred retirement 
 - withdrawal settlement  - transfer to UNJSPF  - deferment of decision  - death 
 
Total separation  710 
 
  
14 
2 
- 
19 
1 
13 
1 
    
50 
 
Beneficiaries of the Pension Plan on 31 December 2004  
 
Type of benefit At 31 December 2003 New beneficiaries 
in 2004 Death of 
beneficiaries in 2004 At 31 December 2004 
Retirement 13 14 1 26 
Early retirement 19 2  21 
Deferred retirement 4 -  4 
Surviving spouse's benefit 0 1  1 
Partial disability benefit 3 1  4 
Child's benefit 0 3  3 
Total benefits 39 21 (1) 59 
 
  WT/L/628 
 Page 13 
 
 
 V. ACCOUNTS 
33. A statement of significant accounting policies is reproduced in Annex 3. 
34. The income and expenditure for the period 1 January – 31 December 2004 and surplus 
account as at 31 December 2004 are reproduced in Statements 1 and 2, respectively. 
35. The balance sheet as at 31 December 2004 is reproduced in Statement 3. 
36. The source and application of funds for the period 1 January – 31 December 2004 is 
reproduced in Schedule A. 
37. A glossary of terms to facilitate an understandi ng of the tables is reproduced in Schedule E. 
VI. ACTUARIAL POSITION OF THE PLAN 
38. The Consulting Actuary to the WTO Pension Plan  completed a full actuarial valuation of the 
WTO Pension Plan as at 31 December 2004.  Th is assessment was calculated using individual 
membership data.  The results of the actuarial valuation show that, on an ongoing basis, the 
current contribution rate of 22.5% lies within  an optimistic range of possible outcomes for 
calculating the long-term cost of the Plan. By the end of 2005 the Management Board intends to launch a review of all parameters that im pact the long-term sustainability of the Plan 
(benefit provisions, contribution rate) and the actuarial assumptions used to assess the long-
term sustainability of the Plan. 
 
   (signed) (signed)   ___________________________ __________________________ 
  Esra Demir Robert Luther 
  Chairman Secretary   WTOPP Management Board WTO Pension Plan  
 
 
      
 
     WT/L/628 
Page 14  
 
 Report of the External Auditor on the Accounts of the WTO Pension Plan
 
for the Year Ended 31 December 2004  
 
 According to Rule C.1 of the Rules of Procedure of  the Management Board, the External Auditor of 
the WTO is also appointed as External Auditor of  the WTO Pension Plan. The Austrian Court of 
Audit was appointed as External Auditor of the WT O and WTO Pension Plan for the financial years 
2002 to 2006.  After significant negative nominal rates of retu rn in 2001 (–10.13%) and 2002 (–18.31%) the Plan 
achieved positive nominal rates of return in 2003 (10.01%) and 2004 (4.47%). A comparison of the 
investment portfolios for the years 2003 and 2004 is given in the following table: 
 
 31.12.2003 31.12.2004 
ACTUARIAL  RATE  OF RETURN 
a. value of assets as of  01 Jan 163, 368,410 195,986,085 
b. value of assets as of   31 Dec 195, 986,085 223,344,222 
i. investment income 17,124,162 9,168,405 
average assets = (a+b-i)/2 171,115,167 205,080,951 
actuarial rate of return in nominal terms = 
i / average assets 10.01% 4.47% 
CPI for Switzerland 0.60% 1.40% 
actuarial rate of return, net of inflation 9.41% 3.07% 
 
The Auditor noted that the actuarial rate of return in nominal terms deteriorated by 55% in 2004 
compared to 2003. On the other hand, investment and other administrative expenses increased from 
CHF 0.83 million to CHF 1.43 million or 73%, respectively (Statement 1). The Auditor also noted 
that investment and other administrative expenses compared to periodic benefits (2003: CHF 
1.75 million; 2004: CHF 2.25 million) increased from 47% in 2003 to 64 % in 2004 (Statement 1). 
 
Advisors to the Management Board  
 
Pursuant to Article 7 of the Regulations of th e WTO Pension Plan, the Director-General shall 
appoint advisors upon the recommendation of th e Management Board.  Accordingly, the 
Management Board decided at its 18th meeting in January 2001 to establish an Investment 
Committee.  This Committee ce ased to function at the beginning of 2003.  In December 2003 
the Management Board contracted investment advisory services with Watson Wyatt AG for an initial period of one year with au tomatic renewal on an annual basis. 
 
