HomeMy WebLinkAbout2014 - 27245 LBWL Lansing Board of Water and Light Retiree Benefit Plan and Trust Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Financial Report
with Required Supplemental Information
June 30, 2014
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Contents
Report Letter 1-2
Management's Discussion and Analysis 3-4
Financial Statements
Statement of Trust Net Position 5
Statement of Changes in Trust Net Position 6
Notes to Financial Statements 7-16
Required Supplemental Information 17
Schedule of Funding Progress 18
Schedule of Employer Contributions 19
Independent Auditor's Report
To the Honorable Mayor, Members of
the City Council, and Commissioners
of the Board of Water and Light
Lansing Board of Water and Light Retiree Benefit
Plan and Trust
City of Lansing, Michigan
Report on the Financial Statements
We have audited the accompanying financial statements of Lansing Board of Water and Light
Retiree Benefit Plan and Trust (the "Plan") as of and for the years ended June 30, 2014 and 2013
and the related notes to the financial statements, which collectively comprise the Plan's basic
financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's 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 audits 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 auditor's
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.
I
To the Honorable Mayor, Members of
the City Council, and Commissioners
of the Board of Water and Light
Lansing Board of Water and Light Retiree Benefit
Plan and Trust
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the trust net position of the Lansing Board of Water and Light Retiree Benefit Plan and Trust as
of June 30, 2014 and 2013 and the changes in its trust net position for the years then ended, in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplemental Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, schedule of funding progress, and schedule of employer
contributions, as identified on the table of contents, 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, which 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
supplemental 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.
PLLC
September 2, 2014
2
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Management's Discussion and Analysis
Using this Annual Report
This annual report consists of two parts: (1) management's discussion and analysis (this section)
and (2) the basic financial statements. The financial statements also include notes that explain
some of the information in the financial statements and provide more detailed data.
Condensed Financial Information
The table below compares key financial information in a condensed format between the current
year and the prior two years:
2014 2013 2012
Assets held in trust:
Cash and money market trust funds $ 5,71 1,439 $ 8,498,919 $ 6,666,106
Corporate bonds and notes 20,713,869 19,321,385 18,602,251
Government bonds and notes 16,284,339 13,019,316 12,723,224
Equities 108,540,537 86,128,263 69,522,814
Mutual funds and other 2,259,641 1,950,935 1,961,220
Interest and dividend receivable 211,625 185,624 194,729
Total plan assets $ 153,721,450 $ 129,104,442 $ 109,670,344
Changes in net position:
Net investment income (loss) $ 25,667,779 $ 15,71 1,575 $ (405,257)
Employer contributions 9,266,529 14,045,204 15,854,530
Retiree benefits paid (9,266,529) (9,524,120) (9,416,763)
Administrative fees (1,050,771) (798,561) (747,493)
Net change in net position $ 24,617,008 $ 19,434,098 $ 5,285,017
During fiscal year 2014, net investment gains were $25.7 million. We believe this performance is
in line with the overall level of returns experienced by similarly situated institutional investors.
The employer contributions were down by $4.8 million due to the decrease in the Board of
Water and Light - City of Lansing, Michigan's (the "BWL") annual required contribution (ARC) as
determined by the BWL's actuary.
3
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Management's Discussion and Analysis (Continued)
Investment Objectives and Asset Allocation
The Plan's assets shall be invested in accordance with sound investment practices that
emphasize long-term investment fundamentals. In establishing the investment objectives of the
Plan, the BWL has taken into account the time horizon available for investment, the nature of
the Plan's cash flows and liabilities, and other factors that affect the Plan's risk tolerance.
Consistent with this, the BWL has determined that the investment objective is income and
growth. This investment objective is a balanced approach that emphasizes a stable and
substantial source of current income and some capital appreciation over the long term.
Consistent with the advice of the investment advisor, the BWL has selected the following target
asset allocation strategy:
Domestic large capitalization stocks 43.2%
Domestic small capitalization stocks 10.0%
International stocks 10.7%
U.S. core fixed income 31. 1%
Private equity 5.0%
Investment Results
The fiscal year ended June 30, 2014 saw a net investment gain of$24.6 million. We believe this
performance is in line with the overall level of recovery experienced by the stock and bond
markets.
Future Events
The BWL is funding its other postemployment benefits (OPEBs) and is intending to meet its annual
required contributions (ARC) in part by making contributions into the VEBA Trust Fund.
Contacting the Plan's Management
This financial report is intended to provide a general overview of the Plan's finances and to show
accountability for the money it receives. If you have questions about this report or need
additional information, we welcome you to contact the office of Susan Devon, Chief
Administrative and Technology Officer, at P.O. Box 13007, Lansing, Michigan 48901-3007.
