RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/463
7 December 2001
(01-6304)
General Council
19 December 2001
WTO PENSION PLAN
MANAGEMENT BOARD
ANNUAL REPORT1
2000
                                                     
1 This Annual Report is published in accordance with Article 5 of the Regulations of the Plan.WT/GC/W/463
Page 2
TABLE OF CONTENTS
PAGE
Introduction 3
Structure of the Pension Plan 3
Meetings of the Management Board 4Participation in the Pension Plan 6
Operating costs 7
Accounts 7
Actuarial position of the Plan 8
Opinion of the External Auditors on the accounts of the WTO Pension Plan 8
for the Financial Year Ended 31 December 2000
ANNEXES
Annex 1: Structure of the WTO Pension Plan
Annex 2: Return on passive and active portfolios in 2000Annex 3: Income and Expenditure Statement for the period 1.1.2000 – 31.12.2000
Annex 4: Surplus account as of 31 December 2000
Annex 5: Balance Sheet as of 31 December 2000
Annex 6: Source and Application of Funds for the Period 1.1.2000 – 31.12.2000
Annex 7: Glossary of termsAnnex 8: Report of the External Auditor on the accounts of the WTO Pension Plan
for the Year Ended 31 December 2000WT/GC/W/463
Page 3
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 NationsJoint Staff Pension Fund on 31 December 1998 and to adopt the Regulations and Administrative Rulesof 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 present report for the period from 1 January 2000 to 31 December 2000 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 the Plan participants.  Individual statements of account will be made available
to all participants together with the Annual Report.
STRUCTURE OF THE PENSION PLAN
4. (a) Management Board
The Management Board was composed as follows on 31 December 2000:
Ambassador Jaegil Lee, Chairman
Mr. Roberto Carvalho Azevedo Mr. Jacques Chabert
Mr. Mark Linscott Mr. Hector Millan
Mr. Michael Stone2Mr. Anthony Mistri
Mr. Peter van der GaastMembers elected by
the General Council
Mr. Paul RolianMembers appointed by
the Director-General
Mr. Andrew Johnston Ms. Monette David
Mr. Jean-Marc Mignon Mr. Zdenek Drabek
Mr. Matthew Nwagwu Mr. Jean-Pierre Lapalme
Mr. Stig TraavikAlternates elected
by the General
Council
Mr. Jan-Eirik SørensenAlternates appointed
by the Director-
General
(b) Secretary
Robert Luther
- Support services
Jean-Pierre Helary
Christine Dresti
                                                     
2 Mr. Stone resigned on 3 April 2001 and was replaced by Mr. Remo Moretta.WT/GC/W/463
Page 4
(c) Consulting Actuary
Richard Leblond (Prasa Hewitt S.A.)3.
(d) External Auditor
Mr. Ad J.E. Havermans, Member of the Board of the Netherlands Court of Audit.
(e) Other Advisers
ECOFIN Investment Consulting AG (for investment matters)
Lenz & Staehelin (for legal matters)
5. An organizational chart is reproduced in Annex 1.
MEETINGS OF THE MANAGEMENT BOARD
6. The Management Board held six meetings in 2000.  The agendas included the conclusion of contracts
with the global custodian and active fund managers4, review of investment performance, selection of a
consulting actuary, preparation of a transfer agreement with the United Nations Joint Staff Pension
Fund, drafting of rules of procedure, selection of a firm for the outsourcing of specialist supportservices and the establishment of an investment monitoring mechanism.  These items are dealt with ingreater detail below.
7. Regular progress reports were made available to the Plan participants.
Selection of Global Custodian and Active Fund Managers
8. The Management Board determined the investment strategy for the Plan in 1999.  Details were
provided in the Annual Report for 1999.  In 2000, the Management Board concentrated on completing
its implementation through the appointment of investment managers under appropriate mandates.
9. As stated in the Annual Report for 1999, the mandates with the Northern Trust Company as the global
custodian and with ING Investment Management and Wellington Management International as theactive fund managers were launched on 19 April 2000.  Assets to a value of approximately SFR 70million were transferred on that date to Northern Trust and assigned equally to the two active
portfolios.
Management of the Assets and Performance
10. In February 2000, the Management Board decided to move the current account of the Plan from the
UBS to the Crédit Suisse since the latter offered more favourable cash management terms.
11. Barclays Global Investors (BGI) continued to serve as manager of the Plan's four passive5 portfolios
allocated to Swiss bonds, global bonds ex-Switzerland, Swiss equities and European equities ex-Switzerland.