The Auditor noted, while the Investment Comm ittee was designed as a cost free advisory 
body, the cost for the investment consu ltant amounted to CHF 0.3 million in 2004. 
 
  WT/L/628 
 Page 15 
 
 
 Financial rules and regulations  
 
The Regulations of the WTO Pension Plan do not  refer to the application of any financial 
rules and regulations governing the Plan.  Th e Auditor reiterated the recommendation from 
the preceding report, that the WTO Financial Rules and Regulations should apply mutatis 
mutandis and as far as applicable in cases where ar e no specific rules in the Regulations of the 
Pension Plan.  Consequently, references shoul d also be included in the Statement of 
Significant Accounting Policies as contained in an Annex of the Annual Report. 
 Operating costs
 
 
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." 
 
Upon recommendation of the Auditor in its 2002 report, the reserve fund for operating costs 
of CHF 1 million as of 31 December 2002 w as partially wound up in 2003 and CHF 750,000 
were transferred to the surp lus account, leaving CHF 250,000 in the credit of the Balance 
Sheet as of 31 December 2003. Without a furthe r allocation of a reserve, this liability was 
transferred into 2004 account and disclosed in  the Balance Sheet as of 31 December 2004 
accordingly. 
 
Letter of representation  
Referring to the audit of the accounts of the WTO Pension for the year ended 31 December 
2003 the Secretary of the Plan was asked by the Auditor for a letter of representation to confirm the completeness, regularity and accura cy of the entries in the books. At its 
39
th Meeting the Management Board expressed "… the doubts of the Board regarding the 
appropriateness of certain of the undertaki ngs contained in the proposed letter of 
representation …". The External Auditor was in formed by the Management Board that it 
intended "… to revert at a later date to th e question of the letter of representation." The 
Auditor noted during the course of the audit of the 2004 accounts of the Pension Fund (i.e. 
end of June 2005) that no further action had b een taken by the Board. The Auditor reiterated 
his view that the instrument of a representati on letter is in accordance with internationally 
accepted auditing standards and an essential part of the external audit process. 
    
(signed) 
_________________________ 
Josef Moser 
President of the Austrian Court of Audit 
 
 
 
    
 WT/L/628 
Page 16  
 
 Opinion of the External Auditor on the Accounts of the WTO Pension Plan
 
for the Year Ended 31 December 2004  
 
 The representatives of the Austrian Court of Audit have examined the appende d Financial Statements 
contained in the Annual Report for 2004, comprising Statements 1 to 3 and Schedules A, B and C of 
the WTO Pension Plan for the year ending 31 Decem ber 2004.  As a result of the examination, the 
opinion is given that these statements, which we re prepared in conformity with the accounting 
policies described in Annex 3 of the Annual Report for 2004 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 2004 and the operations for 2004. 
 The accounting system of the WTO Pension Plan was outsourced to Trianon
4, which prepared the 
accounts for 2004.  Trianon provided the report of its external auditor including the financial 
statements for the year 2004 for information.  Trianon also provided the accounting transactions for 
the year 2004 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 
 
   
                                                     
 
4 Trianon Conseils SA, Lutry, Switzerland  
  WT/L/628
 Page 17STATEMENT 1  
 
Income and Expenditure Statement 
(Expressed in Swiss francs)  
Expenditure at 31.12.2004 at 31.12.2003 Income at 31.12.2004 at 31.12.2003 
Benefits    Contributions    
Lump sum    Participants 7,610,700 6,998,404 
Withdrawal settlement – Art. 26 308,471 756,068 Organization 15,221,384 13,996,794 
Commutation – Art. 23(c) & Art. 24(c) 1,593,383 2,534,945 Interest on validations 238 - 
Transfer to other organizations  337,230 -    
 2,239,084 3,291,013  22,832,322 20,995,198 
Periodic benefits    Investment Income    
Retirement benefit – Art. 23 1,046,678 763,609    
Early retirement benefit – Art. 24 1,073,434 915, 782 Profit on securities 10,412,100 17,718,192 
Surviving spouse benefit – Art. 29  21,510 - Interest on current accounts 2,839 6,425 
Child benefit – Art. 30 4,934 -    
Partial disability benefit – Art. 28 104,810 73,584    
 2,251,366 1,752,975  10,414,939 17,724,617 
      
