2021 Retirement Plans Annual Report

St. Louis County, Missouri

INTRODUCTION RETIREMENT PLANS

ANNUAL REPORT 2022

A LETTER FROM THE CHAIRMAN, ST. LOUIS COUNTY RETIREMENT BOARD

November 1, 2022

Dear Retirement Plan Member:

The Board of Trustees of the St. Louis County Employees Retirement Plans is pleased to present the Plans 2021 Annual Report.

This report includes a description of the provisions of the Actuarial Valuation Report of the civilian and police pension plans and statistical information relating to the operations of those plans during 2021. In addition, the Report includes the audited Financial Statements of the Retirement Plans for our fiscal year ending December 31, 2021, and the Independent Auditor’s Opinion for the year. Note that the Retirement Plans’ auditor states in their report that the financial statements present fairly, in all material respects, the fiduciary net position of the Plans as of December 31, 2021, in accordance with accounting principles generally accepted in the United States.

The Plans had a highly successful 2021 calendar year, achieving a return of 15.5%, resulting in a market value of $965,602,105 as of December 31, 2021. This performance capped off very successful 5 and 10-year periods in which the Retirement Plans rate of return ranked in the top quartile of its national public plan peer group.

As of December 31, 2021, the actuarial funded level of the Retirement Plans stood at 75.1%, an increase over the 71.9% level as of December 31, 2019 As with almost all defined benefit public pension plans, the Plans continue to have long-term challenges related to expected retirement obligations versus current Pension Plans balances. The Board believes that the Plans’ assets are managed in a professional and prudent manner consistent with meeting its obligations to retirees while also increasing its funded level.

For the Board of Trustees,

Milton P. Wilkins, Jr. Chairman

BOARD OF TRUSTEES

The Retirement Board of Trustees is responsible for the governance and administration of the Civilian Employees’ and Commissioned Police Officers’ Retirement Plans. The Board consists of seven members appointed by the County Executive. Four members represent the general public and three members are employees of St. Louis County. Two of the public members’ appointments are based upon the recommendation of the St. Louis County Council. The Director, Division of Personnel, and the Chief Accounting Officer, St. Louis County, serve as Ex-Officio members of the Board.

The Board holds regular monthly meetings on the last Thursday of each month in the Lawrence K. Roos County Government Center, Division of Fiscal Management, 8th Floor Conference Room, 41 South Central Avenue, Clayton, Missouri, unless otherwise provided. At these meetings, the Board reviews and acts upon requests for retirement, death, and disability benefits; plan improvements; investment philosophy, strategy, performance; and other business. During 2019, the Board and its committees held 12 such meetings.

As of December 31, 2021, the members of the Board were:

J. MICHAEL BRUNO

Retired

Formerly, Senior Vice President, Plancorp LLC

JAMES CUNNANE

Retired

Formerly, Managing Director and Senior Portfolio Manager

Tortoise Capital Advisors

BRIAN HANSEN

President and Chief Operating Officer

Confluence Investment Management, LLC

EMILY KOENIG

Acting Executive Director at St. Louis County Children's Service Fund

CAPTAIN GERALD LOHR

Lieutenant Colonel, St. Louis County Police Department

MILTON P. WILKINS JR. Investment Manager

RBF Wealth Advisors

As of December 31, 2021, there was one open Director position.

In addition to the above members of the Board, the following individuals serve as active exofficio members and provide assistance to the Board.

SUSAN DANIELS Director of Human Resources, St. Louis County Government

VICKI FREDRICK Chief Accounting Officer, St. Louis County Government

INVESTMENT MANAGERS AND PROFESSIONAL SUPPORT STAFF AS OF DECEMBER 2021

INVESTMENT MANAGERS:

Acadian Asset Management

Aristotle Capital Management LLC

Earnest Partners

Granite Investment Partners

Heitman American Real Estate Trust, L.P.

Income Research & Management

Jennison Associates Capital Corporation

Mondrian Investment Partners Limited

Prudential Global Investment Management

RREEF America LLC

Sanderson Asset Management

Western Asset Management

Rhumline Advisers

WCM Investment Management

William Blair & Company

CUSTODIAN: State Street Corporation

LEGAL COUNSEL:

Beth Orwick, St. Louis County Counselor

Margaret Hart-Mahon, St. Louis County Counselor

Laura Robb, St. Louis County Counselor

ACTUARY:

Foster and Foster LLC

CONSULTANTS:

Asset Consulting Group

Investment Consultants

STAFF: Susan Daniels, Personnel Director

Denise Derr, HR Generalist II

BOARD OF TRUSTEES 1967 - 2020

EARL LASETER

PHILLIP T. SLATTERY

WILLIAM A. KENLEY

EUGENE C. NELSON

CAREY E. ASHLEY

MELVIN C. BAHLE

MAURICE WEINGART

GEORGE C. STOCK

PHYLLIS EDWARDS

MARTIN E. JUNCKER

1967 – 1976

1967 – 1976

THOMAS P. MOONIER VICE-CHAIRMAN 1991 – 1995

BETTY GREEN

PHILLIP K. WESSELS

HAROLD G. BLATT

– 1975

– 1980

– 1978

ANN M. TEGETHOFF 1976 – 1979

MSGR. ROBERT L. MCCARTHY VICE-CHAIRMAN 1976 – 1978/ CHAIRMAN 1978 – 2007 1976 - 2007

GEORGE C. LEACHMAN VICE-CHARIMAN 1978 – 1981 1977 – 1988

MORTIMER J. REILY

PATRICK J. SWEENEY, JR.

