HomeMy Public PortalAboutPension Plan 2008 Audited FinancialsTHE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
INDEPENDENT AUDITORS' REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 2008
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 2 - 9
FINANCIAL STATEMENTS
Statements of Plan Net Assets 10
Statements of Changes in Plan Net Assets 11
Notes to Financial Statements 12 - 22
REQUIRED SUPPLEMENTAL ,INFORMATION
Schedule of Funding in Progress 23
Schedule of Employer Contributions in Accordance with GASB Statement No. 25 23
Note to Required Supplemental Information 24
STATISTICAL SECTION (Unaudited)
Performance and Net Asset Value 25
Historical Trend Information:
Revenue by Source 26
Expenses by Type 27
Member Count 28
Graphs:
Total Benefit Payments 29
Employer Contributions 29
Total Benefit Recipients 30
Top Ten Investment Holdings 31
Schedule of Investment Managers and Advisor Fees 32
SCHMERSAHL TRELOAR &
.noill Certified Public Accountants
Independent Auditors' Report
To the Board of Trustees of the
Metropolitan St. Louis Sewer District
We have audited theaccompanying statement of plan net .assets of the Metropolitan St. Louis Sewer
District Employees' Pension Plan (the "Plan") as of December 31, 2008, and the related statement of
changes in plan net assets for the year then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these financial statements based
on our audit. The financial statements of the Metropolitan St. Louis Sewer District Employees' Pension
Plan as of and for the year ended December 31, 2007, were audited by other auditors whose report dated
November 12, 2008, expressed an unqualified opinion on those statements.
We conducted our audit 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 basisfor 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 our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the plan
net assets as of December 31, 2008, and changes in plan net assets for the year then ended, in conformity
with U.S. generally accepted accounting principles.
The management's discussion and analysis (the "MD&A") and the schedules of funding progress and
employer contributions (the "schedules"), as listed in the table of contents, are not a required part of the
basic financial statements but are supplementary information required by U.S. generally accepted
accounting principles. We have applied certain limited procedures to the MD&A and the schedules,
which consisted principally of inquires of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the information and
express no opinion on it.
The statistical data included in the statistical section of this report has not been subjected to the auditing
procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion
on them.
November 6, 2009
(314) 966-2727 • fax (314) 966-6464 • 3660 S. Geyer Rd., Suite 200 • St. Louis, MO 63127 • e-mail: stcpa@stcpa.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
'MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
As management of The Metropolitan St. Louis Sewer District Employees' Pension Plan, we offer
readers of the Plan's financial statements this Management's Discussion and Analysis (MD&A) of the
financial activities of the Plan for the year ended December 31, 2008. This MD&A is intended to
supplement the Plan's financial statements, and we encourage readers to consider the information
presented here in conjunction with those statements, which begin on page 10.
OVERVIEW OF THE FINANCIAL STATEMENTS
The following MD&A is intended to serve as an introduction to the Plan's financial statements. The
basic financial statements are:
1) Statements of plan net assets
2) Statements of changes in plan net assets
3) Notes to financial statements
This report also contains required supplemental information to the basic financial statements which
provides actuarial information for use in analyzing the funded status of the Plan and includes:
1) Schedule of funding in progress
2) Schedule of employer contributions in accordance with GASB Statement No. 25
3) Note to required supplemental information
Certain revenues, expenses associated with administering the Plan, and other trend data are presented
immediately following the note to required supplemental information in the statistical section of this
report.
The basic financial statements contained in this report are described below:
• The statement of plan net assets is a point in time snapshot of account balances at year-end. It
reports the assets available for future payments to retirees, and any current liabilities that are
owed as of the statement date. The resulting net assets value [assets - liabilities = net assets]
represents the value of assets held in trust for pension benefits.
• The statements of changes in plan net assets displays the effect of pension fund transactions that
occurred during the fiscal year [additions - deductions = net increase (decrease) in net assets].
This net increase (decrease) in net assets reflects the change in the net assets value of the
statements of plan net assets from the prior year to the current year. Both statements are in
compliance with Governmental Accounting Standards Board (GASB) Pronouncements.
2
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
• The notes to financial statements are an integral part of the financial statements and provide
additional information that is essential for a comprehensive understanding of the data provided in
the financial statements. These notes describe the accounting and administrative policies under
which the Plan operates, and provide additional levels of detail for selected financial statement
items. See notes to financial statements beginning on page 12 of this report.
Because of the long-term nature of a defined benefit pension plan, financial statements alone cannot
provide sufficient information to properly reflect the ongoing plan perspective. Therefore, in addition to
the financial statements explained above, this financial report includes two additional schedules entitled
"required supplemental information".
The schedule of funding in progress (page 23) includes actuarial information about the status of
the Plan from an ongoing, long-term perspective and the progress made in accumulating
sufficient assets to pay pension benefits when due. Valuation assets in excess of actuarial
accrued liabilities indicate that sufficient assets exist to fund the future pension benefits of the
current members and benefit recipients, whereas, excess liabilities requires future funding or
investment performance in excess of the actuarial assumed investment returns.
• The schedule of employer contributions in accordance with GASB Statement No. 25 (page 23)
presents historical trend information regarding the value of total annual contributions required to
be paid by employers and the actual performance of employers in meeting this requirement.
• The note to required supplemental information provides explanatory detail to aid in
understanding the required supplemental schedules.
FINANCIAL HIGHLIGHTS 2008
• Net assets held in trust for pension benefits totaled $150,808,626 as of December 31, 2008 for a
decrease of $40,573,866 or (21.2%) as compared with December 31, 2007. This decrease in net
assets primarily resulted from cumulative investment losses during the year and an increase of
$692,022 in benefit payments.
• The Plan's funding objective is to meet long-term benefit obligations to the extent possible. As
of December 31, 2008, the date of the latest actuarial valuation, the funded ratio of the Plan was
86.6%. In general, this means that for every dollar of pension benefits due, the Plan has
approximately $0.87 of net assets available for payment. The Plan's funding ratio decreased by
8.0% as compared with the funding ratio for December 31, 2007. The decrease in the funding
ratio is primarily attributed to a decline in the value of investments.
