HomeMy Public PortalAboutPension Plan 2009 Audited Financials
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
INDEPENDENT AUDITORS’ REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 2009
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 - 24
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Funding in Progress................................................................................................. 25
Schedule of Employer Contributions in Accordance with GASB Statement No. 25.................. 25
Note to Required Supplemental Information............................................................................... 26
STATISTICAL SECTION (Unaudited)
Performance and Net Asset Value............................................................................................... 27
Historical Trend Information:
Revenue by Source ................................................................................................................... 28
Expenses by Type..................................................................................................................... 29
Member Count.......................................................................................................................... 30
Graphs:
Total Benefit Payments............................................................................................................. 31
Employer Contributions............................................................................................................ 31
Total Benefit Recipients ........................................................................................................... 32
Top Ten Investment Holdings..................................................................................................... 33
Schedule of Investment Managers and Advisor Fees.................................................................. 34
Independent Auditors' Report
To the Board of Trustees ofthe
Metropolitan St. Louis Sewer District
We have audited the accompanying statements of plan net assets of the Metropolitan St. Louis Sewer
District Employees' Pension Plan (the "Plan") as of December 31, 2009 & 2008, and the related
statements 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.
We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, ,evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe 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, 2009 and 2008, and changes in plan net assets for the years then ended, in
conformity with U.S. generally accepted accounting principles.
The management's discussion and analysis (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 audits of the basic financial statements and, accordingly, we express no
opinion on them.
December 7,2010
(314) 966-2727 • fax (314) 966-6464 • 10805 Sunset Office Drive, Suite 400 • St. Louis, MO 63127 • e-mail: stcpa@stcpa.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
2
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, 2009. 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 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
3
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 progress (page 25) 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 25)
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 2009
Net assets held in trust for pension benefits totaled $ 179,219,472 as of December 31, 2009 for an
increase of $28,410,846 or 18.8%% as compared with December 31, 2008. This increase in net
assets primarily resulted from cumulative investment gains during the year.
The Plan’s funding objective is to meet long-term benefit obligations to the extent possible. As
of December 31, 2009, the date of the latest actuarial valuation, the funded ratio of the Plan was
83.3%. In general, this means that for every dollar of pension benefits due, the Plan has
approximately $0.83 of net assets available for payment. The Plan’s funding ratio decreased by
3.3% as compared with the funding ratio for December 31, 2008. The decrease in the funding
ratio is primarily attributed to a decline in the actuarial value of investments that was impacted
by the 2008 investment loss.
Total increase to the Plan’s net assets (page 11) amounted to $28,410,846 for the year 2009
consisting of an investment income of $29,480,946, as offset by plan payments net of
contributions of $1,070,100.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
4
Administrative expenses (deductions to the Plan’s net assets, page 11) increased from $104,221
in 2008 to $148,157or approximately $43,936 (42.2%) which primary reflects the net impact of
an increase in the asset based costs such as consulting services that is associated with a higher
value of assets under management.
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 2007
consisting of an investment loss of $38,697,158, and plan payments net of contributions of
1,876,708.
Administrative expenses (deductions to the Plan’s net assets, page 11) decreased from $147,232
in 2007 to $104,221or approximately $43,011 (29.2%) 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 advisory 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 (the District) 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 2009 and 2008, the Fund was up by 20.8% and down by19.9%, respectively,
which ranked in the 34th and 10th percentile, respectively, of the Public Fund universe. Net assets held
in trust for pension benefits increased by $28,410,846 in 2009 and decreased by $40,573,866 in 2008.
