HomeMy Public PortalAboutDeferred Comp Plan 2020 Audited Financial Statements
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
DEFERRED COMPENSATION PLAN
AND TRUST
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 - 21
Supplemental Information
Historical Trend Information ....................................................................................... 22
Investment Returns And Expense Ratios .............................................................. 23 - 24
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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
Deferred Compensation Plan and Trust (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 10 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, 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 investment returns 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
DEFERRED COMPENSATION PLAN AND TRUST
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”) Deferred Compensation Plan and Trust (“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, net position restricted for plan benefits is approximately $93.6M. The net position
value increased by approximately $16.9M from that of December 31, 2019, due to an increase in the
overall value of equity investments that resulted primarily from an increase in market values.
Contributions from participants are approximately $4.8M, which is an increase of $0.1M as compared
with prior year contributions.
Distributions to participants and beneficiaries are approximately $3.6M, which is a decrease of $0.3M
compared with prior year distributions.
The increase in the fair value of investments in 2020 is approximately $13.1M whereas the fair value of
investments increased approximately $11.9M in 2019.
FINANCIAL HIGHLIGHTS 2019
At December 31, net position restricted for plan benefits was approximately $76.6M. The net position
value increased by approximately $15.2M from that of December 31, 2018, due to an increase in the
overall value of equity investments that resulted from an increase in market values and an increase in
participant contributions.
Contributions from participants were approximately $4.7M, which was an increase of $0.3M as
compared with prior year contributions.
Distributions to participants and beneficiaries were approximately $3.9M, which was a decrease of
$0.1M compared with prior year distributions.
The increase in the fair value of investments in 2019 was approximately $11.9M whereas the fair
value of investments decreased approximately $5.5M in 2018.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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 $93.6M, an increase of approximately
$16.9M over net position as of December 31, 2019.
2019 Analysis
The Plan’s net position as of December 31, 2019, totaled approximately $76.6M, an increase of approximately
$15.2M over net position as of December 31, 2018.
Increase Increase
December 31,December 31,(Decrease)December 31,(Decrease)
2020 2019 2020-2019 2018 2019-2018
ASSETS
Investments at Fair Value 91,868,162$ 74,640,936$ 17,227,226$ 59,659,559$ 14,981,377$
Investments at Contract Value 275,726 569,885 (294,159) 480,233 89,652
Other Assets 1,424,667 1,410,022 14,645 1,306,563 103,459
Total Assets 93,568,555 76,620,843 16,947,712 61,446,355 15,174,488
NET POSITION RESTRICTED
FOR PLAN BENEFITS 93,568,555$ 76,620,843$ 16,947,712$ 61,446,355$ 15,174,488$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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 $4.7M to $4.8M or an increase of $0.1M. The
Plan recognized a net investment income increase of $1.4M 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 $3.6M, a decrease of $0.3M 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 $4.4M to $4.7M or an increase of $0.3M. The
Plan recognized a net investment income increase of $17.4M 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 $3.9M, a decrease of $0.1M over calendar year 2018.
For the Year For the Year For the Year
Ended Ended Increase Ended Increase
December 31, December 31, (Decrease) December 31, (Decrease)
2020 2019 2020-2019 2018 2019-2018
ADDITIONS
Net Investment Income (Loss) 15,721,305$ 14,299,022$ 1,422,283$ (3,062,767)$ 17,361,789$
Contributions and Other Additions 4,922,954 4,847,170 75,784 4,527,030 320,140
Total Additions 20,644,259 19,146,192 1,498,067 1,464,263 17,681,929
DEDUCTIONS
Distributions to Participants 3,566,103 3,845,540 (279,437) 3,955,843 (110,303)
Administrative Expenses and Legal Fees 130,444 126,164 4,280 129,348 (3,184)
Total Deductions 3,696,547 3,971,704 (275,157) 4,085,191 (113,487)
NET INCREASE 16,947,712 15,174,488 1,773,224 (2,620,928) 17,795,416
FIDUCIARY NET POSITION
BEGINNING OF YEAR 76,620,843 61,446,355 15,174,488 64,067,283 (2,620,928)
FIDUCIARY NET POSITION
END OF YEAR 93,568,555$ 76,620,843$ 16,947,712$ 61,446,355$ 15,174,488$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 6
For calendar year 2020, the Plan showed a net gain of $17,093,142 when compared to original costs. The U.S.
