HomeMy Public PortalAbout2014 Audited Financials
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2014 AND 2013
Contents
Page
Independent Auditors’ Report........................................................................ 1 - 2
Management’s Discussion And Analysis ..................................................... 3 - 12
Financial Statements
Statements of Fiduciary Net Position ..............................................................13
Statements of Changes in Fiduciary Net Position ............................................14
Notes to Financial Statements .................................................................. 15 - 26
Required Supplemental Information
Schedule of Changes in Net Pension Liability ................................................27
Schedule of Employer Contributions ...............................................................28
Actuarial Methods and Assumptions used for Funding Policy ......................29
Schedule of Annual-Weighted Rate of Return on Investments .......................30
Statistical Section (Unaudited)
Performance and Net Position Value ...............................................................31
Revenue by Source and Total Employer Contributions ..................................32
Expenses by Type and Total Benefit Payments ...............................................33
Member Count and Total Benefit Receipts .....................................................34
Top Ten Investment Holdings and Percentage Distribution ............................35
Schedule of Investment Manager and Advisor Fees ........................................36
Independent Auditors’ Report
Board of Trustees
The Metropolitan St. Louis Sewer District
St. Louis, Missouri
Report on the Financial Statements
We have audited the accompanying statement of fiduciary net position of The Metropolitan St. Louis Sewer
District Employees’ Pension Plan (the Plan) as of December 31, 2014 and 2013, and the related statement of
changes in fiduciary net position for the years then ended, and the related notes to the financial statements,
which collectively comprise the Plan’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Board of Trustees
The Metropolitan St. Louis Sewer District
Page 2
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the fiduciary
net position of The Metropolitan St. Louis Sewer District Employees’ Pension Plan as of December 31, 2014
and 2013, and the changes in fiduciary net position for the years then ended in accordance with accounting
principles generally accepted in the United States of America.
Change in Accounting Principle
As discussed in Note 1 to the financial statements in 2014, the District adopted the provisions of GASB
Statement No. 67, Financial Reporting for Pension Plans. Our opinion is not modified with respect to this
matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis on pages 3 through 12 and the pension plan schedules on pages 27 through 30 be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the Plan’s financial statements. The
statistical information is presented for purposes of additional analysis and is not a required part of the basic
financial statements. The statistical information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The statistical information has not been subjected to the auditing procedures applied in the audit of the basic
financial statements and accordingly, we do not express an opinion or provide any assurance on it.
July 14, 2015
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 3
MANAGEMENT’S DISCUSSION AND ANALYSIS
For The Year Ended December 31, 2014
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, 2014. 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 13.
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 fiduciary net position
2) Statements of changes in fiduciary net position
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) Statement of Pension Liability
2) Schedule of Employer Contributions
3) Actuarial Method and Assumptions
4) Schedule of Annual-Weighted Rate of Return on Investments
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 statements of fiduciary net position are 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 position value [assets plus
deferred outflows - liabilities plus deferred inflows = net position] represents the value of net
position held in trust for pension benefits.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 4
• The statements of changes in fiduciary net position displays the effect of pension fund
transactions that occurred during the fiscal year [additions - deductions = net increase
(decrease) in net position]. This net increase (decrease) in net position reflects the change in
the net position value of the statements of Plan net position from the prior year to the current
year. Both statements are in compliance with Governmental Accounting Standards Board
(GASB) Pronouncements.
• The notes to the 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 provides additional levels of detail for selected
financial statement items. See notes to financial statements beginning on page 15 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 additional schedules entitled
“required supplemental information.”
• The Schedule of Net Pension Liability (page 27) includes actuarial information about the
status of the Plan from an ongoing, long-term perspective and overall net position of the plan.
The total pension liability and Plan fiduciary net position are actuarially determined. A total
pension liability in excess of Plan fiduciary net position would indicate a net pension liability.
• The Schedule of Employer Contributions (page 28) 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.
• Actuarial Methods and Assumptions and the Schedule of Annual-Weighted Rate of Return on
Investments provide information regarding assumptions and interest rates used in the actuarial
calculations.
FINANCIAL HIGHLIGHTS 2014
• Net position restricted for pension benefits totaled $250,515,821 as of December 31, 2014 for
an increase of $4,268,543 or 1.7% as compared with December 31, 2013. This increase in net
position primarily resulted from employer contributions as cumulative investment gains
during the year were 70.6% lower in 2014 compared with 2013.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 5
• The Plan’s funding objective is to meet long-term benefit obligations to the extent possible.
As of December 31, 2014, the date of the latest actuarial valuation, the funded ratio of the
Plan was 87.4%. In general, this means that for every dollar of pension benefits due, the Plan
has approximately $0.87 of net position available for payment. The Plan’s funding ratio
increased by 1.3 percentage points as compared with the funding ratio for December 31, 2013.
