 RESTRICTED  
  
WT/BFA/W/596  
WT/L/1149  
22 August  2022 
(22-6314) Page: 1/12 
Committee on Budget, Finance and Administration  
General Council  
6-7 October 2022  Original:  French  
 
  
WTO PENSION PLAN  
REPORT OF THE INDEPENDENT EXTERNAL AUDITOR  ON THE AUDIT  OF THE FINANCIAL  
STATEMENTS  OF THE WORLD TRADE ORGANIZATION  PENSION PLAN  
FOR THE FINANCIAL YEAR  ENDED 31 DECEMBER 2021  
The report of the independent External Auditor on the audit of the financial statements of the 
WTO Pension Plan for 2021 is attached.  
 
_______________  
 
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EXTERNAL AUDIT  OF 
THE WORLD TRADE ORGANIZATION 
PENSION  PLAN  
 
AUDIT REPORT  
 
FINANCIAL STATEMENTS OF  
THE WORLD TRADE  ORGANIZATION  
PENSION PLAN  
FOR THE FINANCIAL YEAR ENDED 
31 DECEMBER  2021 
 
 
 
 
 
 
 
FRENCH NATIONAL AUDIT OFFICE  REFERENCE : CoE 2021 -2 
 
 
 
 
 
 
 
 
 
  
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TABLE OF CONTENTS  
I. OBJECTIVES AND SCOPE OF THE AUDIT  ................................ ................................ ...... 6 
II. LIST OF RECOMMENDATIONS  ................................ ................................ .....................  7 
III. GENERAL COMMENTS  ................................ ................................ ................................ . 9 
IV. AUDIT OBSERVATIONS  ................................ ................................ ...........................  10 
 1. Corrections to the financial statements of the Pension Plan  ................................ ....... 10 
 2. Accounting framework applicable to rendering the accounts of the Pension  Plan ...........  10 
 3. Long-term balance of the Pension Plan  ................................ ................................ ... 10 
 4. Communication elements of the Pension Plan  ................................ ..........................  11 
 5. Other audit observations  ................................ ................................ ......................  11 
V. ACKNOWLEDGEMENTS  ................................ ................................ .............................  12 
 
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  I. OBJECTIVES AND SCOPE OF THE AUDIT  
1. In accordance with the conditions of our undertaking and our notification letter dated 
12 January  2021, a team of seven auditors carried out, from 2 to 20 May 2022, the final audit 
mission of the financial statements of the World Trade Organization (WTO) and its Pension Plan for 
the financial year ended 31 December 2021.  
 
2. The audit of the fi nancial statements was carried out in accordance with the provisions of the 
Regulations of the World Trade Organization Pension Plan, the International Standards on Auditing 
(ISA) and International Standards of Supreme Audit Institutions (ISSAI1) on finan cial audit.  
 
3. The financial statements for the financial year ended 31 December 2021 were sent to the 
External Auditor on 2 May 2022.  
 
4. The observations and conclusions in this report were discussed with WTO and Pension Plan 
officials, to whom an interim  report was sent on 16 June 2022. Their comments (factual and/or 
formal) and written replies have, where appropriate, have been fully reflected in the final version of 
this report.  
 
5. The External Auditor is issuing, on the financial statements of the Pension Pl an for the financial 
year ended 31 December 2021, an unqualified opinion including  an emphasis of matter on the 
limitations of the use of financial statements presented under a specific accounting framework.  
 
  
 
1 International Standards of Supreme Audit Institutions.  WT/BFA/W/596 • WT/L/1149  
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  II. LIST OF  RECOMMENDATIONS  
6. The recommendations made are assigned a priority level, decided by the External Auditor:  
 
• Priority 1:  fundamental point requiring special attention of the governing bodies and prompt 
action by senior management;  
 
• Priority 2:  point that must be implemented, but  may be postponed depending on the 
circumstances;  
 
• Priority 3 : point of improvement of controls, rendering of accounts or management, brought 
to the attention of senior management.  
 
Area  Priority  Recommendations  
  
2 1. The External Auditor recommends clarifying, with objective and 
quantitative criteria, what the Management Board means by  
"long -term balance of the Pension Plan" and setting a deadline for 
the achievement of this balance.  
  
 
2 2. The External Auditor recommends that the actuarial information 
produced by the actuary EY be communicated to employees, 
beneficiaries and members of the Management Board, as well as the 
actuarial information produced by the consulting actuary C -alm, and 
that the differences and purposes be explai ned. 
 
7. The External Auditor had previously made a recommendation in support of his audit of the 
financial statements of the WTO Pension Plan for the financial year ended 31 December 2020.  
 