Growth Fund Admiral had the greatest gain in value for any one individual fund at $3,566,540.
Value at
December 31, Net % of Current
Fund Name Cost 2020 Gain/(Loss) Value
Vanguard Group, Inc.
U.S. Growth Fund Admiral 6,411,817$ 9,978,357$ 3,566,540$ 10.85 %
Institutional Index Fund 10,310,356 13,425,977 3,115,621 14.61
International Growth Fund Admiral 4,493,870 7,071,211 2,577,341 7.70
Balanced Index Fund Institutional 5,703,040 6,967,860 1,264,820 7.58
Mid-Cap Index Fund Admiral 4,130,209 5,289,881 1,159,672 5.76
Institutional Target Retirement 2025 5,088,394 5,917,651 829,257 6.44
Small-Cap Index Fund Admiral 2,892,095 3,635,293 743,198 3.96
Windsor II Fund Admiral 9,497,382 10,073,877 576,495 10.97
Institutional Target Retirement 2035 2,450,901 2,975,068 524,167 3.24
Institutional Target Retirement 2045 2,247,756 2,746,845 499,089 2.99
Institutional Target Retirement 2030 2,344,218 2,808,433 464,215 3.06
Institutional Target Retirement 2020 2,887,051 3,276,110 389,059 3.57
Institutional Target Retirement 2040 1,737,753 2,108,933 371,180 2.30
Total Bond Market Index Fund Admiral 4,296,150 4,622,795 326,645 5.03
Institutional Target Retirement 2050 1,341,238 1,636,632 295,394 1.78
Institutional Target Retirement Income 1,033,555 1,153,605 120,050 1.26
Institutional Target Retirement 2015 1,113,419 1,222,287 108,868 1.33
Institutional Target Retirement 2055 431,889 523,071 91,182 0.57
Institutional Target Retirement 2060 311,550 377,070 65,520 0.41
Institutional Target Retirement 2065 26,938 31,767 4,829 0.03
Retirement Savings Trust III 3,405,300 3,405,300 — 3.71
Cash Reserves Federal Money Market Fund 2,620,139 2,620,139 — 2.85
Totals 74,775,020$ 91,868,162$ 17,093,142$ 100.00 %
Change in Fund Asset Values - 2020
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 7
For calendar year 2019, the Plan showed a net gain of $5,105,198 when compared to original costs. The
Institutional Index Fund had the greatest gain in value for any one individual fund at $1,590,460.
Value at
December 31, Net % of Current
Fund Name Cost 2019 Gain/(Loss) Value
Vanguard Group, Inc.
Institutional Index Fund 9,919,436$ 11,509,902$ 1,590,466$ 15.43 %
Balanced Index Fund Institutional 4,449,967 4,973,004 523,037 6.66
U.S. Growth Fund Admiral 6,153,550 6,637,616 484,066 8.89
Mid-Cap Index Fund Admiral 3,816,233 4,290,243 474,010 5.75
Institutional Target Retirement 2025 4,918,308 5,273,622 355,314 7.07
International Growth Fund Admiral 4,044,955 4,305,103 260,148 5.77
Small-Cap Index Fund Admiral 3,138,141 3,340,023 201,882 4.47
Institutional Target Retirement 2030 2,222,360 2,411,260 188,900 3.23
Total Bond Market Index Fund Admiral 3,672,171 3,858,244 186,073 5.17
Institutional Target Retirement 2035 2,249,724 2,433,938 184,214 3.26
Institutional Target Retirement 2045 1,900,350 2,064,819 164,469 2.77
Institutional Target Retirement 2020 2,415,992 2,575,867 159,875 3.45
Institutional Target Retirement 2040 1,519,532 1,644,626 125,094 2.20
Institutional Target Retirement 2050 1,095,633 1,192,855 97,222 1.60
Institutional Target Retirement Income 972,254 1,026,226 53,972 1.37
Institutional Target Retirement 2015 989,336 1,035,303 45,967 1.39
Institutional Target Retirement 2055 295,845 321,946 26,101 0.43
Institutional Target Retirement 2060 221,653 240,830 19,177 0.32
Institutional Target Retirement 2065 9,571 10,351 780 0.01
Prime Money Market Fund 3,086,143 3,086,143 — 4.13
Retirement Savings Trust III 2,998,100 2,998,100 — 4.02
Windsor II Fund Admiral 9,446,484 9,410,915 (35,569) 12.61
Totals 69,535,738$ 74,640,936$ 5,105,198$ 100.00 %
Change in Fund Asset Values - 2019
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 8
For calendar year 2018, the Plan showed a net loss of $6,370,983 when compared to original costs. The Windsor
II Fund Admiral had the greatest loss in value for any one individual fund at $1,407,830.
