HomeMy Public PortalAboutDefined Contribution Plan 2020 Audited Financial Statements
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
Contents
Page
Independent Auditors’ Report........................................................................ 1 - 2
Management’s Discussion And Analysis ..................................................... 3 - 10
Financial Statements
Statements Of Fiduciary Net Position..............................................................11
Statements Of Changes In Fiduciary Net Position ..........................................12
Notes To Financial Statements ................................................................ 13 - 22
Supplemental Information
Historical Trend Information ...........................................................................23
Fund Values And Expense Ratios....................................................................24
CLA is an independent member of Nexia International, a leading, global network of independent
accounting and consulting firms. See nexia.com/member‐firm‐disclaimer for details.
Page 1
CliftonLarsonAllen LLP
CLAconnect.com
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 financial statements of The Metropolitan St. Louis Sewer District
Defined Contribution Plan (the Plan), which comprise the statements of fiduciary net position as of
December 31, 2020 and 2019, and the related statements of changes in fiduciary net position for the
years then ended, and the related notes to the financial statements.
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 opinion.
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 Plan as of December 31, 2020 and 2019, 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.
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 7 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 basic financial statements as a
whole. The historical trend information and fund values and expense ratios are presented for purposes
of additional analysis and are not a required part of the basic financial statements. Such 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.
CliftonLarsonAllen LLP
St. Louis, Missouri
July 29, 2021
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Page 3
MANAGEMENT’S DISCUSSION AND ANALYSIS
For The Years Ended December 31, 2020 and 2019
This report consists of a series of financial statements related to The Metropolitan St. Louis Sewer
District (“District”) Defined Contribution Plan (“Plan”). The Statements of Fiduciary Net Position and
the Statements of Changes in Fiduciary Net Position (on pages 11 and 12) provide information about
this Plan’s net position and changes in its net position during the year. These statements are prepared
using the accrual basis of accounting.
The Management’s Discussion and Analysis of the Plan’s financial performance provides an overview
of the Plan’s financial activities for the years ended December 31, 2020 and 2019. Please read it in
conjunction with the Plan’s financial statements.
FINANCIAL HIGHLIGHTS 2020
At December 31, the Plan consisted of 583 participants with account balances of approximately
$18.0M in net position (page 11).
Total increase to the Plan’s net position (page 12) amounted to approximately $5.0M, consisting
of Plan contributions and other additions of approximately $2.8M and net investment gain of
approximately $2.7M, offset by deductions of approximately $0.5M.
Administrative expenses (part of the deductions to the Plan’s net position) totaled
approximately $69K. This consisted of Vanguard record-keeping and compliance testing, as
well as consultant and accounting fees.
FINANCIAL HIGHLIGHTS 2019
At December 31, the Plan consisted of 540 participants with account balances of approximately
$13.0M in net position (page 11).
Total increase to the Plan’s net position (page 12) amounted to approximately $4.4M, consisting
of Plan contributions and other additions of approximately $2.5M and net investment gain of
approximately $2.3M, offset by deductions of approximately $0.4M.
Administrative expenses (part of the deductions to the Plan’s net position) totaled
approximately $65K. This consisted of Vanguard record-keeping and compliance testing, as
well as consultant and accounting fees.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 4
FINANCIAL ANALYSIS
The condensed Statements of Fiduciary Net Position as compared to prior years are as follows:
2020 Analysis
The Plan’s net position as of December 31, 2020, totaled approximately $18.0M, an increase of
approximately $5.0M over net position as of December 31, 2019.
2019 Analysis
The Plan’s net position as of December 31, 2019, totaled approximately $13.0M, an increase of
approximately $4.4M over net position as of December 31, 2018.
Increase Increase
December 31, December 31, (Decrease) December 31, (Decrease)
2020 2019 2020-2019 2018 2020-2019
ASSETS
Investments at Fair Value:
Mutual Funds 17,744,000$ 12,891,296$ 4,852,704$ 8,481,474$ 4,409,822$
Common/Collective Trust 227,408 72,366 155,042 87,981 (15,615)
Total Investments 17,971,408 12,963,662 5,007,746 8,569,455 4,394,207
NET POSITION RESTRICTED
FOR PLAN BENEFITS 17,971,408$ 12,963,662$ 5,007,746$ 8,569,455$ 4,394,207$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 5
The condensed Statements of Changes in Fiduciary Net Position as compared to prior years are as follows:
2020 Analysis
Additions to the Plan’s net position include contributions and investment income. For calendar year
2020, contributions increased from those of calendar year 2019 from $2.5M to $2.7M or an increase
of $0.2M. The Plan recognized a net investment income increase of $0.4M for calendar year 2020 over
calendar year 2019.
