. /.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/W/79
25 September 2002
(02-5151)
Committee on Budget, Finance and Administration
AGREED TERMINATIONS
Supplementary Information
I. INTRODUCTION
1. At the meeting held on 5 July 2002, the Committee on Budget, Finance and Administration
considered document WT/BFA/W/75 which set out a proposal for implementing the existing
provisions of the Staff Regulations and Rules relating to the agreed termination of regular staff.  In the
course of the discussion, a number of questions were posed by Members which were summarized in
paragraph 14 of the report of the meeting (WT/BFA/59).  The present paper has been prepared in
response to those questions and also contains some information on the actuarial implications of theproposal.
II. PURPOSE OF THE PROPOSAL
2. The primary purpose of the proposal would be to facilitate the restructuring of the
Organization in order to meet changing requirements.  Where the skills of a particular staff member
no longer met those requirements, the proposal would permit the Director-General to replace that staffmember with a staff member specifically selected  through the normal recruitment process to respond
more effectively to those needs.  In the large majority of cases, this would result in the replacement of
the staff member by a staff member at a lower grade, thus generating not only gains in efficiency but
also savings.
III. RELATIONSHIP BETWEEN THE PROVISIONS OF THE STAFF REGULATIONS
AND RULES AND THE PROPOSED ARRANGEMENTS
3. The proposed arrangement would be based entirely on the existing provisions of the Staff
Regulations and Rules, i.e. termination indemnity (Staff Regulation 10.6, Staff Rule 111.8 and Annex
4 of the Staff Rules), pay in lieu of notice (Staff Regulation 10.5 and Staff Rule 111.7(b)), and special
leave (Staff Regulation 6.9 and Staff Rule 109.4).  No amendments to those provisions would be
required.
IV. FUNCTIONING  OF THE PROPOSED ARRANGEMENTS
4. Whereas it is proposed that the arrangements should be non-discriminatory and open to all
staff, the Director-General would retain responsibility for the operation of the proposed arrangements
and particularly for the selection of staff to whom a separation arrangement should be offered.
Consequently, although an individual staff member may take the initiative to apply for consideration
under the proposed arrangements, the final decisi on would remain with the Director-General.WT/BFA/W/79
Page 2
V. EXPECTED NUMBER OF CASES PER YEAR
5. Although it is difficult to predict the number of cases likely to occur in any one year, past
experience would suggest that the average number of annual separations would be less than five.  That
number would depend on certain variables, including the extent to which the needs of the
Organization evolve and the degree to which the staff profile no longer matches those needs.
VI. FINANCING OF THE PROPOSED ARRANGEMENTS
6. It is proposed that a contingency reserve be established corresponding to the above predicted
average annual number of cases and that the reserve be replenished on an annual basis as required.
VII. ACTUARIAL IMPLICATIONS OF THE PROPOSED ARRANGEMENTS
7. The consulting actuary of the WTO Pension Plan has studied the actuarial implications of the
proposed arrangements for the WTO Pension Plan.  He has come to the conclusion that, if all staffmembers over age 55 opted for the proposed arrangements and continued to contribute to the Pension
Plan for a period of two years of special leave, there would be no net cost to the Pension Plan.  The
reason for this result is that, although the staf f member would gain in terms of pension value by
accruing extra contributory service and thus become subject to a lower early retirement reduction
factor, the resulting pension would actually be cheaper because it would be paid for a shorter period.Furthermore, the pension would be based on the staff member’s salary at the termination date, not at
the normal age of retirement.  Furthermore, the delay in the initial payment of the pension would be
financially beneficial to the Pension Plan.
8. The consulting actuary nevertheless noted that, if  only certain staff members, typically those
with much shorter than average length of service, opted for the proposed arrangements, there might bea cost to the Plan which, in the worst-case scenario, might amount to CHF 1.5 million.  However, it
would obviously be possible to guard against such costs by avoiding an over concentration of such
cases.
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