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THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
INDEPENDENT AUDITORS’ REPORT,
FINANCIAL STATEMENTS AND
SUPPLEMENTAL INFORMATION
FOR THE YEARS ENDED
DECEMBER 31, 2009 AND 2008
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
CONTENTS
Page
INDEPENDENT AUDITORS’ REPORT .................................................................................. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS .............................................................. 2 - 5
FINANCIAL STATEMENTS
Statements of Plan Net Assets..................................................................................................... 6
Statements of Changes in Plan Net Assets.................................................................................. 7
Notes to Financial Statements ..................................................................................................... 8 - 16
SUPPLEMENTAL INFORMATION
Historical Trend Information....................................................................................................... 17
Investment Returns and Expense Ratios ..................................................................................... 18 - 19
Independent Auditors' Report
To the Board of Trustees of the
Metropolitan St. Louis Sewer District
We have audited the accompanying statements of plan net assets of the Metropolitan St. Louis Sewer District
DefelTed Compensation Plan and Trust (the "Plan") as of December 31, 2009 and 2008, and the related
statements of changes in plan net assets for the years then ended. These financial statements are the
responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements refelTed to above present fairly, in all material respects, the plan
net assets as of December 31, 2009 and 2008, and the changes in plan net assets for the years then
ended, in conformity with U.S. generally accepted accounting principles.
The management's discussion and analysis is not a required part of the basic financial statements, but is
supplementary information required by U.S. generally accepted accounting principles. We have applied
certain limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the supplementary information. However, we did not audit
the information and express no opinion on it.
Our audit was for the purpose of forming an opinion on the financial statements that collectively
comprise the Plan's financial statements. The supplemental information, as listed in the table of
contents, is presented for purposes of additional analysis and is not a required part of the basic financial
statements of the Plan. Such information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
(314) 966-2727 • fax (314) 966-6464 • 10805 Sunset Office Drive, Suite 400 • St. Louis, MO 63127 • e-mail: stcpa@stcpa.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
MANAGEMENT’S DISCUSSION AND ANALYSIS
_________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
2
This report consists of a series of financial statements related to The Metropolitan St. Louis Sewer
District’s Deferred Compensation Plan and Trust (the Plan). The Statements of Plan Net Assets and the
Statements of Changes in Plan Net Assets (on pages 6 and 7) provide information about this Plan’s
assets and changes in its assets during the year. These statements are prepared using the accrual basis of
accounting. The investments held in trust for plan benefits are reported at fair value.
This management’s discussion and analysis of the plan’s financial performance provides an overview of
the Plan’s financial activities for the fiscal year ended December 31, 2009. Please read it in conjunction
with the Plan’s financial section.
FINANCIAL HIGHLIGHTS
Plan Additions, Deductions, and Net Assets
Net assets available for plan benefits exceeded $29.2 million at the end of 2009 and the net asset value
increased by $6.6 million from that of December 31, 2008, due to the combined impact of an increase in
the overall value of equity investments that resulted from an increase in the various stock markets and an
increase in participant contributions. Contributions from participants were approximately $2.7 million,
which was a slight decrease of $38 thousand as compared with prior year contributions.