Deductions from the Plan’s net position include participant distributions and administrative expenses.
For calendar year 2020, distributions amounted to $407K, an increase of $59K over calendar year 2019.
2019 Analysis
Additions to the Plan’s net position include contributions and investment income. For calendar year
2019, contributions increased from those of calendar year 2018 from $1.9M to $2.5M or an increase
of $0.6M. The Plan recognized a net investment income increase of $2.9M for calendar year 2019 over
calendar year 2018.
Deductions from the Plan’s net position include participant distributions and administrative expenses.
For calendar year 2019, distributions amounted to $348K, an increase of $210K over calendar year
2018.
For the Year For the Year For the Year
Ended Ended Increase Ended Increase
December 31, December 31, (Decrease) December 31, (Decrease)
2020 2019 2020-2019 2018 2019-2018
ADDITIONS
Contributions and Other Additions 2,799,448$ 2,539,168$ 260,280$ 1,958,418$ 580,750$
Net Investment Income 2,686,641 2,268,675 417,966 (630,768) 2,899,443
Total Additions 5,486,089 4,807,843 678,246 1,327,650 3,480,193
DEDUCTIONS
Distributions to Participants 407,180 348,467 58,713 138,856 209,611
Administrative Expenses and Legal Fees 71,163 65,169 5,994 63,464 1,705
Total Deductions 478,343 413,636 64,707 202,320 211,316
NET INCREASE 5,007,746 4,394,207 613,539 1,125,330 3,268,877
FIDUCIARY NET POSITION
BEGINNING, January 1 12,963,662 8,569,455 4,394,207 7,444,125 1,125,330
FIDUCIARY NET POSITION
ENDING, December 31 17,971,408$ 12,963,662$ 5,007,746$ 8,569,455$ 4,394,207$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 6
For calendar year 2020 the Plan showed a net gain of $3,296,578 when compared to original costs.
The Target Retirement 2045 Fund had the greatest gain in value for any one individual fund at
$591,681.
Value at
December 31, Net % of Current
Fund Name Cost 2020 Gain/(Loss) Value
Vanguard Group, Inc.
Institutional Target Retirement 2045 2,576,313$ 3,167,994$ 591,681$ 17.62 %
Institutional Target Retirement 2050 1,844,221 2,249,758 405,537 12.52
International Growth Fund Admiral 597,219 943,056 345,837 5.25
Institutional Target Retirement 2040 1,543,770 1,877,666 333,896 10.45
Institutional Target Retirement 2035 1,487,446 1,783,933 296,487 9.93
Institutional Target Retirement 2055 1,110,204 1,353,140 242,936 7.53
Institutional Index Fund 914,932 1,143,266 228,334 6.36
Institutional Target Retirement 2025 852,410 999,578 147,168 5.56
Institutional Target Retirement 2030 743,682 880,557 136,875 4.90
U.S. Growth Fund Admiral 249,077 381,116 132,039 2.12
Mid-Cap Index Fund Admiral 464,546 590,595 126,049 3.29
Institutional Target Retirement 2060 489,346 593,996 104,650 3.30
Small-Cap Index Fund Admiral 322,616 404,104 81,488 2.25
Balanced Index Fund Institutional 234,298 287,952 53,654 1.60
Institutional Target Retirement 2020 168,306 192,003 23,697 1.07
Total Bond Market Index Fund Admiral 354,306 372,372 18,066 2.07
Windsor II Fund Admiral 220,748 235,742 14,994 1.31
Institutional Target Retirement Income 65,087 71,365 6,278 0.40
Institutional Target Retirement 2065 33,719 39,792 6,073 0.22
Institutional Target Retirement 2015 8,240 9,079 839 0.05
Retirement Savings Trust III 227,408 227,408 — 1.27
Cash Reserves Federal Money Market Fund 166,936 166,936 — 0.93
Totals 14,674,830$ 17,971,408$ 3,296,578$ 100.00 %
Change in Fund Asset Values - 2020
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 7
For calendar year 2019 the Plan showed a net gain of $1,027,911 when compared to original costs.
