HomeMy Public PortalAbout2005 Audited Financials
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT EMPLOYEES’
PENSION PLAN
FINANCIAL REPORT
(Audited)
Year Ended December 31, 2005
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________________________FINANCIAL REPORT
____________________________________________________________________________Contents
Page
INDEPENDENT AUDITORS' REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 3
FINANCIAL STATEMENTS
Statements of Plan Net Assets 11
Statements of Changes in Plan Net Assets 12
Notes to Financial Statements 13
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Funding Progress 23
Schedule of Employer Contributions in Accordance with GASB Statement No. 25 23
Additional Information Re: Required Schedules 24
Note to Required Supplemental Information 24
STATISTICAL SECTION (Unaudited)
Performance and Net Asset Value 26
Historical Trend Information:
Revenues by Source 27
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
Hochschil ,Bloom &C ompany L P
Certifi ed Public Acc ountants
Consultants and Advisors
INDEPENDENT AUDITORS'REPORT
August 4, 2006
Board of Trustees
THE METROPOLITAN ST.LOUIS SEWER DISTRICT
We have audited the accompanying statement of plan net assets of THE METROPOLITAN ST.
LOUIS SEWER DISTRICT EMPLOYEES'PENSION PLAN (the Plan) as of December 31,
2005, 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 opin-
ion on these financial statements ba sed on our audit. The financial statements of the Plan as of De-
cember 31,2004 were audited by other auditors who se report dated September 2,2005,expres sed an
unqualified opinion on th ose statements.
We conducted our audit in acc ordance with U .S.generally accepted auditing standard s.Those stan-
dards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstat ement.An audit includes consideration of int ernal
control over financial reporting as a basis for des igning audit procedures that are appropriate in the
circumstances ,but not for the purpose of expressing an opinion on the effectiveness of the Plan 'in-
ternal control over financ ial reporting. Accordingly,we express no such opinion.An audit also in-
cludes examining,on a test basis,evidence supporting the am ounts and discl osures in the financial
statements ,assessing the accounting principles used and significant estimates made by management,
as well as evaluating the ov erall financial statement pr esentation.We believe that our audit provides
a reasonable basi s for our opinion.
In our opinion,the financial statements referred to above present fairly, in a)lmaterial respects,the
plan net assets of the Plan as of December 31,2005,and the changes in plan net assets for the year
then ended ,in conformity with U .S .generally accepted accounting principles ,
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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 ac-
counting principles.We have applied certain limited procedures to the MD&A and the schedules,
which consisted principally of inquiries 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 audit-
ing procedures applied in the audit of the basic financial statements and,accordingly,we express no
opinion on them.
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CERTIFIED PUBLIC ACCOUNT-~S ;
Page 2
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 3
As management of The Metropolitan St. Louis Sewer District Employees’ Pension Plan (the 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, 2005. This MD&A is intended to
supplement the Plan’s financial statements, and we encourage readers to consider the information pre-
sented here in conjunction with those statements, which begin on page 11.
OVERVIEW OF THE FINANCIAL STATEMENTS
The following MD&A is intended to serve as an introduction to the Plan’s financial statements. The ba-
sic 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 pro-
vides actuarial information for use in analyzing the funded status of the Plan and includes:
1) Schedule of funding progress
2) Schedule of employer contributions in accordance with GASB Statement No. 25
3) Additional information re: required schedules
4) 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 re-
port.
The basic financial statements contained in this report are described below:
• The statements 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 state-
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 4
ments of plan net assets from the prior year to the current year. Both statements are in compli-
ance with Governmental Accounting Standards Board (GASB) Pronouncements.
• The notes to financial statements are an integral part of the financial statements and provide ad-
ditional 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 13 of this report.
Because of the long-term nature of a defined benefit pension plan, financial statements alone cannot pro-
vide 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 “re-
quired supplemental information”.
• The schedule of funding 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 liabili-
ties 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 perform-
ance 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 additional information re: required schedules and the note to required supplemental infor-
mation provides background information and explanatory detail to aid in understanding the re-
quired supplemental schedules.