12. Accumulated contributions were swept regularly into  the BGI passive portfolios in accordance with the
weights specified in the investment strategy approved by the Management Board.
                                                     
3 Mr. Leblond was replaced by Mr. Cameron Hannah (William Mercer S.A.) on 1 March 2001.
4 An "active" fund manager manages a portfolio by selecting investments in a manner designed to
achieve outperformance of a benchmark (i.e. reference index) over time.
5 A "passive" fund manager manages a portfolio by linking the investments to a given index so that the
portfolio value moves with that index.WT/GC/W/463
Page 5
13. The performance of the BGI passive portfolios and of the ING and Wellington active portfolios over
the period ending 31 December 2000 is summarized in Annex 2.
14. In spite of difficult market conditions, the Plan achieved a nominal rate of return of 4.73% in 2000,
corresponding to a real rate of return of 3.23% after deduction of the movement of 1.5% in the Swisscost-of-living index in 2000.  It is recalled that the long-term target for the Plan is a real rate of return
of 3.5%.
Selection of a Consulting Actuary
15. In the course of 2000, the Management Board completed its analysis of tenders received for the
provision of actuarial services and heard presentations  from three short-listed candidates.  Pursuant to
Article 7 of the Regulations of the Plan, the Management Board decided to recommend to the Director-
General the appointment Mr. Cameron Hannah of William Mercer S.A. to serve as the Plan'sconsulting actuary.  Mr. Hannah took up his duties on 1 March 2001.
Transfer Agreement with the United Nations Joint Staff Pension Fund (UNJSPF)
16. As provided for under Article 10 of the Regulations, the Management Board negotiated a transfer
agreement with the UNJSPF under which participants  would be able to transfer their accumulated
pension rights from one plan to the other.  The transfer agreement was endorsed by the GeneralCouncil and United Nations General Assembly in December 2000 and entered into force on1 January 2001.
Rules of Procedure
17. Article 5(c) of the Regulations of the Pension Plan states that the duties and authority of the
Management Board as well as rules for the auditing of accounts shall be laid down in rules ofprocedure which shall be approved by the General Council.
18. The Management Board continued its work on the drafting of the rules of procedure with a view to
their submission to the General Council
6.
Outsourcing of Specialist Support Services
19. The Management Board analysed the replies to the call for tenders issued in 1999 for the outsourcing
of the Plan's specialist support services.  These services include the maintenance of individual records,the calculation of benefits and estimates and the maintenance of accounts.  The Management Boarddecided to select Trianon S.A., a specialist firm based in Lutry (VD), subject to the negotiation of asatisfactory contract.
20. In deciding to outsource the above services, the Management Board also agreed that the Plan
Secretariat should continue to pr ovide an in-house service allowing participants and beneficiaries
access to information about their pension entitlements.  The Management Board further decided thatthe contract with Trianon should provide for the purchase of the software licence by the Plan and returnof a complete, historized database in the event that the Management Board decided to cease
outsourcing those services.
21. The contract negotiations were still in progress at the end of the year
7.
                                                     
6 The rules of procedure of the Management Board were approved by the General Council on
8 May 2001.
7 The contract with Trianon was signed on 1 June 2001.WT/GC/W/463
Page 6
Establishment of an Investment Monitoring Mechanism
22. With the launching of the full investment strategy, the Management Board turned its attention to the
ongoing maintenance of that strategy, including monitoring compliance of fund managers with theirmandates, ensuring that the proper balance of the strategy is maintained and assessing the need foradjustments to the strategy in the light of investment performance and/or changes in the liability
structure of the Plan.  The Management Board concluded that it would be necessary to set up an expert
subsidiary body to deal with those tasks and noted that similar bodies, or "investment committees",existed in other pension plans.
23. Work on the composition and terms of reference of the investment committee was still in progress at
the end of the year
8.
PARTICIPATION IN THE PENSION PLAN
24. The following table shows the trends in the numbers of participants and beneficiaries in the Pension
Plan in the course of 2000.
Participants in the Pension Plan in 2000
Total number on 1 January 2000 552
Movements in 2000
-   entries-   separations
Total number on 31 December 200057
28
581
Breakdown of separations in 2000
-   retirement
-   early retirement
-   withdrawal settlement-   deferment of decision2
23
3
Beneficiaries of the Pens ion Plan on 31 December 2000
Retirement benefits 1
Early retirement benefits 5
Total number of beneficiaries on 31 December 2000 6
                                                     
8 The investment committee is expected to be established by the middle of 2001.WT/GC/W/463
Page 7
OPERATING COSTS
25. The External Auditor noted, in reporting on 1999 WT O Pension Plan accounts, that the operating costs
of the Pension Plan did not include the costs incurred by the WTO Secretariat working for the Plan.The External Auditor advised that the situation shou ld be reconsidered sin ce the costs concerned were
basically costs of the Pension Plan.