The Target Retirement 2045 Fund had the greatest gain in value for any one individual fund at
$208,225.
Value at
December 31, Net % of Current
Fund Name Cost 2019 Gain/(Loss) Value
Vanguard Group, Inc.
Institutional Target Retirement 2045 2,295,864$ 2,504,089$ 208,225$ 19.31 %
Institutional Target Retirement 2050 1,406,438 1,533,098 126,660 11.83
Institutional Target Retirement 2040 1,316,271 1,431,787 115,516 11.04
Institutional Index Fund 735,615 842,373 106,758 6.50
Institutional Target Retirement 2035 1,308,166 1,413,278 105,112 10.90
Institutional Target Retirement 2055 846,903 923,397 76,494 7.12
Institutional Target Retirement 2025 736,458 787,928 51,470 6.08
Institutional Target Retirement 2030 622,887 671,725 48,838 5.18
Mid-Cap Index Fund Admiral 388,731 433,906 45,175 3.35
International Growth Fund Admiral 430,115 467,737 37,622 3.61
Institutional Target Retirement 2060 355,419 387,234 31,815 2.99
Balanced Index Fund Institutional 219,040 243,814 24,774 1.88
Small-Cap Index Fund Admiral 251,499 267,279 15,780 2.06
U.S. Growth Fund Admiral 204,079 219,186 15,107 1.69
Institutional Target Retirement 2020 153,455 163,341 9,886 1.26
Total Bond Market Index Fund Admiral 196,434 203,885 7,451 1.57
Institutional Target Retirement Income 45,375 47,576 2,201 0.37
Institutional Target Retirement 2065 12,383 13,306 923 0.10
Institutional Target Retirement 2015 6,885 7,179 294 0.06
Prime Money Market Fund 142,181 142,181 — 1.10
Retirement Savings Trust III 72,366 72,366 — 0.56
Windsor II Fund Admiral 189,187 186,997 (2,190) 1.44
Totals 11,935,751$ 12,963,662$ 1,027,911$ 100.00 %
Change in Fund Asset Values - 2019
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 8
For calendar year 2018 the Plan showed a net loss of $918,272 when compared to original costs. The
Target Retirement 2045 Fund had the greatest loss in value for any one individual fund at $195,128.
Value at
December 31, Net % of Current
Fund Name Cost 2018 Gain/(Loss) Value
Vanguard Group, Inc.
Total Bond Market Index Fund Admiral 134,852$ 135,519$ 667$ 1.59 %
Prime Money Market Fund 92,659 92,659 — 1.08
Retirement Savings Trust III 87,981 87,981 — 1.03
Institutional Target Retirement 2015 5,665 5,329 (336) 0.06
Institutional Target Retirement 2065 8,323 7,516 (807) 0.09
Institutional Target Retirement Income 39,901 38,478 (1,423) 0.45
Institutional Target Retirement 2020 135,140 126,335 (8,805) 1.47
Balanced Index Fund Institutional 177,569 168,098 (9,471) 1.96
Institutional Target Retirement 2060 225,216 202,856 (22,360) 2.37
Small-Cap Index Fund Admiral 177,322 150,631 (26,691) 1.76
Windsor II Fund Admiral 192,860 161,135 (31,725) 1.88
Mid-Cap Index Fund Admiral 273,809 239,919 (33,890) 2.80
U.S. Growth Fund Admiral 223,203 187,672 (35,531) 2.19
Institutional Index Fund 490,342 449,437 (40,905) 5.24
Institutional Target Retirement 2025 578,239 535,941 (42,298) 6.25
Institutional Target Retirement 2030 571,634 524,299 (47,335) 6.12
International Growth Fund Admiral 262,419 212,386 (50,033) 2.48
Institutional Target Retirement 2055 629,740 566,779 (62,961) 6.61
Institutional Target Retirement 2035 1,032,063 940,278 (91,785) 10.97
Institutional Target Retirement 2040 1,123,843 1,017,316 (106,527) 11.87
Institutional Target Retirement 2050 1,101,707 990,779 (110,928) 11.56
Institutional Target Retirement 2045 1,923,240 1,728,112 (195,128) 20.17
Totals 9,487,727$ 8,569,455$ (918,272)$ 100.00 %
Change in Fund Asset Values - 2018
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 9
INVESTMENT ASSET ALLOCATION
Investment decisions are participant directed. The participants are offered a diversified
portfolio of investment options from which to select. These investment options represent a
series of mutual funds sponsored and managed by the Vanguard Group. A breakdown of the
participant directed asset allocation as of December 31, 2020 follows:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 10
FIDUCIARY RESPONSIBILITIES
The Board of Trustees and senior management are fiduciaries of the Plan and Trust. Fiduciaries are
charged with the responsibility of assuring that the assets of the Plan are used exclusively for the benefit
of plan participants and their beneficiaries.
