HomeMy Public PortalAbout2015 Audited Financials
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
FINANCIAL STATEMENTS
DECEMBER 31, 2015 AND 2014
Contents
Page
Independent Auditors’ Report........................................................................ 1 - 2
Management’s Discussion And Analysis ....................................................... 3 - 6
Financial Statements
Statements Of Fiduciary Net Position .................................................................7
Statements Of Changes In Fiduciary Net Position ..............................................8
Notes To Financial Statements ................................................................... 9 - 17
Supplemental Information
Historical Trend Information ............................................................................18
Investment Returns And Expense Ratios .................................................. 19 - 20
Independent Auditors’ Report
Board of Trustees
The Metropolitan St. Louis Sewer District
St. Louis, Missouri
Report On The Financial Statements
We have audited the accompanying Statement of Fiduciary Net Position of The Metropolitan
St. Louis Sewer District Deferred Compensation Plan and Trust (the Plan) as of December 31, 2015
and 2014, and the related Statement of Changes in Fiduciary Net Position for the years then ended,
and the related notes to the financial statements, which collectively comprise the Plan’s basic
financial statements as listed in the table of contents.
Management’s Responsibility For The Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Board of Trustees
The Metropolitan St. Louis Sewer District
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
fiduciary net position of The Metropolitan St. Louis Sewer District Deferred Compensation Plan and
Trust as of December 31, 2015 and 2014, and the changes in fiduciary net position for the years then
ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis on pages 3 through 6 be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the Plan’s financial statements.
The supplemental information which includes historical trend information and investment returns and
expense ratios are presented for purposes of additional analysis and are not a required part of the
basic financial statements. The supplemental information is the responsibility of management and
was derived from and relates directly to the underlying accounting and other records used to prepare
the basic financial statements. The supplemental information has not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not express
an opinion or provide any assurance on it.
July 6, 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Page 3
MANAGEMENT’S DISCUSSION AND ANALYSIS
For The Year Ended December 31, 2015
This report consists of a series of financial statements related to The Metropolitan St. Louis Sewer
District (“the District”) Deferred Compensation Plan and Trust (“the Plan”). The Statements of
Fiduciary Net Position and the Statements of Changes in Fiduciary Net Position (on pages 7 and 8)
provide information about this Plan’s net position and changes in its net position during the year.
These statements are prepared using the accrual basis of accounting.
The Management’s Discussion and Analysis of the Plan’s financial performance provides an
overview of the Plan’s financial activities for the years ended December 31, 2015 and 2014. Please
read it in conjunction with the Plan’s financial section.
FINANCIAL HIGHLIGHTS 2015
• Net position restricted for plan benefits exceeded $50.0M at the end of 2015 and the net
position value increased by $1.1M from that of December 31, 2014, due to an increase in
participant contributions and a decrease in distributions to participants and beneficiaries offset
by a decrease in the overall value of equity investments that resulted from a decrease in the
various markets.
• Contributions from participants were approximately $3.5M, which was an increase of
approximately $455,000 as compared with prior year contributions.
• Distributions to participants and beneficiaries were approximately $2.4M, which was a
decrease of approximately $1.5M as compared with prior year distributions.
• The decrease in the fair value of investments in 2015 was $1.9M whereas the fair value of
investments increased $2.0M in 2014.
FINANCIAL HIGHLIGHTS 2014
• Net position restricted for plan benefits exceeded $48.9M at the end of 2014 and the net
position value increased by $2.9M from that of December 31, 2013, due to the combined
impact of an increase in the overall value of equity investments that resulted from an increase
in the various markets and an increase in participant contributions.
• Contributions from participants were approximately $3.0M, which was a slight increase of
$55,000 as compared with prior year contributions.
• Distributions to participants and beneficiaries were approximately $3.9M, which was an
increase of approximately $0.7M as compared with prior year distributions.