These net assets are used to meet ongoing benefit obligation to the Plan’s participants and their
beneficiaries.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
5
Required employer contributions as determined by the Plan’s actuary increased for 2009 compared to
2008. 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
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 2009 net investment income of $29,480,946 was higher than the actuarially assumed investment
income, and, the 2008 net investment loss of $38,697,158 was significantly lower than the actuarially
assumed investment income. Overall, the Plan remains 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 2009 and
2008 was negative 4.6%, 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, 2009 and 2008, the Plan’s
actuarial value of assets was less than its actuarial value of liabilities by $37,310,076 and $28,387,059,
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:
December 31, 2009 Change
2009 2008 Amount Percent
ASSETS
Investments at fair value $178,867,750 $150,347,966 $28,519,784 19.0%
Other assets 6,016,977 6,004,424 12,553 .2%
Total Assets 184,884,727 156,352,390 $28,532,337 18.2%
LIABILITIES 5,665,255 5,543,764 121,491 2.2%
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS $179,219,472 $150,808,626 $28,410,846 18.8%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
6
December 31, 2008 Change
2008 2007 Amount Percent
ASSETS
Investments at fair value $150,347,966 $190,730,668 $40,382,702 (21.2)%
Other assets 6,004,424 2,053,823 3,950,601 192.4
Total Assets $156,352,390 192,784,491 (36,432,101) (18.9)%
LIABILITIES 5,543,764 1,401,999 4,141,765 295.4
NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS $150,808,626 $191,382,492 ($40,573,866) (21.2)%
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 $179,219,472 and $150,808,619, 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:
For The Years
Ended December 31 2009 Change
2009 2008 Amount Percent
ADDITIONS
Net investment income (loss) $ 29,480,945 ($38,697,158) $68,178,104 176.2 %
Employer contributions 8,910,664 7,460,492 1,450,172 19.4 %
Total Additions (Reductions) 38,391,609 (31,236,666) 69,628,276 222.9 %
DEDUCTIONS
Benefits paid to retirees and beneficiaries 9,832,606 9,232,979 599,627 6.5 %
Administrative expenses 148,157 104,221 43,936 42.2 %
Total Deductions (9,980,763) (9,337,200) 643,563 6.9 %
NET INCREASE (DECREASE) 28,410,846 (40,573,866) 68,984,713 270.0 %
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, JANUARY 1 150,808,626 191,382,492 (40,573,866) 21.2 %
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, DECEMBER 31 $179,219,472 $150,808,626 28,410,847 18.8 %
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
7
For the Years
Endeded December 31, 2008 Change
2008 2007 Amount Percent
ADDITIONS
Net investment (loss) income $(38,697,158) $ 18,063,136 $(56,760,294) (314.2)%
Employer contributions 7,460,492 7,702,456 (241,964) (3.1)
Total (Deductions) Additions (31,236,666) 25,765,592 (57,002,258) (221.2)
DEDUCTIONS
Benefits paid to retirees and beneficiaries 9,232,979 8,540,957 692,022 8.1
Administrative expenses 104,221 99,074 5,147 5.2
Total Deductions 9,337,200 8,640,031 697,169 8.1
NET (DECREASE) INCREASE (40,573,866) 17,125,561 (57,699,427) (336.9)
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, JANUARY 1 191,382,492 174,256,931 17,125,561 9.8
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS, DECEMBER 31 $150,808,626 $191,382,492 $(40,573,866) (21.2)%
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 (reductions) for the year ended December 31, 2009 and 2008, totaled $38,391,609 and
$(31,236,666), respectively.
Additions to Plan assets for 20909 exceeded 2008 due to investment gains. 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, 2009 totaled $9,980,763, an increase of
6.9% over 2008. The increase in benefits paid resulted primarily from an increase in the number of
retirees receiving benefits. Deductions from plan net assets of $9,980,763 were exceeded by additions
to plan net assets of $38,391,609 by $28,410,846 for the year ended December 31, 2009. The Plan has
consistently managed within its administrative expense budget, with no material variances between
planned and actual expenditures.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
8
Investment Performance - 2009
The following are a few characteristics and achievements for the Plan for the year ending December 31,
2009:
The Plan ended the year with $179,219,472 in net assets.
The Plan’s performance for the year was 20.8% compared to the passive policy index of 19.6%,
and the average five-year return was 5.1% compared to the passive policy index of 4.2%.