4
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Statement of Trust Net Position
June 30
2014 2013
Assets
Investments - Fair value:
Cash and money market trust funds $ 5,71 1,439 $ 8,498,919
Corporate bonds and commercial paper 20,713,869 19,321,385
Government bonds and notes 16,284,339 13,019,316
Equities 108,540,537 86, 128,263
Mutual funds 2,259,641 1 ,950,935
Total investments at fair value 153,509,825 128,918,818
Investment interest and dividend receivable 211,625 185,624
Trust Net Position $ 153,721,450 $ 129,104,442
See Notes to Financial Statements. 5
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Statement of Changes in Trust Net Position
Year Ended June 30
2014 2013
Increase
Investment income:
Net appreciation in fair value of investments $ 22,774,150 $ 12,938,049
Interest and dividend income 2,893,629 2,773,526
Total investment income 25,667,779 15,71 1 ,575
Employer contributions 9,266,529 14,045,204
Total increase 34,934,308 29,756,779
Decrease
Retiree benefits paid 9,266,529 9,524, 120
Administrative expenses 1,050,771 798,561
Total decrease 10,317,300 10,322,681
Net Increase in Trust Net Position 24,617,008 19,434,098
Net Position
Beginning of year 129,104,442 109,670,344
End of year $ 153,721,450 $ 129,104,442
See Notes to Financial Statements. 6
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note I - Description of the Plan
The following description of the Lansing Board of Water and Light Retiree Benefit Plan
and Trust (the "Plan"), a trust fund of the Board of Water and Light - City of Lansing,
Michigan (the "BWL"), provides only general information. Participants should refer to
the plan agreement for a more complete description of the Plan's provisions.
General - The Plan was established on October 20, 1999, effective as of July 1, 1999, to
constitute a voluntary employee beneficiary association (VEBA) under Section 501(c)(9)
of the Internal Revenue Code of 1986, as amended. The Plan was formed for the
purpose of accumulating assets sufficient to fund retiree healthcare insurance costs in
future years.
The Plan is a single-employer defined benefit healthcare plan. The Plan provides
medical, dental, and life insurance benefits in accordance with Section 5-203 of the City
Charter. Substantially all of the BWL's employees may become eligible for healthcare
benefits and life insurance benefits if they reach normal retirement age while working
for the BWL. There were 698 participants eligible to receive benefits at June 30, 2014
and 692 participants eligible at June 30, 2013.
Contributions to the Plan are a combination of amounts contributed by the BWL to the
Plan and the direct cost of benefits paid to participants from the BWL's general cash
flow. During the years ended June 30, 2014 and 2013, the cost to BWL of maintaining
the Retiree Benefit Plan was $9,266,529 and $14,045,204, respectively, of which $0 and
$4,521,084 was contributed to the VEBA trust and $9,266,529 and $9,524,120,
respectively, was incurred as direct costs of benefits.
Benefits - Benefits shall not be paid from this Plan to participants or their beneficiaries
during a plan year in which there has been a "qualified transfer" pursuant to Internal
Revenue Code Section 420(e)(1)(8) from the Lansing Board of Water and Light Defined
Benefit Plan for the Employees' Pensions, except that once the "qualified transfer" has
been exhausted for the purpose of paying qualified current retiree health liabilities,
benefit payments may be made under this Plan consistent with Internal Revenue Code
Section 420(e)(1)(B). After "qualified transfers" have been exhausted, benefits paid
under this Plan shall be those benefits described in the relevant sections of the
Postretirement Benefit Plan for Eligible Employees of the Lansing Board of Water and
Light.
Trustees - Each member of the Lansing Board of Water and Light board of
commissioners is a trustee during the term of office as a commissioner. The trustees
have appointed Merrill Lynch, Pierce, Fenner & Smith Incorporated as custodian of the
Plan's assets.
7
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note I - Description of the Plan (Continued)
Contributions - The Lansing Board of Water and Light makes contributions in such a
manner and at such times as appropriate. All contributions received, together with the
income thereon, are held, invested, reinvested, and administered by the trustees
pursuant to the terms of the plan agreement. No employee contributions are allowed
under this Plan. Contributions are recognized when due and when the amount to be
contributed is committed by the BWL.