• Total decrease to the Plan's net assets (page 11) amounted to $40,573,866 for the year 2008
consisting of an investment loss of $38,697,158, and plan payments and administrative expenses
net of contributions of $1,876,708.
3
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
• Administrative expenses (deductions to the Plan's net assets, page 11) increased from $99,074
for fiscal 2007 to $104,221or approximately $5,147 (5.2%) which primary reflect the net impact
of an increase in the cost of legal fees.
FINANCIAL HIGHLIGHTS 2007
• Net assets held in trust for pension benefits totaled $191,382,492 as of December 31, 2007 for an
increase of $17,125,561 or 9.8% as compared with December 31, 2006. This increase in net
assets primarily resulted from cumulative investment gains during the year that more than offset
a $699,174 increase in benefit payments.
• The Plan's funding objective is to meet long-term benefit obligations to the extent possible. As
of December 31, 2007, the date of the latest actuarial valuation, the funded ratio of the Plan was
94.6%. In general, this means that for every dollar of pension benefits due, the Plan has
approximately $0.95 of net assets available for payment. The Plan's funding ratio increased by
3.5% as compared with the funding ratio for December 31, 2006. The increase in the funding
ratio is attributed to both plan contributions and improved cumulative investment returns.
Total additions to the Plan's net assets (page 11) amounted to $25,765,592 for the year 2007
consisting of an investment gain of $18,063,136 and employer contributions of $7,702,456.
• Administrative expenses (deductions to the Plan's net assets, page 11) decreased from $150,548
for fiscal 2006 to $99,074 for 2007 or approximately $51,474 (34.2%) which primary reflected
the net impact of a decrease in the cost of actuarial services and the reclassification of certain
fees to investment manager and advisor fees.
ANALYSIS OF FINANCIAL ACTIVITIES
The Plan's funding objective is to meet long-term benefit obligations through investment income and
contributions. Accordingly, the receipt of employer contributions and the income from investments
provide the reserves needed to finance future retirement benefits.
The Metropolitan St. Louis Sewer District's contributions into the Plan continue to increase as the result
of a combination of factors, including an increase in salaries and a lower than anticipated investment
performance as measured on an actuarially smoothed basis. Relative to the Public Fund peer group for
2008 and 2007, the Fund was down by 19.9% and up by 11.2%, respectively, which ranked in the 17th
and 8th percentile, respectively, of the Public Fund universe. Net assets held in trust for pension
benefits decreased by $40,573,866 in 2008 and increased by $17,125,561 in 2007. These net assets are
used to meet ongoing benefit obligation to the Plan's participants and their beneficiaries.
Required employer contributions as determined by the Plan's actuary increased for 2008 compared to
2007. The item that most significantly increased the required plan contribution by the employer is the
decline in the market value of the assets, in particular is the decline in the value of the equity
investments. As the years roll forward and total assets and liabilities grow, the Plan's investment
4
TIE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
income will play a more significant role in funding future retirement benefits - eventually providing
80% - 90% of the necessary funds. Therefore, investment return over the long-term is critical to the
funding status of the Plan.
In 2008 net investment loss of $(38,697,158) was significantly lower than the actuarially assumed
investment income, and the 2007 net investment income of $18,063,136 was higher than the actuarially
assumed investment income. Overall, the Plan is adequately funded and any accumulative difference
between actuarial liabilities and assets is being amortized and funded over an appropriate period. It is
important to remember that the Plan's funding is based on a long time horizon, where temporary ups and
downs in the market are expected. The more critical factor is that the Plan be able to meet an expected
earnings yield of, on average, 7.5%. The Plan's average return for both 2008 and 2007 was negative
(5.6%), which is below the actuarially assumed investment rate of 7.5%, and could, depending on future
investment performance, require additional contributions in future years.
The Plan continues to retain an investment consultant to identify opportunities to improve investment
return. A suggestion made by the investment consultant is that the Plan should more broadly diversify
its investment asset base. As such, the Plan added new asset classes that have helped to offset the
impact from the significant decline in the value of equity investments that was experienced in 2008.
Based upon our latest actuarial valuations for the years ended December 31, 2008 and 2007, the Plan's
actuarial value of assets was less than its actuarial value of liabilities by $28,387,059and $10,477,707,
respectively. This means that additional future funding will be needed to continue to reduce this
liability.
FINANCIAL ANALYSIS
The condensed statements of plan net assets as compared to prior years are as follows:
ASSETS
Investments at fair value
Other assets
Total Assets
LIABILITIES
December 31
2008
2007
$150,347,966
6,004,424
156,352,390
5,543,764
$190,730,668
2,053,823
192,784,491
1,401,999
2008 Change
Amount Percent
($40,382,702)
3,950,601
( 36,432,101)
4,141,765
(21.2)%
192.4
(18.9)
295.4
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS $150,808,626 $191,382,492 ($40,573,866) (21.2)%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
ASSETS
Investments at fair value
Other assets
Total Assets
December 31
2007 2006
$190,730,668
2,053,823
192,784,491
LIABILITIES 1,401,999
$174,086,388
7,496,267
181,582,655
7,325,724
2006 Change
Amount Percent
$16,644,280 9.6%
(5,442,444) (72.6)
11,201,836 6.2
(5,923,725) (80.9)
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS $191,382,492 $174,256,931 $17,125,561 9.8%
As previously noted, net assets viewed over time may serve as a useful indication of the Plan's financial
position. At the close of calendar years 2009 and 2008, the assets of the Plan exceeded its liabilities
with $150,808,626 and $191,382,492, respectively, in net assets held in trust for pension benefits. The
net assets are available to meet the Plan's ongoing obligation to the . Plan's participants and their
beneficiaries.