Investment and Other Admin. expenses    Other income  6,000 10,099 
Currency revaluation 129,338 53,439    
Bank charges 856 464    
Audit fees 4,611 6,000    
Management fees 1,116,340 586,691    
Actuarial expenses 53,425 65,950    
Administrative costs 130,518 118,715    
 1,435,088 831,259    
      
      
Excess income over expenditure  27,327,723 32,854,667 Excess expenditure over income   - 
 33,253,261 38,729,914  33,253,261 38,729,914 
(signed) 
_________________________ 
Esra Demir  
Chairman  
WTOPP Management Board (signed) 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  
 WT/L/628 
Page 18   STATEMENT 2  
 
 
Surplus Account 
(expressed in Swiss francs)  
Debit at 31.12.2004 at 31.12.2003 Credit at 31.12.2004 at 31.12.2003 
   Excess income over expenditure   
27,327,723  
32,854,667 
      
   Dissolution of  provision for  - 750,000 
   administrative fees   
      
      
Profit 27,327,723 33,604,667    
      
 27,327,723 33,604,667  27,327,723 33,604,667 
(signed) 
_________________________ 
Esra Demir  
Chairman  
WTOPP Management Board (signed) 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan 
  
  WT/L/628
 Page 19STATEMENT 3  
 
Balance Sheet 
(expressed in Swiss francs)  
Assets at 31.12.2004 at 31.12.2003 Liabilities at 31.12.2004 at 31.12.2003 
      
Securities 218,262,819 195,801,554 Capital 1.1  195,458,228 161,853,561 
Current accounts  5,078,862 180,477    
 223,341,681 195,982,031    
   Reserve funds    
   Operating cost 250,000 250,000 
      
Current assets    Current liabilities    
Withholding taxes to be recovered  994 3,559 Accrued expenses  308,271 277,857 
Contributions receivable  1,547 495    
 2,541 4,054    
      
      
   Profit  27,327,723 33,604,667 
 223,344,222 195,986,085  223,344,222 195,986,085 
(signed) 
_________________________ 
Esra Demir  
Chairman  
WTOPP Management Board (signed) 
____________________ 
Robert Luther 
Secretary 
WTO Pension Plan WT/L/628 
Page 20  
 
 SCHEDULE A
 
 
Source and Application of Funds  
(expressed in Swiss francs ) 
 
Source  1.1.2004-31.12.2004 1.1.2003-31.12.2003 
   
Funds as at 1.1 195,986,085 163,368,411 
Receipt of contributions 22,832,322 20,995,198 
Profit on securities 10,285,601 17,671,178 
Increase in current liabilities 30,414 - 
Other income 6,000 10,099 
 228,140,422 202,044,886 
Less:   
Application    
   
Settlement of benefits 4,490,450 5,043,988 
Expenditure 1,305,750 777,820 
Decrease in current liabilities - 236,993 
 5,796,200 6,058,801 
Funds as at 31.12  223,344,222 195,986,085 
  WT/L/628 
 Page 21 
 
 
 SCHEDULE B  
 
Manager Lineup  
 
Investment Mgmt. Firms  Location Mandate Benchmark 
Credit Suisse Asset 
Management Zurich, Switzerland Swiss Real Estate 
Foundation  KGAST Capital 
Weighted Real Estate 
Index 
Houlihan Rovers SA Brussels, Belgium European Real Estate 
Securities EPRA Europe 
Pictet & Cie London, England Active Emerging 
Markets MSCI Emerging 
Markets 
Rogge Global Partners London,  England Global Bonds Hedged 
into Sfr. Citigroup World 
Government Bond 
Index hedged into Sfr. 
Wellington Management International Ltd Boston, MA; London 
England Enhanced Active 
Global Equities MSCI World 
Developed 
To be determined - Active Global Equities MSCI World 
Developed 
   
 WT/L/628 
Page 22  
 
 SCHEDULE C
 
 
 