26. The Management Board reconsidered this matter an d noted that, according to Article 5(f) of the
Regulations of the Plan, all expenses incurred in administering the plan, investing plan assets,employing the services of professional advisers and those incurred by the WTO in providing facilitiesfor and in support of the Management Board are to be borne by the Plan and that each element is to beseparately identified in the annual report.
27. The Management Board further noted that the ongoing costs of administering the Plan could not be
accurately determined until the outsourcing contract with Trianon (see paragraphs 19-21, above) wasfully operational.  The cost of investing Plan assets and employing services of professional adviserswas already reported in detail in the Pension Plan accounts.
28. The Management Board further noted that the provision for administrative costs of 0.2 per cent of
pensionable remuneration included in the total contribution rate of 22.5 per cent of pensionableremuneration had been determined without taking into account the salary and related costs of the staffinvolved in the administration of the Plan.  The provision of 0.2 per cent, corresponding toapproximately SFR 154,700 in 2000, was intended to cover actuarial costs and administrative costs
other than those relating to the salaries of the WTO secretariat staff.
29. Finally, the Management Board was informed by the WTO Secretariat that, during the present interim
phase and pending the full introduction of the above outsourcing arrangements with Trianon, it wasestimated that the WTO Secretariat allocated 1.6 work years to the administration of the Plan,
corresponding to approximately SFR 250,000, or approximately 0.3 per cent of pensionable
remuneration.  The Management Board noted that the current overall contribution rate of 22.5 per cent,
which was 1 per cent higher than the actuarially requ ired contribution rate was adequate to cover the
full operating costs of the Plan.  The Management Bo ard agreed to establish a reserve to cover the
operating costs.
ACCOUNTS
30. Pursuant to Article 15(a) of the Regulations of the Pension Plan, the unit of account of the Pension Plan
is the Swiss franc.  For practical reasons, the curre nt United Nations operational rates of exchange are
used for the conversion of other currencies into the Swiss franc.
31. The accounting year is 1 January to 31 December.
32. Unrealized exchange rate gains and losses are placed in the currency revaluation reserve fund.  In 1999,
the Pension Plan’s foreign currency holdings in BGI had been revalued in Swiss franc terms  on amonthly basis and the results credited to the currency revaluation reserve fund.  In 2000, it was decided
that the accounts should reflect the historical value in Swiss francs of those holdings.  As a result of
that correction, the currency revaluation reserve fund was reduced by SF 3,437,125 on 1 January 2000.
33. The value of securities recorded in the accounts corresponds to the lower of the purchase price or
market value.
9
34. The income and expenditure statement for the period 1.1.2000 - 31.12.2000 and surplus account as at
31.12.2000 are reproduced in Annexes 3 and 4, respectively.
35. The balance sheet as at 31.12.2000 is reproduced in Annex 5.
                                                     
9 On 31 December 2000, the value of unrealized gains, corresponding to the difference between the
market value and purchase price of the Plan’s assets stood at SFR 8,379,784.WT/GC/W/463
Page 8
36. The source and application of funds for the period 1.1.2000 - 31.12.2000 is reproduced in Annex 6.
37. A glossary of terms to facilitate an understanding of the tables is reproduced in Annex 7.
38. The significant increase in management fees in 2000 is explained by the fact that the mandates for the
two active fund managers were launched on 19 April 2000 (see paragraph 9, above).
39. The increase in the amount of cash held on current account at 31 December 2000 compared to
31 December 1999 is explained by the fact that, in a ddition to the monthly cont ributions received at the
end of December 2000, an amount of SFR 1,641,400 was being held in cash at that date by the threefund managers.
ACTUARIAL POSITION OF THE PLAN
40. The consulting actuary to the WTO Pension Plan has completed an interim actuarial assessment of the
WTO Pension Plan effective 31 December 2000.  The interim assessment was completed by taking theresults of the official actuarial valuation completed at 31 December 1998 and adjusting these resultsbased on grouped membership data provided by the Secretariat.  Based on the results of this actuarialassessment, the consulting actuary confirms that the actuarial position of the plan has improved relative
to the actuarial valuation completed as at 31 December 1998.  This is mostly due to the fact that
liabilities are in Swiss francs whereas the majority of the assets were in US dollars which strengthenedsignificantly relative to the Swiss franc.