Despite variations in the stock market, management and the Plan's actuary concur that the Plan remains
in a sound financial position to meet its obligations to the Plan's participants and beneficiaries. The
current financial position is the result of a successful investment program and prudent management
practices that have been in place for many years. The condensed statements of changes in plan nets
assets as compared to prior years are as follows:
ADDITIONS
Net investment (loss) income
Employer contributions
Total (Deductions) Additions
For the Years
Endeded December 31, 2008 Change
2008 2007
$(38,697,158) $ 18,063,136
7,460,492 7,702,456
(31,236,666) 25,765,592
DEDUCTIONS
Benefits paid to retirees and beneficiaries 9,232,979 8,540,957
Administrative expenses 104,221 99,074
Total Deductions 9,337,200 8,640,031
NET (DECREASE) INCREASE (40,573,866)
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, JANUARY 1
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, DECEMBER 31
191,382,492
$150,808,626
Amount Percent
$(56,760,294) (314.2)%
(241,964) (3.1)
(57,002,258) (221.2)
692,022
5,147
697,169
8.1
5.2
8.1
17,125,561 (57,699,427) (336.9)
174,256,931
17,125,561
9.8
$191,382,492 $(40,573,866) (21.2)%
6
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
ADDITIONS
Net investment income
Employer contributions
Total Additions
For the Years
Endeded December 31, 2007 Change
2007 2006
Amount Percent
$ 18,063,136 $ 17,565,462 $ 497,674 2.8%
7,702,456 6,861,223 841,233 12.3
25,765,592 24,426,685 1,338,907 5.5
DEDUCTIONS
Benefits paid to retirees and beneficiaries 8,540,957 7,841,783 699,174 8.9
Administrative expenses 99,074 150,548 (51,474) (34.2)
Total Deductions 8,640,031 7,992,331 647,700 8.1
NET INCREASE
17,125,561 16,434,354 691,207 4.2
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, JANUARY 1 174,256,931 157,822,577 16,434,354 10.4
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, DECEMBER 31 $191,382.492 $174,256,931 $17,125,561 9.8%
As noted above, the funds needed to finance retirement benefits are accumulated through the collection
of employer contributions and through earnings on investments (net of investment expense). Total
additions (deductions) for the years ended December 31, 2008 and 2007, totaled $(31,236,666) and
$25,765,592, respectively.
The Plan experienced a deduction to net assets for 2008 due largely to investment losses. The
investment section of this report summarizes the results of investment activity for the year ended
December 31, 2008.
The Plan was created to provide retirement, survivor, and disability benefits to qualified members and
their beneficiaries. The cost of such programs includes recurring benefit payments as designated by the
Plan, and the cost of administering the Plan.
As noted above deductions for the year ended December 31, 2008 totaled $9,337,200, an increase of
8.1% over 2007. The increase in benefits paid resulted primarily from an increase in the number of
retirees receiving benefits. The Plan has consistently managed within its administrative expense budget,
with no material variances between planned and actual expenditures.
Investment Performance - 2008
The following are a few characteristics and achievements for the Plan for the year ending December 31,
2008:
• The Plan ended the year with $150,808,626 in net assets.
7
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
The Plan's performance for the year was negative (19.9)% compared to the passive policy index
of negative (20.2)%, and the average five-year return was 3.0% compared to the passive policy
index of 2.8%.
• The District retains an independent investment consultant to monitor the investment performance
of the Plan and identify opportunities for improved returns. The recommendation of the
investment consultant has been to more broadly diversify the investment asset base of the Plan.
• The strategic asset allocation compared to the December 31, 2008 actual allocation was as
follows:
Asset Class
Proposed Actual
Target Range 2008 2007
Equities:
Domestic Large -Cap Stocks 20.0% 16 - 24 17.3 19.6
Domestic Small -Cap Stocks 10.0 8 - 12 8.4 9.2
International Developed Markets Stocks 10.0 8 - 12 9.3 9.7
International Emerging Markets Stocks 3.0 2 - 5 2.3 3.5
Fixed Income:
Domestic Core Bonds 20.0 16 - 24 20.3 19.2
Global Bonds 8.0 6 - 10 9.4 8.1
High Yield Bonds 5.0 3 - 7 4.5 4.5
Other:
Global Tactical 10.0 8 - 12 9.9 9.7
Real Estate 5.0 3 - 7 5.9 5.1
Market Neutral 5.0 3 - 7 6.5 5.6
Absolute Return 4.0 3 - 7 4.1 3.9
Cash Equivalents - - 2.1 1.9
All asset classes have been rebalanced when needed during the year in order to maintain a weighting
consistent with the strategic allocation ranges.
The large -cap stocks were diversified between active value, active growth, and passive core strategies.
The fund had a 60% large -cap growth value and 40% large -cap growth allocation which added value to
the fund during the year as value stocks outperformed growth stocks.
The purpose of employing a Global Tactical allocation manager is to provide an additional layer of
diversification with the twin goals of increasing return and decreasing risk. Global Tactical asset
allocation managers have the ability to invest in more than one asset class and full authority to adjust the
weighting of the asset classes under their discretion.
The Absolute Return allocation investment objective is to achieve attractive long-term, risk adjusted,
returns in a variety of capital market conditions. The fund -of -funds portfolio should achieve this
8
THE METROPOLITAN OPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2008
objective by purchasing investment funds that utilize a broad range of absolute return oriented
investment strategies.
The Plan Administrator and the Consultant will review the Plan's asset allocation quarterly to determine
if the allocation is consistent with the established exposure ranges. If an asset class is at or beyond the
maximum/minimum range as determined at the quarterly asset allocation review, the Plan
Administrator, with the assistance of the Consultant, will develop a plan to rebalance the allocation
target. At a minimum, a rebalancing plan will move the allocation to the midpoint between the
maximum/minimum limit violated and the target allocation. The Plan Administrator and the Consultant
will consider market conditions and transaction costs, as well as any other relevant factors when
rebalancing, but shall have a predisposition to transfer funds from asset classes that are outperforming to
asset classes that are underperforming.
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 the Plan's participants and their beneficiaries.