Participation - Participation in this Plan is determined in accordance with the terms of
the Postretirement Benefit Plan for Eligible Employees of the Lansing Board of Water
and Light. At June 30, 2014, there were 698 active participants (not eligible to receive
benefits), 80 disabled participants, 476 retired participants, 473 active spouses (not
eligible to receive benefits), and 152 surviving spouses participating in the Plan. At June
30, 2013, there were 681 active participants (not eligible to receive benefits), 82
disabled participants, 457 retired participants, 488 active spouses (not eligible to receive
benefits), and 140 surviving spouses participating in the Plan.
Vesting - Benefits become payable in accordance with the terms of the Postretirement
Benefit Plan for Eligible Employees of Lansing Board of Water and Light. At no time will
benefits of the Postretirement Benefit Plan for Eligible Employees of Lansing Board of
Water and Light be vested. The BWL may reduce or eliminate any or all plan benefits at
any time, subject to the requirements of any collective bargaining agreement.
Termination - In the event of plan termination, all plan assets shall be used to purchase
additional eligible benefits in accordance with the terms of the plan agreement. In the
event of dissolution, merger, consolidation, or reorganization of the BWL, the Plan shall
terminate and liquidate in a manner consistent with the plan agreement unless the Plan
is continued by a successor to the BWL.
Note 2 - Summary of Significant Accounting Policies
Accounting and Reporting Principles
The Plan follows accounting principles generally accepted in the United States of
America (GAAP) as applicable to governmental units. Accounting and financial reporting
pronouncements are promulgated by the Government Accounting Standards Board.
Basis of Accounting
Fiduciary funds use the economic resources measurement focus and the full accrual
basis of accounting. Revenue is recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Plan member
contributions are recognized in the period in which the contributions are due. Employer
contributions to the Plan are recognized when due pursuant to legal requirements.
8
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 2 - Summary of Significant Accounting Policies (Continued)
Benefits and refunds are recognized when due and payable in accordance with the terms
of the Plan.
Report Presentation
This report includes the fund-based statements of the Plan.
Investment Valuation and Income Recognition - Plan investments are reported at
fair value. Securities traded on a national or international exchange are valued at the last
reported sales price.
Purchases and sales of investments are recorded on a trade-date basis.
Appreciation or depreciation of investments is calculated based on the beginning of the
period's fair value of investments.
Expenses - Substantially all costs and expenses incurred in connection with the
operation and administration of the Plan are paid by the BWL, the plan sponsor. The
Plan pays all transaction expenses incurred in connection with the investment accounts,
which are netted with investment income.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements. Actual results could differ
from those estimates.
Funding Policy - The BWL adopted a process for funding the retiree benefits using
both a VEBA trust and, to the extent permitted by law, excess pension assets in the
Defined Benefit Pension Plan. Additional contributions to the VEBA trust from BWL
operating funds to supplement Section 420 transfers will not exceed the recommended
annual contribution amount required to cover current service of active participants and
amortize the unfunded accrued liability over 30 years. The required contribution is
based on a projected pay-as-you-go financing requirement with an additional amount to
prefund benefits.
The BWL's annual other postemployment benefit (OPEB) cost is calculated based on
the annual required contribution (ARC), an amount actuarially determined in accordance
with the parameters of GASB Statement No. 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover normal costs each year and
amortize any unfunded actuarial liabilities over a period of 30 years.
9
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 2 - Summary of Significant Accounting Policies (Continued)
Contribution trend information is as follows (in thousands):
Percentage of
Annual OPEB
Fiscal Year Annual OPEB Annual OPEB Cost
Ended Cost Contributed Contributed
6/30/2012 $ 15,774 $ 15,854 101%
6/30/2013 13,994 14,045 100%
6/30/2014 9,202 9,268 101%
Funded Status and Funding Progress - Actuarial valuations of an ongoing plan
involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Significant actuarial assumptions
used in determining the annual OPEB cost at June 30, 2014 and 2013 include (a) rate of
return on the investments of present and future assets of 7.5 percent, compounded
annually, (b) projected healthcare trend rates ranging from 5.0 percent to 9.0 percent,
and (c) amortization method level dollar over an open 30-year period.
Funding status and funding progress trend information is as follows (in thousands):
Unfunded AAV as a
Actuarial Actuarial Accrued Actuarial Percentage
Valuation Date Asset Value Liability Accrued Liability of AAL
2/29/2012 $ 110,029 $ 245,418 $ 135,389 44.83%
2/28/2013 123,195 207,864 84,669 59.27%
2/28/2014 148,307 194,365 46,058 76.30%
10
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 2 - Summary of Significant Accounting Policies (Continued)
Actuarial Assumptions - Actuarial valuations of an ongoing plan involve estimates of
the value of reported amounts and assumptions about the probability of occurrence of
events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded
status of the plan and the annual required contributions of the employer are subject to
continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress, presented as
required supplemental information following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and the plan members) and include the types
of benefits provided at the time of each valuation and the historical pattern of sharing of
benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the
effects of short-term volatility in actuarial accrued liabilities consistent with the long-
term perspective of the calculations.