Plan Additions for 2009, 2008, and 2007 (in thousands)
2009 2008
Percent
Change
2007
Percent
Change
Employee Contributions $2,685 $2,724 (1.4%) $2,596
4.9%
Investment income 4,837
(7,663) (163.1)
1,500
(610.9)
Total Additions
(Subtractions) 7,522 (4,939) (252.3)
4,096
(220.6)
Plan Deduction for 2009, 2008, and 2007 (in thousands)
2009 2008
Percent
Change
2007
Percent
Change
Distribution to Participants
and beneficiaries $972 $1,169 (16.9%) $1,443
(19.0%)
Net Assets at December 31, 2009, 2008, and 2007 (in thousands)
2009 2008
Percent
Change
2007
Percent
Change
Assets held in trust $29,209 $22,658 28.9% $28,766 (21.2%)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
MANAGEMENT’S DISCUSSION AND ANALYSIS
_________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
3
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
as follows:
Number Of
December 31 Participants
2009 649
2008 640
2007 625
Investment Aspects
Investment decisions are participant directed. The participants are offered a diversified portfolio of
investment options to select from. 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 the last day of the fiscal years ended 2009, 2008, and 2007 follows:
Asset Allocation as of
December 31, 2009
51%
27%
9%
8%5%Equity
Balanced
Fixed Income
Stable Value
Cash equivalents
Asset Allocation as of
December 31, 2007
59%24%
7%5%5%Equity
Balanced
Fixed Income
Stable Value
Cash Equivalents
Asset Allocation as of
December 31, 2008
47%
24%
11%
11%7%Equity
Balanced
Fixed Income
Stable Value
Cash equivalents
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
MANAGEMENT’S DISCUSSION AND ANALYSIS
_________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
4
An independent investment consultant, New England Pension Consultants, monitored investment
performance of the various options offered to the participants. For 2009 and 2008 the investment
consultant reported that all actively managed funds posted positive returns for the fiscal years ended
December 31, 2009 and 2008. 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 the performance for
year end 2009 and 2008 as compared to the appropriate benchmarks as well as their current expense ratios:
Returns Net of Fees*
Funds / Benchmarks Expense Ratios 2009 2008
Federal Money Market
Prime Money Market Investment
Retirement Savings Trust
90-day T-Bills
Bankers Trust 3-Year Guaranteed Investment
Contract Rate
N/A* %
0.25
0.24
N/A*
0.5
3.0
3.0
0.2
4.5
2.5%
Not offered
4.4
2.1
4.8
Total Bond Market Index
BarCap US Aggregate Bond Index
0.22 5.9
5.9
5.1
5.2
Balanced Index Fund
60% Standard & Poor’s 500/ 40% BarCap
Agg Index
0.25 20.1
16.4
(22.2)
(22.1)
Life Strategy Income
Dow Jones U.S. Moderate Conservative
Portfolio
0.22 12.1
11.2
(10.5)
(5.5)
Life Strategy Conservative Growth
Dow Jones U.S. Moderate Conservative
Portfolio
0.22 17.1
15.4
(19.5)
(14.9)
Life Strategy Moderate Growth
Dow Jones U.S. Moderate Portfolio
0.22 20.3
18.3
(26.5)
(22.8)
Life Strategy Growth
Russell 1000
0.21 25.0
22.4
(34.4)
(30.9)
Standard & Poor’s 500 Index
Standard & Poor’s 500 Index
0.18 26.5
26.5
(37.0)
(37.0)
Windsor II Fund
Russell 1000 Value Index
0.39 27.1
19.7
(36.7)
(36.8)
U.S. Growth
Russell 1000 Growth Index
0.49 35.0
37.2
(37.8)
(38.4)
Mid Cap Index
Russell Mid Cap Index
0.27 41.6
34.3
(41.8)
(42.8)
Small Cap Index
Russell 2000 Index
0.28 36.1
34.0
(36.1)
(37.2)
International Growth
Citigroup PMI EPAC Index
MSCI EAFE Index
0.53 41.6
34.3
(44.9)
(43.3)
(43.4)
Vanguard Target Retirement Income
Vanguard Retirement Income Benchmark
0.19 14.3
14.3
Not offered in
2008
Vanguard Target Retirement 2005
Vanguard Target 2005 Benchmark
0.18 16.2
16.4
Not offered in
2008
Vanguard Target Retirement 2010
Vanguard Target 2010 Benchmark
0.19 19.3
19.4
Not offered in
2008
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
MANAGEMENT’S DISCUSSION AND ANALYSIS
_________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
5
Vanguard Target Retirement 2015
Vanguard Target 2015 Benchmark
0.18 21.3
21.4
Not offered in
2008
Vanguard Target Retirement 2020
Vanguard Target 2020 Benchmark
0.19 23.1
23.3
Not offered in
2008
Vanguard Target Retirement 2025
Vanguard Target 2025 Benchmark
0.18 24.8
25.1
Not offered in
2008
Vanguard Target Retirement 2030
Vanguard Target 2030 Benchmark
0.19 26.7
27.0
Not offered in
2008
Vanguard Target Retirement 2035
Vanguard Target 2035 Benchmark
0.18 28.2
28.5
Not offered in
2008
Vanguard Target Retirement 2040
Vanguard Target 2040 Benchmark
0.19 28.3
28.5
Not offered in
2008
Vanguard Target Retirement 2045
Vanguard Target 2045 Benchmark
0.18 28.2
28.5
Not offered in
2008
Vanguard Target Retirement 2050
Vanguard Target 2050 Benchmark
0.19 28.3
28.5
Not offered in
2008
The performance shown above is net of fees, as reported by the managers.