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 asset allocation compared to the December 31, 2009 actual allocation was as follows:
Proposed Actual
Asset Class Target Range 2009 2008
Equities:
Domestic Large-Cap Stocks 20.0% 16-24% 19.1% 17.3%
Domestic Small-Cap Stocks 10.0 8 - 12 9.7 8.4
International Developed Markets Stocks 10.0 8 - 12 9.5 9.3
International Emerging Markets Stocks 3.0 2 - 5 3.3 2.3
Fixed Income:
Domestic Core Bonds 20.0 16 - 24 14.8 20.3
High Yield Bonds 5.0 3 - 7 5.3 4.5
Global Bonds 8.0 6 - 10 7.9 9.4
Other:
Global Tactical 10.0 8-12 10.2 9.9
Real Estate 5.0 3 - 7 3.9 5.9
Market Neutral 5.0 3 - 7 5.6 6.5
Cash Equivalents 0.0 0.0 6.8 2.1
Absolute Return 4.0 3-7 3.9 4.1
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 METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
________________________________________FOR THE YEAR ENDED DECEMBER 31, 2009
____________________________________________________________________________________
9
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 63103-255
E-mail: kjtymi@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
________________________________________________STATEMENTS OF PLAN NET ASSETS
See notes to financial statements________________________________________________________
10
December 31
2009 2008
ASSETS
Investments at fair value:
Mutual funds $ 76,113,440 $ 58,922,082
Corporate obligations 30,129,155 34,749,104
Domestic common stocks 21,199,474 16,734,623
U.S. Treasury and agency obligations 9,689,256 5,326,542
Foreign obligations 7,609,646 7,426,150
Collective investment fund 17,083,798 18,709,555
Money market funds 14,108,201 6,678,377
Municipal obligations 796,981 817,529
Foreign stocks 1,940,458 984,004
Domestic preferred stock 197,341 -
Total investments 178,867,750 150,347,966
Receivables:
Due from brokers for forward currency
exchange contracts 5,238,726 5,195,803
Due from brokers for pending sales securities
sold 109,433 57,416
Interest and dividends receivable 668,818 751,205
Total Receivables 6,016,977 6,004,424
Total Assets 184,884,727 156,352,390
LIABILITIES
Due to brokers for forward currency exchange
contracts 5,370,387 5,140,015
Due to brokers for securities purchased 122,096 138,858
Accrued expenses 172,772 264,891
Total liabilities 5,665,255 5,543,764
NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS $179,219,472 $150,808,626
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
___________________________________STATEMENTS OF CHANGES IN PLAN NET ASSETS
See notes to financial statements________________________________________________________
11
For The Years Ended
December 31
2009 2008
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation (depreciation) in fair value of
investments $ 26,442,207 $(41,855,346)
Interest and dividends 3,690,046 3,872,588
Total Investment Income (Loss) 30,132,253 (37,982,758)
Less – Investment managers and advisor fees 651,308 714,400
Net Investment Income (Loss) 29,480,945 (38,697,158)
Employer contributions 8,910,664 7,460,492
Total Additions (Reductions) 38,391,609 (31,236,666)
DEDUCTIONS FROM NET ASSETS ATTRIBUTED
TO:
Benefits paid to retirees & beneficiaries 9,832,606 9,232,979
Administrative expenses 148,157 104,221
Total Deductions 9,980,763 9,337,200
NET INCREASE (DECREASE) 28,410,846 (40,573,866)
NET ASSETS HELD IN TRUST FOR PENSION
BENEFITS, January 1 150,808,626 191,382,492
NET ASSETS HELD IN TRUST FOR PENSION
BENEFITS, December 31 $179,219,472 $150,808,626
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
12
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
2009 2008 (Decrease)
Active plan members 938 885 53
Retirees and beneficiaries currently receiving benefits 550 532 18
Terminated members entitled to receive benefits 192 196 (4)
1,680 1,613 67
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
13
NOTE A – DESCRIPTION OF PLAN (Continued)
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
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
14
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 terms 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.
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
15
NOTE C – CASH AND INVESTMENTS (Continued)
1. Categories of Asset Risk (Continued)
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.
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
2009 2008
Investments, at fair value
Mutual Funds $ 76,113,440 $ 58,922,082
Corporate obligations 30,129,155 34,749,104
Domestic common stocks 21,199,474 16,734,623
U.S. Treasury and agency obligations 9,689,256 5,326,542