The increase in the funding ratio is primarily attributed to the increase in the Plan’s actuarial
value of assets outpacing the present value of future benefits to members and their
beneficiaries. In addition, the present value of future normal costs decreased.
• Total increase to the Plan’s net position (page 14) amounted to $4,268,543 for the year 2014
consisting of an investment gain of $7,066,420 offset by Plan payments net of contributions
and expenses of $2,797,877.
• Administrative expenses (deductions to the Plan’s net position, page 14) increased from
$81,482 for 2013 to $86,504 or $5,022 or (6.2%) which primarily reflects an increase in US
Bank Trustee fees of 5.5%. This represents 81.9% of the total increase in overall
Administrative expenses.
FINANCIAL HIGHLIGHTS 2013
• Net position restricted for pension benefits totaled $246,247,278 as of December 31, 2013 for
an increase of $22,779,766 or 10.2% as compared with December 31, 2012. This increase in
net position 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, 2013, the date of the latest actuarial valuation, the funded ratio of the
Plan was 86.1%. In general, this means that for every dollar of pension benefits due, the Plan
has approximately $0.86 of net position available for payment. The Plan’s funding ratio
increased by 3.1 percentage points as compared with the funding ratio for December 31, 2012.
The increase in the funding ratio is primarily attributed to the increase in the Plan’s actual
value of assets outpacing the present value of future benefits to members and their
beneficiaries. In addition, the present value of future normal costs decreased.
• Total increase to the Plan’s net position (page 14) amounted to $22,779,766 for the year 2013
consisting of an investment gain of $24,001,334 offset by Plan payments net of contributions
of $1,221,568.
• Administrative expenses (deductions to the Plan’s net position, page 14) decreased from
$96,434 for 2012 to $81,482 or $14,952 or (15.5%) which primarily reflects a decrease in US
Bank Trustee fees of 8.7%. This represents 48% of the total decrease in overall
Administrative expenses.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 6
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 income from investments and employer contributions
provide the reserves needed to finance future retirement benefits.
Relative to the Public Fund peer group for 2014 and 2013, the Fund was up by 2.9% and 10.9%,
respectively, which ranked in the 98th and 96th percentile for 2014 and 2013, respectively. Net
position restricted for pension benefits increased by $4,268,543 in 2014 and increased by
$22,779,766 in 2013. This net position is used to meet ongoing benefit obligation to the Plan’s
participants and their beneficiaries.
The Metropolitan St. Louis Sewer District’s (the District) contributions into the Plan, as determined
by the Plan’s actuary, decreased for 2014 compared to 2013. The primary reason for the decrease
was related to the overall gain the Plan experienced in 2013.
Overall, the Plan remains adequately funded and any cumulative 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 7.0% on average. Both the Plan’s investment performance and the rate of return on
actuarial value have averaged 8.6% and 8.3%, respectively, over the last three years and are above
the actuarially assumed investment rate of 7.0%. Even though these are positive factors for the Plan,
should future investment performance fall below the actuarially assumed investment rate it could
result in additional contributions in future years.
Based upon our latest actuarial valuations for the years ended December 31, 2014 and 2013, the
Plan’s actuarial value of assets was less than its actuarial value of liabilities by $36,640,207 and
$38,224,005, respectively. Included in this liability is a deferred but unrecognized gain of
$3,255,784 resulting from the difference in the value of Net Position at December 31, 2014 of
$250,515,821 and the actuarial value of assets at December 31, 2014 of $253,771,605. This means
that additional future funding will be needed to continue to reduce the liability including this deferred
but unrecognized gain.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 7
FINANCIAL ANALYSIS
The condensed statements of fiduciary net position as compared to prior years are as follows:
2014 2013 Amount $ Percent
ASSETS
Investments at fair value 250,217,335$ 245,986,723$ 4,230,612$ 1.7%
Other assets 468,493 443,264 25,229 5.7%
Total Assets 250,685,828 246,429,987 4,255,841 1.7%
LIABILITIES 170,007 182,709 (12,702) (7.0%)
NET POSITION RESTRICTED
FOR PENSION BENEFITS 250,515,821$ 246,247,278$ 4,268,543$ 1.7%
For the Years Ended
December 31, 2014 Change
2013 2012 Amount $ Percent
ASSETS
Investments at fair value 245,986,723$ 223,415,457$ 22,571,266$ 10.1%
Other assets 443,264 8,703,827 (8,260,563) (94.9%)
Total Assets 246,429,987 232,119,284 14,310,703 6.2%
LIABILITIES 182,709 8,651,772 (8,469,063) (97.9%)
NET POSITION RESTRICTED
FOR PENSION BENEFITS 246,247,278$ 223,467,512$ 22,779,766$ 10.2%
For the Years Ended
December 31, 2013 Change
As previously noted, net position viewed over time may serve as a useful indication of the Plan’s
financial position. At the close of calendar years 2014 and 2013, the assets of the Plan exceeded its
liabilities by $250,515,821 and $246,247,278, respectively, in net position restricted for pension
benefits. The net position is available to meet the Plan’s ongoing obligation to the Plan’s participants