Value at
December 31, Net % of Current
Fund Name Cost 2018 Gain/(Loss) Value
Vanguard Group, Inc.
Total Bond Market Index Fund Admiral 3,196,027$ 3,205,088$ 9,061$ 5.38 %
Prime Money Market Fund 1,851,932 1,851,932 — 3.10
Retirement Savings Trust III 3,274,298 3,274,298 — 5.49
Institutional Target Retirement 2065 1,986 1,829 (157) 0.00
Institutional Target Retirement 2060 141,698 127,586 (14,112) 0.21
Institutional Target Retirement 2055 225,691 203,139 (22,552) 0.34
Institutional Target Retirement Income 1,005,641 969,751 (35,890) 1.63
Institutional Target Retirement 2015 1,005,781 953,613 (52,168) 1.60
Institutional Target Retirement 2050 974,510 877,811 (96,699) 1.47
Institutional Target Retirement 2040 1,319,281 1,192,473 (126,808) 2.00
Institutional Target Retirement 2045 1,590,832 1,425,147 (165,685) 2.39
Institutional Target Retirement 2030 2,074,813 1,904,867 (169,946) 3.19
Institutional Target Retirement 2035 1,993,397 1,815,949 (177,448) 3.04
Institutional Target Retirement 2020 2,740,233 2,561,246 (178,987) 4.29
Balanced Index Fund Institutional 4,965,076 4,700,254 (264,822) 7.88
Institutional Target Retirement 2025 4,995,127 4,632,195 (362,932) 7.76
Mid-Cap Index Fund Admiral 3,615,669 3,170,722 (444,947) 5.31
Small-Cap Index Fund Admiral 2,951,415 2,504,098 (447,317) 4.20
International Growth Fund Admiral 3,432,155 2,769,033 (663,122) 4.64
Institutional Index Fund 9,038,185 8,296,932 (741,253) 13.91
U.S. Growth Fund Admiral 6,358,903 5,351,534 (1,007,369) 8.97
Windsor II Fund Admiral 9,277,892 7,870,062 (1,407,830) 13.20
Totals 66,030,542$ 59,659,559$ (6,370,983)$ 100.00 %
Change in Fund Asset Values - 2018
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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
primarily 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
DEFERRED COMPENSATION PLAN AND TRUST
Management’s Discussion And Analysis (Continued)
Page 10
PARTICIPANT CENSUS
Employee participation in the Plan is on a voluntary basis. Plan participants are comprised of active employees
of the District, retirees or surviving spouses, and terminated employees with account balances. Active employee
participants are as follows:
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
Email: tsnoke@stlmsd.com
Number Of Active
December 31,Participants
2020 813
2019 810
2018 773
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying Notes To Financial Statements. Page 11
STATEMENTS OF FIDUCIARY NET POSITION
2020 2019
ASSETS
Investments at Fair Value:
Mutual Funds 88,462,862$ 71,642,836$
Common/Collective Trust 3,405,300 2,998,100
Total Investments at Fair Value 91,868,162 74,640,936
Investments at Contract Value:
Annuity Contracts 275,726 569,885
Total Investments 92,143,888 75,210,821
Notes Receivable from Participants 1,424,667 1,410,022
NET POSITION RESTRICTED FOR PLAN BENEFITS 93,568,555$ 76,620,843$
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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 2,666,058$ 2,459,094$
Interest Income on Participant Loans 79,355 75,083
Net Appreciation in Fair Value of Investments 13,111,324 11,871,937
Total Investment Income 15,856,737 14,406,114
Less: Investment Expenses 135,432 107,092
Net Investment Income 15,721,305 14,299,022
Contributions and Other Additions:
Emplo yee Contributions 4,675,593 4,681,167
Emplo yee Contributions - Rollovers 115,752 39,839
Change in Cost Due to Prior Period Adjustments 1,165 —
Plan Expenses Paid by Emplo yer 130,444 126,164
Total Contributions and Other Additions 4,922,954 4,847,170
Total Additions 20,644,259 19,146,192
DEDUCTIONS FROM NET POSITION ATTRIBUTED TO:
Distributions to Participants and Beneficiaries 3,566,103 3,845,540
Administrative Expenses 128,500 125,900
Legal Fees 1,944 264
Total Deductions 3,696,547 3,971,704
NET INCREASE 16,947,712 15,174,488
NET POSITION RESTRICTED FOR BENEFITS, January 1 76,620,843 61,446,355
NET POSITION RESTRICTED FOR BENEFITS, December 31 93,568,555$ 76,620,843$
Ended December 31,
For the Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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
Deferred Compensation Plan and Trust’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 deferred
compensation plans. Employer and employee 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. Investments in the annuity contracts are valued at contract
value, as reported by the investment carriers. The investment valuation includes contributions received,
plus investment income earned to date less applicable charges and amounts withdrawn.