FINANCIAL HIGHLIGHTS 2005
• Net assets held in trust for pension benefits totaled $157,822,577 as of December 31, 2005 for an
increase of $8,769,404 or 5.9% as compared with December 31, 2004. This increase in net as-
sets primarily resulted from cumulative investment gains during the year that more than offset a
$582,946 increase in benefit payments.
• The Plan’s funding objective is to meet long-term benefit obligations to the extent possible. As
of December 31, 2005, the date of the latest actuarial valuation, the funded ratio of the Plan was
89.1%. In general, this means that for every dollar of pension benefits due, the Plan has ap-
proximately $0.89 of net assets available for payment. The Plan’s funding ratio increased by
4.1% as compared with the funding ratio for December 31, 2004. The increase in the funding ra-
tio is attributed to both plan contributions and improved cumulative investment returns.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 5
• During 2005 the Plan continued its efforts to more broadly diversify its investment asset base.
Investment asset classes that were added included: emerging market equity, high yield fixed in-
come, global fixed income, market neutral, and absolute return strategy. The increased diversifi-
cation was achieved by lowering the exposure to domestic common stock and corporate obliga-
tions. This diversification effort accounts for increased investments of mutual funds, collective
investment funds, and foreign obligations, and accounts for a decreased investment in domestic
common stocks, corporate obligations, and money market investments.
• Total additions to the Plan’s net assets (page 12) amounted to $15,667,806 for the year 2005 con-
sisting of an investment gain of $8,475,275 and employer contributions of $7,192,531.
• Administrative expenses (deductions to the Plan’s net assets, page 12) decreased from $121,587
for fiscal 2004 to $116,986 for 2005, or approximately $4,600 (3.8%) which reflected the net
impact of a decrease in legal services offset by an increase in the cost of actuarial and record-
keeping services.
FINANCIAL HIGHLIGHTS 2004
• Net assets held in trust for pension benefits totaled $149,053,173 as of December 31, 2004, or an
increase of $12,028,957, 8.8%, during 2004, which primarily resulted from cumulative invest-
ment gains during the year.
• The Plan’s funding objective is to meet long-term benefit obligations to the extent possible. As
of December 31, 2004, the funded ratio of the Plan was 85.0%. In general, this means that for
every dollar of pension benefits due, the Plan has approximately $0.85 of net assets available for
payment.
• Total additions to the Plan’s net assets (page 12) amounted to $18,349,014 for the year 2004
principally due to an investment gain of $11,551,937 and employer contributions of $6,797,077.
• Administrative expenses (deductions to the Plan’s net assets, page 12) increased from $106,892
during 2003 to $121,587 in 2004, or approximately 13.7%, which resulted from an increase in
legal fees associated with Plan improvements and investment diversification.
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 (the District) contributions into the Plan continue to in-
crease as the result of a combination of factors, including an increase in salaries and a lower than antici-
pated investment performance as measured on an actuarially smoothed basis. Relative to the Public
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 6
Fund peer group for 2005 and 2004, the Fund was up 5.9% and 8.8%, respectively, which ranked in the
76th and 85th percentile, respectively, of the Public Fund universe. Net assets held in trust for pension
benefits increased by $8,769,404 in 2005 and $12,028,957 in 2004. These net assets are used to meet
ongoing benefit obligation to the Plan’s participants and their beneficiaries.
Employer contributions continue to rise due to wage inflation and depreciation in plan net assets due to
unfavorable market conditions as measured on an actuarial basis. As the years roll forward and total as-
sets and liabilities grow, the Plan’s investment income will play a more significant role in funding future
retirement benefits - eventually providing 80% - 90% of the necessary funds. Therefore, investment re-
turn over the long-term is critical to the funding status of the Plan.
In 2005 net investment income of $8,475,275 was slightly below the actuarially assumed investment in-
come, whereas, the 2004 net investment income of $11,551,937 was significantly higher than the actu-
arially assumed investment income. Overall, the Plan is adequately funded and any accumulative differ-
ence 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 ex-
pected earnings yield of, on average, 7.5% annual return on investments for both 2005 and 2004. The
Plan’s average return for both 2005 and 2004 combined was 7.3%, which is slightly below the actuari-
ally assumed investment rate of 7.5%.