Foreign obligations 7,609,646 7,426,150
Collective investment fund 17,083,798 18,709,555
Money market funds 14,108,201 6,678,377
Municipal obligations 796,981 817,529
Foreign stocks 1,940,458 984,004
Domestic preferred stock 197,341 -
Total Investments $178,867,750 $150,347,966
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
16
NOTE C – CASH AND INVESTMENTS (Continued)
2. Interest Rate Risk
The Plan had the following debt securities and maturities:
December 31, 2009
Investment Type Fair Value
Weighted
Average
Maturity
(Years)
Corporate obligations $30,129,155 4.19
U.S. Treasury and agency obligations 9,689,256 6.79
Foreign obligations 7,609,646 5.67
Municipal obligations 796,981 0.08
$48,225,038
Portfolio weighted average maturity 4.89
December 31, 2008
Investment Type Fair Value
Weighted
Average
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
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
17
NOTE C – CASH AND INVESTMENTS (Continued)
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 tables provide information on the credit ratings associated with the Plan’s
investments in debt securities:
Credit Rating By Investment as of December 31, 2009
S & P
Rating
U.S. Treasury
& Agency
Obligations
Municipal
Obligations
Corporate
Obligations
Foreign
Obligations Totals
AAA $9,689,256 $152,940 $ 5,173,969 $2,760,368 $17,776,533
AA 644,041 2,288,968 395,950 3,328,959
A - 9,336,852 2,592,230 11,929,082
BBB - 3,694,050 778,153 4,472,203
BB - 2,662,162 417,727 3,079,889
B - 5,552,469 665,218 6,217,687
CCC - 1,248,495 - 1,248,495
Not
Rated - 172,190 - 172,190
Total $9,689,256 $796,981 $30,129,155 $7,609,646 $48,225,038
Credit Rating By Investment as of December 31, 2008
S & P
Rating
U.S. Treasury
& Agency
Obligations
Municipal
Obligations
Corporate
Obligations
Foreign
Obligations Totals
AAA $5,326,542 $177,978 $ 7,709,188 $2,724,668 $15,938,376
AA - 489,239 4,745,697 959,013 6,193,949
A - 150,312 12,339,435 2,524,190 15,013,937
BBB - - 4,493,941 577,183 5,071,124
BB - - 2,062,219 240,324 2,302,543
B - - 2,847,416 400,772 3,248,188
CCC - - 515,203 - 515,203
Not
Rated - - 36,005 - 36,005
Total $5,326,542 $817,529 $34,749,104 $7,426,150 $48,319,325
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
18
NOTE C – CASH AND INVESTMENTS (Continued)
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:
Foreign Currency Exposure By Asset Class
In U.S. Dollars as of December 31, 2009
Foreign
Currency Equities Obligations Totals
Australian dollar $ - $1,336,667 $1,336,667
Brazil Real - 563,371 563,371
British Pound Sterling - 623,246 623,246
Canadian Dollar - 361,840 361,840
Euro - 98,002 98,002
Indonesia Rupiah - 417,727 417,727
Malaysian Ringgit - 698,381 698,381
Mexican Peso - 528,724 528,724
New Zealand Dollar - 531,661 531,661
Polish Zloty - 669,211 669,211
South Africa Rand - 228,031 228,031
Swedish Krona - 341,614 341,614
Not Denominated in a
foreign currency 1,940,458 1,211,171 3,151,629
$1,940,458 $7,609,646 $9,550,104
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
19
NOTE C – CASH AND INVESTMENTS (Continued)
4. Foreign Currency Risk (Continued)
Foreign Currency Exposure By Asset Class
In U.S. Dollars as of December 31, 2008
Foreign
Currency 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
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
20
NOTE C – CASH AND INVESTMENTS (Continued)
5. Open Foreign Currency Exchange Contracts in U.S. Dollars :
OPEN CONTRACTS AS OF DECEMBER 31, 2009
Fair
Value
Aggregate
Cost Value
Delivery
Dates
Unrealized
Appreciation
Unrealized
Depreciation
Foreign Currency Exchange
Contracts Purchased:
Australian Dollar $ 93,031 $ 93,031 2/8/2010 $ - $ -
British Pound 1,401,636 1,360,031 3/3/2010 41,605 -
Canadian Dollar 142,131 137,902 2/2/2010 4,229 -
New Zealand Dollar 30,563 30,963 2/10/2010 - 400
Norwegian Krone 852,475 869,880 1/15/2010 - 17,405
South Korean Won 661,141 619,667 1/7/2010 41,474 -
Swedish Krona 480,171 500,080 1/25/2010 - 19,909
Turkish Lira 506,181 556,235 3/17/2010 - 50,054
Foreign Currency Exchange
Contracts Sold:
Australian Dollar 426,090 523,406 2/8/2010 - 93,316
Canadian Dollar 22,008 24,668 2/2/2010 - 2,660
Euro 46,570 56,748 3/3/2010 - 178
New Zeland Dollar 139,762 172,800 2/10/201 - 33,038
Norwegian Krone 147,827 152,282 1/15/2010 - 4,455
South Korean Won 117,571 117,649 1/7/2010 - 78
Swedish Krona 171,561 165,037 1/25/2010 6,524 -
Totals $93,832 $225,493
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
21
NOTE C – CASH AND INVESTMENTS (Continued)
5. Open Foreign Currency Exchange Contracts in U.S. Dollars (Continued):