REQUEST FOR INFORMATION
This financial report is designed to provide the Board of Trustees, our members, ratepayers, investment
managers, and creditors 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
financial information should be addressed to:
Karl J. Tyminski, Secretary -Treasurer
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
E-mail: kjtymi@stlmsd.com
9
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATEMENTS OF PLAN NET ASSETS
December 31
2008 2007
ASSETS
Investments at fair value:
Mutual funds $ 58,922,082 $ 79,191,173
Corporate obligations 34,749,104 28,293,559
Collective investment fund 18,709,555 20,541,658
Domestic common stocks 16,734,623 17,271,953
Foreign obligations 7,426,150 12,547,217
Money market funds 6,678,377 13,344,451
U.S. Treasury and agency obligations 5,326,542 16,025,339
Foreign stocks 984,004 1,989,958
Municipal obligations 817,529 1,356,398
Domestic preferred stock 168,962
Total Investments 150,347,966 190,730,668
Receivables:
Due from brokers for forward currency exchange contracts 5,195,803 1,120,647
Due from brokers for pending sales securities sold 57,416 69,684
Interest and dividends receivable 751,205 863,492
Total Receivables 6,004,424 2,053,823
Total Assets 156,352,390 192,784,491
LIABILITIES
Due to brokers for forward currency exchange contracts 5,140,015 1,096,610
Due to brokers for securities purchased 138,858 152,391
Accrued expenses 264,891 152,998
Total Liabilities 5,543,764 1,401,999
NET ASSETS HELD IN TRUST FOR PENSION
BENEFITS (a schedule of funding progress is
presented on page 25)
See notes to financial statements
$150,808,626 $191,382,492
10
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATEMENTS OF CHANGES IN PLAN NET ASSETS
For The Years Ended
December 31
2008 2007
(REDUCTIONS OF) ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income:
Net (depreciation) appreciation in fair value of
investments $(41,855,346) $ 12,823,681
Interest and dividends 3,872,588 5,932,903
Total Investment (Loss) Income (37,982,758) 18,756,584
Less - Investment managers and advisor fees 714,400 693,448
Net Investment (Loss) Income (38,697,158) 18,063,136
Employer contributions 7,460,492 7,702,456
Total (Reductions) Additions (31,236,666) 25,765,592
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to retirees and beneficiaries 9,232,979 8,540,957
Administrative expenses 104,221 99,074
Total Deductions 9,337,200 8,640,031
NET (DECREASE) INCREASE
NET ASSETS HELD IN TRUST FOR PENSION
BENEFITS, JANUARY 1
NET ASSETS HELD IN TRUST FOR PENSION
BENEFITS, DECEMBER 31
See notes to financial statements
(40,573,866) 17,125,561
191,382,492 174,256,931
$150,808,626 $191,382,492
11
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE A — DESCRIPTION OF PLAN
The following brief description of THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN (the "Plan") is provided for general information purposes only.
Members should refer to the Plan ordinance for more complete information.
The Plan is a noncontributory single employer defined benefit plan providing retirement benefits as well
as death and disability benefits. As a condition of employment, all full-time employees of The
Metropolitan St. Louis Sewer District (the "District") are covered by the Plan.
Membership in the Plan consists of:
December 31 Increase
2008 2007 (Decrease)
Retirees and beneficiaries currently receiving benefits 532 504 28
Terminated members entitled to receive benefits 196 198 (2)
Active plan members 885 811 74
Total
1,613 1,513 100
The District's Board of Trustees, primarily to improve benefits to members, amends the Plan,
established on November 1, 1967. A Pension Committee consisting of two members of the District's
Board of Trustees, two elected employee members and four members of the District's management staff
administer the Plan. A committee of the District's Board of Trustees, with the aid of an investment
advisor, reviews and evaluates the Plan's investments and the related rates of return on a periodic basis.
The Plan is exempt from' the requirements of the Employee Retirement Income Security Act of 1974
and, as such, is not subject to the Act's reporting requirements.
All benefits vest after five years of credited service. Members retiring at or after age 65 with five or
more years credited service are entitled to a pension benefit. The Plan permits early retirement with
reduced benefits beginning at age 55 if the member has completed 60 months of employment.
Ordinance No. 10664 provides for unreduced retirement benefits to any member whose combined age
and term of service is equal to 75. Effective January 1, 1999, Ordinance No. 10491 amended the Plan
benefits formula. The annual benefit payable became 1.40% of final average earnings plus 0.40% of
final average earnings that are in excess of covered earnings multiplied by the period of years and
months of credited service not to exceed 35 years. Also, the annual reduction for early retirement was
revised from 5% to 2% prior to age 60 and from 2.5% to 1% after age 60.
Ordinance No. 10664, effective January 1, 2000, amended the plan benefits formula to 1.45% of final
average earnings plus 0.4% of final average earnings that are in excess of covered earnings multiplied
by the period of years and months of credited service not to exceed 35 years. This ordinance also
provided for a survivor's benefit for vested members who have not yet reached their normal retirement
date or earned 75 points. The survivor's benefit is equal to the greater of 50% of the member's monthly
12
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE A — DESCRIPTION OF PLAN (Continued)
accrued retirement benefit as of the date of death, or 15% of the monthly earnings and the member's
monthly accrued retirement benefit actuarially reduced under the 100% joint and survivor annuity
option. Members are also able to select a Contingent Annuity Pop -Up option. This option allows the
member to elect a survivor annuity for life, with the provision that if the beneficiary should predecease
the member, the benefit shall increase to the amount payable had the survivor option not been selected.
Ordinance Number 10872, effective January 1, 2001, further amended the Plan to extend the cost of
living increases for retirees from a maximum of 30% to 45% of the original benefit.
Effective August 1, 2004, Ordinance No. 11781 amended the plan to change the benefit formula to 1.7%
of final average earnings plus 0.4% of final average earnings that are in excess of covered earnings
multiplied by the period of years and months of credited service not to exceed 35 years without
including accrued sick leave. A member who retires between August 1, 2004 and July 1, 2007 is
entitled to select the greater of the above or the benefit calculated under the 1.45%/1.85% benefit
formula including accrued sick leave. Sick leave is paid out at 1.25% per year of service times the
amount of leave accrued. Also, the Plan was amended to provide the retiring member with a 10% partial
lump sum payment option. The balance of the distribution will be paid in accordance with any one of
the other payment options available under the Plan.