and their beneficiaries.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 8
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 the fiduciary net position as compared to prior years are as
follows:
2014 2013 Amount $ Percent
ADDITIONS
Net investment income 7,066,420$ 24,001,334$ (16,934,914)$ (70.6%)
Employer contributions 10,682,846 11,397,904 (715,058) (6.3%)
Total additions 17,749,266 35,399,238 (17,649,972) (49.9%)
DEDUCTIONS
Benefits paid to retirees and beneficiaries 13,394,219 12,537,990 856,229 6.8%
Administrative expenses 86,504 81,482 5,022 6.2%
Total Deductions 13,480,723 12,619,472 861,251 6.8%
NET INCREASE 4,268,543 22,779,766 (18,511,223) (81.3%)
NET POSITION RESTRICTED FOR
PENSION BENEFITS, January 1 246,247,278 223,467,512 22,779,766 10.2%
NET POSITION RESTRICTED FOR
PENSION BENEFITS, December 31 250,515,821$ 246,247,278$ 4,268,543$ 1.7%
For the Years Ended
December 31, 2014 Change
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 9
2013 2012 Amount $ Percent
ADDITIONS
Net investment income 24,001,334$ 23,391,788$ 609,546$ 2.6%
Employer contributions 11,397,904 11,742,410 (344,506) (2.9%)
Total additions 35,399,238 35,134,198 265,040 0.8%
DEDUCTIONS
Benefits paid to retirees and beneficiaries 12,537,990 11,910,664 627,326 5.3%
Transfers to Defined Contribution Plan — 210 (210) (100.0%)
Administrative expenses 81,482 96,434 (14,952) (15.5%)
Total Deductions 12,619,472 12,007,308 612,164 5.1%
NET INCREASE 22,779,766 23,126,890 (347,124) (1.5%)
NET POSITION RESTRICTED FOR
PENSION BENEFITS, January 1 223,467,512 200,340,622 23,126,890 11.5%
NET POSITION RESTRICTED FOR
PENSION BENEFITS, December 31 246,247,278$ 223,467,512$ 22,779,766$ 10.2%
For the Years Ended
December 31, 2013 Change
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 for the years ended December 31, 2014 and 2013, total $17,749,266 and
$35,399,238, respectively.
Additions to Plan assets for 2014 were due primarily to employer contributions as cumulative
investment gains during the year were 70.6% lower in 2014 compared with 2013. The Investment
Performance section of this report summarizes the results of investment activity for the year ended
December 31, 2014.
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 10
As noted above, deductions for the year ended December 31, 2014 totaled $13,480,723, an increase
of 6.8% over 2013. The increase in benefits paid resulted primarily from an increase in the number
of retirees receiving benefits by 24 members or a 3.8% increase. Deductions from Plan net position
of $13,480,723 were exceeded by additions to Plan net position of $17,749,266 for the year ended
December 31, 2014. The Plan has consistently managed within its administrative expense budget,
with no material variances between planned and actual expenditures.
INVESTMENT PERFORMANCE - 2014
The following are a few characteristics and achievements for the Plan for the year ending
December 31, 2014:
• The Plan ended the year with a net position of $250,515,821.
• The Plan’s performance for the year was 2.9% compared to the policy benchmark index of
3.3%, and the average five-year return was 7.6% compared to the policy benchmark index of
7.9%.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 11
• The actual asset allocation as of December 31, 2014, as compared to the December 31, 2013
actual allocation, is as follows:
2014 2013
Equities:
Domestic large-cap stocks 21.0 % 16 - 24 % 22.4 % 21.5 %
Domestic small-cap stocks 6.0 3 - 7 6.1 5.5
International developed markets stocks 11.0 8 - 12 10.7 10.4
International emerging markets stocks 3.0 2 - 5 2.8 2.9
Fixed Income:
Domestic core bonds 14.0 10 - 20 14.4 12.4
High yield bonds 5.0 3 - 7 5.0 5.0
Global bonds 9.0 6 - 10 8.8 7.7
Credit opportunities 2.0 0 - 5 2.0 1.9
Emerging fixed 5.0 3 - 7 4.3 4.7
Other:
Global tactical 10.0 8 - 12 9.9 9.9
Real estate 5.0 3 - 7 5.4 4.3
Real assets 5.0 3 - 7 3.8 4.4
Market neutral -- 3 - 7 0.0 4.1
Cash equivalents -- -- 0.5 0.5
Absolute return 4.0 3 - 7 3.9 4.8
Asset Class
ActualProposed
RangeTarget
All asset classes have been rebalanced when needed during the year in order to maintain a weighting
consistent with the strategic allocation ranges. Resolution 2986, effective August 2011, authorized
proposed targets and ranges, which are reflected above. Resolution 3138, effective February 2014,
authorized new proposed targets and ranges and will be implemented in 2015. Ordinance 13719,
effective September 2013, authorized Pavilion to act as the Plan’s investment consultant for the District
and provide investment advisory services.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Management’s Discussion And Analysis (Continued)
Page 12
Overall asset class allocations changed moderately. The Fixed income asset class increased 2.8
percentage points, primarily due to increases in domestic core bonds and global bonds of 2.0 and 1.1
percentage points, respectively. The Equity asset class increased 1.7 percentage points, primarily due
to increases in domestic large cap and domestic small cap stocks of .9 and .6 percentage points,
respectively. These increases were offset by the Other asset class decreasing 4.5 percentage points as
market neutral assets were liquidated, resulting in dropping 4.5 percentage points. While domestic
large cap stocks put this sub-class over target by 1.4 percentage points, it was still within the target
range. Resolution 2987, effective August 2011, authorized specific investment managers to act on
behalf of the Plan to actively manage specific investment types.
