HomeMy Public PortalAboutMSD 2022 Defined Contribution Audited Financial Statements
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
Contents
Page
Independent Auditors’ Report........................................................................ 1 - 3
Management’s Discussion And Analysis .................................................... 4 - 11
Financial Statements
Statements Of Fiduciary Net Position..............................................................12
Statements Of Changes In Fiduciary Net Position ..........................................13
Notes To Financial Statements ................................................................ 14 - 23
Supplemental Information
Historical Trend Information ...........................................................................24
Fund Values And Expense Ratios....................................................................25
Page 1
INDEPENDENT AUDITORS’ REPORT
Board of Trustees
The Metropolitan St. Louis Sewer District
St. Louis, Missouri
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of The Metropolitan St. Louis Sewer District
Defined Contribution Plan (the Plan), as of and for the year ended December 31, 2022 and 2021, and
the related notes to the financial statements, which collectively comprise the Plan’s basic financial
statements as listed in the table of contents
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, 2022 and 2021, 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.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States
of America (GAAS). Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of the Plan and to meet our other ethical responsibilities in accordance with the relevant
ethical requirements relating to our audits. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Plan's ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently
known information that may raise substantial doubt shortly thereafter.
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
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Board of Trustees
The Metropolitan St. Louis Sewer District
Page 2
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a
material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control. Misstatements are considered
material if there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 Plan’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Plan’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
Board of Trustees
The Metropolitan St. Louis Sewer District
Page 3
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis on pages 4 through 11 be presented to supplement the basic
financial statements. Such information is the responsibility of management and, 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
Management is responsible for the other information included in the annual report. The other
information comprises the historical trend information and fund values and expense ratios but does not
include the basic financial statements and our auditors’ report thereon. Our opinions on the basic
financial statements do not cover the other information, and we do not express an opinion or any form
of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
CliftonLarsonAllen LLP
St. Louis, Missouri
July 26, 2023
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Page 4
MANAGEMENT’S DISCUSSION AND ANALYSIS
For The Years Ended December 31, 2022 and 2021
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 12 and 13) 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, 2022 and 2021. Please read it in
conjunction with the Plan’s financial statements.
FINANCIAL HIGHLIGHTS 2022
On December 31, the Plan consisted of 624 participants with account balances of approximately
$20.4M in net position.
Total decrease to the Plan’s net position amounted to approximately $2.6M, consisting of Plan
contributions and other additions of approximately $3.1M, offset by net investment loss of
approximately $4.1M and deductions of approximately $1.6M.
Administrative expenses (part of the deductions to the Plan’s net position) totaled
approximately $59K. This consisted of Vanguard record-keeping and compliance testing, as
well as consultant and accounting fees.
FINANCIAL HIGHLIGHTS 2021
On December 31, the Plan consisted of 601 participants with account balances of approximately
$23.0M in net position.
Total increase to the Plan’s net position amounted to approximately $5.0M, consisting of Plan
contributions and other additions of approximately $3.1M and net investment gain of
approximately $2.8M, offset by deductions of approximately $0.9M.
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 5
FINANCIAL ANALYSIS
The condensed Statements of Fiduciary Net Position as compared to prior years are as follows:
2022 Analysis
The Plan’s net position as of December 31, 2022, totaled approximately $20.4M, a decrease of
approximately $2.6M over net position as of December 31, 2021.
2021 Analysis
The Plan’s net position as of December 31, 2021, totaled approximately $23.0M, an increase of
approximately $5.0M over net position as of December 31, 2020.
Increase Increase
December 31, December 31, (Decrease) December 31, (Decrease)
2022 2021 2022-2021 2020 2021-2020
ASSETS
Investments at Fair Value:
Mutual Funds 20,186,926$ 22,808,942$ (2,622,016)$ 17,744,000$ 5,064,942$
Common/Collective Trust 175,011 147,329 27,682 227,408 (80,079)
Total Investments 20,361,937 22,956,271 (2,594,334) 17,971,408 4,984,863
NET POSITION RESTRICTED
FOR PLAN BENEFITS 20,361,937$ 22,956,271$ (2,594,334)$ 17,971,408$ 4,984,863$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 6
The condensed Statements of Changes in Fiduciary Net Position as compared to prior years are as
follows:
2022 Analysis
Additions to the Plan’s net position include contributions, other additions and investment income. For
calendar year 2022, contributions and other additions remained relatively flat from those of calendar
year 2021. The Plan recognized a net investment loss of $4.1M for calendar year 2022 and an overall
decrease of $6.9M when compared to calendar year 2021.
Deductions from the Plan’s net position include participant distributions and administrative expenses.