Certain participants with assets valued at $672,844 and $597,063 in 2009 and 2008, 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.
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 the 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 Plans 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:
Karl J. Tyminski, Secretary-Treasurer
2350 Market Street
St. Louis, MO 63103-2555
Phone: (314) 768-6222
Fax: (314) 768-2701
kjtymi@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
________________________________________________STATEMENTS OF PLAN NET ASSETS
See notes to financial statements________________________________________________________
6
December 31,
2009 2008
ASSETS
Investments at fair value:
Mutual funds $25,519,210 $18,961,391
Common/collective trust 2,385,693 2,388,744
Annuity contracts 672,844 597,063
Participant loans 630,912 710,672
NET ASSETS HELD IN TRUST FOR PLAN BENEFITS $29,208,659 $22,657,870
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
___________________________________STATEMENTS OF CHANGES IN PLAN NET ASSETS
See notes to financial statements________________________________________________________
7
For the Years
Ended December 31,
2009 2008
ADDITIONS TO (REDUCTIONS OF) NET ASSETS
ATTRIBUTED TO:
Investment income (loss):
Interest and dividends $ 715,981 $ 808,552
Net depreciation in fair value of investments 4,121,727 (8,471,611)
Total Investment Income (Loss) 4,837,708 (7,663,059)
Less: Investment expenses (302) (325)
Net Investment Income (Loss) 4,837,406 (7,663,384)
Employee contributions:
Elected deferrals 2,685,427 2,723,760
Total Additions (Reductions) 7,522,833 (4,939,624)
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants and beneficiaries 972,044 1,168,917
NET INCREASE (DECREASE) 6,550,789 (6,108,541)
NET ASSETS AVAILABLE FOR BENEFITS,
JANUARY 1 22,657,870 28,766,411
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31 $29,208,659 $22,657,870
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
8
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies consistently applied by The Metropolitan St. Louis Sewer District
Deferred Compensation Plan and Trust (the “Plan”) in the preparation of the accompanying financial
statements are summarized below:
1. Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis of accounting.
Benefit payments to participants or beneficiaries are recorded upon distribution.
2. Accounting Estimates
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.
3. Investment Valuation
Purchases and sales of mutual funds are recorded on the settlement date. Investments in mutual
funds are valued at fair value based on quoted market prices. Investments in annuity contracts
are valued at contract values reported by the insurance company, which approximate fair value.
Investments in participant loans are valued at the outstanding principal balance, which
approximate fair value.
4. Administrative Expenses
All general administrative costs of the Plan are paid by The Metropolitan St. Louis Sewer
District (the “District”), except those attributable to participants’ choice of optional
investments or optional forms of benefit payments. These expenses are charged to the
respective participants’ account balance.
5. Subsequent Events
In preparing these financial statements, the District has evaluated events and transactions for
potential recognition or disclosure through December 7, 2010, the date the financial statements
were available to be issued.
NOTE B – DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information. Participants should refer to the
Plan agreement for a complete description of the Plan’s provisions.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
9
NOTE B – DESCRIPTION OF THE PLAN (Continued)
1. General
The Plan is a defined contribution benefit plan covering substantially all employees of the
District. The District’s Board of Trustees established the Plan in September 1996. The first
contributions were made in October 1996. 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.
2. 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, 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) not to exceed $16,500 and $15,500 for the years ended December 31, 2009 and 2008.
If the employee is over the age of 50, they can contribute an additional catch-up contribution
up to $5,500 and $5,000 for the years ended December 31, 2009 and 2008. Underutilization
catch-up of two times the standard annual deferral applies 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.
Employee contributions may be allocated to the Vanguard accounts only, in 1% increments as
the participant directs. No contributions are currently made to the Lincoln National accounts:
Equity option: Vanguard Windsor II Fund, Vanguard Index 500 Fund, and Vanguard
U.S. Growth Fund – Investment objective is long-term capital appreciation.
Diversification option: Vanguard Small-Cap and Mid-Cap Index Fund and Vanguard
International Growth Fund – Investment objective is long-term capital appreciation.
Life Strategy option: Vanguard Life Strategy Growth Fund, Vanguard Life Strategy
Moderate Growth Fund, Vanguard Life Strategy Conservative Growth Fund, and
Vanguard Life Strategy Income Fund – Investment objective is long-term capital
appreciation and some current income.