The retirement benefit payable to a member who retires after the normal retirement date is the greater of
a) the benefit that would have been payable on the normal retirement date plus a special annual
retirement benefit provided by the accumulated value, at 4% per annum interest, of the monthly benefit
that would have been received prior to the postponed retirement date or b) the benefit determined as of
the postponed retirement date under the normal formula.
NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied by the Plan in the preparation of the accompanying financial
statements are summarized as follows:
1. Basis of Accounting
The Plan's financial statements are prepared using the accrual basis of accounting. Employer
contributions are recognized as revenues in the period when due and the District's Trustees
have made a formal commitment to provide the contribution. Benefits are recognized when
due and payable in accordance with the terrus of the Plan. Plan expenses are recorded when
the corresponding liabilities are incurred regardless of when payment is made. Investment
purchases and sales are recorded on a trade -date basis.
13
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2. Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management and the Plan's actuary to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of additions to and
deductions from net assets during the reporting period. Actual results could differ from those
estimates.
3. Method Used to Value Investments
The Plan's investment assets, which are trusteed by U.S. Bank, N.A., are reported at fair value as
determined and certified by the Trustee. Investments traded on a national exchange are valued at
reported sales prices. Investments that do not have an established market are reported at
estimated fair value. The money market fund is reported at cost, which approximates fair value.
NOTE C — CASH AND INVESTMENTS
1. Categories of Asset Risk
The Plan is authorized to invest in:
Equity Investments: Common stocks of corporations, mutual funds, or commingled
equity funds (Domestic and International, both within defined limits); however, the
investments in equities cannot exceed 53% of total investments.
• Fixed Income Investments: U.S. government and agency securities, corporate bonds,
debentures, notes, or other evidence of indebtedness assumed or guaranteed by
corporations (Domestic and International, both within defined limits); however, the
investment in fixed income cannot exceed 41% of total investments.
Short-term Securities: Commercial paper, treasury bills, certificates of deposit, and/or
money market funds.
• Real Estate Investments: Real estate investment trusts and multi -employer property
trusts; however the investment in real estate cannot exceed 7% of total investments.
• Global Tactical Asset Allocation, Market Neutral, and Absolute Return: These
investment strategies help diversify the investment portfolio while increasing return and
decreasing risk. These investments cannot exceed 12%, 7%, and 7% of total investments,
respectively.
14
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE C — CASH AND INVESTMENTS (Continued)
1. Categories of Asset Risk (Continued)
• Futures Contracts: Currency forward contracts for the purpose of currency risk
management of non-U.S. investments.
The fair value of investments managed consisted of the following:
December 31
2008 2007
Investments, at fair value
Mutual funds:
Domestic equity $ 20,225,660 $ 28,030,598
Foreign equity 17,508,911 25,232,194
Balanced 14,940,962 18,532,206
Fixed 6,246,549 7,396,175
Corporate obligations 34,749,104 28,293,559
Collective investment funds:
Equity market neutral 9,721,941 10,715,369
Real estate 8,987,614 9,826,289
Domestic common stocks 16,734,623 17,271,953
Foreign obligations 7,426,150 12,547,217
Money market funds 6,678,377 13,344,451
U.S. Treasury and agency obligations 5,326,542 16,025,339
Foreign stocks 984,004 1,989,958
Municipal obligations 817,529 1,356,398
Domestic preferred stock - 168,962
Total Investments $150,347,966 $190,730,668
2. Interest Rate Risk
The Plan had the following debt securities and maturities:
December 31, 2008
Weighted Average
Investment Type Fair Value Maturity (Years)
Corporate obligations $34,749,104 4.21
U.S. Treasury and agency obligations 5,326,542 5.82
Foreign obligations 7,426,150 5.52
Municipal obligations 817,529 1.77
$48,319,325
Portfolio weighted average maturity 4.55
15
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE C — CASH AND INVESTMENTS (Continued)
2. Interest Rate Risk (Continued)
December 31, 2007
Weighted Average
Investment Type Fair Value Maturity (Years)
Corporate obligations $28,293,559 3.88
U.S. Treasury and agency obligations 16,025,339 4.81
Foreign obligations 12,547,217 3.69
Municipal obligations 1,356,398 2.25
$58,222,513
Portfolio weighted average maturity 4.05
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:
• Structuring the investment portfolio so that securities mature to meet cash requirements
for benefit payments, thereby avoiding the need to sell securities on the open market prior
to maturity.
• Monitoring fixed income investment managers performance to be sure the fixed income
portion of the investment portfolio is managed to predetermined indexes.
3. Credit Risk
The Plan will minimize credit risk, the risk of loss due to failure of the security issuer or
backer, by:
• Pre -qualifying the financial institutions, broker/dealers, inteiiuediaries, and advisors with
which the Plan will do business; and
• Diversifying the portfolio so that potential losses on individual securities will be
minimized.
The following tables provide information on the credit ratings associated with the Plan's
investments in debt securities:
16
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE C — CASH. AND INVESTMENTS (Continued)
3. Credit Risk (Continued)
Credit Rating By Investment as of December 31, 2008.
S&P
Rating
AAA
AA
A
BBB
BB
B
CCC
Not Rated
Total
U.S.
Treasury
& Agency Municipal
Obligations Obligations
$5,326,542 $177,978
489,239
150,312
$5,326,542
Corporate
Obligations
$ 7,709,188
4,745,697
12,339,435
4,493,941
2,062,219
2,847,416
515,203
36,005
Foreign
Obligations Totals
$2,724,668
959,013
2,524,190
577,183
240,324
400,772
$15,938,376
6,193,949
15,013,937
5,071,124
2,302,543
3,248,188
515,203
36,005
$817,529 $34,749,104 $7,426,150 $48,319,325
Credit Rating By Investment as of December 31, 2007
S&P
Rating
AAA
AA
A
BBB
BB
B
CCC
Not Rated
U.S.