• The increase in the fair value of investments in 2014 was $2.0M whereas the fair value of
investments increased $7.0M in 2013.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 4
INVESTMENT ASSET ALLOCATION
• Investment decisions are participant directed. The participants are offered a diversified
portfolio of investment options from which to select. These investment options represent a
series of mutual funds primarily sponsored and managed by the Vanguard Group. A
breakdown of the participant directed assets allocation as of December 31, 2015 follows:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 5
2015 2014
Percent
Change
Contributions and Other Additions $ 3,695,763 $ 3,227,393 15%
Net Investment Income (Loss ) (62,451) 3,677,147 -102%
Total Additions $ 3,633,312 $ 6,904,540 -47%
2015 2014
Percent
Change
Distributions to Participants $ 2,395,705 $ 3,861,857 -38%
Administrative Expenses and Legal Fees 134,944 115,944 16%
Total Deductions $ 2,530,649 $ 3,977,801 -36%
2015 2014
Percent
Change
Net Increase $ 1,102,663 $ 2,926,739 -62%
Net Position Restricted for Benefits, January 1 48,929,154 46,002,415 6%
Net Position Restricted for Benefits, December 31 $ 50,031,817 $ 48,929,154 2%
Net Position
Plan Deductions
Plan Additions
Plan Additions, Deductions, and Net Position are as follows:
PARTICIPANT CENSUS
Employee participation in the Plan is on a voluntary basis. Plan participants are comprised of active
employees of the District, retirees or surviving spouses, and terminated employees with account
balances. Active employee participants are as follows:
Number Of Active
December 31, Participants
2015
2014
731
705
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 6
FIDUCIARY RESPONSIBILITIES
The Board of Trustees and senior management are fiduciaries of the Plan and Trust. Fiduciaries are
charged with the responsibility of assuring that the assets of the Plan are used exclusively for the
benefit of plan participants and their beneficiaries.
REQUEST FOR INFORMATION
This financial report is designed to provide the Board of Trustees, participants, investment managers,
and other interested parties with an overview of the Plan’s finances and accountability for the money
received. Questions concerning any of the information provided in this report or requests for
additional information should be addressed to:
Tim Snoke, Secretary-Treasurer
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
Email: tsnoke@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying notes to financial statements. Page 7
STATEMENTS OF FIDUCIARY NET POSITION
2015 2014
ASSETS
Investments at Fair Value:
Mutual Funds 44,783,043$ 43,701,018$
Annuity Contracts 522,022 522,210
Total Investments at Fair Value 45,305,065 44,223,228
Investments at Contract Value:
Common/Collective Trust 3,619,703 3,541,039
Total Investments 48,924,768 47,764,267
Notes Receivable from Participants 1,107,049 1,164,887
NET POSITION RESTRICTED FOR PLAN BENEFITS
December 31,
50,031,817$ 48,929,154$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying notes to financial statements. Page 8
STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION
2015 2014
ADDITIONS TO NET POSITION ATTRIBUTED TO:
Investment Income:
Interest and Dividends on Investments 1,847,769$ 1,719,254$
Interest Income on Participant Loans 48,437 52,428
Net Appreciation (Depreciation) in Fair Value of Investments (1,873,639) 1,983,370
Total Investment Income 22,567 3,755,052
Less: Investment Expenses 85,018 77,905
Net Investment Income (Loss )(62,451) 3,677,147
Contributions and Other Additions:
Employee Contributions 3,481,041 3,026,255
Plan Expenses Paid by Employer 214,722 201,138
Total Contributions and Other Additions 3,695,763 3,227,393
Total Additions 3,633,312 6,904,540
DEDUCTIONS FROM NET POSITION ATTRIBUTED TO:
Distributions to Participants and Beneficiaries 2,395,705 3,861,857
Administrative Expenses 131,828 114,195
Legal Fees 3,116 1,749
Total Deductions 2,530,649 3,977,801
NET INCREASE 1,102,663 2,926,739
NET POSITION RESTRICTED FOR BENEFITS, January 1 48,929,154 46,002,415
NET POSITION RESTRICTED FOR BENEFITS, December 31 50,031,817$ 48,929,154$
For the Years
Ended December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Page 9
NOTES TO FINANCIAL STATEMENTS
December 31, 2015 And 2014
1. Summary of Significant Accounting Policies
The following significant accounting policies, which conform to generally accepted
accounting principles, have been used consistently in the preparation of The Metropolitan
St. Louis Sewer District Deferred Compensation Plan and Trust’s (“the Plan”) financial
statements.
Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis of accounting.
Estimates and Assumptions
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires the Plan Administrator to make certain estimates and assumptions that
affect the reported amounts in the financial statements. Actual results could differ from those
estimates.