REQUEST FOR INFORMATION
This financial report is designed to provide the Board of Trustees, participants, investment managers,
and other interested parties with an overview of the Plan’s finances and accountability for the money
received. Questions concerning any of the information provided in this report or requests for additional
information should be addressed to:
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
DEFINED CONTRIBUTION PLAN
See the accompanying Notes To Financial Statements. Page 11
STATEMENTS OF FIDUCIARY NET POSITION
2020 2019
ASSETS
Investments at Fair Value:
Mutual Funds 17,744,000$ 12,891,296$
Common/Collective Trust 227,408 72,366
Total Investments 17,971,408 12,963,662
NET POSITION RESTRICTED FOR PLAN BENEFITS 17,971,408$ 12,963,662$
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
See the accompanying Notes To Financial Statements. Page 12
STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION
2020 2019
ADDITIONS TO NET POSITION ATTRIBUTED TO:
Investment Income:
Interest and Dividends on Investments 356,782$ 301,337$
Net Appreciation in Fair Value of Investments 2,348,754 1,980,157
Total Investment Income 2,705,536 2,281,494
Less - Investment Managers' and Advisors' Fees 18,895 12,819
Net Investment Income 2,686,641 2,268,675
Contributions and Other Additions:
Employer Contributions 2,629,455 2,291,285
Employee Contributions-Rollovers 103,830 187,714
Plan Expenses Paid by Employer 66,163 60,169
Total Contributions and Other Additions 2,799,448 2,539,168
Total Additions 5,486,089 4,807,843
DEDUCTIONS FROM NET POSITION ATTRIBUTED TO:
Distributions to Participants and Beneficiaries 407,180 348,467
Administrative Expenses 69,291 64,755
Legal Fees 1,872 414
Total Deductions 478,343 413,636
NET INCREASE 5,007,746 4,394,207
NET POSITION RESTRICTED FOR PLAN BENEFITS, January 1 12,963,662 8,569,455
NET POSITION RESTRICTED FOR PLAN BENEFITS, December 31 17,971,408$ 12,963,662$
For The Years
Ended December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Page 13
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 And 2019
1. Summary of Significant Accounting Policies
The following significant accounting policies, which conform to generally accepted accounting
principles, have been used consistently in the preparation of The Metropolitan St. Louis Sewer
District Defined Contribution Plan’s (“Plan”) financial statements.
Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis of accounting and in
accordance with generally accepted accounting principles that apply to governmental
accounting for defined contribution plans. Employer contributions are recognized in the period
for which they are reported to the third-party administrator. Expenses are recognized when due
and payable. Benefit payments are recognized upon distribution.
Estimates and Assumptions
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires the Plan Administrator to make certain estimates and assumptions that affect
the reported amounts in the financial statements. Actual results could differ from those
estimates.
Investment Valuation and Income Recognition
The Plan’s investments in mutual funds are stated at fair value. Shares of registered investment
companies are valued at quoted market prices which represent the net asset value of shares held
by the Plan at year-end. Units of the Retirement Savings Trust III common/collective trust are
valued at net asset value which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis. Interest income is
accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain
distributions are included in dividend income. Realized gains of $61,473 and $18,330 were
recorded in the periods ended December 31, 2020 and 2019, respectively.
The calculation of realized gains and losses is independent of a calculation of the net change in
the fair value of investments. Realized gains and losses on investments that had been held in
more than one reporting period and sold in the current reporting period were included as a
change in the fair value of investments reported in the prior reporting period(s) and the current
reporting period.