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 such as emerging equity invest-
ments, market neutral, high yield fixed income investments, and absolute return strategy during 2005.
Whenever a transfer of assets is made, transaction costs are incurred that will lower the investment re-
turn during the initial transition period.
Based upon our latest actuarial valuations for the years ended December 31, 2005 and 2004, the Plan’s
actuarial value of assets was less than its actuarial value of liabilities by $19,309,000 and $25,271,000,
respectively. This means that additional future funding will be needed to continue to reduce this liabil-
ity.
FINANCIAL ANALYSIS
The condensed statements of plan net assets as compared to prior years are as follows:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 7
December 31 2005 Change
2005 2004 Amount Percent
ASSETS
Investments at fair value $157,201,364 148,647,491 8,553,873 5.8%
Other assets 7,376,246 554,774 6,821,472 1,229.6
Total Assets 164,577,610 149,202,265 15,375,345 10.3
LIABILITIES 6,755,033 149,092 6,605,941 4,430.8
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS $157,822,577 149,053,173 8,769,404 5.9%
December 31 2004 Change
2004 2003 Amount Percent
ASSETS
Investments at fair value $148,647,491 136,548,672 12,098,819 8.9%
Other assets 554,774 589,335 (34,561) (5.9 )
Total Assets 149,202,265 137,138,007 12,064,258 8.8
LIABILITIES 149,092 113,791 35,301 31.0
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS $149,053,173 137,024,216 12,028,957 8.8%
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 2005 and 2004, the assets of the Plan exceeded its liabilities
with $157,822,577 and $149,053,173, 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 benefi-
ciaries.
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 cur-
rent financial position is the result of a successful investment program and prudent management prac-
tices 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:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 8
For The Years
Ended December 31 2005 Change
2005 2004 Amount Percent
ADDITIONS
Net investment income $ 8,475,275 11,551,937 (3,076,662 ) (26.6%)
Employer contributions 7,192,531 6,797,077 395,454 5.8
Total Additions 15,667,806 18,349,014 (2,681,208 ) (14.6 )
DEDUCTIONS
Benefits paid to retirees and beneficiaries 6,781,416 6,198,470 582,946 9.4
Administrative expenses 116,986 121,587 (4,601 ) (3.8 )
Total Deductions 6,898,402 6,320,057 578,345 9.2
NET INCREASE 8,769,404 12,028,957 (3,259,553 ) (27.1 )
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, JANUARY 1 149,053,173 137,024,216 12,028,957 8.8
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, DECEMBER 31 $157,822,577 149,053,173 8,769,404 5.9%
For The Years
Ended December 31 2004 Change
2004 2003 Amount Percent
ADDITIONS
Net investment income $ 11,551,937 23,559,415 (12,007,478 ) (50.9%)
Employer contributions 6,797,077 6,002,479 794,598 13.2
Total Additions 18,349,014 29,561,894 (11,212,880 ) (37.9 )
DEDUCTIONS
Benefits paid to retirees and beneficiaries 6,198,470 5,607,334 591,136 10.5
Administrative expenses 121,587 106,892 14,695 13.7
Total Deductions 6,320,057 5,714,226 605,831 10.6
NET INCREASE 12,028,957 23,847,668 (11,818,711 ) (49.6 )
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, JANUARY 1 137,024,216 113,176,548 23,847,668 21.1
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, DECEMBER 31 $149,053,173 137,024,216 12,028,957 8.8%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 9
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 addi-
tions for the year ended December 31, 2005 and 2004, totaled $15,667,806 and $18,349,014, respec-
tively.
Additions for 2004 and again in 2005 decreased from the prior year primarily due to investment gains.
The investment section of this report summarizes the results of investment activity for the year ended
December 31, 2005.