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:
Tim Snoke, Secretary-Treasurer
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
E-mail: tsnoke@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
See the accompanying notes to financial statements. Page 13
STATEMENTS OF FIDUCIARY NET POSITION
2014 2013
ASSETS
Investments at fair value:
Mutual funds 118,093,075$ 114,862,762$
Corporate obligations 33,236,006 28,933,262
Collective investment funds 47,580,822 56,279,586
Domestic common stocks 20,403,290 19,269,926
US Treasury and agency obligations 12,650,017 11,193,971
Foreign obligations 678,075 911,575
Money market funds 2,663,733 2,587,595
Foreign stocks 481,871 617,052
Municipal obligations 852,619 690,067
Domestic preferred stock 30,987 —
Real estate investments 13,546,840 10,640,927
Total Investments 250,217,335 245,986,723
Receivables
Interest and dividends receivable 468,493 443,264
Total Receivables 468,493 443,264
Total Assets 250,685,828 246,429,987
LIABILITIES
Accrued expenses 170,007 182,709
Total Liabilities 170,007 182,709
NET POSITION RESTRICTED FOR PENSION
BENEFITS 250,515,821$ 246,247,278$
December 31,
For the Years Ended
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
See the accompanying notes to financial statements. Page 14
STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION
2014 2013
ADDITIONS TO NET POSITION ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments 2,445,296$ 20,324,136$
Interest and dividends 5,484,554 4,523,695
Total Investment income 7,929,850 24,847,831
Less - investment managers' and advisors' fees 863,430 846,497
Net Investment income 7,066,420 24,001,334
Employer contributions 10,682,846 11,397,904
Total Additions 17,749,266 35,399,238
DEDUCTIONS FROM NET POSITION ATTRIBUTED TO:
Benefits paid to retirees and beneficiaries 13,394,219 12,537,990
Administrative expenses 86,504 81,482
Total Deductions 13,480,723 12,619,472
NET INCREASE 4,268,543 22,779,766
NET POSITION RESTRICTED FOR PENSION
BENEFITS, January 1 246,247,278 223,467,512
NET POSITION RESTRICTED FOR PENSION
BENEFITS, December 31 250,515,821$ 246,247,278$
December 31,
For the Years Ended
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 15
NOTES TO FINANCIAL STATEMENTS
December 31, 2014 And 2013
1. 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:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting
and adhere to generally accepted accounting principles as issued by the Governmental
Accounting Standards Board (GASB). GASB Statement No. 67, Financial Reporting for
Pension Plans, was adopted during the year ended December 31, 2014. GASB No. 67
addresses the accounting and financial reporting requirements for pension plans. The
requirements for GASB No. 67 require changes in presentation of the financial statements,
notes to the financial statements and required supplementary information. Significant
changes include an actuarial calculation of total and net pension liability/asset. It also
includes comprehensive footnote disclosures regarding the total pension liability, the
sensitivity of the net pension liability/asset to the discount rate, and increased investment
activity disclosures. The implementation of GASB No. 67 did not significantly impact the
accounting for investment balances. The total pension liability, determined in accordance
with GASB No. 67, is presented in Note 5 and in the Required Supplementary Information.
Estimates and Assumptions
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 position during the reporting period. Actual
results could differ from those estimates.
Investment Valuation
The Plan’s investment assets, for which U.S. Bank, N.A., acts as a trustee, 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.
Payment of Benefits
Benefits are recorded when paid.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 16
Subsequent Events
Management has evaluated subsequent events through July 14, 2015 the date the financial
statements were available for issue.
2. 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.
General
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) commencing service
prior to December 31, 2010, were eligible to be covered by the Plan. As of January 1, 2011,
the Plan was frozen to new employees. Instead, new employees of the District may
participate in the Defined Contribution Plan and/or the Deferred Compensation Plan. Current
employees with less than ten years of service on this date could also voluntarily elect to
transfer from the Plan and enter the defined contribution plan.