Investment Valuation and Income Recognition
The Plan’s investments in mutual funds and annuity contracts are stated at fair value. Shares
of registered investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Plan at year-end. Units of the Retirement Savings Trust are
valued at contract value.
Purchases and sales of investments are recorded on a trade-date basis. Interest income is
accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain
distributions are included in dividend income. Realized gains of $7,625 and $164,477 are
included in net appreciation (depreciation) in fair value of investments for the periods ended
December 31, 2015 and 2014, respectively.
Payment of Benefits
Benefits are recorded when paid.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 10
Subsequent Events
Management has evaluated subsequent events through, July 6, 2016, the date through which
the financial statements were available for issue.
2. Description of the Plan
The following description of the Plan provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering substantially all employees of the District
beginning on the first day of employment. The District’s Board of Trustees established the
Plan in January 1976 through ordinance No. 2971. Plan provisions are established and may
be amended by the District’s Board of Trustees. The District does not contribute to the Plan.
All assets of the Plan are the sole property of the Plan and are not subject to the claims of
creditors of the District. The Plan Administrator issues a publicly available Summary Plan
Description. That information may be obtained by writing to The Metropolitan St. Louis
Sewer District, 2350 Market Street, St. Louis, MO 63103-2555.
Contributions
Under the Plan provisions, employees of the District are eligible to contribute up to 100% of
their total compensation into the Plan, through payroll deferral, or any amount not previously
reduced or withheld from their total compensation. In accordance with the Internal Revenue
Code Section 457 as amended, the Plan limits an individual’s annual contribution (adjusted
annually) to $18,000 for the year ended December 31, 2015 and $17,500 for the year ended
December 31, 2014. If the employee is 50 or older, they can contribute an additional catch-up
contribution up to $6,000 for the year ended December 31, 2015 and $5,500 for the year
ended December 31, 2014. Special 457(b) catch-up contributions of two times the standard
annual deferral are allowed within the three years prior to normal retirement, less amounts
deferred under the Plan. Amounts contributed by employees are deferred for federal and state
income tax purposes until received as a withdrawal or distribution from the Plan.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and allocations of
Plan earnings. Allocations are based on participants’ account balances, as defined. There are
no forfeitures applicable to the Plan. Participants’ contributions are immediately fully vested.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 11
At December 31, 2015 and 2014, 731 and 705 participants, respectively, actively participated
in the Plan.
Notes Receivable from Participants
Participants may borrow from their account a minimum of $1,000 up to a maximum equal to
the lesser of $50,000 or 50% of their vested account balance. Loans may not extend beyond a
term of five years except for the purchase of a principal residence. Loans are secured by the
balance of the participant’s account, bear interest at interest rates ranging from 4.25% to
9.25%, and are due at varying dates through February 2046. Principal and interest are paid
ratably through payroll deductions.
Investment Options
Upon enrollment in the Plan, a participant directs elective contributions and rollovers in any
of the investment options available. The investment options consist of mutual funds and a
common/collective trust fund. Employee contributions may be allocated to the Vanguard
accounts only, in 1% increments, as the participant directs. No new contributions are
currently allowed to the Lincoln National annuity contract accounts.
Vanguard offers participants in the Plan the following investment options:
Equity option: Vanguard Windsor II Fund, Vanguard 500 Index Fund, and Vanguard U.S.
Growth Fund - Investment objective is long-term capital appreciation.
Diversification option: Vanguard Small-Cap Index Fund, Vanguard Mid-Cap Index Fund, and
Vanguard International Growth Fund - Investment objective is long-term capital appreciation.
Bond option: Vanguard Total Bond Market Index Fund - Investment objective is income
stability and conservation of principal.
Balanced option: Vanguard Balanced Index Fund - Investment objective is income,
conservation of principal and long-term growth.
Stable Value option: Vanguard Retirement Savings Trust - Investment objective is income
stability and conservation of principal.
Money Market option: Vanguard Prime Money Market Fund - Investment objective is
income while maintaining safety of principal.
Target Retirement option: Vanguard Target Retirement 2010-2060 Funds and Vanguard
Target Retirement Income Fund - Investment objective is capital appreciation and current
income consistent with its current asset allocation.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 12
Distributions
Participants contributing to the Plan may receive benefits or withdraw the present value of
funds contributed to the Plan upon retirement, disability, or termination of employment from
the District or due to financial hardship as defined by the Plan, if approved by the Plan
Administrator.