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, 2005 totaled $6,898,402, an increase of
9.2% over 2004. The increase in benefits paid resulted primarily from an increase in the number of re-
tirees receiving benefits. Deductions from plan net assets of $6,898,402 were exceeded by additions to
plan net assets of $15,667,806 by $8,769,404 for the year ended December 31, 2005. The Plan has con-
sistently managed within its administrative expense budget, with no material variances between planned
and actual expenditures.
Investment Performance - 2005
The following are a few characteristics and achievements for the Plan for the year ending December 31,
2005:
• The Plan ended the year with $157,822,577 in net assets.
• The Plan’s performance for the year was 5.9% compared to the passive policy index of 5.4%,
and the average five-year return was 5.1% compared to the passive policy index of 4.3%.
• 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 invest-
ment consultant has been to more broadly diversify the investment asset base of the Plan.
• The Plan diversified its investment asset base in 2005 by adding the following asset classes:
emerging markets international equity, high yield fixed income, global fixed income, market
neutral, and absolute return. Because of this diversification initiative, the Plan incurred certain
nonrecurring transaction costs that served to reduce investment return for 2005.
• The strategic asset allocation compared to the December 31, 2005 actual allocation was as fol-
lows:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2005
___________________________________________________________________________________
Page 10
Proposed Actual
Asset Class Target Range 2005 2004
Equities:
Domestic Large-Cap Stocks 27.0% 22 - 32 30.1 42.3
Domestic Small-Cap Stocks 10.0 7 - 13 10.0 9.4
International Developed Markets Stocks 10.0 7 - 13 10.3 9.6
International Emerging Markets Stocks 3.0 0 - 5 3.5 0.0
Fixed Income:
Domestic Core Bonds 27.0 22 - 32 18.6 29.6
High Yield Bonds 5.0 3 - 7 4.9 0.0
Global Bonds 8.0 5 - 11 7.7 7.4
Other:
Real Estate 5.0 3 - 7 0.0 0.0
Market Neutral 5.0 3 - 7 5.1 0.0
Cash Equivalents 0.0 0.0 0.8 1.7
Absolute Return 0.0 0.0 9.0 0.0
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.
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 re-
ceived. 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
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________STATEMENTS OF PLAN NET ASSETS
See notes to financial statements_______________________________________________________
Page 11
December 31
2005 2004
ASSETS
Investments, at fair value:
Mutual funds $ 75,436,974 51,760,732
Corporate obligations 26,084,256 32,137,433
Domestic common stocks 21,913,290 35,958,532
U.S. Treasury and agency obligations 10,309,696 10,124,942
Foreign obligations 9,088,213 -
Collective investment fund 7,970,172 -
Money market funds 2,746,945 15,083,122
Municipal obligations 2,243,786 901,946
Foreign stocks 1,268,678 2,255,274
Domestic preferred stock 137,804 -
Principal cash 1,550 212,726
Partnerships and joint ventures - 212,784
Total Investments 157,201,364 148,647,491
Receivables:
Due from brokers for securities sold 6,747,130 -
Interest and dividends receivable 629,116 554,774
Total Receivables 7,376,246 554,774
Total Assets 164,577,610 149,202,265
LIABILITIES
Due to brokers for securities purchased 6,603,153 -
Accrued expenses 151,880 149,092
Total Liabilities 6,755,033 149,092
NET ASSETS HELD IN TRUST FOR PENSION
BENEFITS (a schedule of funding progress is
presented on page 23) $157,822,577 149,053,173
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
_________________________________STATEMENTS OF CHANGES IN PLAN NET ASSETS
See notes to financial statements_______________________________________________________
Page 12
For The Years
Ended December 31
2005 2004
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income:
Net appreciation in fair value of investments $ 3,992,427 8,401,365
Interest and dividends 4,989,390 3,793,186
Total Investment Income 8,981,817 12,194,551
Less - Investment managers and advisor fees 506,542 642,614
Net Investment Income 8,475,275 11,551,937
Employer contributions 7,192,531 6,797,077
Total Additions 15,667,806 18,349,014
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to retirees and beneficiaries 6,781,416 6,198,470
Administrative expenses 116,986 121,587
Total Deductions 6,898,402 6,320,057
NET INCREASE 8,769,404 12,028,957
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS,
JANUARY 1 149,053,173 137,024,216
NET ASSETS HELD IN TRUST FOR PENSION BENEFITS,
DECEMBER 31 $157,822,577 149,053,173
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 13
NOTE A - DESCRIPTION OF PLAN
The following brief description of THE METROPOLITAN ST. LOUIS SEWER DISTRICT EM-
PLOYEES’ 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 Metro-
politan St. Louis Sewer District (the District) are covered by the Plan.