Subsequent Events
Management has evaluated subsequent events through July 29, 2021, the date through which
the financial statements were available for issue and determined that no material subsequent
events exist.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 14
2. Description of the Plan
The following description of the Plan provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan established by the District’s Board of Trustees through
Ordinance 13180 and became effective January 1, 2011 and is a qualified plan under Section
401(a) of the Internal Revenue Code. The following regular, full-time permanent employees
are eligible to participate in the Plan: (i) employees first hired on or after January 1, 2011, and
(ii) employees hired prior to January 1, 2011 who elected to terminate participation in The
Metropolitan St. Louis Sewer District Employees’ Pension Plan, effective as of April 1, 2011,
in accordance with the provisions of such Pension Plan, and (iii) employees rehired on or after
January 1, 2011 who are not eligible to accrue benefits under The Metropolitan St. Louis Sewer
District Employees’ Pension Plan. An employee shall become a participant in the Plan on the
first day on which he performs an hour of service for the District.
The District’s Board of Trustees, primarily to improve benefits to members, amends the Plan
in all its respects. 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 intended to provide a means whereby the District may provide retirement benefits
to eligible employees and encourage such employees to establish a regular method of savings,
thereby providing a measure of financial security for such employees and their beneficiaries
upon retirement or in the event of death or disability.
All assets of the Plan are the sole property of the Plan and are not subject to the claims of
creditors of the District. The Plan Administrator issues a publicly available Summary Plan
Description. That information may be obtained by writing to The Metropolitan St. Louis Sewer
District, 2350 Market Street, St. Louis, MO 63103-2555.
Contributions
Employer Basic Contributions: For each payroll period, the District contributes an amount
equal to 7% of the covered compensation earned during such period by each participant entitled
to an allocation of such contribution.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 15
Employer Matching Contributions: For each payroll period, the District contributes an
amount equal to $0.50 of every dollar contributed by the employee to The Metropolitan St.
Louis Sewer District Deferred Compensation Plan and Trust, up to 4% of covered
compensation; thus, the maximum Employer Matching Contribution that will be credited to the
participant under the plan is equal to 2% of compensation.
In no event shall the sum of the employer contributions and employee contributions allocated
to the account of a participant for the Plan year exceed the lesser of:
(a) The amount specified in the applicable Internal Revenue Code (“Code”), as adjusted
annually for any applicable increases in the cost of living; or
(b) 100% of the participant’s compensation for such year.
The compensation limit referred to in (b) shall not apply to any contribution from medical
benefits after separation from service.
Employee Contributions: The Plan will accept a rollover of an eligible rollover distribution
from an eligible retirement plan if the Plan Administrator approves the transaction as meeting
the Plan’s rules. This is called a “Rollover Contribution” and for the years ended December 31,
2020 and 2019, $103,830 and $187,714 were eligible rollover distributions into the Plan,
respectively.
Participant Accounts
The Plan Administrator shall establish and maintain a separate individual account for each
participant (which may consist of various sub-accounts established by the Plan Administrator)
to reflect the participant’s share of contributions made and the income, loss, appreciation and
depreciation attributable to the account. The Plan Administrator shall keep accurate records of
all contributions, receipts, investment distributions and all other transactions. The amount
credited to the individual account of a participant from time to time as of the most recent
valuation date shall constitute the entire interest of the participant in the Plan.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 16
Vesting
As of any time before the normal retirement age of a participant (other than upon death or
permanent disability), the vested percentage of the amounts credited to the Participant’s
Employer Basic Contributions Account shall be determined in accordance with the following
schedule:
Months of Service Vested Percentages
Less than 12 0%
12 but less than 24 20%
24 but less than 36 40%
36 but less than 48 60%
48 but less than 60 80%
60 or more 100%
Normal Retirement Age is defined as the first day of the month coinciding with or next
following a person’s 65th birthday and completion of 60 months of continuous service. The
amount credited to the Participant’s Employer Matching Contributions Account shall be fully
vested at all times.
Investment Options
Upon enrollment in the Plan, a participant directs employer contributions in any of the
investment options available. The investment options consist of mutual funds and a
common/collective trust fund. Employer contributions may be allocated to the Vanguard
accounts, in 1% increments, as the participant directs.
Vanguard offers participants in the Plan the following investment options:
Equity option (Large Cap): Vanguard Windsor II Fund, Vanguard Institutional Index
Fund, and Vanguard U.S. Growth Fund - Investment objective is long-term capital
appreciation.
Equity Diversification option (Small/Mid Cap and International): Vanguard Small-Cap
Index Fund, Vanguard Mid-Cap Index Fund, and Vanguard International Growth Fund
- Investment objective is long-term capital appreciation.