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 $992,241 and $201,412 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.
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance. The interest amount
is determined when the loan is taken and then disbursed across each payment. Delinquent notes
receivable from a participant are reclassified as distributions based upon the terms of the Plan document.
Subsequent Events
Management has evaluated subsequent events through July 29, 2021, the date the financial statements
were available for issue and determined that no material subsequent events exist.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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 covering substantially all employees of the District beginning
on the first day of employment. The District’s Board of Trustees established the Plan in January 1976
through Ordinance No. 2971. Plan provisions are established and may be amended by the District’s
Board of Trustees. The District does not contribute to the Plan except where mandated by the Internal
Revenue Service to compensate participants for lost deferral contributions.
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
Under the Plan provisions, employees of the District are eligible to contribute up to 100% of their total
compensation into the Plan, through payroll deferral, or any amount not previously reduced or withheld
from their total compensation. In accordance with Internal Revenue Code Section 457, as amended, the
Plan limits an individual’s annual contribution (adjusted annually) to $19,500 and $19,000 for the years
ended December 31, 2020 and 2019, respectively. If the employee is 50 or older, there is a special
option which allows the employee to contribute an additional “catch-up” contribution of up to $6,500
and $6,000 for the years ended December 31, 2020 and 2019, respectively.
Another special option is a one-time 457(b) “catch-up” contribution of two times the standard annual
deferral, less amounts already deferred under the Plan, which is allowed in one of the last three calendar
years before the employee reaches Normal Retirement Age. 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. Employees are not permitted to take advantage of both special options
in the same year.
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, $115,752 and $39,839 were eligible
rollover distributions into the Plan, respectively.
Amounts contributed by employees are deferred for federal and state income tax purposes until received
as a withdrawal or distribution from the Plan.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and allocations of Plan
earnings. Allocations are based on participants’ account balances, as defined. There are no forfeitures
applicable to the Plan. Participants’ contributions are immediately fully vested.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 15
At December 31, 2020 and 2019, 813 and 810 participants, respectively, actively participated
in the Plan.
Notes Receivable from Participants
Participants may borrow from their account a minimum of $1,000 up to a maximum equal to the lesser
of $50,000 or 50% of their vested account balance. If the participant also participates in the Metropolitan
St. Louis Sewer District Defined Contribution Plan, borrowing from the vested account balance is
generally limited to 50% of the available balance in excess of 4% of the participant’s compensation.
Participants may only apply for a loan once during each Plan Year and may only have two outstanding
loans from the Plan at any time. Loans may not extend beyond a term of five years except for the
purchase of a principal residence for which the term is thirty years. Loans are secured by the balance of
the participant’s account and bear interest at the prime interest rate plus 1%. Interest rates on current
loans range from 4.25% to 9.25% and the rate is fixed during the term of the loan. Current loans are
due at varying dates through November 2046. Principal and interest are paid ratably through payroll
deductions.
Investment Options
Upon enrollment in the Plan, a participant directs elective contributions and rollovers in any of the
investment options available. The investment options consist of mutual funds and a common/collective
trust fund. Employee contributions may be allocated to the Vanguard accounts only, in 1% increments,
as the participant directs. No new contributions are currently allowed to the Lincoln National annuity
contract accounts.
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.
Stable Value option (Capital Preservation): Vanguard Retirement Savings Trust III - Investment
objective is income stability and conservation of principal.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 16
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
Participants contributing to the Plan may receive benefits or withdraw the present value of funds
contributed to the Plan upon retirement, disability, or termination of employment from the District or
due to financial hardship as defined by the Plan, if approved by the Plan Administrator.