Previous recommendation: The External Auditor recommends (i) submitting the accounting 
framework of the Pension Plan, applied per purpose, for formal approval by the Management 
Board when it approves the financial statements for 2020; (ii) also presenting the Management 
Board, with a view to the rendering of the 202 1 accounts, with the option of adopting an 
appropriate existing accounting standard, as well as, where appropriate, any deviations from that 
standard that would be warranted by the information of the Plan's stakeholders.  
 
8. The accounting framework of the P ension Plan , applied per purpose,  was formally approved on 
24 June 2021 at the 136th meeting of the Management Board. 
 
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  9. Moreover, at its 140th meeting on 22 February 2022, the Management Board decided not to 
adopt an existing accounting standard and to await the IPSAS Board's adoption of a new standard 
being drafted  on the basis of  IAS 26 ("Accounting and Reporting by Retir ement Benefit Plans"). 
At present , there is still no IPSAS that deals specifically with Pension Plans.2 
 
10. Thus, the recommendation made by the External Auditor as part of his audit of the financial 
statements of the WTO Pension Plan is considered to have b een addressed . 
 
  
 
2 The development of a specific standard, IPSAS 26, appears in the IPSAS Board's work plan, but is not 
supposed to be finalized before late 2022.  WT/BFA/W/596 • WT/L/1149  
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  III. GENERAL  COMMENTS  
11. Investment income totalled CHF 75 million in 2021, a significant increase from 2020 
(CHF 28 million). This increase was mainly to the strong performance of equity markets in 2021.  
 
12. Contributions rose 2%, from CHF 28.8 mil lion to CHF 29.4 million, while periodic benefits rose 
4%, from CHF 26.1 million to CHF 27.1 million, following an increase in the number of beneficiaries 
(427 beneficiaries as at 31 December 2021 compared to 408 beneficiaries as at 31 December 2020). 
Lump  sum benefits increased to CHF 3 million in 2021, compared to CHF 2 million in 2020.  
 
13. Thus, in 2021, for the first time in the history of the Pension Plan, the sum of benefits paid 
exceeded the total contributions received by CHF 1 million. This difference is expected to increase 
in the future due to the expected increase in the population of beneficiaries.  
 
14. Moreover, t he benefits paid in 2021 were partially financed by the financial income generated 
by the Plan's investments.  
 
15. The administrative expenses of the Plan totalled CHF 1,030,400, a slight increase due to, inter 
alia, the increase in management costs (from CHF 509,415 in 2020 to CHF 577,824 in 2021) as a 
result of the increase in the value of investments.  
 
16. As at 31 Dece mber 2021, financial assets totalled CHF 737 million, up CHF 74 Million from 
31 December 2020.  
 
17. The other claims for CHF 1,775,026 relate to receivable tax refunds resulting from withholding 
taxes on dividend payments and coupons received. The other claims  decreased by CHF 672,000 
from 31 December 2020. This variation is a result of  the expected disability reimbursements from 
the insurance company Cig na as of 31 December 2020, while Cigna's reimbursements for 2021 were 
paid prior to  31 December 2021.  
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  IV. AUDI T OBSERVATIONS  
1. Corrections to the financial statements of the Pension Plan  
18. As part of the audit of the 2021 financial statements of the Pension Plan, the External Auditor 
identified an anomaly relating to the absence in the financial statements of short -term liquidity in 
the Pictet L -1036700.004 account , for the amount  CHF 45,444.  
 
19. After investigating  the matter, the Pension Plan identified that the difference was the result of 
a double error on the Pictet L -1036700.004 account, which consisted of a reclas sification between 
the accounting items of short -term liquidity and securities. Therefore, the identified error had no 
impact on either the result for the year or the total assets of the Plan.  
 
20. The External Auditor's work also led him to obtain a banking c onfirmation from the bank Pictet 
of the cash and investment balances as at 31 December 2021. This confirmation showed a positive 
difference of CHF 923,476 with the amount originally recorded by the Pension Plan. This difference 
stems from the valuation of CBRE's shareholdings (European real estate investment fund), reflected 
on the Pictet L -1036700.006 account. This position is subject to a quarterly valuation. The Pictet 
report originally used for the Pension Plan reporting did not in clude the final valuat ion of this position, 
which was known  at a later date . 
 
21. The anomalies found were corrected in the final financial statements ended 31 December 2021, 
leading to an increase of CHF 923,476 in the investments and income  generated by the Plan.  
 
2. Accounting fram ework applicable to rendering the accounts of the  
Pension  Plan 
22. The WTO Pension Plan is not a separate legal entity from the WTO, but a component thereof . 
 
23. Article 5(d) of the Regulations of the WTO Pension Plan (in its amended version of 26 July 2017) 
provides that the Management Board shall present a report each year to the WTO General Council 
containing  various pieces of information, including : (i) an acco unt of the financial transactions during 
the financial year, (ii) the balance sheet of the Plan, [...] (vi) any other decisions taken in connection 
with the administration of the Plan.  
 