OPEN CONTRACTS AS OF DECEMBER 31, 2008
Fair
Value
Aggregate
Cost Value
Delivery
Dates
Unrealized
Appreciation
Unrealized
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 Lira 185,926 223,886 1/26/2009 - 37,960
Euro 2,151,796 2,093,279 3/6/2009 58,518 -
New Zealand Dollar 136,165 133,424 3/17/2009 2,741 -
Norwegian Krone 130,675 132,076 1/26/2009 1,401
Foreign Currency Exchange
Contracts Sold:
British Pounds 770,871 612,721 1/22/2009 158,150 -
New Turkish Lira 168,340 185,926 1/26/2009 - 17,586
Totals $223,510 $167,722
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
22
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:
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 $8,859,535 and $7,426,602 excluding certain professional fees paid by the District,
were made to the Plan in 2009 and 2008, respectively. These contributions were made in accordance
with actuarially determined contribution requirements based on actuarial valuations performed at
January 1, 2009 and 2008, respectively, and consisted of:
For The Years Ended
December 31,
2009 2008
Normal Cost $ 5,651,150 $ 5,793,713
Amortization of the unfunded actuarial
accrued liability 2,590,278 1,113,824
8,241,428 6,907,537
Inflation factor of 7.5% 618,107 518,065
Current Year Contribution Due
From The District As Calculated
By The Plan's Actuary $ 8,859,535 $ 7,425,602
December 31
2009 2008
GMO Global Balanced Asset Allocation $18,285,997 $14,940,962
Morgan Stanley Inst. International Equity 17,078,227 14,048,692
First American Prime Money Market 13,966,544 <5%
Vanguard Windsor II Fund 11,693,186 9,195,040
Pyramid US Equity Market Neutral 10,169,363 9,721,941
CIGNA Small Cap Fund 9,602,961 <5%
UBS Real Estate <5% 8,987,614
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
23
NOTE E – CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE (Continued)
Certain professional fees, included in administrative expenses are paid by the District and are recognized
as contributions to the Plan and totaled $51,129 and $34,890 for the years ended December 31, 2009 and
2008. 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, 2010 the most recent actuarial valuation date, and January
1, 2009 s as follows (dollar amounts in thousands):
Valuation
for the
Actuarial
Years
Beginning
January 1
Actuarial
Value of
Assets
Entry Age
Actuarial
Accrued
Liability
(AAL)
Unfunded
AAL
(UAAL)
Funded
Ratio
Annual
Covered
Payroll
UAAL as a
Percentage
of Covered
Payroll
2010 $185,753 $223,063 $37,310 83.3% $52,267 71.4%
2009 183,679 212,066 28,387 86.6% 48,077 59.0%
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.
The information presented in the required supplementary schedules was determined as part of the
actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation
follows:
Valuation dates January 1, 2010 and 2009
Actuarial cost method Entry Age Normal
Amortization method Level dollar closed
Amortization period 20 year period
Asset valuation method 3-year average of adjusted market values
Post-retirement cost of living CPI with maximum 3% of current benefit of
benefit increases $50 if less, and lifetime maximum 45%
in the original benefit or $750 if less.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________DECEMBER 31, 2009 AND 2008
24
NOTE F – FUNDED STATUS AND FUNDING PROGRESS (Continued)
Actuarial assumptions:
Investment rate of return 7.5% per annum (1)
Projected salary increases
based on years of service years of service
0 10.0% (1)
1 7.5% (1)
2 5.0% (1)
3+ 4.5% (1)
Social Security wage base 4.0% per annum increase (1)
(1) Includes inflation component of 3%
NOTE G – 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 H – 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 I – SUBSEQUENT EVENTS
Subsequent to year end the District trustees tentatively approved a 401(k) style pension for employees
who begin January 1, 2011 and thereafter. Current MSD employees will remain in the District’s
tradition pension plan.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
REQUIRED SUPPLEMENTAL INFORMATION
_______________________________________________________DECEMBER 31, 2009AND 2008
REQUIRED SUPPLEMENTAL INFORMATION SECTION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
REQUIRED SUPPLEMENTAL INFORMATION
_______________________________________________________DECEMBER 31, 2009AND 2008
25
Six-year historical trend information 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
Actuarial
Years
Beginning
January 1
Actuarial
Value of
Assets
Entry
Age
Actuarial
Accrued
Liability
(AAL)
Unfunde
d AAL
(UAAL)
Funded
Ratio
Annual
Covered
Payroll
UAAL As