EXCHANGE RATES USED FOR THE VALUATION OF ASSETS IN 2004  
  
Currency Rate used for closing 
on 31.12.2004 
Wellington portfolio EUR 0.647 
 USD 0.879 
 JPY 90.115 
 SEK 5.844 
 GBP 0.458 
 AUD 1.122 
 CAD 1.054 
 HKD 6.836 
 NOK 5.326 
   
BGI portfolios USD 0.879 
 
  
Currency Breakdown (in CHF and P er Cent) as of 31 December 2004  
 
US Dollar
27.7%Japanese Yen
10.5%EURO
38.2%Canadian 
Dollar
1.3%S. Korean Won
1.9%
British Pound 
Sterling
8.8%Other
11.5%
 
 
The amount above reflects only the assets available in the i nvestment account (does not include the CHF 5.1 m in the cash 
account) 
 
The chart above shows the currency allocation at yea r-end.  There was in Swi ss franc exposure as of 
year-end as all Swiss franc asset classes had been li quidated in preparation for the transition to the 
new strategy.  
  WT/L/628
 Page 23SCHEDULE  D 
STRUCTURE OF THE WTO PENSION PLAN  
 
PARTICIPANTS  
GENERAL COUNCIL
 
CONSULTING ACTUARY 
 
ASSET MANAGEMENT SERVICES  
DIRECTOR-GENERAL
 
MEDICAL ADVISER 
 
INVESTMENT COMMITTEE ADMINISTRATIVE 
SERVICES 
 
MANAGEMENT BOARD  
EXTERNAL AUDITOR 
INVESTMENT 
ANALYST/CONSULTANT WT/L/628 
Page 24  
 
 SCHEDULE E
 
 
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 with 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. 
 Contributions receivable  refers to contributions due in respect of contributory service in 2004 but 
received after 31 December 2004.  
Currency revaluation  represents the exchange rate losses on the Crédit Suisse US$ account. 
 Enhanced indexation  refers to a range of low risk strate gies for adding incremental value to a 
passively managed portfolio. Enhanced indexation can be categorized by type of strategies adopted as 
well as by tracking error which may range from about 0. 8% to 1.5% in Europe and up to 2% to 3% in 
the US. Enhanced indexation can deliver an attractiv e level of return for the risk taken. The terms 
"enhanced managed" and "enhanced active" in the text may be considered synonyms.  External audit  includes fees charged by the External Audito r in connection with the audit of the 2003 
accounts.  
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.  In 2004 these fees 
amounted to CHF 1,116,340, broken down as follows: BGI – CHF 107,132;  Northern Trust – CHF 256,969;  Watson Wyatt – CHF 304,936;  Wellington – CHF 447,303.  Passive Investment Management is a form of portfolio management whereby the portfolio manager 
invests the assets in a manner that is  either identical or very similar to the index.  The advantage of 
such an approach are generally lower management fees, lower trading costs and returns very similar 
to the index.  The disadvantage of passive management is the sacrifice of any potential outperformance.       
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.  WT/L/628 
 Page 25 
 
 
 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 2004. WT/L/628 
Page 26  
 
 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 res ponsible for the secure investment of all Plan 
assets, the formulation of investment policies af ter taking appropriate professional advice, and 
the appointment of investment managers 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 and the maintenance of a reasonable level of risk.  The strategy is geared to achieve a long-term rate of return of 3.5% 
net of price inflation, which is the assumpti on on which the feasibility study and contribution 
rates of the Plan were originally based. 
 
3. Derivatives may be used within the globa l hedged fixed income mandate for hedging 
purposes, where they provide the opportunities to achieve 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 rest ricted to forward foreign currency contracts, 
futures, covered bond options and interest rate  options.  Leverage a nd net short positions are 
not allowed.    
 4. At its thirty-sixth meeting held on 26-27 April 2004 (document WTOPP(04)24, 
paragraph 19), the Management Board adopted the following revised investment strategy: 
 
 Bonds 
Global, 
hedged Global 
equities, 
active Global 
equities, 
enhanced Emerging 
market 
equities Real estate 
Europe 
indirect 
investment Real estate 
Switzerland 
indirect 
investment 
Relative allocation 20% 21% 39% 10% 5% 5% 
Absolute 
allocation (in CHF million)  43.7m 45.8m 85.1m 21.8m 10.9m 10.9m 
Notes to above chart: 
• The absolute allocation reflects the weightings of the revised investment strategy based on 
31 December 2004 market values.  At the end of the year, the global bond, global equity active, 
emerging market and the two real estate portfolios had not yet been invested.   
 