Membership in the Plan consists of:
December 31
2005 2004 Increase
Retirees and beneficiaries currently receiving benefits 507 490 17
Terminated members entitled to receive benefits 198 190 8
Active plan members 809 808 1
Total 1,514 1,488 26
The District’s Board of Trustees, primarily to improve benefits to members, amends the Plan, estab-
lished 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 ad-
minister the Plan. A committee of the District’s Board of Trustees, with the aid of an investment advi-
sor, 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 re-
duced 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’s benefits for-
mula. The annual benefit payable became 1.4% 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. 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’s 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 pro-
vided 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 ac-
crued 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 op-
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 14
NOTE A - DESCRIPTION OF PLAN (Continued)
tion. 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 liv-
ing 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 mul-
tiplied 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 ac-
crued 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 op-
tion. The balance of the distribution will be paid in accordance with any one of the other payment op-
tions 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 retire-
ment 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. Em-
ployer contributions are recognized as revenues in the period in which employee services
are performed. Benefits are recognized when due and payable in accordance with the
terms of the Plan. Plan expenses are recorded when the corresponding liabilities are in-
curred regardless of when payment is made.
During 2004, the Plan adopted Governmental Accounting Standards Board (GASB)
Statement No. 40, Deposit and Investment Risk Disclosures, an Amendment of GASB
Statement No. 3 (GASB 40). The adoption of GASB 40 modifies certain financial state-
ment disclosure requirements. The new standard enhances the deposit and investment
risk disclosures by updating the custodial credit risk disclosure requirements of GASB 3
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 15
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1. Basis of Accounting (Continued)
and addressing other common risks, including concentrations of credit risk, interest rate
risk, and foreign currency risk. The implementation of GASB 40 has no effect on finan-
cial statement amounts.
2. Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted ac-
counting 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. Ac-
tual 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 ex-
change 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
investment in equities cannot exceed 55% 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 corpo-
rations (Domestic and International, both within defined limits); however, the invest-
ment in fixed income cannot exceed 47% of total investments.
• Short-term Securities: Commercial paper, treasury bills, certificates of deposits,
and/or money market funds.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 16
NOTE C - CASH AND INVESTMENTS (Continued)
1. Categories of Asset Risk (Continued)
• Real Estate Investments: Real estate investment trusts and multi-employer property
trusts; however, the investment in real estate cannot exceed 7% of total investments.
• Futures Contracts: Currency forward contracts for the purpose of currency risk man-
agement of non-U.S. investments.