OPINION OF THE EXTERNAL AUDITOR ON THE ACCOUNTS OF THE WTO PENSION PLAN
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 200010.
I have examined the appended Financial Statements of the WTO Pension Plan for the year ended 31
December 2000. The examination included a general review of the accounting procedures and such tests of the
accounting records and other supporting evidence as consid ered necessary in the circumstances. As a result of
the examination, the opinion is given that these statements present fairly the financial position of the WTOPension Plan as at 31 December 2000 and the operations for 2000.
                                                     
10 The report of the External Auditor on the accounts of the WTO Pension Plan for the year ended
31 December 2000 is attached as Annex 8.WT/GC/W/463
Page 9STRUCTURE OF THE WTO PENSION PLAN ANNEX 1
MANAGEMENT BOARDPARTICIPANTS GENERAL COUNCIL
EXTERNAL AUDITORSCONSULTING ACTUARY
ASSET MANAGEMENT SERVICESDIRECTOR-GENERAL
MEDICAL ADVISER
INVESTMENT ADVISORY
SERVICESADMINISTRATIVE
SERVICESWT/GC/W/463
Page 10
ANNEX 2
RETURN ON PASSIVE AND ACTIVE PORTFOLIOS IN 2000
PortfolioMarket value at
31 December 2000
(in SFR)Return on portfolio
in
2000Movement of
benchmarks in 2000
Swiss bonds (BGI) 31,566,671 3.08% 3.50%
Global bonds ex-Switzerland (BGI) 32,777,401 2.56% 2.49%
Swiss equities (BGI) 29,461,092 7.34% 7.16%
European equities ex-Switzerland (BGI) 28,461,439 -8.77% -8.72%
Global equities ex-Switzerland (ING)* 31,316,095 -15.70% -16.00%
Global equities ex-Switzerland (Wellington)* 32,395,555 -12.30% -16.00%
* Since inception on 1 May 2000.WT/GC/W/463
Page 11ANNEX 3
Income and Expenditure Statement
(expressed in Swiss francs)
Expenditure at 31.12.2000 at 31.12.1999 Income at 31.12.2000 at 31.12.1999
Benefits Contributions
Lump sum Participants 5,592,747 5,189,136
Withdrawal settlement – Art. 26 254,678 313,299 Organization 11,185,462 10,378,271
Commutation – Art. 23(c) & Art. 24(c) 812,408 16,778,209 15,567,407
254,678 1,125,707
Periodic benefits
Retirement benefit – Art. 23 23,352 15,304
Early retirement benefit – Art. 24 191,881 93,132
215,233 108,436
Investment and Other Administrative
ExpensesInvestment Income
- Bank charges 385 653
- Audit fees 39,238 29,000 Interest on current accounts 16,925 4,873
- Management fees 558,027 35,209 Interest on deposit accounts 1,022,964 3,431,594
- Fees for investment advice 145,349 Income on securities 8,497,648 1,493,113
- Actuarial expenses 18,912 39,432 Foreign exchange difference 732
- Administrative costs 15,535 5,749 Currency revaluation reserve fund 1,309,579 7,157,273
632,097 255,392 10,847,116 12,087,585
Excess income over expenditure 26,523,317 26,165,457
27,625,325 27,654,992 27,625,325 27,654,992WT/GC/W/463
Page 12ANNEX 4
Surplus Account
(expressed in Swiss francs)
Debit at 31.12.2000 at 31.12.1999 Credit at 31.12.2000 at 31.12.1999
Provision for currency revaluation 1,309,579 7,157,273 Excess income over expenditure 26,523,317 26,165,457
Provision for unrealized loss on securities 3,465,349
Provision for operating costs 500,000
5,274,928 7,157,273
Surplus 21,248,389 19,008,184
26,523,317 26,165,457 26,523,317 26,165,457WT/GC/W/463
Page 13ANNEX 5
Balance Sheet
(expressed in Swiss francs)
Assets at 31.12.2000 at 31.12.1999 Liabilities at 31.12.2000 at 31.12.1999
Securities 191,268,022 101,439,036 Capital 1.1 164,504,143 145,495,959
Deposit 67,902,618
Current and investment accounts 3,020,832 1,433,679
194,288,854 170,775,333
Reserve funds
Currency revaluation reserve fund 5,029,727 7,157,273
Unrealized loss on securities reserve fund 3,465,349
Operating costs 500,000
8,995,076 7,157,273
Current assets Current liabilities
Withholding taxes to be recovered 602,961 250,350 Benefits due to participants 15,806 26,230
Receivable from the UNJSPF 22,101 Accrued expenses 196,533 135,892
Accrued interest 61,832 682,856 212,339 162,122
Contributions receivable 6,300 92,898
671,093 1,048,205
Surplus 21,248,389 19,008,184
194,959,947 171,823,538 194,959,947 171,823,538WT/GC/W/463
Page 14
ANNEX 6
Source and Application of Funds
(expressed in Swiss francs)
Source 1.1.1999-31.12.1999 1.1.2000-31.12.2000
Funds as at 1.1 (14.1.1999) 171,823,538 128,286,189
Receivable from UNJSPF 17,209,770
Receipt of contributions 16,778,209 15,567,407
Return on investments 6,072,188 4,930,312
Increase in reserve funds 1,837,803 7,157,273
Increase in current liabilities 50,217 162,122
196,561,955 173,313,073
Less:
Application
Settlement of benefits 469,911 1,234,143
Expenditure 1,132,097 255,392
1,602,008 1,489,535
Funds as at 31.12 194,959,947 171,823,538WT/GC/W/463
Page 15
ANNEX 7
GLOSSARY OF TERMS
Accrued expenses  includes benefits due and expenses incurred but not paid in the current financial
year.