Participants may select various payout options including lump sum or equal annual payments over
various periods. Participants may also elect to have the value of the account converted into fixed or
variable annuity contracts. All investments, including annuity contracts, remain assets of the Plan until
payments are made to the participants.
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.
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
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 17
3. Investments
Investment Balances
Investments held by custodians in the Plan’s name are as follows:
2020 2019
Mutual Funds:
Vanguard Group, Inc.
Institutional Index Fund 13,425,977$ * 11,509,902$ *
Windsor II Fund Admiral 10,073,877 * 9,410,915 *
U.S. Growth Fund Admiral 9,978,357 * 6,637,616 *
International Growth Fund Admiral 7,071,211 * 4,305,103 *
Balanced Index Fund Institutional 6,967,860 * 4,973,004 *
Institutional Target Retirement 2025 5,917,651 * 5,273,622 *
Mid-Cap Index Fund Admiral 5,289,881 * 4,290,243 *
Total Bond Market Index Fund Admiral 4,622,795 3,858,244 *
Small-Cap Index Fund Admiral 3,635,293 3,340,023
Institutional Target Retirement 2020 3,276,110 2,575,867
Institutional Target Retirement 2035 2,975,068 2,433,938
Institutional Target Retirement 2030 2,808,433 2,411,260
Institutional Target Retirement 2045 2,746,845 2,064,819
Cash Reserves Federal Money Market Fund 2,620,139 3,086,143
Institutional Target Retirement 2040 2,108,933 1,644,626
Institutional Target Retirement 2050 1,636,632 1,192,855
Institutional Target Retirement 2015 1,222,287 1,035,303
Institutional Target Retirement Income 1,153,605 1,026,226
Institutional Target Retirement 2055 523,071 321,946
Institutional Target Retirement 2060 377,070 240,830
Institutional Target Retirement 2065 31,767 10,351
Total Mutual Funds 88,462,862 71,642,836
Common/Collective Trust:
Vanguard Group, Inc.
Retirement Savings Trust III 3,405,300 2,998,100
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 18
* Represents 5% or more of the Plan’s net position at December 31, 2020 or 2019, respectively.
Certain participants are invested in a series of fixed and variable rate annuity contracts sponsored by
Lincoln National Life Insurance Company and these assets are valued at $275,726 and $569,885 at
December 31, 2020 and 2019, respectively. The Lincoln National Life option was phased out in 1992,
and any balances represent undistributed participant balances. This option is no longer available to new
participants or for current deferrals.
Categories of Asset Risk - Debt Securities Interest Rate and Credit Risk
The Plan will minimize the risk that the market value of securities in the portfolio will fall due to changes
in general interest rates by selecting mutual funds for the investment portfolio that manage credit quality
and duration of fixed income investments.
The Plan will minimize credit risk, the risk of loss due to failure of the security issuer or backer, by
selecting mutual funds for the investment portfolio that manage their respective fund under a
predetermined average credit risk investment management policy.
The following tables provide information on the duration and credit ratings associated with the Plan’s
investments with debt securities, including obligations of the U.S. Government or obligations explicitly
guaranteed by the U.S. Government within these funds at December 31, 2020 and 2019:
2020 2019
Annuity Contracts:
Lincoln National Life
Fixed Earnings Option:
Fixed Account 164,605 182,406
Variable Earnings Option:
Growth & Income Fund 111,121 207,698
Special Opportunity Fund — 179,781
Total Annuity Contracts 275,726 569,885
Total Investments 92,143,888$ 75,210,821$
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 19
Average
Effective
Fair Percentage Duration Credit
Value of Debt In Years Rating
Balanced Index Fund Institutional 6,967,860$ 38% 6.67 A
Institutional Target Retirement 2025 5,917,651 40% 7.07 A
Total Bond Market Index Fund Admiral 4,622,795 99% 6.67 A
Retirement Savings Trust III 3,405,300 94% 3.10 *
Institutional Target Retirement 2020 3,276,110 50% 6.42 A
Institutional Target Retirement 2035 2,975,068 25% 7.17 A
Institutional Target Retirement 2030 2,808,433 32% 7.17 A
Institutional Target Retirement 2045 2,746,845 10% 7.17 A
Cash Reserves Federal Money Market Fund 2,620,139 41% * *
Institutional Target Retirement 2040 2,108,933 17% 7.16 A
Institutional Target Retirement 2050 1,636,632 9% 7.20 A
Institutional Target Retirement 2015 1,222,287 64% 6.15 A
Institutional Target Retirement Income 1,153,605 68% 6.09 AA
Institutional Target Retirement 2055 523,071 9% 7.18 A
Institutional Target Retirement 2060 377,070 9% 7.13 A
Institutional Target Retirement 2065 31,767 10% 7.14 A
Fixed (Annuity Contracts)164,605 ***
* Information is unavailable for this security.