Bond option (Fixed Income): Vanguard Total Bond Market Index Fund - Investment
objective is income stability and conservation of principal.
Balanced option (Balanced): Vanguard Balanced Index Fund - Investment objective is
income, conservation of principal and long-term growth.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 17
Stable Value option (Capital Preservation): Vanguard Retirement Savings Trust III -
Investment objective is income stability and conservation of principal.
Money Market option (Capital Preservation): Vanguard Cash Reserves Federal Money
Market Fund - Investment objective is income while maintaining safety of principal.
Target Retirement option (Target Date): Vanguard Target Retirement 2015-2065 Funds
and Vanguard Target Retirement Income Fund - Investment objective is capital
appreciation and current income consistent with its current asset allocation.
Distributions
Upon a participant’s severance from service, the amount credited to his/her individual account
shall be payable to the extent such that it is vested. The value of a participant’s vested individual
account balance shall be distributed as soon as administratively feasible. The amount payable
to a participant shall be the vested amount credited to his/her individual account as of the
valuation date immediately preceding such distribution. This amount shall be distributed in any
one or a combination of the following forms as the participant may elect:
(a) In one lump sum payment; or
(b) In annual, quarterly, or monthly installments.
Forfeited Accounts
Upon a participant’s severance from service, the unvested amount credited to his/her individual
account shall be forfeited and credited to the Employer Basic Contributions account and shall
be used to reduce future Employer Basic Contributions. If a participant is rehired before
incurring two consecutive years break in service, the amount previously forfeited will be
restored. If rehired after two consecutive years of break in service, the amounts previously
forfeited will not be restored. Forfeitures amounted to $99,854 and $34,902 for 2020 and 2019,
respectively. The balances in the account as of December 31, 2020 and 2019 were $447 and
$5,516, respectively.
Administrative Expenses
The general administrative expenses of the Plan are paid by the District. These expenses consist
of legal, consultant and accounting expenses as well as the administration of the Plan. Expenses
attributable to a participant’s choice of optional investments or optional forms of benefit
payments are charged to the respective participant’s account balance.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 18
Payment of Death Benefits
Effective February 2, 2019, the beneficiary of a participant who has a separation from service
and who either attained 75 points (combined age and term of service) or attained his/her Normal
Retirement Date, Early Retirement Date (age 55 and completion of five years of employment),
Postponed Retirement Date, or Disability Retirement Date as of the date of separation, will
receive a lump sum payment of $5,000 as long as the participant’s beneficiary is not receiving
a life insurance benefit from the District under another arrangement or program apart from this
Plan.
Retiree Medical Coverage
Effective February 2, 2019, the District will provide the same individual medical coverage as
active employees if a participant separates from service after attaining 75 points (combined age
and term of service) or retires after attaining age 62 and completion of five years of
employment. If the participant was receiving any kind of dependent coverage, such as children
or spousal coverage, the participant shall pay the additional cost of such dependent coverage
and the District will not be liable for the additional cost. The coverage will continue until the
participant becomes eligible for Medicare under Title XVIII of the United States Code, dies, or
becomes eligible under another group medical plan, whichever first occurs. The District retains
the right to amend this policy to require participant contributions, or to otherwise amend or
terminate this policy at any time in any manner with respect to some or all retirees.
Change in Funds
Effective September 2020, the Vanguard Prime Money Market Fund was renamed to Vanguard
Cash Reserves Federal Money Market Fund. The share class was closed to new investors and
the expense ratio remained the same. The underlying investment portfolio changed to a
government money market fund with an almost exclusive investment strategy in cash, U.S.
government securities, and repurchase agreements that are collateralized solely by U.S.
government securities or cash.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 19
3. Investments
Investment Balances
Investments held by custodians in the Plan’s name are as follows:
* Represents 5% or more of the Plan’s net position as of December 31, 2020 or 2019, respectively.
Mutual Funds:2020 2019
Vanguard Group, Inc.