December 31
2005 2004
Investments, at fair value:
Mutual funds $ 75,436,974 51,760,732
Corporate obligations 26,084,256 32,137,433
Domestic common stocks 21,913,290 35,958,532
U.S. Treasury and agency obligations 10,309,696 10,124,942
Foreign obligations 9,088,213 -
Collective investment fund 7,970,172 -
Money market funds 2,746,945 15,083,122
Municipal obligations 2,243,786 901,946
Foreign stocks 1,268,678 2,255,274
Domestic preferred stock 137,804 -
Principal cash 1,550 212,726
Partnerships and joint ventures - 212,784
Total Investments $157,201,364 148,647,491
2. Interest Rate Risk
The Plan had the following debt securities and maturities:
December 31, 2005
Weighted Average
Investment Type Fair Value Maturity (Years)
Corporate obligations $26,084,256 4.07
U.S. Treasury and agency obligations 10,309,696 2.70
Foreign obligations 9,088,213 4.37
Municipal obligations 2,243,786 2.27
$47,725,951
Portfolio weighted average maturity 3.70
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 17
NOTE C - CASH AND INVESTMENTS (Continued)
2. Interest Rate Risk (Continued)
December 31, 2004
Weighted Average
Investment Type Fair Value Maturity (Years)
Corporate obligations $32,137,433 3.26
U.S. Treasury and agency obligations 10,124,942 4.19
Municipal obligations 901,946 2.65
$43,164,321
Portfolio weighted average maturity 3.94
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 require-
ments 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 in-
come 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, intermediaries, 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 table provides information on the credit ratings associated with the Plan’s
investments in debt securities:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 18
NOTE C - CASH AND INVESTMENTS (Continued)
3. Credit Risk (Continued)
Credit Rating By Investment As Of December 31, 2005 December 31
U.S. Treasury 2004
S&P And Agency Municipal Corporate Foreign
Rating Obligations Obligations Obligations Obligations Totals Totals
AAA $10,309,696 1,854,276 5,818,050 5,753,290 23,735,312 16,685,073
AA - 389,510 2,155,558 203,459 2,748,527 6,980,501
A - - 7,955,717 1,581,554 9,537,271 16,435,910
BBB - - 3,898,149 - 3,898,149 3,062,837
BB - - 632,241 909,522 1,541,763 -
B - - 4,979,659 552,788 5,532,447 -
CCC - - 644,882 87,600 732,482 -
Total $10,309,696 2,243,786 26,084,256 9,088,213 47,725,951 43,164,321
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
managers to decide what action to take regarding their respective portfolio’s foreign cur-
rency exposure. The following table demonstrates the Plan’s current level of foreign cur-
rency exposure:
Foreign Currency Exposures By Asset Class
In U.S. Dollars As Of December 31, 2005
Foreign
Currency Equities Obligations Totals
Australian Dollar $ - 1,321,048 1,321,048
Brazil Real - 587,380 587,380
British Pound Sterling - 478,455 478,455
Canadian Dollar - 1,720,493 1,720,493
Euro - 1,311,991 1,311,991
Indonesia Rupiah - 176,954 176,954
Mexican Peso - 623,499 623,499
New Zealand Dollar - 450,909 450,909
Polish Zloty - 837,834 837,834
Singapore Dollar - 673,854 673,854
Taiwan Baht - 120,221 120,221
Not denominated in a
foreign currency 1,268,678 785,575 2,054,253
$1,268,678 9,088,213 10,356,891
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 19
NOTE C - CASH AND INVESTMENTS (Continued)
5. Open Foreign Currency Exchange Contracts in U.S. Dollars:
Open Contracts As Of December 31, 2005
Aggregate
Fair Cost Delivery Unrealized Unrealized
Value Value Dates Appreciation Depreciation
Foreign currency
exchange contracts
purchased:
Australian Dollar $1,292,824 $1,332,067 1/27/2006 $ - 39,243
Euro 1,258,685 1,309,970 1/27/2006
and
2/17/2006 - 51,285
New Zealand Dollar 396,776 398,288 1/27/2006 - 1,512
Foreign currency
exchange contracts
sold:
Japanese Yen 3,834,238 4,095,756 2/16/2006
and
2/17/2006 261,518 -
Thailand Baht 116,386 115,775 1/27/2006 - 611
$261,518 92,651
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 pol-
icy and guidelines, the investments in currency forward contracts do not, in the Plan’s
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 the 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:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 20
NOTE D - INVESTMENTS GREATER THAN 5% OF NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS (Continued)
December 31
2005 2004
Morgan Stanley Inst. International Equity $16,201,002 -
Vanguard Asset Allocation Fund 15,596,588 15,322,969
PIMCO All Asset Fund 14,116,020 -
Vanguard Windsor II Fund 11,372,004 -
Fidelity Market Neutral Fund 7,970,172 -
Cash Assets Trust Money Market - 15,083,122
IRT - International Equity Fund - 14,277,715
Vanguard 500 Index Fund - 10,120,528
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 deter-
mine contributions.