Membership in the Plan consists of:
Increase
2014 2013 (Decrease)
Active plan members 710 761 (51)
Retirees and beneficiaries currently receiving benefits 660 636 24
Terminated members entitled to receive benefits 180 179 1
Total 1,550 1,576 (26)
For the Years Ended
December 31,
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 17
Benefit Payments and Vesting
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 five years
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
1.7% 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. Also, the annual reduction for early retirement was revised from 5% to 2%
prior to age 60 and from 2.5% to 1% after age 60.
Ordinance No. 10664, effective January 1, 2000, amended the Plan benefits formula to 1.45%
of final average earnings plus 0.4% of final average earnings that are in excess of covered
earnings multiplied by the period of years and months of credited service not to exceed 35
years. This ordinance also provided for a survivor’s benefit for vested members who have not
yet reached their normal retirement date or earned 75 points. The survivor’s benefit is equal
to the greater of 50% of the member’s monthly-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. 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 (Continued)
Page 18
Effective August 27, 2011, Ordinance No. 13288 amended the Plan to include the following:
“Upon termination or complete discontinuance of contributions under the Plan, the rights of
all Members to benefits accrued to the date of such termination or discontinuance shall be
non-forfeitable, to the extent then funded.”
Amounts in participants’ accounts are distributed upon retirement, death, disability, or
termination of employment. The normal form of retirement benefit is either a lump sum
payment or equal monthly installments.
3. Cash and Investments
Categories of Asset Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the Plan’s
investment in a single issuer. Due to Resolution 2986, the Plan is authorized to invest in:
• Equity Investments: Common stocks of corporations, mutual funds, or co-mingled
equity funds (Domestic and International, both within defined limits); however, the
investments in equities cannot exceed 47% of total investments.
• Fixed Income Investments: U.S. government and agency securities, corporate bonds,
debentures, notes, or other evidence of indebtedness assumed or guaranteed by
corporations (Domestic and International, both within defined limits); however, the
investment in fixed income cannot exceed 41% of total investments.
• Short-term Securities: Commercial paper, treasury bills, certificates of deposit, and/or
money market funds.
• Real Estate Investments: Real estate investment trusts and multi-employer property
trusts; however the investment in real estate cannot exceed 7% of total investments.
• Global Tactical Asset Allocation, Market Neutral, Absolute Return, and Real Assets:
These investment strategies help diversify the investment portfolio while increasing
return and decreasing risk. These investments cannot exceed 12%, 7%, 7% and 7% of
total investments, respectively.
• Futures Contracts: Currency forward contracts for the purpose of currency risk
management of non-U.S. investments. This practice has been discontinued. The last
year the Plan had open contracts to purchase and sell by foreign currencies was
December 31, 2012.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 19
The fair value of investments managed consisted of the following:
2014 2013
Investments, at fair value
Mutual funds 118,093,075$ 114,862,762$
Corporate obligations 33,236,006 28,933,262
Collective investment funds 47,580,822 56,279,586
Domestic common stocks 20,403,290 19,269,926
U.S. Treasury and agency obligations 12,650,017 11,193,971
Foreign obligations 678,075 911,575
Money market funds 2,663,733 2,587,595
Foreign stocks 481,871 617,052
Municipal obligations 852,619 690,067
Domestic preferred stocks 30,987 —
Real estate investments 13,546,840 10,640,927
Total Investments 250,217,335$ 245,986,723$
as of December 31,
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of
an investment. The Plan does not have a formal investment policy that limits investment
maturities as a means of managing its exposure to interest rates. The Plan had the following
debt securities and maturities:
Weighted
Average
Maturity
Investment Type Fair Value (in Years)
Corporate obligations 33,236,006$ 5.00
U.S. Treasury and agency obligations 12,650,017 5.43
Foreign obligations 678,075 5.55
Municipal obligations 852,619 1.70
Total 47,416,717$
Portfolio weighted average maturity 5.06
as of December 31, 2014
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 20
Weighted
Average
Maturity
Investment Type Fair Value (in Years)
Corporate obligations 28,933,262$ 4.81
U.S. Treasury and agency obligations 11,193,971 5.59
Foreign obligations 911,575 5.09
Municipal obligations 690,067 2.23
Total 41,728,875$
Portfolio weighted average maturity 4.98
as of December 31, 2013
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’ performances to be sure the fixed
income portion of the investment portfolio is managed to predetermined indexes.