Bond option: Vanguard Total Bond Market Index Fund – Investment objective is income
stability and conservation of principal.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
10
NOTE B – DESCRIPTION OF THE PLAN (Continued)
2. Contributions (Continued)
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 2005-2050 Fund – Investment
objective is capital appreciation and current income consistent with its current asset
allocation.
Loan Fund: The District allows participants to borrow from their account, usually a
percentage of their vested balance.
3. 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.
At December 31, 2009 and 2008, approximately 649 and 640 participants, respectively,
actively participated in the Plan.
4. Participant Loans
Active participants, with some exceptions, may borrow from their fund accounts a percentage
of their vested account balances. Principal and interest is paid through payroll deductions. At
December 31, 2009 and 2008, interest rates on loans outstanding range from 5.00% to 9.25%.
5. 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
11
NOTE B – DESCRIPTION OF THE PLAN (Continued)
5. Distributions (Continued)
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.
6. Tax Status
The Plan received a favorable determination letter from the Internal Revenue Service on
June 23, 1999, indicating the Plan and its underlying trust are qualified under Section 457 of
the Internal Revenue Code.
NOTE C – RELATED PARTY-IN-INTEREST 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 party-in-interest transactions which are exempt from the
prohibited transaction rules.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
12
NOTE D – INVESTMENTS
Investments held by the custodians in the Plan’s name were as follows:
December 31,
2009 2008
Mutual funds:
Vanguard Group, Inc.
Windsor II Fund $ 5,290,044 * $ 4,181,430*
Balanced Index Fund 3,379,621 * 2,529,369*
Index 500 Fund 3,043,921 * 2,240,569*
Total Bond Market Index Fund 2,343,959 * 1,982,158*
U.S. Growth Fund 2,021,922 * 1,444,041*
LifeStrategy Moderate Growth Fund 1,792,381 * 1,276,655*
International Growth Fund 1,575,472 * 915,387
Prime Money Market Fund 1,355,842 -
Small-Cap Index Fund 1,114,284 686,871
LifeStrategy Growth Fund 1,111,696 728,630
Mid-Cap Index Fund 1,038,884 657,812
LifeStrategy Conservative Growth Fund 646,614 485,458
LifeStrategy Income Fund 332,386 255,536
Target Retirement 2015 Fund 78,706 -
Target Retirement 2010 Fund 69,707 -
Target Retirement 2030 Fund 60,630 -
Target Retirement 2005 Fund 55,435 -
Target Retirement 2045 Fund 43,504 -
Target Retirement 2025 Fund 42,043 -
Target Retirement 2040 Fund 39,646 -
Target Retirment Income Fund 29,950 -
Target Retirement 2020 Fund 23,209 -
Target Retirement 2035 Fund 10,015 -
Target Retirement 2050 Fund 19,339 -
Federal Money Market Fund - 1,577,475*
Total Mutual Funds 25,519,210 18,961,391
Common/collective trust:
Vanguard Group, Inc.
Retirement Savings Trust 2,385,693 * 2,388,744*
Participant loans 630,912 710,672
* Represents 5% or more of the Plan’s net assets.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
13
NOTE D – INVESTMENTS (Continued)
December 31,
2009 2008
Annuity contracts:
Lincoln National Life
Fixed earnings option:
Lincoln National Fixed 341,613 335,437
Variable earnings option:
Special Opportunity Fund 116,896 90,561
Growth & Income Fund 114,930 101,269
International Fund 24,441 20,365
Trend Fund 21,706 14,170
Money Market Fund 20,786 4,911
Social Awareness Fund 9,777 9,455
Capital Appreciation Fund 7,713 5,629
Midcap Growth Fund 5,078 3,508
Managed Fund 4,299 5,646
Equity-Income Fund 2,876 2,358
Global Growth Fund 2,729 1,939
Aggressive Growth Fund - 1,815
Total Annuity Contracts 672,844 597,063
$29,208,659 $22,657,870
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 following table provides information on the duration and credit ratings associated with the Plan’s