Treasury
& Agency
Obligations
Municipal
Obligations
Corporate Foreign
Obligations Obligations Totals
$16,025,339 $ 768,713 $ 9,836,800 $ 7,110,047 $33,740,899.
587,685 4,041,275 576,620 5,205,580
5,294,242 3,210,272 8,504,514
- 3,103,884 176,185 3,280,069
- 376,340 924,356 1,300,696
- 5,200,580 484,800 5,685,380
- 440,438 440,438
- 64,937 64,937
Total $16,025,339 $1,356,398 $28,293,559 $12,547,217 $58,222,513
4. Foreign Currency Risk
Foreign Currency Risk is the risk that changes in exchange rates will adversely impact the fair
value of an investment. The Plan's policy is to allow the individual investment manager to
decide what action to take regarding their respective portfolio's foreign currency exposure.
The following table demonstrates the Plan's current level of foreign currency exposure:
17
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE C - CASH AND INVESTMENTS (Continued)
4. Foreign Currency Risk (Continued)
Foreign Currency Exposures By Asset Class
In U.S. Dollars as of December 31, 2008
Currency
Foreign
Equities Obligations Totals
Australian Dollar $ , - $1,364,347 $1,364,347
Brazil Real . 393,338 393,338
British Pound Sterling 745,662 745,662
Canadian Dollar - 387,700. 387,700
Indonesia Rupiah - 282,921 282,921
Malaysian Ringgit 764,371 764,371
Mexican Peso 574,819 574,819
New Zealand Dollar 504,379 504,379
Polish Zloty - 654,209 654,209
South Africa Rand 342,014 342,014
Swedish Krona - 319,374 319,374
Not denominated in a foreign currency 984,004 1,093,016 2,077,020
$984,004 $7,426,150 $8,410,154
Foreign Currency Exposures By Asset Class
In U.S. Dollars as of December 31, 2007
Currency
Australian Dollar
Brazil Real
British Pound Sterling
Canadian Dollar
Indonesia Rupiah
Malaysian Ringgit
Mexican Peso
New Zealand Dollar
Norwegian Krone
Polish Zloty
Singapore Dollar
South Africa Rand
Swedish Krona
Not denominated in a foreign currency
Foreign
Equities Obligations Totals
1,989,958
$ 1,896,101 $ 1,896,101
529,147 529,147
1,028,126 1,028,126
789,292 789,292
395,208 395,208
723,967 723,967
669,280 669,280
621,346 621,346
767,972 767,972
1,138,968 1,138,968
1,055,877 1,055,877
682,761 682,761
1,319,772 1,319,772
929,400 2,919,358
$1,989,958 $12,547,217 $14,537,175
18
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE C - CASH AND INVESTMENTS (Continued)
5. Open Foreign Currency Exchange Contracts in U.S. Dollars :
Open Contracts as of December 31, 2008
Aggregate
Fair Cost Delivery Unrealized Unrealized
Value Value Dates Appreciation Depreciation
Foreign currency
exchange contracts
purchased:
'Australian Dollar $ 133,862 $ 133,682 1/9/2009 $ 180 $ -
British Pound 612,721 691,796 1/22/2009 79,075.
British Pound 506,088 537,788 3/12/2009 31,700
Canadian Dollar 399,352 395,431 1/24/2009 3,921
New Turkish 185,926 223,886 1/26/2009 37,960
Euro 2,151,797 2,093,279 3/6/2009 58,518
New Zealand
Dollar 136,165 133,424 3/17/2009 2,741
Norwegian 130,675 132,076 1/26/2009 1,401
Foreign currency
exchange contracts
sold:
British Pound 770,871 612,721 1/22/2009 158,150
New Turkish 168,340 185,926 1/26/2009 - 17,586
Totals
$223,510 $167,722
Open Contracts as of December 31, 2007
Aggregate
Fair Cost Delivery Unrealized Unrealized
Value Value Dates Appreciation Depreciation
Foreign currency
exchange contracts
purchased:
Canadian Dollar $139,825 $139,131 1/24/2008 $ 694 $
Foreign currency
exchange contracts
sold:
British Pound 957,479 980,822 3/20/2008 23,343
Totals $ 694 $ 23,343
19
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE C — CASH AND INVESTMENTS (Continued)
5. Open Foreign Currency Exchange Contracts in U.S. Dollars (Continued)
The fair value of open currency forward contracts, including any unrealized appreciation or
depreciation, is recorded in the statements of plan net assets as amounts due from/to brokers for
securities sold/purchased.
Based upon the advice of the Plan's investment consultant and the Plan's investment policy
and guidelines, the investments in currency forward contracts do not, in the Plans' judgment,
have any legal risk.
The currency forward contracts are executed through large money center banks with credit
rating standards. The credit risk exposure could be with the bank counterparty. Depending on
the bank, the degree of credit risk could vary. Based on the assessment of the Plan's
investment manager trading the account and Plan's investment consultant, the risk is minimal
NOTE D — INVESTMENTS GREATER THAN 5% OF NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS
Investments which exceed 5% or more of net assets held in trust for pension benefits are as follows:
December 31
2008 2007
GMO Global Balanced Asset Allocation $14,940,962 $18,532,206
Morgan Stanley Institutional International Equity 14,048,692 18,547,348
Pyramis US Equity Market Neutral 9,721,941 10,715,369
Vanguard Windsor II Fund 9,195,040 12,491,093
UBS Real Estate 8,987,614 9,826,289
First American Prime Money Market 13,344,451
CIGNA Small Cap Fund 10,070,073
NOTE E — CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE
Ordinances establishing the Plan provide for actuarially determined annual contributions by the District
that are sufficient to pay benefits when due. The Entry Age Normal funding method is used to
determine contributions.