 
 
  (signed) (signed)  __________________________ ________________________   Esra Demir Robert Luther 
  Chairman Secretary 
  WTOPP Management Board WTO Pension Plan  WT/L/628 
 Page 27 
 
 
 ANNEX 2  
Payment of Pension Benefits under Article 32  
of the Regulations of the WTO Pension Plan  
 
 
1. Article 32 of the Regulations of the WTO Pensio n Plan provides for a system of cost-of-living 
adjustment which is designed to ensure the maintenance of purchasing power of periodic benefits in the 
currency in which those benefits are paid.  The sy stem of adjustment app lies to retirement, early 
retirement, deferred retirement, disability, surviv ing spouse's, child's and secondary dependant's 
periodic benefits.  It does not apply to withdrawal and other lump-sum payments. 
 2. The purpose of the present note is to explain how the system of cost-of-living adjustment works. 
 
Cost-of-living adjustment of be nefits paid in Swiss francs
 
3. Where the beneficiary has opted for the be nefit to be paid in Swiss francs ( Swiss franc track ), the 
benefit is adjusted on 1 January of each year accord ing to the annual movement of the Swiss consumer 
price index. 
 
Payment of a benefit in a curren cy other than the Swiss franc  
4. Where a beneficiary selects a currency other than  the Swiss franc, without submitting proof of 
residence in a country other than Switzerland, the rate of exchange between the Swiss franc and the 
local currency applied by the bank on the date of payment of the benefit will be used. 
 
5. Where a beneficiary selects a currency other than th e Swiss franc and submits proof of residence in a 
country other than Switzerland ( local currency track ), the average of the United Nations end-of-
month operational rates of exchange between the Swi ss franc and the local curr ency computed over the 
36 consecutive calendar months up to and including the month of separation will be used. 
 
Cost-of-living adjustment of benefits paid in a currency other than the Swiss franc  
6. Where the beneficiary has opted for th e benefit to be paid in a curren cy other than the Swiss franc and 
provided proof of residence in the country concerned ( local currency track ), the local currency 
amount shall be adjusted on 1 January according to the annual movement of the official consumer price 
index for the country concerned. 
 
Determination of the initial co st-of-living differential factor  
7. Where a beneficiary submits proof of residence in a country other than Swit zerland and where the cost-
of-living in that country is more than 10 per cent hi gher or lower than in Switzerland, an initial cost-of-
living differential factor is applied to the local currency amount of the benefit.  The differential is 
measured by determining the averag e difference in cost-of-living betw een Geneva and the beneficiary's 
country of residence over the 36 consecutive calendar months up to and including the month of 
separation on the basis of the United Nations post adjust ment system.  The factor to be applied is net of 
the above-mentioned initial 10 per cent difference, i.e. where the average cost-of-living difference 
between Geneva and the country of residence is + 14 per cent or – 14 per cent, the differential factor to 
be applied is + 4 per cent or – 4 per cent. 
 WT/L/628 
Page 28  
 
 Certification of residence  
8. The beneficiary is required to submit satisfactory proof of residence by means of the attached form in 
order to benefit from the local currency track  provisions of Articles 32 (e), (f), (g), (h), and (i) of the 
Plan Regulations.  "Country of residence" is interpreted as meaning the country in which the 
beneficiary has his/her tax domicile or in which he/she spends the major part of the year.  The following are some examples of satisfactory proof of residence: 
 
France   Carte de séjour ; 
   Certificate of residence; 
Two official documents co nfirming the address of th e "résidence principale" 
(if above documents cannot be obtained). 
 
Italy Certificado di Residenza, issued by  the Servizi Demografici, L'Ufficiale di 
Anagrafe; 
Dichiarazione di Soggiorno per Stranieri issued by the Ministry of Interior, 
General Department of Police, Foreigners' Division. 
 
United Kingdom Certificate of Re sidence issued by the District  Council, the local police or 
the Inland Revenue. 
 