Participants may select various payout options including lump sum or equal annual payments
over various periods. Participants may also elect to have the value of the account converted
into fixed or variable annuity contracts. All investments, including annuity contracts, remain
assets of the Plan until payments are made to the participants.
Administrative Expenses
The general administrative expenses of the Plan are paid by the District. These expenses
consist of legal and accounting expenses as well as the administration of the Plan. Expenses
attributable to a participant’s choice of optional investments or optional forms of benefit
payments are charged to the respective participant’s account balance.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 13
3. Investments
Investment Balances
Investments held by custodians in the Plan’s name are as follows:
2015
Mutual Funds:
Vanguard Group, Inc.
Windsor II Fund 8,104,711$ *9,012,432$ *
500 Index Fund 6,600,302 *6,619,186 *
U.S. Growth Fund 4,857,609 *4,275,054 *
Balanced Index Fund 4,025,918 *4,035,131 *
Total Bond Market Index Fund 2,654,549 *2,349,624
Mid-Ca p Index Fund 2,624,550 *2,631,528 *
Small-Cap Index Fund 2,424,519 2,471,301 *
Target Retirement 2025 Fund 2,392,133 1,951,293
Target Retirement 2020 Fund 2,050,649 1,974,463
International Growth Fund 2,028,576 2,134,833
Prime Money Market Fund 1,693,619 1,173,059
Target Retirement 2035 Fund 1,149,190 915,424
Target Retirement 2030 Fund 1,029,532 970,921
Target Retirement 2015 Fund 679,306 859,556
Target Retirement 2040 Fund 666,825 543,660
Target Retirement 2045 Fund 613,047 512,292
Target Retirement 2010 Fund 536,227 722,630
Target Retirement Income Fund 294,180 322,326
Target Retirement 2050 Fund 291,959 190,551
Target Retirement 2055 Fund 39,500 18,684
Target Retirement 2060 Fund 26,142 17,070
Total Mutual Funds 44,783,043 43,701,018
Common/Collective Trust:
Vanguard Group, Inc.
Retirement Savings Trust 3,619,703 * 3,541,039 *
December 31,
2014
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 14
2015
Annuity Contracts:
Lincoln National Life
Fixed Earnings option:
Fixed Account 169,124$ 163,461$
Variable Earnings option:
Growth & Income Fund 146,932 151,529
Special Opportunity Fund 129,783 130,768
Capital Appreciation Fund 35,347 35,253
Social Awareness Fund 18,450 18,766
Mid-Cap Growth 10,509 10,400
Global Growth 4,508 4,261
Equity-Income Fund 4,224 4,486
International Fund 2,690 2,826
Mone y Market Fund 455 460
Total Annuity Contracts 522,022 522,210
Total Investments $48,924,768 $47,764,267
December 31,
2014
* Represents 5% or more of the Plan’s net position at December 31, 2015 or 2014, respectively.
Certain participants with assets valued at $522,022 and $522,210 in 2015 and 2014,
respectively, are invested in a series of fixed and variable rate annuity contracts sponsored by
Lincoln National Life Insurance Company. The Lincoln National Life option was phased out
in 1992, and any balances represent undistributed participant balances. This option is no
longer available to new participants or for current deferrals.
Categories of Asset Risk - Debt Securities Interest Rate and Credit Risk
The Plan will minimize the risk that the market value of securities in the portfolio will fall due
to changes in general interest rates by selecting mutual funds for the investment portfolio that
manage credit quality and duration of fixed income investments.
The Plan will minimize credit risk, the risk of loss due to failure of the security issuer or
backer, by selecting mutual funds for the investment portfolio that manage their respective
fund under a predetermined average credit risk investment management policy.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 15
The following tables provide information on the duration and credit ratings associated with
the Plan’s investment in debt-backed mutual funds and annuity contracts, excluding
obligations of the U.S. Government or obligations explicitly guaranteed by the U.S.
Government within these funds at December 31, 2015 and 2014:
Average
Effective
Debt-Backed Fair Not Duration
Plan Investments Value Rated In Years
December 31, 2015:
Vanguard Group, Inc.