Contributions of $7,425,602 and $7,673,240, excluding certain professional fees paid by the District,
were made to the Plan in 2008 and 2007, respectively. These contributions were made in accordance
with actuarially determined contribution requirements based on actuarial valuations performed at
January 1, 2008 and 2007, respectively, and consisted of:
20
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE E — CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE (Continued)
For The Years Ended
December 31,
2008 2007
Noiival Cost $5,793,713 $5,617,087
Amortization of the unfunded actuarial accrued liability 1,113,824 1,520,811
Inflation factor of 7.5%
Current Year Contribution Due From The District
As Calculated By The Plan's Actuary
6,907,537
518,065
7,137,898
535,342
$7,425,602 $7,673,240
Certain professional fees, included in administrative expenses are paid by the District and are recognized
as contributions to the Plan and totaled $34,890 and $29,216 for the years ended December 31, 2008 and
2007. The District provides office space, utilities, and other services to the plan at no cost. Other costs
of administering the Plan are financed from plan net assets.
NOTE F — FUNDED STATUS AND FUNDING PROGRESS
The funded status of the Plan as of January 1, 2009, the most recent actuarial valuation date, and
January 1, 2008 is as follows (dollar amounts in thousands):
Valuation
For The Entry Age UAAL As
Actuarial Actuarial A
Years Actuarial Accrued Unfunded Annual Percentage
Beginning Value Of Liability AAL Funded Covered Of Covered
January 1 Assets (AAL) (UAAL) Ratio Payroll Payroll
2009 $183,679 $212,066 $28,387 86.6% $48,077 59.0%
2008 185,356 195,834 10,478 94.6 43,640 24.0
The schedules of funding progress, presented as required supplemental information following the notes
to financial statements, present multi -year trend information about whether the actuarial values of plan
assets are increasing or decreasing over time relative to the AALs for benefits.
Additional information as of the latest actuarial valuation follows:
Valuation dates
Actuarial cost method
Amortization method
Amortization period
January 1, 2009 and 2008
Entry Age Normal
Level dollar closed
20 year period
21
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
NOTE F - FUNDED STATUS AND FUNDING PROGRESS (Continued)
Asset valuation method Three-year average of adjusted market values
Post -retirement cost -of -living CPI with maximum 3% of current benefit of $50 if less, and
benefit increases lifetime maximum 45% in the original benefit or $750 if less
Actuarial assumptions:
Investment rate of return 7.5% per annum (1)
Projected salary increases Years of service
0 10.0% per annum (1)
1 7.5% per annum (1)
2 5.0% per annum (1)
3+ 4.5% per annum (1)
Social Security wage base 4.0% per annum increase (1)
(1) Includes inflation component of 3%
NOTE G — RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are exposed to various risks
such as interest rate, market, and credit risks. 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 changes could materially affect the amounts reported in the statements of
plan net assets.
Actuarial present value of accumulated plan benefits are reported based on certain assumptions
pertaining to interest rates, inflation rates, and employee demographics, all of which are subject to
change. Due to uncertainties inherent in the estimations and assumptions process, it is at least
reasonably possible that changes in these estimates and assumptions in the near term would be material
to the financial statements.
NOTE H — RISK MANAGEMENT
The Plan is exposed to various risks of loss related to natural disasters, errors and omissions, loss of
assets, torts, etc. The Plan has chosen to cover such losses through the purchase of commercial
insurance. There has been no material insurance claim filed or paid during the past three fiscal years.
NOTE I — RECLASSIFICATIONS
Certain reclassifications have been made to the December 31, 2008 amounts in order to conform to the
presentation of the December 31, 2009 financial statements
22
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
REQUIRED SUPPLEMENTAL INFORMATION
DECEMBER 31, 2008 AND 2007
REQUIRED SUPPLEMENTAL INFORMATION SECTION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
REQUIRED SUPPLEMENTAL INFORMATION
DECEMBER 31, 2008 AND 2007
Six -year historical trend infatuation about the Plan is presented herewith as required supplementary
information. This information is intended to help users assess Plan funding status on a going -concern
basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make
comparisons with other plans.
SCHEDULE OF FUNDING IN PROGRESS (dollars in thousands)
Valuation
For The Entry Age
Actuarial Actuarial UAAL As A
Years Actuarial Accrued Unfunded Annual Percentage
Beginning Value of Liability AAL Funded Covered Of Covered
January 1 Assets (AAL) (UAAL) Ratio Payroll Payroll
2009 $183,679 $212,066 $28,387 86.6 % $48,077 59.0 %
2008 185,356 195,834 10,478 94.6 43,640 24.0
2007 170,757 187,432 16,675 91.1 42,113 39.6
2006 158,321 177,630 19,309 89.1 40,144 48.1
2005 142,986 168,237 25,251 85.0 39,382 64.2
2004 133,966 159,444 25,478 84.0 37,637 67.7
Analysis of the dollar amounts of plan net assets, AAL, and UAAL in isolation can be misleading.
Expressing plan net assets as a percentage of the AAL provides one indication of Plan funding status on
a going -concern basis. Analysis of this percentage over time indicates whether the Plan is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the Plan.
Trends in the UAAL and annual covered payroll are both affected by inflation. Expressing the UALL as
a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids
analysis of Plan progress made in accumulating sufficient assets to pay benefits when due. Generally,
the smaller this percentage, the stronger the Plan.
SCHEDULE OF EMPLOYER CONTRIBUTIONS IN ACCORDANCE WITH GASB
STATEMENT NO.25
Contribution
As A
For The Annual Percentage Of
Years Ended Required Actual Percentage Covered
December 31 Contribution Contribution Contributed Payroll
2008 $7,549,421 $7,460,492 98.8 % 15.5 %
2007 7,260,259 7,702,456 106.1 17.7
2006 7,015,905 6,861,223 97.8 16.3
2005 6,980,026 7,192,531 103.0 17.9
2004 6,384,774 6,797,077 106.5 17.3
2003 5,385,572 6,002,479 111.5 15.9
23
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
REQUIRED SUPPLEMENTAL INFORMATION
DECEMBER 31, 2008 AND 2007
Annual Required Contribution (ARC)
The ARC applicable to the Plan's year ended each year on December 31 in accordance with GASB
Statement No. 25 requires blending of the actuarial valuations. The ARC is presented each year using
the aggregate of the District's ARCs for the portions of the District's fiscal years that overlap the Plan's
fiscal year.