Institutional Target Retirement 2045 3,167,994$ * 2,504,089$ *
Institutional Target Retirement 2050 2,249,758 * 1,533,098 *
Institutional Target Retirement 2040 1,877,666 * 1,431,787 *
Institutional Target Retirement 2035 1,783,933 * 1,413,278 *
Institutional Target Retirement 2055 1,353,140 * 923,397 *
Institutional Index Fund 1,143,266 * 842,373 *
Institutional Target Retirement 2025 999,578 * 787,928 *
International Growth Fund Admiral 943,056 * 467,737
Institutional Target Retirement 2030 880,557 671,725 *
Institutional Target Retirement 2060 593,996 387,234
Mid-Cap Index Fund Admiral 590,595 433,906
Small-Cap Index Fund Admiral 404,104 267,279
U.S. Growth Fund Admiral 381,116 219,186
Total Bond Market Index Fund Admiral 372,372 203,885
Balanced Index Fund Institutional 287,952 243,814
Windsor II Fund Admiral 235,742 186,997
Institutional Target Retirement 2020 192,003 163,341
Cash Reserves Federal Money Market Fund 166,936 142,181
Institutional Target Retirement Income 71,365 47,576
Institutional Target Retirement 2065 39,792 13,306
Institutional Target Retirement 2015 9,079 7,179
Total Mutual Funds 17,744,000 12,891,296
Common/Collective Trust:
Vanguard Group, Inc.
Retirement Savings Trust III 227,408 72,366
Total Investments 17,971,408$ 12,963,662$
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 20
Categories of Asset Risk - Debt Securities Interest Rate and Credit Risk
The Plan will minimize the risk that the market value of securities in the portfolio will fall due
to changes in general interest rates by selecting mutual funds for the investment portfolio that
manage credit quality and duration of fixed income investments.
The Plan will minimize credit risk, the risk of loss due to failure of the security issuer or backer,
by selecting mutual funds for the investment portfolio that manage their respective fund under
a predetermined average credit risk investment management policy.
The following tables provide information on the duration and credit ratings associated with the
Plan’s investments with debt securities, including obligations of the U.S. Government or
obligations explicitly guaranteed by the U.S. Government within these funds at December 31,
2020 and 2019:
Average
Effective
Plan Investments Fair Percentage Duration Credit
With Debt Securities Value of Debt in Years Rating
December 31, 2020:
Vanguard Group, Inc.
Institutional Target Retirement 2045 3,167,994$ 10% 7.17 A
Institutional Target Retirement 2050 2,249,758 9% 7.20 A
Institutional Target Retirement 2040 1,877,666 17% 7.16 A
Institutional Target Retirement 2035 1,783,933 25% 7.17 A
Institutional Target Retirement 2055 1,353,140 9% 7.18 A
Institutional Target Retirement 2025 999,578 40% 7.07 A
Institutional Target Retirement 2030 880,557 32% 7.17 A
Institutional Target Retirement 2060 593,996 9% 7.13 A
Total Bond Market Index Fund Admiral 372,372 99% 6.67 A
Balanced Index Fund Institutiona l 287,952 38% 6.67 A
Retirement Savings Trust III 227,408 94% 3.10 *
Institutional Target Retirement 2020 192,003 50% 6.42 A
Cash Reserves Federal Money Market Fund 166,936 41% * *
Institutional Target Retirement Income 71,365 68% 6.09 AA
Institutional Target Retirement 2065 39,792 10% 7.14 A
Institutional Target Retirement 2015 9,079 64% 6.15 AA
* Information is unavailable for this security.
The average effective duration only applies to the debt portion of the investment.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 21
4. Fair Value Measurement and Application
The Plan has the following fair value measurements as of December 31, 2020 and 2019:
Mutual fund investments of $17,744,000 and $12,891,296, respectively, are valued
using quoted market prices (Level 1 inputs).
Common/Collective trust investments of $227,408 and $72,366, respectively, are
valued at net asset value which approximates fair value.
5. Risks and Uncertainties
The Plan invests in various investment securities as directed by the Plan’s participants.
Investment securities are exposed to various risks such as interest rate, market, and credit risk.
Due to the level of risk associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in the near term and that
such change could materially affect the participants’ account balances and amounts reported in
the Plan’s Statements of Fiduciary Net Position.
Average
Effective
Plan Investments Fair Percentage Duration Credit
With Debt Securities Value of Debt in Years Rating
December 31, 2019:
Vanguard Group, Inc.