Credit Risk
Investment credit risk is the risk that the issuer or other counterparty to an investment will not
fulfill its obligations. The Plan will minimize credit risk 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 METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 21
The following tables provide information on the credit ratings associated with the Plan’s
investments in debt securities:
U.S. Treasury
S & P & Agency Municipal Corporate Foreign
Rating Obligations Obligations Obligations Obligations Total
AAA —$ 90,971$ 4,028,799$ —$ 4,119,770$
AA 286,371 461,685 2,719,056 — 3,467,112
A— 299,963 6,627,691 — 6,927,654
BBB — — 6,908,525 — 6,908,525
BB — — 3,648,699 232,475 3,881,174
B— — 6,360,121 445,600 6,805,721
CCC — — 753,220 — 753,220
Not Rated 12,363,646 — 2,189,895 — 14,553,541
Total 12,650,017$ 852,619$ 33,236,006$ 678,075$ 47,416,717$
Credit Rating by Investment as of December 31, 2014
U.S. Treasury
S & P & Agency Municipal Corporate Foreign
Rating Obligations Obligations Obligations Obligations Total
AAA 6,752,639$ 117,289$ 4,246,144$ —$ 11,116,072$
AA 282,623 — 2,265,659 — 2,548,282
A— 572,778 6,134,345 — 6,707,123
BBB — — 5,086,638 — 5,086,638
BB — — 3,588,209 526,900 4,115,109
B— — 6,520,013 384,675 6,904,688
CCC — — 689,500 — 689,500
CC — — — — —
Not Rated 4,158,709 — 402,754 — 4,561,463
Total 11,193,971$ 690,067$ 28,933,262$ 911,575$ 41,728,875$
Credit Rating by Investment as of December 31, 2013
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 22
Investments Greater Than 5% Of Net Position Held In Trust For Pension Benefits
Investments that exceed 5% or more of net position held in trust for pension benefits at
December 31, 2014 and 2013 are as follows:
2014 2013
Income Research Management 36,053,799$ 30,527,362$
Morgan Stanley International Equity 26,735,417 25,542,840
GMO Global Balanced Asset Allocation 24,737,029 24,417,418
Brandywine Global Bond 22,143,385 18,943,631
Vanguard Institutional 16,087,355 *
T Rowe Price 13,612,960 13,401,922
UBS Trumball 13,546,840 *
Vanguard Windsor II 13,267,354 18,135,703
Holland 13,208,743 13,446,225
Penn Capital 12,558,480 12,441,710
* Denotes less than 5%.
For the Years Ended
December 31,
4. 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 23
Contributions of $10,675,321 and $11,391,287, excluding certain professional fees paid by
the District, were made to the Plan in 2014 and 2013, respectively. These contributions were
made in accordance with actuarially determined contribution recommendations based on
actuarial valuations performed at December 31, 2013 and 2012, respectively, and consisted
of:
2014 2013
Normal Cost 5,852,375$ 6,062,646$
Amortization of the unfunded
actuarial accrued liability 4,101,304 4,558,601
Investment Rate of Return factor of 7.25% 721,642 770,040
Current Year Contribution due
from the District as Calculated
by the Plan's Actuary 10,675,321$ 11,391,287$
For the Years Ended
December 31,
Certain professional fees, included in administrative expenses are paid by the District and are
recognized as contributions to the Plan and totaled $7,525 and $6,617 for the years ended
December 31, 2014 and 2013, 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 position.
5. Net Pension Liability of the District
During the year ended December 31, 2014, the District implemented GASB Statement No. 67,
Financial Reporting for Pension Plans. The schedule of net pension liability pursuant to the
provisions of GASB Statement No. 67 is as follows:
Net Pension Liability
Net Pension Liability December 31, 2014
Total pension liability $290,411,812
Fiduciary net position 250,515,821
District's pension liability $39,895,991
Fiduciary net position as a percentage of total pension liability 86.26%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 24
Actuarial Assumptions: The total pension liability was determined by an actuarial valuation
as of December 31, 2014, calculated based on the discount rate and actuarial assumptions
below:
Inflation Rate 2.50%
Projected Salary Increases 4.25%
Investment Rate of Return 7.00%
Mortality Rates were based on the RP-2000 Mortality for Employees and Health
Annuitants.
Discount Rate
Discount rate (changed from 7.25% in prior year) 7.00%
Long-term expected rate of return, net of investment expense 7.00%
Municipal bond rate N/A
The plan's fiduciary net position was projected to be available to make all projected future benefit payments
of current active and inactive employees. Therefore, the discount rate for calculating the total pension
liability is equal to the long-term expected rate of return.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 25
Long-Term Expected Rate of Return
Long-Term
Expected
Arithmetic
Target Real Rate
Asset Class Allocation of Return
Domestic Equity 26.5% 7.1%
International Equity 10.0% 7.6%
Emerging Market Equities 3.5% 10.8%
Global Fixed Income 35.0% 0.8%
Absolute Return/HFOF 15.0% 5.6%
Real Estate 5.0% 4.9%
Real Assets 5.0% 5.0%
Assumed Inflation - Mean 2.5%
The expected long term rate of return is assumed to be 7.0%.