Balanced Index Fund $4,025,918 yes 5.79
Retirement Savings Trust 3,619,703 yes *
Total Bond Market Index Fund 2,654,549 yes 5.79
Target Retirement 2025 Fund 2,392,133 yes 6.24
Target Retirement 2020 Fund 2,050,649 yes 6.17
Prime Money Market Fund 1,693,619 yes *
Target Retirement 2035 Fund 1,149,190 yes 6.23
Target Retirement 2030 Fund 1,029,532 yes 6.24
Target Retirement 2015 Fund 679,306 yes 5.68
Target Retirement 2040 Fund 666,825 yes 6.23
Target Retirement 2045 Fund 613,047 yes 6.24
Target Retirement 2010 Fund 536,227 yes 5.47
Target Retirement Income Fund 294,180 yes 5.43
Target Retirement 2050 Fund 291,959 yes 6.24
Target Retirement 2055 Fund 39,500 yes 6.24
Target Retirement 2060 Fund 26,142 yes 6.24
Lincoln National Life
Fixed (annuity contracts)169,124 yes *
Money Market Fund 455 yes *
* Information is unavailable for this security.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 16
Average
Effective
Debt-Backed Fair Not Duration
Plan Investments Value Rated In Years
December 31, 2014:
Vanguard Group, Inc.
Balanced Index Fund $4,035,131 yes 5.66
Retirement Savings Trust 3,541,039 yes 2.50
Total Bond Market Index Fund 2,349,624 yes 5.50
Target Retirement 2020 Fund 1,974,463 yes 5.84
Target Retirement 2025 Fund 1,951,293 yes 5.84
Prime Money Market Fund 1,173,059 yes 0.27
Target Retirement 2030 Fund 970,921 yes 5.85
Target Retirement 2035 Fund 915,424 yes 5.85
Target Retirement 2015 Fund 859,556 yes 5.42
Target Retirement 2010 Fund 722,630 yes 5.24
Target Retirement 2040 Fund 543,660 yes 5.85
Target Retirement 2045 Fund 512,292 yes 5.86
Target Retirement Income Fund 322,326 yes 5.18
Target Retirement 2050 Fund 190,551 yes 5.85
Target Retirement 2055 Fund 18,684 yes 5.86
Target Retirement 2060 Fund 17,070 yes 5.85
Lincoln National Life
Fixed (annuity contracts)163,461 yes *
Money Market Fund 460 yes *
* Information is unavailable for this security.
4. Risks and Uncertainties
The Plan invests in various investment securities as directed by the Plan’s participants.
Investment securities are exposed to various risks such as interest rate, market, and credit risk.
Due to the level of risk associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in the near term and
that such change could materially affect the participants’ account balances and amounts
reported in the Plan’s Statements of Fiduciary Net Position.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 17
5. Plan Termination
Although it has not expressed any intent to do so, the District has the right under the Plan to
terminate the Plan at any time. In the event of Plan termination, participants would remain
100% vested in their accounts.
6. Related Party Transactions
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard Fiduciary
Trust Company (“VFTC”). VFTC acts as trustee for only those investments as defined by the
Plan. Transactions in such investments qualify as related party transactions which are exempt
from the prohibited transaction rules.
7. Tax Status
The Plan received a favorable determination letter from the Internal Revenue Service (“the
IRS”) on June 23, 1999, indicating the Plan and its underlying Trust are qualified under
Section 457 of the Internal Revenue Code. Although the Plan has been amended since
receiving the determination letter, the Plan Administrator believes that the Plan is currently
designed and is being operated in compliance with applicable requirements of the IRS.