investment in debt-backed mutual funds, excluding obligations of the U.S. Government or obligations
explicitly guaranteed by the U.S. government within these funds at December 31, 2009 and 2008:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT DEFFERRED COMPENSATON PLAN AND TRUST NOTES TO FINANCIAL STATEMENTS ___________________________________________________________________________________________DECEMBER 31, 2009 AND 2008 _______________________________________________________________________________________________________________________ 14 NOTE D – INVESTMENTS (Continued) S&P Average Average Effective Plan Investments Fair Credit Credit Quality Percentage Not Duration With Debt Securities Value Rating AAA AA A BBB BB B Rated In Years December 31, 2009: Vanguard Group, Inc. Balanced Index Fund $3,379,621 AA 29.0 % 1.5 % 3.8 % 3.4 % - % - %-%4.50 Total Bond Market Index Fund 2,343,959 AA 77.0 4.0 10.0 9.0 - - -4.50 Prime Money Market Fund 1,355,842 AA 42.5 44.6 12.9 - - - -0.20 Life Strategy Moderate Growth Fund 1,792,381 AAA 24.6 1.0 3.2 2.9 - - -4.50 Retirement Savings Trust 2,385,693 AA 61.7 36.1 2.2 - - - -0.77 Life Strategy Conservative Growth Fund 646,614 AA 28.9 4.3 7.2 6.3 - - 1.4 3.70 Life Strategy Income Fund 332,386 AA 42.6 5.2 9.2 7.2 - - 1.3 4.00 Target Retirement 2005 Fund 55,435 AAA 46.9 1.7 3.9. 3.3 - - -4.70 Target Retirement 2010 Fund 69,707 AAA 37.5 1.4 3.7 3.2 - - -4.60 Target Retirement 2015 Fund 78,706 AA 27.8 1.4 3.6 3.2 - - -4.50 Target Retirement 2020 Fund 23,209 AA 22.5 1.2 2.9 2.6 - - -4.50 Target Retirement 2025 Fund 42,043 AA 17.2 0.9 2.2 2.0 - - -4.50 Target Retirement 2030 Fund 60,630 AA 11.9 0.6 1.5 1.4 - - -4.50 Target Retirement 2035 Fund 10,015 AA 7.1 0.4 0.9 0.8 - - -4.50 Target Retirement 2040 Fund 39,646 AA 7.1 0.4 0.9 0.8 - - -4.50 Target Retirement 2045 Fund 43,504 AA 7.1 0.4 0.9 0.8 - - -4.50 Target Retirement 2050 Fund 19,339 AA 7.1 0.4 0.9 0.8 - - -4.50 Target Retirement Income 29,950 AAA 51.2 1.8 4.3 3.7 - - -4.70 Lincoln National Life Fixed (annuity contracts) 341,613 BBB * * * 100.0 * * ** Lincoln Money Market Fund 20,786 * * * * * * * ** * Information is unavailable for this mutual fund.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT DEFFERRED COMPENSATON PLAN AND TRUST NOTES TO FINANCIAL STATEMENTS ___________________________________________________________________________________________DECEMBER 31, 2009 AND 2008 _______________________________________________________________________________________________________________________ 15 NOTE D – INVESTMENTS (Continued) S&P Average Average Effective Plan Investments Fair Credit Credit Quality Percentage Duration With Debt Securities Value Rating AAA AA A BBB BB B In Years December 31, 2008: Vanguard Group, Inc. Balanced Index Fund $2,529,369 AAA 31.3 % 1.1 % 3.6 % 2.7 % - % - % 3.7 Total Bond Market Index Fund 1,982,158 AAA 81.1 3.0 9.2 6.7 - - 3.7 Federal Money Market Fund 1,577,475 AAA 100.0 - - - - - 0.2 Life Strategy Moderate Growth Fund 1,276,655 AAA 23.9 0.9 2.7 2.0 - - 3.7 Retirement Savings Trust 2,388,744 AA 59.3 40.6 0.1 - - - 2.4 Life Strategy Conservative Growth Fund 485,458 AA 31.6 3.9 7.5 5.7 0.1 0.4 3.1 Life Strategy Income Fund 255,536 AA 48.1 4.5 9.4 7.1 0.1 0.7 3.3 Lincoln National Life Fixed (annuity contracts) 335,437 AA * * * * * * * Money Market Fund 4,911 AA * * * * * * * * Information is unavailable for this mutual fund.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
____________________________________________________________________________________
16
NOTE E – RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. 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 Statement of Plan Net Assets.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