For calendar year 2022, distributions amounted to $1.6M, an increase of $0.7M over calendar year
2021.
2021 Analysis
Additions to the Plan’s net position include contributions, other additions and investment income. For
calendar year 2021, contributions and other additions increased $0.3M from those of calendar year
2020. The Plan recognized a net investment income of $2.8M for calendar year 2021 with an overall
increase of $0.4M compared to calendar year 2020.
Deductions from the Plan’s net position include participant distributions and administrative expenses.
For calendar year 2021, distributions amounted to $0.8M, an increase of $0.4M over calendar year
2020.
For the Year For the Year For the Year
Ended Ended Increase Ended Increase
December 31, December 31, (Decrease) December 31, (Decrease)
2022 2021 2022-2021 2020 2021-2020
ADDITIONS
Net Investment Income (Loss) (4,132,817)$ 2,773,146$ (6,905,963)$ 2,686,641$ 86,505$
Contributions and Other Additions 3,157,794 3,123,505 34,289 2,799,448 324,057
Total Additions (975,023) 5,896,651 (6,871,674) 5,486,089 410,562
DEDUCTIONS
Distributions to Participants 1,560,158 842,427 717,731 407,180 435,247
Administrative Expenses 59,153 69,361 (10,208) 71,163 (1,802)
Total Deductions 1,619,311 911,788 707,523 478,343 433,445
NET INCREASE/(DECREASE)(2,594,334) 4,984,863 (7,579,197) 5,007,746 (22,883)
FIDUCIARY NET POSITION
BEGINNING, January 1 22,956,271 17,971,408 4,984,863 12,963,662 5,007,746
FIDUCIARY NET POSITION
ENDING, December 31 20,361,937$ 22,956,271$ (2,594,334)$ 17,971,408$ 4,984,863$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 7
As of December 31, 2022, the Plan’s investments at fair value showed a net loss of $2.4M when
compared to original costs. The Institutional Index Fund had the greatest gain in value for any one
individual fund at $0.1M.
Value at
December 31, Net % of Current
Fund Name Cost 2022 Gain (Loss) Value
Vanguard Group, Inc.
Institutional Index Fund 1,698,606$ 1,776,547$ 77,941 8.73 %
Mid-Cap Index Fund Admiral 742,064 815,694 73,630 4.01
Small-Cap Index Fund Admiral 562,406 573,006 10,600 2.81
Balanced Index Fund Institutional 308,866 317,631 8,765 1.56
Cash Reserves Federal Money Market Admiral 216,294 216,294 — 1.06
Retirement Savings Trust III 175,011 175,011 — 0.86
Windsor II Fund Admiral 300,326 293,218 (7,108) 1.44
Target Retirement 2020 56,700 49,214 (7,486) 0.24
Target Retirement Income 112,444 101,210 (11,234) 0.50
Target Retirement 2065 173,197 157,745 (15,452) 0.77
Total Bond Market Index Fund Admiral 557,241 499,046 (58,195) 2.45
U.S. Growth Fund Admiral 334,712 271,994 (62,718) 1.34
Target Retirement 2025 761,143 662,769 (98,374) 3.25
Target Retirement 2060 953,296 835,571 (117,725) 4.10
Target Retirement 2030 1,197,361 1,044,457 (152,904) 5.13
Target Retirement 2055 1,989,348 1,740,204 (249,144) 8.55
Target Retirement 2040 2,168,299 1,884,528 (283,771) 9.26
Target Retirement 2035 2,236,031 1,942,572 (293,459) 9.54
International Growth Fund Admiral 1,407,867 1,100,503 (307,364) 5.40
Target Retirement 2050 2,932,368 2,551,278 (381,090) 12.53
Target Retirement 2045 3,877,624 3,353,445 (524,179) 16.47
Totals 22,761,204$ 20,361,937$ (2,399,267)$ 100.00 %
Change in Fund Asset Values - 2022
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 8
As of December 31, 2021, the Plan’s investments at fair value showed a net gain of $4.9M when
compared to original costs. The Target Retirement 2045 Fund had the greatest gain in value for any
one individual fund at $1.0M.
Value at
December 31, Net % of Current
Fund Name Cost 2021 Gain Value
Vanguard Group, Inc.