24. The financial statements presented by the Pension Plan and submitted to the External Auditor 
specifically meet the obligations provided for in this Article. According the principles and definitions 
of the international standards on auditing , they constitut e special purpose financial statements.  
 
25. Article 5(e) of the Regulations of the Pension Plan provides that the accounts of the Plan shall 
be audited by the External Auditor [of the WTO] under the conditions decided by mutual agreement 
with the Management B oard. Since no agreement relating to the external audit of the accounts of 
the Pension Plan had been concluded, the accounts were audited in accordance with International 
Standard on Auditing (ISA) 800 ("Special Considerations - Audits of Financial Stateme nts Prepared 
in Accordance with Special Purpose Frameworks").  
 
26. In order to have a framework for his audit work, as required by ISA 800, the External Auditor 
first sought to obtain a description of the accounting principles and methods applied to the produc tion 
of their accounts from the Pension Plan managers.  
 
27. However, in accordance with paragraph 14 of ISA 800, the opinion  of the External Auditor  
includes an emphasis of matter "alerting users of the auditor's report [i.e the beneficiaries of the 
Pension Pl an] that the financial statements are prepared in accordance with a special purpose 
framework and that, as a result, the financial statements may not be suitable for another purpose".  
 
3. Long -term balance of the Pension Plan  
28. Article 9(a) of the Regulations o f the Pension Plan states that the Management Board shall have 
an actuarial valuation made of the Plan at least once every three years by the consulting actuary. 
Article 9(d) provides that in the particular case of an actuarial deficit or surplus, the Mana gement 
Board shall recommend to the General Council any necessary corrective action. Such action may WT/BFA/W/596 • WT/L/1149  
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  include an adjustment to contributions and/or benefits or any other measure which the Management 
Board deems appropriate to restore an actuarial balance.  
 
29. According to the 2021 interim actuarial valuation report by the consulting actuary C -alm, the 
long-term cost (required contribution rate) of the Pension Plan decreased from 34.2% at year -end 
2020 to 33.1% at year -end 2021. As the actual contribution rate r emained unchanged at 23.7%, 
there was an actuarial difference of 9.4% at year -end 2021. It should be recalled that the actuarial 
difference was 10.5% at year -end 2020 and 5.8% at year -end 2019.  
 
30. Furthermore, in accordance with the Regulations of the Pensio n Plan, the Management Board 
must propose to the General Council measures  to ensure that the actual contribution rate is equal 
to the required contribution rate.  
 
31. The External Auditor notes, however, that strict equality between the two rates is neither a 
realistic nor satisfactory objective, as its pursuit would imply some variability in contribution rates.  
 
Recommendation No. 1  The External Auditor recommends clarifying, with objective and 
quantitative criteria, what the Management Board means by  "long -term balance of the 
Pension Plan" and setting a deadline for the achievement of this balance.  
 
4. Communication elements of the Pension Plan  
32. In its communication to employees, beneficiaries and members of the Management Board, the 
Pension Plan only refers to the work carried out by the consulting actuary C -alm. The figures reported 
are taken from the C -alm actuarial valuation report and primarily concern the long -term cost 
(required contribution rate) of the Pension Plan and the actuarial difference found with the actual 
contribution rate.  
 
33. The assumptions used in the actuarial valuation carried out by the consulting actuary C -alm 
differ from those used by the actuary EY, which carries out an actuarial valuation for the WTO 
reporting established in IP SAS. 
 
34. The purpose of IPSAS is to improve the quality of general purpose financial reporting by public 
sector entities , by enhancing the transparency and comparability of financial statements at the 
international level. Therefore, the actuarial valuation ca rried out by EY pursuant to IPSAS contains 
relevant information which enhances the financial information provided by the Pension Plan. It is all 
the more necessary that the information concerning the Pension Plan contained  in the WTO financial 
report be ac cessible to all members of the Pension Plan , who  may be troubled by the fact that th is 
information differs significantly from the information that appears in the accounts of the 
Pension  Plan. 
 
Recommendation No. 2  The External Auditor recommends that the a ctuarial information 
produced by the actuary EY be communicated to employees, beneficiaries and members 
of the Management Board, as well as the actuarial information produced by the 
consulting actuary C -alm, and that the differences and purposes be explain ed. 
 
5. Other audit  observations  
35. The External Auditor's other observations relating to the liabilities of the Pension Plan and the 
basic implementation and actuarial assumptions can be found in the audit report of the 
WTO's  financial statements.  
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  V. ACKNOWLEDGEMENTS  
36. The External Auditor extends its sincere thanks to all the WTO Pension Plan teams for making 
themselves available and for the quality of the information provided during the audit.  
 
 
 
End of audit observations.  
 
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