____________________________________________________SUPPLEMENTAL INFORMATION
SUPPLEMENTAL INFORMATION SECTION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
____________________________________________________SUPPLEMENTAL INFORMATION
____________________________________________________________________________________
17
HISTORICAL TREND INFORMATION
For The Distributions To Increase
Years Ended Employee Net Investment Participants (Decrease)
December 31, Contributions Income (Loss) And Beneficiaries In Net Assets
2009 $2,685,427 $4,837,706 ($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)
2001 1,986,726 (1,194,727) (793,369) (1,370)
2000 2,345,212 (257,908) (850,507) 1,236,797
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
____________________________________________________SUPPLEMENTAL INFORMATION
____________________________________________________________________________________
18
INVESTMENT RETURNS AND EXPENSE RATIOS
An independent investment consultant, New England Pension Consultants, 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 performance for the years 2009 and 2008 as compared to the appropriate benchmarks
as well as their current expense ratios:
Returns Net of Fees*
Funds / Benchmarks Expense Ratios 2009 2008
Federal Money Market
Prime Money Market Investment
Retirement Savings Trust
90-day T-Bills
Bankers Trust 3-Year Guaranteed Investment
Contract Rate
N/A* %
0.25
0.24
N/A*
0.5
3.0
3.0
0.2
4.5
2.5%
Not offered
4.4
2.1
4.8
Total Bond Market Index
BarCap US Aggregate Bond Index
0.22 5.9
5.9
5.1
5.2
Balanced Index Fund
60% Standard & Poor’s 500/ 40% BarCap
Agg Index
0.25 20.1
16.4
(22.2)
(22.1)
Life Strategy Income
Dow Jones U.S. Moderate Conservative
Portfolio
0.22 12.1
11.2
(10.5)
(5.5)
Life Strategy Conservative Growth
Dow Jones U.S. Moderate Conservative
Portfolio
0.22 17.1
15.4
(19.5)
(14.9)
Life Strategy Moderate Growth
Dow Jones U.S. Moderate Portfolio
0.22 20.3
18.3
(26.5)
(22.8)
Life Strategy Growth
Russell 1000
0.21 25.0
22.4
(34.4)
(30.9)
Standard & Poor’s 500 Index
Standard & Poor’s 500 Index
0.18 26.5
26.5
(37.0)
(37.0)
Windsor II Fund
Russell 1000 Value Index
0.39 27.1
19.7
(36.7)
(36.8)
U.S. Growth
Russell 1000 Growth Index
0.49 35.0
37.2
(37.8)
(38.4)
Mid Cap Index
Russell Mid Cap Index
0.27 41.6
34.3
(41.8)
(42.8)
Small Cap Index
Russell 2000 Index
0.28 36.1
34.0
(36.1)
(37.2)
International Growth
Citigroup PMI EPAC Index
MSCI EAFE Index
0.53 41.6
34.3
(44.9)
(43.3)
(43.4)
Vanguard Target Retirement Income
Vanguard Retirement Income Benchmark
0.19 14.3
14.3
Not offered in
2008
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFFERRED COMPENSATON PLAN AND TRUST
____________________________________________________SUPPLEMENTAL INFORMATION
____________________________________________________________________________________
19
Vanguard Target Retirement 2005
Vanguard Target 2005 Benchmark
0.18 16.2
16.4
Not offered in
2008
Vanguard Target Retirement 2010
Vanguard Target 2010 Benchmark
0.19 19.3
19.4
Not offered in
2008
Vanguard Target Retirement 2015
Vanguard Target 2015 Benchmark
0.18 21.3
21.4
Not offered in
2008
Vanguard Target Retirement 2020
Vanguard Target 2020 Benchmark
0.19 23.1
23.3
Not offered in
2008
Vanguard Target Retirement 2025
Vanguard Target 2025 Benchmark
0.18 24.8
25.1
Not offered in
2008
Vanguard Target Retirement 2030
Vanguard Target 2030 Benchmark
0.19 26.7
27.0
Not offered in
2008
Vanguard Target Retirement 2035
Vanguard Target 2035 Benchmark
0.18 28.2
28.5
Not offered in
2008
Vanguard Target Retirement 2040
Vanguard Target 2040 Benchmark
0.19 28.3
28.5
Not offered in
2008
Vanguard Target Retirement 2045
Vanguard Target 2045 Benchmark
0.18 28.2
28.5
Not offered in
2008
Vanguard Target Retirement 2050
Vanguard Target 2050 Benchmark
0.19 28.3
28.5
Not offered in
2008
*The returns shown above are net of fees as reported by the managers.