A
Percentage
of Covered
Payroll
2010 $185,753 $223,063 $37,310 83.3 % $52,267 71.4% %
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 64.1
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
For The
Years
Ended
December
31
Annual Required
Contribution
Actual
Contribution
Percentage
Contributed
Contribution As A
Percentage of
Covered Payroll
2009 $8,859,535 $8,859,535 100.0 % 17.0 %
2008 7,549,421 7,425,602 98.4 15.4
2007 7,260,259 7,702,456 105.7 17.7
2006 7,015,905 6,861,223 100.3 16.3
2005 6,980,026 7,192,531 102.9 17.9
2004 6,384,774 6,797,077 106.1 17.3
2003 5,385,572 6,002,479 111.3 15.9
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
REQUIRED SUPPLEMENTAL INFORMATION
_______________________________________________________DECEMBER 31, 2009AND 2008
26
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 SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
STATISTICAL SECTION (UNAUDITED)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
27
Performance & NAV
Year Net Asset Value (NAV) 12/31 Total Plan Performance
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 10.8%
2008 $ 150,808,625 (21.2%)
2009 $ 179,219,472 18.8%
Net Asset Value (NAV) 12/31
$179.2
$150.8
$191.4$174.3$157.8$149.1$137.0
$113.2$123.0$125.3
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Millions
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
28
Revenues by Source
Year
Employers
Contributions
Employers
Contributions as a
Percentage of
Covered Payroll
Investment Income
(Net) Total
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 17.6% $ 18,111,294 $ 25,813,750
2008 $ 7,460,492 15.4% $ (38,697,158) $ (31,236,666)
2009 $ 8,910,664 17.0% $ 29,480,946 $ 38,391,609
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
29
Expenses by Type
Year Benefit Payments Administrative Expense Total
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 $ 147,232 $ 8,688,189
2008 $ 9,232,979 $ 104,221 $ 9,337,200
2009 $ 9,832,606 $ 148,157 $ 9,980,763
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
30
Member Count
Year
Retirees &
Beneficiaries
Currently
Receiving Benefits
Terminated
Members Entitled
to Receive Benefits
Active Plan
Members Total
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 481¹ 199 798² 1,478
2007 504¹ 198 811² 1,513
2008 532¹ 196 885² 1,613
2009 550¹ 192 938² 1,680
¹ New Actuarial excluded individuals covered by insurance policy.
² New Actuarial excludes members with less than six months of service
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
31
Employer Contributions
$2,986.7 $3,971.5 $4,789.5 $6,002.5 $6,797.1 $7,192.5 $6,861.2 $7,702.5 $7,460.5 $8,910.7 $0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(Dollar Am ounts in Millions)
Total Benefit Payments
$3,694.4
$4,211.2
$4,830.2
$5,607.3
$6,198.5
$6,781.4
$7,841.8
$8,541.0
$9,233.0
$9,832.6
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(Dollar Amounts in Millions)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
32
Total Benefit Recipents
428 443 459 482 490
460 481 504 532 550
0
100
200
300
400
500
600
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
New actuarial census for 2005 through 2009 excluded individuals covered by insurance policy.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
33
Top 10 Investment Holdings
As of December 31, 2009
Holding Market Value at 12/31/2009 Percentage of Plan
GMO Global Balanced Asset Allocation $ 18,285,997 10.2%
Morgan Stanley Inst. International Equity 17,078,227 9.5%
First American Prime Money Market 13,966,544 7.8%
Vanguard Windsor II Fund 11,693,186 6.5%
Fidelity Market Neutral Fund 10,169,363 5.6%
CIGNA Small Cap Fund 9,602,961 5.4%
PIMCO All Asset Fund 7,068,646 3.9%
UBS Real Estate 6,914,435 3.9%
Vanguard 500 Index Fund 6,517,900 3.6%
Morgan Stanley Emerging Market Fund 5,866,524 3.3%
TOTALS $ 107,163,783 59.8%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
STATISTICAL SECTION (UNAUDITED)
_______________________________________________________DECEMBER 31, 2009AND 2008
34
Schedule of Investment Managers And Advisor Fees
For the Years Ended December 31, 2009 and 2008
2009 2008
Managers Fees:
Income Research Management $ 111,547 $ 136,901
Fidelity Investments 91,240 90,677
Waddell & Reed 60,058 71,476
Kennedy Capital /ARK Asset Managers 57,666 57,957
PENN Capital Management 63,950 60,168
Brandywine Asset Management 68,094 68,238
Buford, Dickson, Harper, & Sparrow 35,427 44,704
UBS Real Estate Separate Account 78,714 114,709
Total Managers Fees 566,696 644,830
Advisor Fees:
NEPC Investment Advisor 84,612 69,570
TOTAL $ 651,308 $ 714,400