CENTRAL STATES PENSION FUND

FINANCIAL AND ANALYTICAL INFORMATION

JUNE 30, 2016

CENTRAL STATES PENSION FUND

FINANCIAL AND ANALYTICAL INFORMATION
JUNE 30, 2016

Financial Report

FR

Financial Statements:
Executive Summaries

1-3

Financial Statements

4-5

Statement of Receipts and Disbursements

Graph

6
7

PENSION FUND
FINANCIAL REPORT
June 30, 2016 and the Six Months Then Ended
Dollars in Thousands
1.

Net assets were $15,626,115 at June 30, 2016, compared to $16,126,208 at December 31 ,
2015, a decrease of $500,093 compared to a decrease of $532,184 for the same period last
year.
The $32,091 difference is due to $198,545 more net investment income offset by $166,454
more net operating loss.

2.

3.

A comparison of Full-Time Equivalent (FTE) actives and retirees follows :

Actives

Retirees

As of:
May 2016
December 201 5

59 ,234
59 ,551

204,115
205,202

Five-month average :
May 2016
May 2015
% decrease

58 ,623
59 ,621
(1 .67)%

204 ,698
207,284
(1 .25)%

For the six months ended June 2016, the Fund's net asset decrease from operations (before
investment income) was $1 ,042,997 compared to a decrease of $876,543 for the same period
in 2015, or a $166,454 unfavorable change:

($169,949) less contributions primarily due to recognition of withdrawal liability previously

classified as potentially refundable in 2015,

$1 ,967 less benefits and

$1,528 less general and administrative expenses.

4.

During the six months ended June 2016 and 2015, the Fund withdrew $1 ,029,063 and
$1 ,012,615 respectively, from investment assets to fund the cash operating deficit.

5.

Investment asset allocation as of June 30, 2016:

Other

Cash
1%

Fixed
Income
35%

Equity
60%

FR

Central States, Southeast and Southwest Areas Pension Fund

Executive Summary of Financial Position
June 30, 2016
(Dollar amounts in thousands)

June 30,
2016
Investments:
Cash equivalents
Fixed income
Equity
Other
Total investments

Investment related assets

Employer contributions
receivable, net
Other assets
Total assets

Investment related liabilities

Other liabilities
Total liabilities

NET ASSETS

December 31,
2015

Change in Net Assets

Dollars
Percentage

558,757
4,643,664
9,525,411
742,416
15,470,248

620,846
4,689,031
10,054,750
687,073
16,051,700

(62,089)
(45,367)
(529,339)
55,343
(581,452)

(0.4)
(0.3)
(3.3)
0.3
(3.7)

2,357,710

2,300,151

57,559

0.4

68,020

72,206

(4,186)

8,853

9,602

{749}

17,904,831

18,433,659

(528,828)

(3.3)

2,212,068

2,244,189

32,121

0.2

66,648

63,262

2,278,716

2,307,451

28,735

0.2

15,626,115

16,126,208

(500,093)

(3.1)

{3,386}

FOR INTERNAL USE ONLY

Central States, Southeast and Southwest Areas Pension Fund

Executive Summary of Financial Operations
June 30, 2016
(Tabular dollar amounts in thousands)
Year-to-Date
2016
INCOME & EXPENSES
Contributions (includes W/L)

Benefits
General and administrative
expenses
Change in net assets
before net investment income(loss)

Change in net assets

OPERATING STATISTICS
Benefits to contributions
General and administrative
expenses to:
Contributions
Benefits
Five-month average FTEs
Contributions per average FTE
Benefits per average FTE

Pensioners and beneficiaries

-current month
Current month average benefit
per pensioner and beneficiary

(169,949) (1)

(30.6)

1,406,943

1,967

0.1

25,576

1,528

6.0

(876,543)

(166,454)

N/A

542,904

344,359

198,545

N/A

(500,093)

(532,184)

32,091

N/A

386,027

555,976

1,404,976

24,048

(1 ,042,997)

Net investment income(loss)

Change from Prior Year

Dollars
Percentage

2015

364.0 %

253.1 %

6.2 %
1.7 %

4.6 %
1.8 %

58,623
6,585
23,966

59,621
9,325
23,598

203,950

206,338

1,142

1,134

Note<sl:
(1) Primarily recognition of withdrawal liability previously classified as potentially refundable ($184,000).
FOR INTERNAL USE ONLY

Central States, Southeast and Southwest Areas Pension Fund

Executive Summary of Current and Projected Operations
June 30, 2016
(Dollar amounts in thousands)

Actual through
June 2016
Contributions (includes W/L)

Benefits
General and administrative expenses
Change in net assets
before net investment income(loss)

July

Projection
Remainder of

2016

2016

Year Ending
December 2016

386,027

76,500

291,473

754,000

1,404,976

233,800

1,168,124

2,806,900

24,048

4,300

21,252

49,600

{1,042,997)

{161,600)

{897,903)

{2, 102,500)

Assumptions Used in 2016 Projections

Contributions- No change in plan mix and $142.9 million in estimated withdrawal liability income.
Benefits - Level benefits.
General and administrative expenses -Actual expenses to date plus 2/o increase over 2015 expenses for remaining months and decreased MPRA
related expenses.