Contributions of $7,184,531 and $6,775,520, excluding certain professional fees paid by the District,
were made to the Plan in 2005 and 2004, respectively. These annual contributions were made in accor-
dance with actuarially determined contribution requirements based on actuarial valuations performed at
January 1, 2005 and 2004, respectively, and consisted of:
For The Years
Ended December 31
2005 2004
Normal cost $4,576,505 4,223,796
Amortization of the unfunded actuarial accrued liability 2,106,780 2,079,013
6,683,285 6,302,809
Inflation factor of 7.5% 501,246 472,711
Current Year Contribution Due From The
District As Calculated By The Plan’s Actuary $7,184,531 6,775,520
Certain professional fees, included in administrative expenses, are paid by the District and are recog-
nized as contributions to the Plan and totaled $8,000 and $21,557 for the years ended December 31,
2005 and 2004, respectively. 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
______________________________________________NOTES TO FINANCIAL STATEMENTS
__________________________________________________________________________________
Page 21
NOTE F - RISK MANAGEMENT
The Plan is exposed to various risks of loss related to natural disasters, errors and omissions, loss of as-
sets, torts, etc. The Plan has chosen to cover such losses through the purchase of commercial insurance.
There have been no material insurance claims filed or paid during the past three fiscal years.
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 pertain-
ing 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 state-
ments.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
_______________________________________REQUIRED SUPPLEMENTAL INFORMATION
__________________________________________________________________________________
Page 22
REQUIRED SUPPLEMENTAL INFORMATION SECTION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
_______________________________________REQUIRED SUPPLEMENTAL INFORMATION
__________________________________________________________________________________
Page 23
Six-year historical trend information about the Plan is presented herewith as required supplemental in-
formation. This information is intended to help users assess the Plan’s 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 PROGRESS (dollars in thousands)
Valuation
For The Entry Age
Actuarial Actuarial UAAL As A
Years Actuarial Accrued Unfunded Annual Percentage
Beginning Value Liability AAL Funded Covered Of Covered
January 1 Of Assets (AAL) (UAAL) Ratio Payroll Payroll
2006 $158,321 $177,630 $19,309 89.1% $40,144 48.1%
2005 142,966 168,237 25,271 85.0 39,382 64.2
2004 133,966 159,444 25,478 84.0 37,637 67.7
2003 129,783 150,405 20,622 86.3 38,868 53.1
2002 133,012 139,336 6,324 95.5 37,600 16.8
2001 128,688 128,124 (564 ) 100.4 37,380 (1.5 )
Analysis of the dollar amounts of plan net assets, AAL, and UAAL in isolation can be misleading. Ex-
pressing plan net assets as a percentage of the AAL provides one indication of the Plan’s 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 UAAL
as a percentage of annual covered payroll approximately adjusts for the effects of inflation and aids
analysis of the Plan’s progress made in accumulating sufficient assets to pay benefits when due. Gener-
ally, the smaller this percentage, the stronger the Plan.
SCHEDULE OF EMPLOYER CONTRIBUTIONS IN ACCORDANCE WITH GASB
STATEMENT NO. 25
For The Annual Contribution As
Years Ended Required Percentage A Percentage Of
December 31 Contribution Contributed Covered Payroll
2005 $6,980,026 102.9% 17.8%
2004 6,384,774 106.1 17.0
2003 5,385,572 111.3 13.9
2002 4,370,579 109.3 11.6
2001 3,458,881 114.6 9.3
2000 2,947,522 100.2 8.1
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
_______________________________________REQUIRED SUPPLEMENTAL INFORMATION
__________________________________________________________________________________
Page 24
ADDITIONAL INFORMATION RE: REQUIRED SCHEDULES
The information presented in the required supplemental schedules was determined as part of the actuar-
ial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:
Valuation date January 1, 2006
Actuarial cost method Entry Age Normal
Amortization method Level dollar closed
Amortization period 20 year period
Asset valuation method Three-year average of adjusted market values
Post-retirement benefit increases 3% of current benefit or $50 if less
Maximum 45% in the original benefit or $750 if less
Actuarial assumptions:
Investment rate of return 7.5% per annum (1)
Projected salary increases 5.5% per annum (1)
Social Security wage base 4.5% per annum increase (1)
(1) Includes inflation component of 3%.