24
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
STATISTICAL SECTION (UNAUDITED)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
p
e
T
T /AL
Year
NAV 12/31
Total Plan Performance
1999
$ 125,365,457
10.9%
2000
125,256,835
(0.1)
2001
123,040,018
(1.8)
2002
113,176,548
(8.0)
2003
137,024,216
21.1
2004
149,053,173
8.8
2005
157,822,577
5.9
2006
174,256,931
10.4
2007
191,382,492
9.8
2008
150,808,626
(21.2)
sN
2
$250.0
$200.0
$150.0
$100.0
$50.0
$0.0
$137.0
$149.1 $157.8 $150.8
$191.4
$174.3
Net Asset Value (NAV) 12/31
$125.4 $125.3 $123.0 $113.2
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
25
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Revenues by Source
Year
Employers
Contributions
Employers
Contributions as a
Percentage of
Covered Payroll
Investment
Income (Net)
Total
1999
$ 2,968,216
8.1%
$ 12,758,125
$ 15,726,341
2000
2,986,650
7.9
831,238
3,817,888
2001
3,971,540
10.6
(1,878,456)
2,093,084
2002
4,789,473
12.7
(9,726,380)
(4,936,907)
2003
6,002,479
15.9
23,559,415
29,561,894
2004
6,797,077
17.3
11,551,937
18,349,014
2005
7,192,531
17.9
8,475,275
15,667,806
2006
6,861,223
16.3
17,565,462
24,426,685
2007
7,702,456
17.7
18,063,136
25,765,592
2008
7,460,492
15.5
(38,697,158)
(31,236,666)
26
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Expenses by Type
Year
Benefit Payments
Administrative Expense
Total
1999
$ 3,250,637
$ 141,336
$ 3,391,973
2000
3,694,444
232,066
3,926,510
2001
4,211,174
98,727
4,309,901
2002
4,830,167
96,396
4,926,563
2003
5,607,334
106,892
5,714,226
2004
6,198,470
121,587
6,320,057
2005
6,781,416
116,986
6,898,402
2006
7,841,783
150,548
7,992,331
2007
8,540,957
99,074
8,640,031
2008
9,232,979
104,221
9,337,200
27
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Member Count
Year
Retirees &
Beneficiaries
Currently Receiving
Benefits
Terminated Members
Entitled to Receive
Benefits
Active Plan
Members
Total
1999
410
151
934
1,495
2000
428
164
890
1,482
2001
443
175
855
1,473
2002
459
182
829
1,470
2003
482
194
788
1,464
2004
490
190
808
1,488
2005
4601
198
7802
1,438
2006
481'
199
7982
1,478
2007
5041
198
8112
1,513
2008
5321
196
8852
1,613
1 New actuarial census excluded individuals covered by insurance policy.
2 New actuarial census excludes members with less than six months of service.
28
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Total Benefit Payments
(Dollar Amounts in Millions)
$10,000
$9,000 -
$8,000
$7,000 -
$6,000 -
$5,000 -
$4,000 -
$3,000
$2,000
$1,000
$0
$3,250.6
$3,694.4
$4,211.2
$4,830.2
$6,781.4
$6,198.5
$5,607.3
$7,841.8
$9,233.0
541.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Employer Contributions
(Dollar Amouits in Millions)
$9,000 -
$8,000 -
$7,000 -
$6,000 -
$5,000 -
$4,000 -
$3,000 -
$2,000 -
$1,000 -
$0
es
1999
�^h
‘b,
esry,
2000
2001
2002
2003
2004
2005
2006
2007
2008
29
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Total Benefit Recipents
600 -
500 -
400 -
300 -
200 -
100 -
410
428
443
459
482
490
460
481
504
532
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
New actuarial census for 2005 through 2008 excluded individuals covered by insurance policy.
30
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Top 10 Investment Holdings
As of December 31, 2008
As of December 31, 2007
Holding
Market Value
Percentage
of Plan
Market Value
Percentage
of Plan
GMO Global Balanced Asset Allocation
$ 14,940,962
9.9%
$ 18,532,206
9.7%
Morgan Stanley Inst. International Equity
14,048,692
9.3
18,547,348
9.7
Pyramis U.S. Equity Market Neutral Fund
9,721,941
6.5
10,715,369
5.6
Vanguard Windsor II Fund
9,195,040
6.1
12,491,093
6.5
UBS Real Estate
8,987,614
6.0
9,826,289
5.1
CIGNA Small Cap Fund
7,075,371
4.7
10,070,073
5.3
PIMCO All Asset Fund
6,246,555
4.2
7,396,175
3.9
Vanguard 500 Index Fund
3,955,249
2.6
5,469,432
2.9
Morgan Stanley Emerging Mkts. Fund
3,460,219
2.3
6,684,846
3.5
First American Prime Money Mkt
3,186,524
2.1
13,344,451
7.0
TOTALS
$ 80,818,167
53.7%
$ 113,077,282
59.2%
31
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
DECEMBER 31, 2008 AND 2007
Schedule of Investment Managers
And Advisor Fees
For the Years Ended December 31, 2008 and 2007
2008
2007
Managers Fees:
Income Research Management
$ 136,901
$ 118,975
UBS Real Estate Separate Account
114,709
116,572
Fidelity Investments
90,677
84,205
Waddell & Reed
71,476
80,486
Brandywine Asset Management
68,238
65,765
PENN Capital Management
60,168
64,760
Kennedy Capital /ARK Asset Managers
57,957
60,763
Buford, Dickson, Harper, & Sparrow
44,704
47,769
Total Managers Fees
644,830
639,295
Advisor Fees:
NEPC Investment Advisor
69,570
54,153
TOTAL
$ 714,400
$ 693,448
32