Institutional Target Retirement 2045 3,015,621$ 4,019,920$ 1,004,299$ 17.49 %
Institutional Target Retirement 2050 2,247,191 2,955,756 708,565 12.88
Institutional Index Fund 1,367,002 1,868,296 501,294 8.14
Institutional Target Retirement 2040 1,677,775 2,174,460 496,685 9.47
Institutional Target Retirement 2035 1,687,233 2,145,896 458,663 9.35
Institutional Target Retirement 2055 1,351,045 1,747,032 395,987 7.61
Mid-Cap Index Fund Admiral 621,471 885,783 264,312 3.86
Institutional Target Retirement 2030 922,330 1,136,444 214,114 4.95
Institutional Target Retirement 2060 678,976 869,083 190,107 3.78
Institutional Target Retirement 2025 749,643 913,187 163,544 3.98
International Growth Fund Admiral 1,097,968 1,244,208 146,240 5.42
Small-Cap Index Fund Admiral 428,606 550,405 121,799 2.40
U.S. Growth Fund Admiral 296,935 396,873 99,938 1.73
Balanced Index Fund Institutional 277,491 354,752 77,261 1.55
Windsor II Fund Admiral 266,077 325,232 59,155 1.42
Institutional Target Retirement 2020 168,537 194,568 26,031 0.85
Institutional Target Retirement 2065 81,088 93,398 12,310 0.41
Institutional Target Retirement Income 108,094 110,147 2,053 0.48
Total Bond Market Index Fund Admiral 552,421 554,010 1,589 2.41
Institutional Target Retirement 2015 9,911 10,756 845 0.05
Cash Reserves Federal Money Market Admiral 258,736 258,736 — 1.13
Retirement Savings Trust III 147,329 147,329 — 0.64
Totals 18,011,480$ 22,956,271$ 4,944,791$ 100.00 %
Change in Fund Asset Values - 2021
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 9
As of December 31, 2020, the Plan’s investments at fair value showed a net gain of $3.3M when
compared to original costs. The Target Retirement 2045 Fund had the greatest gain in value for any
one individual fund at $0.6M.
Value at
December 31, Net % of Current
Fund Name Cost 2020 Gain Value
Vanguard Group, Inc.
Institutional Target Retirement 2045 2,576,313$ 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 10
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 totaling $20.4M as of December 31, 2022 follows:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Management’s Discussion And Analysis (Continued)
Page 11
PARTICIPANT CENSUS
Employee participation in the Plan is on a voluntary basis. Plan participants are comprised of active
employees of the District, retirees or surviving spouses, and terminated employees with account
balances. Active employee participants are as follows:
FIDUCIARY RESPONSIBILITIES
The Board of Trustees and senior management are fiduciaries of the Plan and Trust. Fiduciaries are
charged with the responsibility of assuring that the assets of the Plan are used exclusively for the benefit
of plan participants and their beneficiaries.
REQUEST FOR INFORMATION
This financial report is designed to provide the Board of Trustees, participants, investment managers,
and other interested parties with an overview of the Plan’s finances and accountability for the money
received. Questions concerning any of the information provided in this report or requests for additional
information should be addressed to:
Tim Snoke, Secretary-Treasurer
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
E-mail: tsnoke@stlmsd.com
December 31,
Active
Participants
2022 624
2021 601
2020 583
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
See the accompanying Notes To Financial Statements.
Page 12
STATEMENTS OF FIDUCIARY NET POSITION
2022 2021
ASSETS
Investments at Fair Value:
Mutual Funds 20,186,926$ 22,808,942$
Common/Collective Trust 175,011 147,329
Total Investments 20,361,937 22,956,271
NET POSITION RESTRICTED FOR PLAN BENEFITS 20,361,937$ 22,956,271$
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
See the accompanying Notes To Financial Statements.
Page 13
STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION
2022 2021
ADDITIONS TO NET POSITION ATTRIBUTED TO:
Investment Income:
Interest and Dividends on Investments 726,745$ 685,640$
Net Change in Fair Value of Investments (4,840,511) 2,110,726
Total Investment Income (Loss) (4,113,766) 2,796,366
Less: Investment Expenses 19,051 23,220
Net Investment Income (Loss) (4,132,817) 2,773,146
Contributions and Other Additions:
Employer Contributions 3,098,033 3,001,195
Employee Contributions - Rollovers 608 57,949
Plan Expenses Paid by Employer 59,153 64,361
Total Contributions and Other Additions 3,157,794 3,123,505
Total Additions (Reductions) (975,023) 5,896,651
DEDUCTIONS FROM NET POSITION ATTRIBUTED TO:
Distributions to Participants and Beneficiaries 1,560,158 842,427
Administrative Expenses 59,153 69,361
Total Deductions 1,619,311 911,788
CHANGE IN NET POSITION (2,594,334) 4,984,863
NET POSITION RESTRICTED FOR PLAN BENEFITS, January 1 22,956,271 17,971,408
NET POSITION RESTRICTED FOR PLAN BENEFITS, December 31 20,361,937$ 22,956,271$
For The Years
Ended December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Page 14
NOTES TO FINANCIAL STATEMENTS
December 31, 2022 And 2021
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 and employee rollovers 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. 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 $2,497,158 and $445,582 were
recorded in the periods ended December 31, 2022 and 2021, 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 15
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 16
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,
2022 and 2021, $608 and $57,949 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 17
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 and employee
rollovers into 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 18
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 Admiral - Investment objective is income while maintaining safety of
principal.