FOR INTERNAL USE ONLY

Central States, Southeast and Southwest Areas Pension Fund

Statement of Net Assets
(In thousands)
June 30,
2016
ASSETS
Investments:
Cash equivalents
Fixed income
Equity
Other, primarily real estate related
Total investments

December 31,
2015

2014

558,757
4,643,664
9,525,411
742,416
15,470,248

620,846
4,689,031
10,054,750
687,073
16,051,700

652,095
5,292,888
11,179,145
808,375
17,932,503

68,020
59,111
353,250
480,381

72,206
57,278
360,790
490,274

84,074
62,986
354,774
501,834

Cash
Assets held in securities lending program
Other, primarily furniture and equipment - net
Total assets

903
1,945,349
7,950
17,904,831

1,518
1,882,083
8,084
18,433,659

1,295
2,142,191
6,480
20,584,303

LIABILITIES
Liability to return collateral held under
securities lending agreements
Payable for securities purchased
Accounts payable and accrued expenses (2)
Deferred withdrawal liability receipts
Total liabilities

1,945,349
257,359
71,897
4,111
2,278,716

1,882,083
350,687
69,044
5,637
2,307,451

2,142,191
357,263
67,532
154,211
2,721,197

Receivables:
Employer contributions, less allowance for
uncollectible contributions ( 1)
Interest and dividends
Other, primarily for securities sold
Total receivables

NET ASSETS

15,626,115

16,126,208

17,863,106

Note(s):
( 1) Allowance for uncollectible contributions:
Reserve for YRC included in above allowance:
(2) Includes a liability for 401(h) plan assets:

$
$
$

67,738
55,673
50,354

71,779
59,862
48,347

73,876
60,060
48,058

FOR INTERNAL USE ONLY

Central States, Southeast and Southwest Areas Pension Fund

Statement of Changes in Net Assets
(In thousands)
June
2016
Revenue:
Contributions
Withdrawal liability
Total revenue

Benefits and expenses:

Benefits to participants
General and administrative expenses
Total benefits and expenses
Change in net assets
before net investment income( loss)
Investment income(Joss):
Interest, dividends and other
Realized and unrealized gain(loss)
on investments, net
Investment expenses
Net investment income( loss)
Change in net assets

NET ASSETS:
Beginning of period
End of period

50,745
18,549
69,294

2015
47,749
214,932 (1)
262,681

Six Months Ended June

2015
2016
297,641
88,386
386,027

234,207
4,138
238,345

234,765
4,561
239,326

1,404,976
24,048
1,429,024

(169,051)

23,355

(1,042,997)

30,923

47,636

290,988
264,988 (1)
555,976

1,406,943
25,576
1,432,519

(876,543)

180,373

197,617

23,820
{3,319)
51,424

(333,000)
{3,450)
{288,814)

382,870
{20,339)
542,904

169,204
{22,462}
344,359

(117,627)

(265,459)

(500,093)

(532,184)

15,743,742

17,596,381

16,126,208

17,863,106

15,626,115

17,330,922

15,626,115

17,330,922

Note(s):
(1) Recognition of withdrawal liability previously classified as potentially refundable- $184 million.
FOR INTERNAL USE ONLY
5a

Central States, Southeast and Southwest Areas Pension Fund

Statement of Changes in Net Assets
(In thousands)
Years Ended

2015
Revenue:
Contributions
Withdrawal liability
Total revenue

Benefits and expenses:

Benefits to participants
General and administrative expenses
Total benefits and expenses
Change in net assets
before net investment income( loss)
Investment income(loss):
Interest, dividends and other
Realized and unrealized gain( loss)
on investments, net
Investment expenses
Net investment income( loss)
Change in net assets
NET ASSETS:
Beginning of period

End of period

2014

2013

2012

586,686
687,827
1,274,513

582,359
232,836
815,195

571,104
153,928
725,032

568,878
188,828
757,706

2,814,338
52,562
2,866,900

2,822,248
38,078
2,860,326

2,822,508
36,799
2,859,307

2,823,581
34,498
2,858,079

(1,592,387)

(2,045,131)

(2,134,275)

(2, 100,373)

368,132

370,170

348,708

379,051

(470,066)
{42,577}
(144,511}

843,954
{46,646}
1,167,478

2,807,635
{46,568}
3,109,775

1,881,196
{44,490}
2,215,757

(1,736,898)