Accrued interest  refers to interest earned on deposit accounts.
Actuarial expenses  includes expenses charged by the consulting actuary for the provision of actuarial
services.
Administrative costs  includes costs incurred in the general administration of the Pension Plan.
Audit fees  includes fees charged by the External Auditor in connection with the audit of the 2000
accounts.
Contributions receivable  refers to contributions due in respect of contributory service in 2000 but
received after 31.12.2000.
Fees for investment advice  includes fees paid to external advisers for assistance with respect to the
establishment of the investment strategy.
Foreign exchan ge difference  refers to a realized exchange rate gain.
Income on pooled trust funds  refers to investment income from the BGI passive mandates.
Management fees  includes fees paid to fund managers 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.
Receivable from the UNJSPF  refers to assets to be transferred from the UNJSPF.
Withholding taxes to be recovered  includes amounts of withholding tax levied by the Swiss
authorities and subject to recovery after 31.12.2000.WT/GC/W/463
Page 16
ANNEX 8
Report of the external auditor on the accounts of the WTO Pension Plan
for the year ended 31 December 2000
General
In this second year of the WTO Pension Plan, some important decisions concerning the management of
the assets were taken, including the appointment of the global custodian and the active fund managers.
Financial Management
Rules of procedure
The auditors noted that, in accordance with their suggestions in the 1999 report, the duties and
authority of the Management Board and the auditing rules have been laid down in rules of procedure whichwere approved by the General Council.
Attestation de vita
The auditors noted that their suggestion to develop a system of Attestation de vita had been accepted
and implemented.
Operating costs
In the 1999 report it had been mentioned that the operating costs of the Plan had been carried by the
Secretariat of the WTO. The auditors had advised that this  situation should be recons idered. They noted that the
Management Board had given due consideration to this point (paragraphs 25-29 of the annual report for 2000).The auditors stipulated that a reserve for the operating costs should be created.  A more definitive solution to
this issue has still to be found.
Outsourcing of specialist services
The auditors noted that the Management Board has outsourced administrative and accounting services
as from 1 June 2001. The contract stipulates that the annual accounts are to be submitted to the external auditor.
The auditors would ask the Management Board to oblige the contractors to provide information to the auditors
whenever needed.
Outsourcing the above-mentioned services still le aves the responsibility for administration and
accounting with the Management Board. The auditors advise that an internal control system with respect to the
service provider and an audit trail should be established.
Other audit findings
The books proved to be well kept, although not every transaction was fully understandable from paper
without additional explanations.  Decisions with financial implications should therefore be included in the files,
thus providing a better audit trail. Given the limited number of staff and, consequently, the vulnerability of the
Plan, such a provision would be important not only from the view of the external auditor but even more for thePlan itself.
The auditors noted that not all invoices paid bore certification for payment for the delivery of the goods
or the services. They asked for attention to that point.WT/GC/W/463
Page 17
Actuarial position
In their 1999 report the auditors had recommended the inclusion of a chapter in the annual report of the
Pension Plan giving the latest available information concerning the actuarial position of the Plan. The auditorsnoted that such information was added to the annual report for 2000.  In the year 2002 there will be the firstperiodical actuarial evaluation of the Plan. The interest rate that will be used in that calculation has not yet been
determined by the Management Board.
Final remarks
The representatives of the Netherlands Court of Audit wish to record their appreciation of the willing
cooperation given by the officers of the Pension Plan Secretariat during the audit.
__________