The Plan has calculated the accrued actuarial liability and required contribution using
certain methods and assumptions. Benefit payments have been computed using the
individual entry age normal method. The assets have been valued in the actuary report
using the fair market value. The healthcare cost trend rates used range from 5.0 to 9.0
percent for the years ended June 30, 2014 and 2013.
Note 3 - Cash, Investments, and Fair Disclosure
The Lansing Board of Water and Light Retiree Benefit Plan and Trust has adopted GASB
No. 40, Deposit and Investment Risk Disclosures. The modified disclosures required by
GASB No. 40 are reflected below.
The Plan is authorized through Public Act 149 of 1999 to invest in accordance with
Public Act 314. Public Act 314 of 1965, as amended, allows the Plan to invest in certain
reverse repurchase agreements, stocks, diversified investment companies, annuity
investment contracts, real estate leased to public entities, mortgages, real estate, debt
or equity of certain small businesses, certain state and local government obligations, and
certain other specified investment vehicles.
The Plan's deposits and investment policies are in accordance with PA 196 of 1997 and
have authorized the investments according to Michigan PA 314 of 1965, as amended.
II
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 3 - Cash, Investments, and Fair Disclosure (Continued)
The Plan's cash and investments are subject to several types of risk, which are examined
in more detail below:
Risks at June 30, 2014
Custodial Credit Risk of Bank Deposits
Custodial credit risk is the risk that in the event of a bank failure, the Plan's deposits may
not be returned to it. The Plan requires that financial institutions must meet minimum
criteria to offer adequate safety to the Plan. The Plan evaluates each financial institution
with which it deposits funds and only those institutions meeting minimum established
criteria are used as depositories.
Custodial Credit Risk of Investments
Custodial credit risk is the risk that, in the event of the failure of the counterparty, the
Plan will not be able to recover the value of its investments or collateral securities that
are in the possession of an outside party. The Plan does not have a policy for custodial
credit risk. At year end, all investments of the Plan were held in the name of the Board
of Water and Light and are therefore not subject to custodial credit risk.
Interest Rate Risk
Interest rate risk is the risk that the value of investments will decrease as a result of a
rise in interest rates. The Plan's investment policy does not restrict investment
maturities. At year end, the average maturities of investments are as follows:
Weighted Average
Investment Fair Value Maturity
Government bonds and notes $ 16,284,339 11.46 years
Corporate bonds and notes 20,713,869 13.89 years
Money market trust funds 5,388,690 Less than I year
12
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 3 - Cash, Investments, and Fair Disclosure (Continued)
Credit Risk
State law limits investments in commercial paper to the top two ratings issued by
nationally recognized statistical rating organizations. The Plan has no investment policy
that would further limit its investment choices. As of year end, the credit quality ratings
of debt securities (other than the U.S. government) are as follows:
Investment Fair Value Rating Rating Organization
Corporate bonds $ 2,592,281 AAA S&P
Corporate bonds 7,599,714 AA+ S&P
Corporate bonds 409,881 AA S&P
Corporate bonds 325,014 AA- S&P
Corporate bonds 814,828 A+ S&P
Corporate bonds 1,459,545 A S&P
Corporate bonds 2,435,470 A- S&P
Corporate bonds 1,519,586 BBB+ S&P
Corporate bonds 1,243,225 BBB S&P
Corporate bonds 847,165 BBB- S&P
Corporate bonds 139,359 BB+ S&P
Corporate bonds 217,310 BB S&P
Corporate bonds 171,619 BB- S&P
Corporate bonds 48,487 B+ S&P
Corporate bonds 36,750 B S&P
Corporate bonds 142,363 B- S&P
Corporate bonds 645,767 CCC S&P
Corporate bonds 65,505 D S&P
Money market trust funds 5,388,690 Not rated Not rated
Concentration of Credit Risk
The Board of Commissioners places no limit on the amount the Plan may invest in any
one issuer.
13
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 3 - Cash, Investments, and Fair Disclosure (Continued)
Risks at June 30, 2013
Custodial Credit Risk of Bank Deposits
Custodial credit risk is the risk that in the event of a bank failure, the Plan's deposits may
not be returned to it. The Plan requires that financial institutions must meet minimum
criteria to offer adequate safety to the Plan. The Plan evaluates each financial institution
with which it deposits funds and only those institutions meeting minimum established
criteria are used as depositories.