Institutional Target Retirement 2045 2,504,089$ 10% 6.84 A
Institutional Target Retirement 2050 1,533,098 10% 6.85 A
Institutional Target Retirement 2040 1,431,787 17% 6.87 A
Institutional Target Retirement 2035 1,413,278 23% 6.85 A
Institutional Target Retirement 2055 923,397 10% 6.84 A
Institutional Target Retirement 2025 787,928 38% 6.85 A
Institutional Target Retirement 2030 671,725 31% 6.87 A
Institutional Target Retirement 2060 387,234 10% 6.84 A
Balanced Index Fund Institutiona l 243,814 39% 6.26 AA
Total Bond Market Index Fund Admiral 203,885 97% 6.26 AA
Institutional Target Retirement 2020 163,341 47% 6.20 A
Prime Money Market Fund 142,181 8% * *
Retirement Savings Trust III 72,366 89% 3.10 *
Institutional Target Retirement Income 47,576 67% 5.82 AA
Institutional Target Retirement 2065 13,306 10% 6.87 A
Institutional Target Retirement 2015 7,179 61% 5.90 AA
* Information is unavailable for this security.
The average effective duration only applies to the debt portion of the investment.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 22
6. Plan Termination
Although it has not expressed any intent to do so, the District has the right under the Plan to
terminate the Plan at any time. In the event of Plan termination, the Trustee shall liquidate the
assets and disburse all funds to participants or their beneficiaries.
7. Related Party Transactions
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard Fiduciary Trust
Company (“VFTC”). VFTC acts as trustee for only those investments as defined by the Plan.
8. Tax Status
The Plan received a favorable determination letter from the Internal Revenue Service (“IRS”)
on May 21, 2014, in which the IRS stated that the Plan, as then designed, was in compliance
with the applicable requirements of the Code.
SUPPLEMENTAL INFORMATION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
See the accompanying independent auditors’ report. Page 23
HISTORICAL TREND INFORMATION
Employer
Contributions, Distributions To
For The Rollovers, And Participants
Years Ended Expenses Paid Net Investment And Plan Increase
December 31, By Employer Income (Loss) Expenses In Net Position
2020 2,799,448$ 2,686,641$ (478,343)$ 5,007,746$
2019 2,539,168 2,268,675 (413,636) 4,394,207
2018 1,958,418 (630,768) (202,320) 1,125,330
2017 1,644,620 1,094,223 (233,608) 2,505,235
2016 1,298,838 360,826 (224,325) 1,435,339
2015 1,204,333 (41,012) (106,835) 1,056,486
2014 907,020 134,513 (98,732) 942,801
2013 678,967 204,824 (27,154) 856,637
2012 420,158 44,390 (20,642) 443,906
2011 239,482 (5,193) (30,568) 203,721
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
See the accompanying independent auditors’ report. Page 24
FUND VALUES AND EXPENSE RATIOS
This asset-based fee is a measure of what it costs an investment company to operate a mutual fund. An
expense ratio is determined through an annual calculation, where a fund's operating expenses are divided
by the average dollar value of its assets under management. Operating expenses are taken out of a fund's
assets, lowering the return in the fund. Lower expense ratios reduce fees coming out of a fund, thus
increasing the fund’s rate of return to the participant. The listing below shows all funds and their asset
value with their corresponding expense ratio.
Value at
December 31,
Fund Name 2020
Vanguard Group, Inc.
Institutional Target Retirement 2045 3,167,994$ 0.09 %
Institutional Target Retirement 2050 2,249,758 0.09
Institutional Target Retirement 2040 1,877,666 0.09
Institutional Target Retirement 2035 1,783,933 0.09
Institutional Target Retirement 2055 1,353,140 0.09
Institutional Index Fund 1,143,266 0.04
Institutional Target Retirement 2025 999,578 0.09
International Growth Fund Admiral 943,056 0.33
Institutional Target Retirement 2030 880,557 0.09
Institutional Target Retirement 2060 593,996 0.09
Mid-Cap Index Fund Admiral 590,595 0.05
Small-Cap Index Fund Admiral 404,104 0.05
U.S. Growth Fund Admiral 381,116 0.28
Total Bond Market Index Fund Admiral 372,372 0.05
Balanced Index Fund Institutional 287,952 0.06
Windsor II Fund Admiral 235,742 0.26
Retirement Savings Trust III 227,408 0.30
Institutional Target Retirement 2020 192,003 0.09
Cash Reserves Federal Money Market Fund 166,936 0.16
Institutional Target Retirement Income 71,365 0.09
Institutional Target Retirement 2065 39,792 0.09
Institutional Target Retirement 2015 9,079 0.09
Vanguard Total/Average Ratio 17,971,408$ 0.12 %
Expense
Ratio