Target Retirement option (Target Date): Vanguard Target Retirement 2020-2070 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 $186,019 and $154,600 for 2022 and
2021, respectively. The balances in the account as of December 31, 2022 and 2021 were
$13,676 and $65,142, 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 19
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 $5,000 as long as the participant’s beneficiary is not receiving
a life insurance benefit from the District under another arrangement or program apart from this
Plan.
Retiree Medical Coverage
Effective February 2, 2019, the District will provide the same individual medical coverage as
active employees if a participant separates from service after attaining 75 points (combined age
and term of service) or retires after attaining age 62 and completion of five years of
employment. If the participant was receiving any kind of dependent coverage, such as children
or spousal coverage, the participant shall pay the additional cost of such dependent coverage
and the District will not be liable for the additional cost. The coverage will continue until the
participant becomes eligible for Medicare under Title XVIII of the United States Code, dies, or
becomes eligible under another group medical plan, whichever first occurs. The District retains
the right to amend this policy to require participant contributions, or to otherwise amend or
terminate this policy at any time in any manner with respect to some or all retirees.
Change in Funds
Effective February 2022, the Vanguard Institutional Target Retirement Funds were changed to
Vanguard Target Retirement Funds. This was done to consolidate the assets in the combining
funds to lower costs. The funds that were combined have identical investment objectives,
investment strategies, and investment risks.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 20
3. Investments
Investment Balances
Investments held by custodians in the Plan’s name are as follows:
* Represents 5% or more of the Plan’s total investments as of December 31, 2022 or 2021, respectively.
Mutual Funds:2022 2021
Vanguard Group, Inc.
Target Retirement 2045 Fund 3,353,445$ * —$
Target Retirement 2050 Fund 2,551,278 * —
Target Retirement 2035 Fund 1,942,572 * —
Target Retirement 2040 Fund 1,884,528 * —
Institutional Index Fund 1,776,547 * 1,868,296 *
Target Retirement 2055 Fund 1,740,204 * —
International Growth Fund Admiral 1,100,503 * 1,244,208 *
Target Retirement 2030 Fund 1,044,457 * —
Target Retirement 2060 Fund 835,571 —
Mid-Cap Index Fund Admiral 815,694 885,783
Target Retirement 2025 Fund 662,769 —
Small-Cap Index Fund Admiral 573,006 550,405
Total Bond Market Index Fund Admiral 499,046 554,010
Balanced Index Fund Institutional 317,631 354,752
Windsor II Fund Admiral 293,218 325,232
U.S. Growth Fund Admiral 271,994 396,873
Cash Reserves Federal Money Market Admiral 216,294 258,736
Target Retirement 2065 Fund 157,745 —
Target Retirement Income Fund 101,210 —
Target Retirement 2020 Fund 49,214 —
Institutional Target Retirement 2045 — 4,019,920 *
Institutional Target Retirement 2050 — 2,955,756 *
Institutional Target Retirement 2040 — 2,174,460 *
Institutional Target Retirement 2035 — 2,145,896 *
Institutional Target Retirement 2055 — 1,747,032 *
Institutional Target Retirement 2030 — 1,136,444
Institutional Target Retirement 2025 — 913,187
Institutional Target Retirement 2060 — 869,083
Institutional Target Retirement 2020 — 194,568
Institutional Target Retirement Income — 110,147
Institutional Target Retirement 2065 — 93,398
Institutional Target Retirement 2015 — 10,756
Total Mutual Funds 20,186,926 22,808,942
Common/Collective Trust:
Vanguard Group, Inc.
Retirement Savings Trust III 175,011 147,329
Total Investments 20,361,937$ 22,956,271$
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 21
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,
2022 and 2021:
Average
Effective
Plan Investments Fair Percentage Duration Credit
With Debt Securities Value of Debt in Years Rating
December 31, 2022:
Vanguard Group, Inc.