Custodial Credit Risk of Investments
Custodial credit risk is the risk that, in the event of the failure of the counterparty, the
Plan will not be able to recover the value of its investments or collateral securities that
are in the possession of an outside party. The Plan does not have a policy for custodial
credit risk. At year end, all investments of the Plan were held in the name of the Board
of Water and Light and, therefore, are not subject to custodial credit risk.
Interest Rate Risk
Interest rate risk is the risk that the value of investments will decrease as a result of a
rise in interest rates. The Plan's investment policy does not restrict investment
maturities. At year end, the average maturities of investments are as follows:
Weighted Average
Investment Fair Value Maturity
Government bonds and notes $ 13,019,316 12. 14 years
Corporate bonds and notes 19,321,385 14.67 years
Money market trust funds 5,679,922 Less than I year
14
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 3 - Cash, Investments, and Fair Disclosure (Continued)
Credit Risk
State law limits investments in commercial paper to the top two ratings issued by
nationally recognized statistical rating organizations. The Plan has no investment policy
that would further limit its investment choices. As of year end, the credit quality ratings
of debt securities (other than the U.S. government) are as follows:
Investment Fair Value Rating Rating Organization
Corporate bonds $ 2,665,293 AAA S&P
Corporate bonds 7,164,975 AA+ S&P
Corporate bonds 313,858 AA S&P
Corporate bonds 358,219 AA- S&P
Corporate bonds 998,377 A+ S&P
Corporate bonds 1,250,910 A S&P
Corporate bonds 2,074,030 A- S&P
Corporate bonds 736,143 BBB+ S&P
Corporate bonds 1,671,545 BBB S&P
Corporate bonds 549,653 BBB- S&P
Corporate bonds 181,288 BB+ S&P
Corporate bonds 225,628 BB S&P
Corporate bonds 224,763 BB- S&P
Corporate bonds 19,350 B+ S&P
Corporate bonds 121,588 B S&P
Corporate bonds 229,346 B- S&P
Corporate bonds 488,732 CCC S&P
Corporate bonds 47,687 D S&P
Money market trust funds 5,679,922 Not rated Not rated
Concentration of Credit Risk
The Board of Commissioners places no limit on the amount the Plan may invest in any
one issuer.
15
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Notes to Financial Statements
June 30, 2014 and 2013
Note 4 - Net Appreciation of Investments
The net appreciation (depreciation) of the Plan's investments is as follows:
2014 2013
Investments at fair value as determined by
quoted market price:
Corporate bonds and notes $ 451,415 $ 284,652
Government bonds and notes 188,304 (576,489)
Equities 21,775,370 12,21 1,563
Alternative investments 40,441 15,276
Mutual funds 318,620 1,003,047
Total $ 22,774,150 $ 12,938,049
Note S - Tax Status
The Plan is exempt under Internal Revenue Code Section 501(c)(9) and received an
exemption letter as of February 9, 2000. The Plan has since been amended.
Management believes the Plan continues to operate as a qualified plan.
16
Required Supplemental Information
17
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Schedule of Funding Progress
(in thousands)
Valuation Actuarial Funded
Date Asset Value AAL UAAL Ratio
2/28/2007 $ 52,335 $ 198,005 $ 145,670 26.43%
2/29/2008 57,246 236,102 178,856 24.25%
2/28/2009 45,320 256,888 211,568 17.64%
2/28/2010 76, 117 252,142 176,025 30. 19%
2/28/2011 100,604 260,097 159,493 38.68%
2/28/2012 110,029 245,418 135,389 44.83%
2/28/2013 123, 195 207,864 84,669 59.27%
2/28/2014 148,307 194,365 46,058 76.30%
AAL - Actuarial accrued liability (projected unit credit accrued liability)
UAAL - Unfunded actuarial accrued liability and negative UAAL indicate a funding excess.
18
Lansing Board of Water and Light
Retiree Benefit Plan and Trust
Schedule of Employer Contributions
(in thousands)
Employer Contributions Percentage
Fiscal Year of ARC
Ended Required Actual Contributed
6/30/2007 $ 17,867 $ 18,090 101%
6/30/2008 14,797 14,962 101%
6/30/2009 18,132 17,866 99%
6/30/2010 21,291 21,318 100%
6/30/201 1 17,300 17,236 100%
6/30/2012 15,744 15,854 101%
6/30/2013 13,994 14,045 100%
6/30/2014 9,200 9,268 101%
ARC - Annual required contribution
19