(877,653)

975,500

115,384

17,863,106

18,740,759

17,765,259

17,649,875

16,126,208

17,863,106

18,740,759

17,765,259

FOR INTERNAL USE ONLY

5b

Central States, Southeast and Southwest Areas Pension Fund

Statement of Cash Receipts and Disbursements
(In thousands)
June
Operations:
Contributions
Benefits paid, net (1)

Payroll
Employee benefits
Fees, services and software
Rent
Office
Withdrawal liability receipts
Other
Net from operations
Investments:
Net sales( purchases)
Interest and dividends
Management fees
Investments, net
Change in cash

Note(s):
( 1) Includes change in overdraft:

2015

43,465
(233,821)
(190,356)

55,384
(234,711)
(179,327)

299,751
( 1.404,262)
(1,104,511)

289,674
(1.406,124)
(1,116,450)

(1,146)
(590)
(944)
(116)
(314)
12,612
(706)
8,796
(181,560)

(1,304)
(764)
(697)
(153)
(684)
34,798
(1,601)
29,595
(149,732)

(7,673)
(3,753)
(4,006)
(700)
(2,538)
86,927
(978)
67,279
(1,037,232)

(8,395)
(3,837)
(3,535)
(880)
(3,190)
125,979
(2,350)
103,792
(1,012,658)

155,939
30,434
(4,735)
181,638

129,973
31,680
(11,044)
150,609

880,547
178,472
(22,402)
1,036,617

853,921
184,878
(25,894)
1,012,905

78

877

825

665

1,518

1,295

903

1,542

903

1,542

385

54

714

818

Cash:
Beginning of period
End of period

Six Months Ended June

2016
2015

2016

(615)

247

FOR INTERNAL USE ONLY

6a

Central States, Southeast and Southwest Areas Pension Fund

Statement of Cash Receipts and Disbursements
(In thousands}
Years Ended
2015
Operations:
Contributions
Benefits paid, net (1}

Payroll
Employee benefits
Fees, services and software
Rent
Office
Withdrawal liability receipts
Other
Net from operations
Investments:
Net sales(purchases)
Interest and dividends
Management fees
Investments, net
Change in cash

End of period

Note(s):
(1} Includes change in overdraft:

2012

597,999
(2,814, 127)
(2,216, 128)

580,516
(2,822,084)
(2,241 ,568)

572,902
(2,822,571)
(2,249,669)

568,834
(2,823,666)
(2,254,832)

(17,741}
(7,816}
(7,687}
(1 ,730}
(15,380)
548,619
(980)
497,285
(1 ,718,843}

(16, 145}
(7,456}
(4, 102}
(1 ,663)
(8,358)
255,800
(5,523)
212,553
(2,029,015}

(15,941}
(7,532}
(2,726}
(1,717)
(8,850}
234,417
(1 ,084)
196,567
(2,053, 102}

(15,364}
(7,113}
(2,341}
(1 ,658)
(7,659)
217,745
1,394
185,004
(2,069,828}

1,398,513
364,575
(44,022)
1,719,066

1,707,729
367,079
(45,818)
2,028,990

1,760,498
337,794
(46,282)
2,052,010

1,731,937
380,470
(44,704)
2,067,703

(25}

(1 ,092)

(2, 125}

223

Cash:
Beginning of period

2013

2014

1,295

1,320

2,412

4,537

1,518

1,295

1,320

2,412

210

163

(62)

(84)

FOR INTERNAL USE ONLY

6b

Central States Pension Fund

Full Time Equivalents vs. Retirees
June 2010 Through May 2016
250,000
225,000
200,000

-..----oooo----------------------------"'--------------

--

175,000

--

----- ... ----==---------=--=---

--150,000 ............. ---- ----------------------==------------ .... ------------ . . . . . . . -_.... -------- . . . . . . . . . . __

--

----

----

--

---

---

---

-----

-----

.......

---

-------~-------------

--

--w 125,000 - =======--==-=--==-=--==-=--==-=--==-=--==-=--==-=--==--=-==-- -===--===

U)

--

t:

100,000

---

-----

---

-----

-----

---

---------.
.
-=-.
.
.
.
.
,
__
---=-----.
.
_-------------=---------------------=---------------------=--------------------=-----.
.
--------------..
--------75,000
-----_ -------------------------50,000 .
----
--25,000 .
----
---

_....................

-~-

--

---

0
Jun

Dec

2010

---~-

---

Jun

-Dec

2011

Jun

Dec

2012

Jun

Dec

2013
nr FTEs

Jun

Dec

2014

Jun

Dec

2015

May

2016

=RETIREES
FOR INTERNAL USE ONLY