Target Retirement 2045 3,353,445$ 13 % 6.82 AA-
Target Retirement 2050 2,551,278 9 6.83 AA-
Target Retirement 2035 1,942,572 27 6.83 AA-
Target Retirement 2040 1,884,528 20 6.82 AA-
Target Retirement 2055 1,740,204 9 6.82 AA-
Target Retirement 2030 1,044,457 35 6.83 AA-
Target Retirement 2060 835,571 9 6.83 AA-
Target Retirement 2025 662,769 43 6.50 AA
Total Bond Market Index Fund Admiral 499,046 99 6.53 AA
Balanced Index Fund Institutional 317,631 40 6.53 AA
Cash Reserves Federal Money Market Admiral 216,294 21 * *
Retirement Savings Trust III 175,011 90 3.40 *
Target Retirement 2065 157,745 9 6.85 AA-
Target Retirement Income 101,210 68 5.81 AA
Target Retirement 2020 49,214 55 6.02 AA
* 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 - 2022
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 22
4. Fair Value Measurement and Application
The Plan has the following fair value measurements as of December 31, 2022 and 2021:
Mutual fund investments of $20,186,926 and $22,808,942, respectively, are valued
using quoted market prices (Level 1 inputs).
Common/Collective trust investments of $175,011 and $147,329, respectively, are
valued at net asset value which approximates fair value.
Average
Effective
Plan Investments Fair Percentage Duration Credit
With Debt Securities Value of Debt in Years Rating
December 31, 2021:
Vanguard Group, Inc.
Institutional Target Retirement 2045 4,019,920$ 11 % 7.36 A
Institutional Target Retirement 2050 2,955,756 9 7.36 A
Institutional Target Retirement 2040 2,174,460 18 7.36 A
Institutional Target Retirement 2035 2,145,896 25 7.36 A
Institutional Target Retirement 2055 1,747,032 9 7.35 A
Institutional Target Retirement 2030 1,136,444 32 7.36 A
Institutional Target Retirement 2025 913,187 40 7.11 A
Institutional Target Retirement 2060 869,083 9 7.34 A
Total Bond Market Index Fund Admiral 554,010 97 6.86 AA
Balanced Index Fund Institutional 354,752 36 6.85 AA
Cash Reserves Federal Money Market Admiral 258,736 44 * *
Institutional Target Retirement 2020 194,568 51 6.51 A
Retirement Savings Trust III 147,329 94 3.10 *
Institutional Target Retirement Income 110,147 67 6.23 A
Institutional Target Retirement 2065 93,398 9 7.32 A
Institutional Target Retirement 2015 10,756 65 6.26 A
* 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 - 2021
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Notes To Financial Statements (Continued)
Page 23
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, 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. Although the Plan has been amended since
receiving the determination letter, the Plan Administrator believes the Plan is currently designed
and is being operated in compliance with applicable requirements of the IRS.
9. Subsequent Events
Management has evaluated subsequent events through July 26, 2023, the date through which
the financial statements were available for issue and determined that no material subsequent
events exist.
SUPPLEMENTAL INFORMATION
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
See the accompanying independent auditors’ report.
Page 24
HISTORICAL TREND INFORMATION
Employer
Contributions, Distributions To
For The Rollovers, And Participants
Years Ended Expenses Paid Net Investment And Plan Change
December 31, By Employer Income (Loss) Expenses In Net Position
2022 3,157,794$ (4,132,817)$ (1,619,311)$ (2,594,334)$
2021 3,123,505 2,773,146 (911,788) 4,984,863
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
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
DEFINED CONTRIBUTION PLAN
Page 25
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 2022
Vanguard Group, Inc.
Target Retirement 2045 Fund 3,353,445$ 0.08 %
Target Retirement 2050 Fund 2,551,278 0.08
Target Retirement 2035 Fund 1,942,572 0.08
Target Retirement 2040 Fund 1,884,528 0.08
Institutional Index Fund 1,776,547 0.04
Target Retirement 2055 Fund 1,740,204 0.08
International Growth Fund Admiral 1,100,503 0.34
Target Retirement 2030 Fund 1,044,457 0.08
Target Retirement 2060 Fund 835,571 0.08
Mid-Cap Index Fund Admiral 815,694 0.05
Target Retirement 2025 Fund 662,769 0.08
Small-Cap Index Fund Admiral 573,006 0.05
Total Bond Market Index Fund Admiral 499,046 0.05
Balanced Index Fund Institutional 317,631 0.06
Windsor II Fund Admiral 293,218 0.26
U.S. Growth Fund Admiral 271,994 0.23
Cash Reserves Federal Money Market Admiral 216,294 0.10
Retirement Savings Trust III 175,011 0.28
Target Retirement 2065 Fund 157,745 0.08
Target Retirement Income Fund 101,210 0.08
Target Retirement 2020 Fund 49,214 0.08
Vanguard Total/Average Ratio 20,361,937$ 0.11 %
Expense
Ratio