The average effective duration only applies to the debt portion of the investment.
Credit Quality Percentage of Total Plan Investments-2020
Lincoln National Life
Plan Investments
With Debt Securities
December 31, 2020:
Vanguard Group, Inc.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
Notes To Financial Statements (Continued)
Page 20
Average
Effective
Fair Percentage Duration Credit
Value of Debt In Years Rating
Institutional Target Retirement 2025 5,273,622$ 38% 6.85 A
Balanced Index Fund Institutional 4,973,004 39% 6.26 AA
Total Bond Market Index Fund Admiral 3,858,244 97% 6.26 AA
Cash Reserves Federal Money Market Fund 3,086,143 8% * *
Retirement Savings Trust III 2,998,100 89% 3.10 *
Institutional Target Retirement 2020 2,575,867 47% 6.20 A
Institutional Target Retirement 2035 2,433,938 23% 6.85 A
Institutional Target Retirement 2030 2,411,260 31% 6.87 A
Institutional Target Retirement 2045 2,064,819 10% 6.84 A
Institutional Target Retirement 2040 1,644,626 17% 6.87 A
Institutional Target Retirement 2050 1,192,855 10% 6.85 A
Institutional Target Retirement 2015 1,035,303 61% 5.90 AA
Institutional Target Retirement Income 1,026,226 67% 5.82 AA
Institutional Target Retirement 2055 321,946 10% 6.84 A
Institutional Target Retirement 2060 240,830 10% 6.84 A
Institutional Target Retirement 2065 10,351 10% 6.87 A
Fixed (Annuity Contracts)182,406 ***
* Information is unavailable for this security.
The average effective duration only applies to the debt portion of the investment.
Lincoln National Life
Credit Quality Percentage of Total Plan Investments-2019
Plan Investments
With Debt Securities
December 31, 2019:
Vanguard Group, Inc.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
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 $88,462,862 and $71,642,836, respectively, are valued using quoted
market prices (Level 1 inputs).
Common Collective Trust investments of $3,405,300 and $2,998,100, respectively, are valued
at net asset value which approximates fair value.
5. Risks and Uncertainties
The Plan invests in various investment securities as directed by the Plan’s participants. Investment
securities are exposed to various risks such as interest rate, market, and credit risk. Due to the level of
risk associated with certain investment securities, it is at least reasonably possible that changes in the
values of investment securities will occur in the near term and that such change could materially affect
the participants’ account balances and amounts reported in the Plan’s Statements of Fiduciary Net
Position.
6. Plan Termination
Although it has not expressed any intent to do so, the District has the right under the Plan to terminate
the Plan at any time. In the event of Plan termination, participants would remain 100% vested in their
accounts.
7. Related Party Transactions
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard Fiduciary Trust
Company (“VFTC”). VFTC acts as trustee for only those investments as defined by the Plan.
8. Tax Status
The Plan received a favorable determination letter from the Internal Revenue Service (“IRS”) on
June 23, 1999, indicating the Plan and its underlying Trust are qualified under Section 457 of the Internal
Revenue Code. Although the Plan has been amended since receiving the determination letter, the Plan
Administrator believes that the Plan is currently designed and is being operated in compliance with
applicable requirements of the IRS.