The long-term expected rate of return is determined by adding expected inflation to expected long-
term realreturns and reflecting expected volatility and correlation. The capital market assumptions
as of December 31, 2014 are as follows:
Sensitivity of the Net Pension Liability to changes in the Discount Rate
1% Current 1%
Decrease Discount Rate Increase
6.00% 7.00% 8.00%
Total pension liability $323,167,414 $290,411,812 $262,413,602
Fiduciary net position 250,515,821 250,515,821 250,515,821
Net pension liability 72,651,593 39,895,991 11,897,781
The following presents the net pension liability of the District, calculated using the discount rate of 7.00%,as wellas
what the District's net pension liability would be if it were calculated using a discount rate that is 1 percentage point
lower (6.00%) or 1 percentage point higher (8.00%) than the current rate.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Notes To Financial Statements (Continued)
Page 26
Rate of Return
For the year ended December 31, 2014, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 2.86%. The money-weighted
rate of return considers the changing amounts actually invested during a period and weights
the amount of pension plan investments by the proportion of time they are available to earn a
return during that period. External cash flows are determined on a monthly basis and are
assumed to occur at the beginning of each month. External cash inflows are netted with
external cash outflows, resulting in a net external cash flow in each month. The money-
weighted rate of return is calculated net of investment expenses.
6. 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.
7. 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 position.
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.
8. Tax Status
The plan received a favorable determination letter from the Internal Revenue Service on
September 10, 2014, indicating the Plan and its underlying trust are qualified under Section
414(d) of the Internal Revenue Code. The Plan has not been amended since receiving the
determination letter.
REQUIRED SUPPLEMENTARY INFORMATION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 27
REQUIRED SUPPLEMENTARY INFORMATION UNDER GASB NO. 67
FOR THE LAST TEN FISCAL YEARS
Schedule of Net Pension Liability
Total Pension Liabilty
Service cost 5,409,485$
Interest 19,900,507
Effect of economic/demographic gains or losses (3,667,991)
Effect of changes of assumptions 6,500,227
Benefit payments, including refunds of member contributions (13,387,127)
Net Change In Total Pension Liability 14,755,101
Total Pension Liability - Beginning 275,656,711
Total Pension Liability - Ending 290,411,812$
Plan Fiduciary Net Position
Contributions - employer 10,682,846
Net investment income 7,066,420
Benefit payments, including refunds of member contributions (13,394,219)
Administrative expenses (86,504)
Net Change In Plan Fiduciary Net Position 4,268,543
Plan Fiduciary Net Position - Beginning 246,247,278
Plan Fiduciary Net Position - Ending 250,515,821
District’s Net Pension Liability - Ending 39,895,991$
Plan Fiduciary Net Position As A Percentage Of The
Total Pension Liability 86.26%
Covered Employee Payroll 44,663,896$
The District's Net Pension (Asset) As A Percentage Of
Covered Employee Payroll 89.32
Notes to schedule:
Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 28
REQUIRED SUPPLEMENTARY INFORMATION UNDER GASB NO. 67 (Continued)
Schedule of Employer Contributions
Plan Year Actuarially Contribution Covered Contribution
Ending Determined Annual Deficiency Employee as a % of
December 31 Contribution Contribution (Excess) Payroll* Covered Payroll
2005 $7,184,531 $7,184,531 - $40,144,000 17.90%
2006 6,847,278 $6,847,278 - $42,113,000 16.26%
2007 7,673,240 $7,673,240 - $43,640,000 17.58%
2008 7,425,602 $7,425,602 - $48,077,000 15.45%
2009 8,859,535 $8,859,535 - $52,267,000 16.95%
2010 10,306,739 $10,306,739 - $51,703,000 19.93%
2011 10,969,154 $10,969,154 - $49,432,000 22.19%
2012 11,737,168 $11,737,168 - $48,333,000 24.28%
2013 11,391,287 $11,391,287 - $46,600,000 24.44%
2014 10,675,321 $10,675,321 - $44,663,896 23.90%
* Payroll as of prior December 31 Measurement Date
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 29
REQUIRED SUPPLEMENTARY INFORMATION UNDER GASB NO. 67 (Continued)
Actuarial Methods and Assumptions Used for Funding Policy
Valuation Timing
Actuarial Cost Method Entry Age Normal
Amortization Method
Level percent or level dollar Level dollar
Closed, open, or layered periods Layered, 20 year periods
Asset Valuation Method
Smoothing period 5 years
Inflation 2.50%
Salary Increases 4.25%
Investment Rate of Return 7.00%
Cost of Living Adjustments 2.5%, with 45%/$750 per month lifetime cap
Retirement Age Retirement rates are summarized in the 2015 Actuarial Valuation.
Turnover Turnover rates are summarized in the 2015 Actuarial Valuation.
Disability Disability rates are summarized in the 2015 Actuarial Valuation.
Mortality
Actuarially determined contribution rates are calculated as of January 1
of the fiscal year in which the contributions are reported.