United States Copy of national passport stamped by United States Immigration 
Authorities upon arrival, and/or alie n registration card  (green card). 
For guidance with respect to other countries, participants and beneficiaries should contact the Pension 
Plan Secretariat.  
9. The "issue date" of the proof of residence must be after the date of separation of the participant.  For 
beneficiaries whose benefits are already in payment, the "issue date" must not be more than six months 
prior to the date of submission. 
 
10. Beneficiaries will be asked each year to declare on th eir certificate of entitlement that they continue to 
reside in their country of residence. 
 
11. In the event of doubt, the beneficiary will be asked to provide further evidence such as utilities bills 
proving that the beneficiary was at the address in question.  C/ O addresses will not be accepted as 
satisfactory evidence. 
 
12. If the beneficiary fails to continue to provide satisf actory evidence, the beneficiary will be advised that 
his/her benefit will no longer be adjusted by the differential factor or local CPI until satisfactory 
evidence is provided. 
 13. A beneficiary may revert from the local currency track  to the Swiss franc track  in exceptional cases, 
such as hardship, and with the prior approval of the Management Board.  WT/L/628 
 Page 29 
 
 
 WORLD TRADE ORGANIZATION  PENSION PLAN (WTOPP) 
 
Centre William Rappard 
154, rue de Lausanne 
1211 Genève 21 
Suisse 
Tel + 41 22 739 52 12 
 
1. THE SUBMISSION OF THIS FORM IS OPTIONAL.  Please refer to Article 32 of the Pension Plan 
Regulations, the note by the Secretary on "Payme nt of pension benefits under Article 32 of the 
Regulations of the WTO Pension Plan". 
 
2. A declaration of your country of re sidence is not effective without a ce rtificate of residence issued by 
a national or local government authority .  The certificate of residence must be issued after the date 
of separation from service.  Its acceptance will en able you to avail yourself  of the provisions of 
Articles 32 (e), (f), (g), (h), and (i) of the Plan Re gulations concerning local currency track pensions. 
 3. If you submit this form, it cannot be dated or submitted more than two weeks before the 
commencement date of the WTOPP entitlement.  A future communication concerning your 
entitlement will be sent to the address given on  that form, unless a reasonable explanation is 
provided for doing otherwise.  Shou ld you change your address, whethe r or not this involves moving to 
a different country, it is essential that you inform us immediately. 
 4. If you do NOT submit this form, your benefit will be established in Swiss francs and will then be 
adjusted in accordance with the Swiss Consumer Pr ice Index.  You may however, at any time in the 
future, declare your country of residence and submit this form. 
 A. DECLARATION OF COUNTRY OF RESIDENCE
 
 Having taken note of paragraphs 1, 2, 3 and 4 above, 
 
I,  _____________________________  ______________________________ _________________________ 
  (SURNAME) (FIRST) (MIDDLE) 
 declare my residence as a WTOPP beneficiary as follows:  
My country of residence is:  ____________________________________ 
My home address is:   ____________________________________ 
    ____________________________________     ____________________________________ 
    ____________________________________ 
Telephone No:    _______________________________       e-mail: _____________________ 
 B. PROOF OF RESIDENCE
 
 
A certificate of residence issued by a national or local government auth ority is attached [  ]. 
 I understand that, having submitted proof  of my country of residence and th ereby having become entitled to a 
local currency track pension, I will rema in permanently on that track and I will not be able to withdraw from 
that track unless so authorized to do  so by the Management Board of the Pension Plan under Article 32 (j) of 
the Plan Regulations).  I undertake, in the future, to noti fy the Plan of any change in my country of residence 
as soon as it occurs.  I understand th at failure to do so, or providing a fa lse statement, may lead to the loss of 
my entitlements under th e local currency track. 
  Date:  ______________________________  Signature:  __________________________________ 
 (please see paragraph 3 above) 
 WT/L/628 
Page 30  
 
  
 
ANNEX 3
 
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 practi cal reasons, the current United Nations operational 
rates of exchange are used for the conversion of  other currencies 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 actua rial balance 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 WT O.  The provisions of Chapter XI ("External 
Audit") and the Appendix ("Add itional terms of reference govern ing external audit") 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 
  
__________