NOTE TO REQUIRED SUPPLEMENTAL INFORMATION
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
__________________________________________________________STATISTICAL (Unaudited)
__________________________________________________________________________________
Page 25
STATISTICAL SECTION (Unaudited)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Statistical
Section
December 31, 2005
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 26
Performance And Net Asset Value (NAV)
Year NAV December 31 Total Plan Performance
1996 $ 83,930,038 13.3%
1997 101,384,482 20.8
1998 113,031,089 11.5
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
NAV December 31
$113.2
$137.0 $149.1
$123.0$125.2$125.4
$113.0$101.4$83.9
$157.8
$0.0
$50.0
$100.0
$150.0
$200.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Millions
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 27
Revenues By Source
Year
Employer
Contributions
Total Employer
Contributions As
A Percentage Of
Covered Payroll
Net
Investment Income
(Loss) Total
1996 $ 2,458,958 7.9% $ 9,761,305 $ 12,220,263
1997 2,734,418 8.5 17,463,552 20,197,970
1998 2,810,289 8.1 11,898,138 14,708,427
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 12.3 (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
Expenses By Type
Year Benefits Paid
Administrative
Expenses Total
1996 $ 2,217,635 $ 139,208 $ 2,356,843
1997 2,604,476 139,050 2,743,526
1998 2,874,930 186,891 3,061,821
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
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 29
Total Benefit Payments
$2,217.6
$2,604.5 $2,874.9
$3,250.6
$3,694.4
$4,211.2
$4,830.2
$5,607.3
$6,198.5
$6,781.4
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
(Dollar Amounts in Millions)
Employer Contributions
$2,459.0 $2,734.4 $2,810.3 $2,968.2 $2,986.7 $3,971.5 $4,789.5 $6,002.5 $6,797.1 $7,192.5 $0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
(Dollar Amounts in Millions)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 28
Member Count
Year
Retirees And
Beneficiaries
Currently
Receiving
Benefits
Terminated
Members
Entitled To
Receive Benefits
Active Plan
Members Total
1996 377 129 898 1,404
1997 391 137 914 1,442
1998 406 145 942 1,493
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 507 198 809 1,514
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 30
Total Benefit Recipients
377 391 406 410 428 443 459 482 490 507
0
100
200
300
400
500
600
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 31
Top 10 Investment Holdings
As Of December 31, 2005
Holding
Market Value At
December 31, 2005
Percentage Of
Plan Net Assets
Morgan Stanley Inst. International Equity $ 16,201,002 10.3%
Vanguard Asset Allocation Fund 15,596,588 9.9
PIMCO All Asset Fund 14,116,020 8.9
Vanguard Windsor II Fund 11,372,004 7.2
Fidelity Market Neutral Fund 7,970,172 5.1
CIGNA Small Cap Fund 7,858,637 5.0
Morgan Stanley Emerging Mkts. Fund 5,568,605 3.5
Vanguard 500 Index Fund 4,724,112 3.0
First American Prime Money Mkt 2,746,945 1.7
Federal Home Loan Mortgage Corporation
DEB 7.00% 03/15/2010 1,324,469 0.8
TOTALS $ 87,478,554 55.4%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 32
Schedule Of Investment Managers And Advisor Fees
For The Years Ended December 31
2005 2004
Income Research Management $ 124,652 $ 130,068
Waddell & Reed 71,068 88,447
NEPC Investment Advisor 63,529 56,533
ARK Asset Managers 58,498 59,725
Brandywine Asset Management 52,817 -
Buford, Dickson, Happer, Sparrow 40,215 39,867
Fidelity Investments 31,514 -
PENN Capital Management 26,301 -
Alliance Capital 17,105 137,593
Federated 9,713 -
AMVESCAP 9,127 108,896
Garner Asset Management 2,003 21,485
TOTALS $ 506,542 $ 642,614