SUPPLEMENTAL INFORMATION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying independent auditors’ report. Page 18
HISTORICAL TREND INFORMATION
Employee Distributions
For The Contributions And To Participants Increase
Years Ended Expenses Paid Net Investment And Plan (Decrease)
December 31, By Employer Income (Loss) Expenses In Net Position
2015 3,695,763$ (62,451)$ (2,530,649)$ 1,102,663$
2014 3,227,393 3,677,147 (3,977,801) 2,926,739
2013 3,163,343 7,863,858 (3,298,602) 7,728,599
2012 2,969,056 4,056,818 (2,725,147) 4,300,727
2011 2,723,859 238,167 (1,886,224) 1,075,802
2010 2,674,626 3,420,763 (2,406,761) 3,688,628
2009 2,685,427 4,837,406 (972,044) 6,550,789
2008 2,723,760 (7,663,384) (1,168,917) (6,108,541)
2007 2,595,532 1,500,519 (1,442,611) 2,653,440
2006 2,479,067 2,790,431 (1,405,638) 3,863,860
2005 2,203,103 1,311,662 (670,007) 2,844,758
2004 2,050,893 1,909,831 (792,780) 3,167,944
2003 2,041,688 2,746,391 (1,238,629) 3,549,450
2002 2,133,784 (2,095,283) (1,819,333) (1,780,832)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying independent auditors’ report. Page 19
INVESTMENT RETURNS AND EXPENSE RATIOS
An independent investment consultant, Pavilion, monitored investment performance of the various
options offered to the participants. Performance of the funds are measured net of the corresponding
expense ratios. Below is a table that reflects the funds available for employees to invest and their
one-year performance for the years 2015 and 2014 as compared to the appropriate benchmarks, as
well as their current expense ratios:
Funds / Benchmarks Expense Ratios 2015 2014
Vanguard Prime Money Market Investment 0.0 0.0
BofA Merrill Lynch 3 Month U.S. T-Bill 0.1 0.7
Vanguard Retirement Savings Trust 1.9 1.8
Ryan 3yr Guaranteed Investment Contract Master 1.2 1.0
Vanguard Total Bond Market Index 0.3 5.8
Vanguard Total Bond Market Index Benchmark 0.4 5.7
Vanguard Balanced Index 0.4 9.8
Vanguard Balanced Index Fund Benchmark 0.6 6.6
Vanguard Windsor II -3.2 11.2
Russell 1000 Value Index -3.8 13.5
Vanguard 500 Index 1.2 13.5
Standard & Poor’s 500 1.4 13.7
Vanguard U.S. Growth 8.5 13.1
Russell 1000 Growth Index 5.7 13.1
Vanguard Mid-Cap Index -1.5 13.6
Vanguard Mid-Cap Index Fund Blended Benchmark -1.3 13.8
Vanguard Small-Cap Index -3.8 7.4
Vanguard Small-Cap Index Fund Blended Benchmark -3.7 7.5
Vanguard International Growth -0.7 -5.6
MSCI AC World Index Ex USA -5.7 -3.9
0.23
0.23
0.47
0.47
Returns Net of Fees*
0.20
0.23
0.34
0.17
0.16
0.53
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying independent auditors’ report. Page 20
INVESTMENT RETURNS AND EXPENSE RATIOS (Continued)
Funds / Benchmarks Expense Ratios 2015 2014
Vanguard Target Retirement Income -0.2 5.6
Vanguard Target Income Composite Index 0.1 5.8
Vanguard Target Retirement 2010 -0.2 5.9
Vanguard Target 2010 Composite Index 0.0 6.1
Vanguard Target Retirement 2015 -0.5 6.5
Vanguard Target 2015 Composite Index -0.2 6.8
Vanguard Target Retirement 2020 -0.7 7.1
Vanguard Target 2020 Composite Index -0.4 7.4
Vanguard Target Retirement 2025 -0.8 7.2
Vanguard Target 2025 Composite Index -0.6 7.4
Vanguard Target Retirement 2030 -1.0 7.2
Vanguard Target 2030 Composite Index -0.8 7.5
Vanguard Target Retirement 2035 -1.3 7.3
Vanguard Target 2035 Composite Index -1.0 7.6
Vanguard Target Retirement 2040 -1.6 7.1
Vanguard Target 2040 Composite Index -1.2 7.6
Vanguard Target Retirement 2045 -1.6 7.1
Vanguard Target 2045 Composite Index -1.3 7.6
Vanguard Target Retirement 2050 -1.6 7.2
Vanguard Target 2050 Composite Index -1.3 7.6
Vanguard Target Retirement 2055 -1.7 7.2
Vanguard Target 2055 Composite Index -1.3 7.6
Vanguard Target Retirement 2060 -1.7 7.2
Vanguard Target 2060 Composite Index -1.3 7.6
Returns Net of Fees*
0.16
0.16
0.16
0.18
0.16
0.18
0.17
0.17
0.18
0.18
0.18
0.18
*The returns shown above are net of fees as reported by the managers.