Healthy Lives: RP-2000 Mortality for Employees and Healthy
Annuitants, male and female rates, with projection five years fromthe
valuation date using Scale AA; Disabled Lives: RP-2000 Disability
Mortality, male and female rates.
The following actuarial methods and assumptions were used in the December 31, 2014 funding valuation. Please see the
valuation report dated May 31, 2015 for further details.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 30
REQUIRED SUPPLEMENTARY INFORMATION UNDER GASB NO. 67 (Continued)
Schedule of Annual-Weighted Rate of Return on Investments
Annual money weighted rate of return, net of investment expense: 2.85%
Note to Schedule: The District implemented GASB Statement No. 67 in fiscal year 2014.
Information for years prior to fiscal year 2014 is therefore unavailable.
STATISTICAL SECTION (UNAUDITED)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 31
STATISTICAL SECTION
For The Year Ended December 31, 2014
Net Position Value
(NPV) as of
Year December 31
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
2010 198,540,074 10.8
2011 200,340,622 1.9
2012 223,467,512 11.5
2013 246,247,278 10.2
2014 250,515,821 1.7
Performance and NPV
Total
Plan
Performance
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 32
STATISTICAL SECTION
For The Year Ended December 31, 2014
Net
Employer Investment
Year Contributions Income Total
2005 $ 7,192,531 17.9 % $ 8,475,275 $ 15,667,806
2006 6,875,168 16.3 17,565,462 24,440,630
2007 7,731,672 17.7 18,111,294 25,842,966
2008 7,460,492 15.5 (38,697,159) (31,236,667)
2009 8,910,664 17.0 29,480,945 38,391,609
2010 10,347,592 20.0 19,597,109 29,944,701
2011 10,981,546 22.2 2,144,533 13,126,079
2012 11,742,410 24.3 23,391,578 35,133,988
2013 11,397,904 24.5 24,001,334 35,399,238
2014 10,682,846 23.9 7,066,420 17,749,266
Payroll
Revenues by Source
Employer
Contributions
as a Percentage
of Covered
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 33
STATISTICAL SECTION
For The Year Ended December 31, 2014
Benefit Administrative
Year Payments Expense Total
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
2010 10,508,665 115,434 10,624,099
2011 11,233,668 91,863 11,325,531
2012 11,910,664 96,434 12,007,098
2013 12,537,990 81,482 12,619,472
2014 13,394,219 86,504 13,480,723
Expenses by Type
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 34
STATISTICAL SECTION
For The Year Ended December 31, 2014
Terminated
Members
Entitled to
Receive
Year Benefits Total
2005 460
1 198 780
2 1,438
2006 481
1 199 798
2 1,478
2007 504
1 198 811
2 1,513
2008 532
1 196 885
2 1,613
2009 550
1 192 938
2 1,680
2010 571
1 183 917
2 1,671
2011 596
1 183 838 1,617
2012 614
1 179 803 1,596
2013 636
1 179 761 1,576
2014 660
1 180 710 1,550
1 New Actuarial excluded individuals covered by insurance policy.
2 New Actuarial excludes members with less than six months of service.
Member Count
Benefits
Active Plan
Members
Retirees &
Beneficiaries
Currently
Receiving
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 35
STATISTICAL SECTION
For The Year Ended December 31, 2014
Market Percentage
Value as of of
Holding December 31, 2014 Plan
Income Research Management $ 36,053,799 14.4%
Morgan Stanley International Equity 26,735,417 10.7%
GMO Global Balanced Asset Allocation 24,737,029 9.9%
Brandywine Global Bond 22,143,385 8.8%
Vanguard Institutional 16,087,355 6.4%
T Rowe Price 13,612,960 5.4%
UBS Trumball 13,546,840 5.4%
Vanguard Windsor II 13,267,354 5.3%
Holland 13,208,743 5.3%
Penn Capital 12,558,480 5.0%
Totals $ 191,951,362 76.6%
Top 10 Holdings by Investment Manager
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES’ PENSION PLAN
Page 36
STATISTICAL SECTION
For The Year Ended December 31, 2014
2014 2013
Investment Manager Fees:
Income Research Management $ 120,898 $ 107,987
Loomis / Sayles 22,316 21,034
Brandywine Asset Management 99,484 80,895
Fidelity Investments (Pyramis) 14,836 91,189
PENN Capital Management 91,661 87,156
UBS Real Estate 134,768 119,696
Wellington Management 98,787 93,386
Waddell & Reed — 20,748
Holland 102,874 72,140
Buford, Dickson, Harper & Sparrow — 10,579
Kennedy Capital/ARK Asset Managers 72,806 55,896
Total Investment Manager Fees 758,429 760,706
Advisor Fees:
NEPC/Pavilion 105,001 85,791
Total Advisor Fees 105,001 85,791
Total of All Fees $ 863,430 $ 846,497
Schedule of Investment Manager & Advisor Fees
For the Years Ended December 31,
Firm