SUPPLEMENTAL INFORMATION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying independent auditors’ report. Page 22
HISTORICAL TREND INFORMATION
Employee
And Employer Distributions
For The Contributions And To Participants Increase
Years Ended Expenses Paid Net Investment And Plan (Decrease)
December 31, By Employer Income (Loss) Expenses In Net Position
2020 4,922,954$ 15,721,305$ (3,696,547)$ 16,947,712$
2019 4,847,170 14,299,022 (3,971,704) 15,174,488
2018 4,527,030 (3,062,767) (4,085,191) (2,620,928)
2017 4,021,256 9,235,115 (4,136,198) 9,120,173
2016 3,962,177 3,944,851 (2,991,735) 4,915,293
2015 3,584,552 17,327 (2,499,216) 1,102,663
2014 3,227,393 3,677,147 (3,977,801) 2,926,739
2013 3,163,343 7,863,858 (3,298,602) 7,728,599
2012 2,969,056 4,056,818 (2,725,147) 4,300,727
2011 2,723,859 238,167 (1,886,224) 1,075,802
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying independent auditors’ report. Page 23
INVESTMENT RETURNS AND EXPENSE RATIOS
An independent investment consultant, Aon Investments USA Inc., monitored investment performance of the
various options offered to the participants. Performance of the funds are measured net of the corresponding
expense ratios. Below is a table that reflects the funds available for employees to invest and their one-year
performance for the years 2020 and 2019 as compared to the appropriate benchmarks, as well as their current
expense ratios:
*The expense ratios reported as of December 31 of the respective year.
Funds / Benchmarks Expense Ratios % 2020*2019*
Vanguard Cash Reserves Federal Money Market Fund 0.5 2.2
ICE BofAML 3 Month U.S. T-Bill 0.7 2.3
Vanguard Retirement Savings Trust III 2.2 2.5
ICE BofAML 3 Month U.S. T-Bill 0.7 2.3
Vanguard Total Bond Market Index Admiral 7.7 8.7
Vanguard Splc Blmbg. Barc. US Agg Flt Adj 7.7 8.9
Vanguard Balanced Index Institutional 16.4 21.8
Vanguard Balanced Composite Index 17.3 21.9
Vanguard Windsor II Admiral 14.5 29.2
Russell 1000 Value Index 2.8 26.5
Vanguard Institutional Index 18.4 31.5
Standard & Poor’s 500 Index 18.4 31.5
Vanguard U.S. Growth Admiral 58.7 33.5
Russell 1000 Growth Index 38.5 36.4
Vanguard Mid-Cap Index Admiral 18.2 31.0
Vanguard Spliced Mid Cap Index 18.2 31.1
Vanguard Small-Cap Index Admiral 19.1 27.4
Vanguard Spliced Small Cap Index 19.1 27.3
Vanguard International Growth Admiral 59.8 31.5
Vanguard Spliced International Index 10.7 21.5
0.05
0.05
0.33
0.28
0.04
Returns Net of Fees
0.05
0.06
0.26
0.16
0.30
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFERRED COMPENSATION PLAN AND TRUST
See the accompanying independent auditors’ report. Page 24
INVESTMENT RETURNS AND EXPENSE RATIOS (Continued)
*The expense ratios reported as of December 31 of the respective year.
Funds / Benchmarks Expense Ratios % 2020*2019*
Vanguard Institutional Target Retirement Income 10.2 13.2
Vanguard Target Income Composite Index 10.7 13.4
Vanguard Institutional Target Retirement 2015 10.4 14.9
Vanguard Target 2015 Composite Index 11.1 15.1
Vanguard Institutional Target Retirement 2020 12.1 17.7
Vanguard Target 2020 Composite Index 12.8 17.9
Vanguard Institutional Target Retirement 2025 13.3 19.7
Vanguard Target 2025 Composite Index 14.2 19.9
Vanguard Institutional Target Retirement 2030 14.1 21.1
Vanguard Target 2030 Composite Index 15.0 21.3
Vanguard Institutional Target Retirement 2035 14.8 22.6
Vanguard Target 2035 Composite Index 15.7 22.8
Vanguard Institutional Target Retirement 2040 15.4 23.9
Vanguard Target 2040 Composite Index 16.3 24.2
Vanguard Institutional Target Retirement 2045 16.2 25.1
Vanguard Target 2045 Composite Index 17.0 25.4
Vanguard Institutional Target Retirement 2050 16.3 25.1
Vanguard Target 2050 Composite Index 17.2 25.4
Vanguard Institutional Target Retirement 2055 16.4 25.1
Vanguard Target 2055 Composite Index 17.2 25.4
Vanguard Institutional Target Retirement 2060 16.4 25.1
Vanguard Target 2060 Composite Index 17.2 25.4
Vanguard Institutional Target Retirement 2065 16.2 25.1
Vanguard Target 2065 Composite Index 17.2 25.4
0.09
0.09
0.09
0.09
0.09
0.09
0.09
0.09
0.09
0.09
0.09
0.09
Returns Net of Fees