KENNETH E. GUEBERT

MARY K. FRISCH

VICE-CHAIRMAN 1981 – 1991

THOMAS G. WRIGHT VICE-CHAIRMAN 1992 – 2007/CHAIRMAN 2007 -2017

ROBERT H. PETERSON

OLLIE W. LANGHORST

JAMES E. CONLEY, SR.

BRENDA J. LOFTIN

RENEE HINES-TYCE

BRIAN A. BASS

JOHN L. ROSENTHAL

DAVID T. PUDLOWSKI

NORRIS R. ACKER

CAPT. VINCE MANNING (RET.)

CLAYTON ERICKSON VICE- CHAIRMAN 2007 – 2015

DETECTIVE GARY FOURTNEY

GLADYS LEWIS

BRYAN PINI

MILTON WILKINS CHAIRMAN 2017-current

JOAN GILMER

THOMAS CURRAN

CAPT. STEVEN SACK

KATE TANSEY

GARY O’NEAL

PATRICIA WASHINGTON

CYNTHIA WILLIAMS

ANDREW DURKET

1978 – 1984

1978 – 1989

1979 – 1991

1980 – 1992

1984- 2017

1988 - 2005

1990 – 1999

1991 – 2001

1992 – 1993

1994 – 1995

1995 - 2007

1995 – 1996

1996 - 2005

2000 – 2001

-

-

FRANCIS STROBLE 2015-2017

J. MICHAEL BRUNO 2017-current

CAPT. GERALD LOHR 2018-current

JAMES CUNNANE

BRIAN HANSEN

EMILY KOENIG

EX-OFFICIO MEMBERS

ROBERT D. CRAWFORD

EARL R. CHAMBERS 1967 – 1987

SUMMARY

SUMMARY OF PRINCIPAL PLAN PROVISIONS – PLAN A 1 - TRADITIONAL

Eligibility: In general, all salaried civilian employees are eligible. Entry date is the first of the month coinciding with or next closest in time to the date of commencement of full time employment. Exclusions: members of boards and commissions, and employees whose customary employment is less than 30 hours per week, or less than 9 months per year.

Credited Service: All periods of participation.

Compensation: Aggregate compensation including any salary reduction amounts excluding reimbursed expenses and all other unusual compensation, and in accordance with applicable Internal Revenue Code provisions.

Service Retirement Date: Age 65 and 3 years of credited service.

Rule of 80 Retirement Date: Sum of age and credited service equals or exceeds 80.

Early Retirement Eligibility: Any combination of age and credited service from the table below:

1 This Summary for Plan A and Plan B (the ”Plans”) provides a general overview of the Plans’ provisions in effect in 2018. The official Plans provisions are set out in Chapter 204 of the St. Louis County Revised Ordinances. To the extent there are any discrepancies between this Summary and Chapter 204, Chapter 204 (2016) shall govern.

BENEFITS:

Basic Retirement Benefit: 1.5% of final average compensation times credited service.

Supplemental Benefit: $15 per month per year of credited service payable from service retirement date.

Rule of Eighty Benefit: Computed in the same way as normal retirement.

Early Retirement Benefit: 1.5% of final average compensation times credited service times actuarial reduction factor.

Duty Death Benefit: For a participant who dies solely as a direct and proximate result of injuries sustained while in the actual discharge and performance of the participant’s duties of employment.

Pre-Retirement Death Benefit: The surviving spouse of a deceased vested participant (who was either active or had terminated on or after 10/26/1986) is eligible for a monthly benefit payable for life under the conditions set forth in §204.152.

Post-Retirement Death Benefits: $10,000 for participants who were receiving Early, Rule of 80, or Normal Retirement benefits at time of death

Termination Benefits: A vested participant receives an annuity beginning on his normal retirement date of 1.5% of final average compensation times credited service. A participant is vested if he has 5 years of credited service or if he is at least 65 and his age plus credited service is at

least 70, provided he has at least three (3) years of credited service.

Final Average Compensation: Average over the 36 consecutive months from the last 120 that produce the highest average. This is based on a calendar year except for the year of retirement.

Cost of Living Adjustments: Available as the Board deems appropriate taking into consideration the changes in cost of living since retirement and the solvency of the Plans and subject to the approval of the St. Louis County Executive and St. Louis County Council.

SUMMARY OF PRINCIPAL PLAN PROVISIONS – PLAN A- CONTRIBUTORY

A Contributory Plan participant in Plan A or Plan B shall be required to contribute four percent of the participant’s compensation to the retirement fund each payroll period for purposes of funding benefits.

Eligibility:

In general, all salaried civilian employees are eligible. Entry date is the first of the month coinciding with or next closest in time to the date of commencement of full time employment. Exclusions: members of boards and commissions, and employees whose customary employment is less than 30 hours per week, or less than 9 months per year.

Credited Service: All periods of participation.

Compensation: Aggregate compensation including any salary reduction amounts excluding reimbursed expenses and all other unusual compensation, and in accordance with applicable Internal Revenue Code provisions.

Service Retirement Date: Age 67 and 3 years of credited service.

Rule of 85 Retirement Date: Sum of age and credited service equals or exceeds 85

Early Retirement Eligibility: Any combination of age and credited service from the table below: Age Service 55 20

1 This Summary for Plan A and Plan B (the ”Plans”) provides a general overview of the Plans’ provisions in effect in 2018. The official Plans provisions are set out in Chapter 204 of the St. Louis County Revised Ordinances. To the extent there are any discrepancies between this Summary and Chapter 204, Chapter 204 (2016) shall govern.

BENEFITS:

Basic Retirement Benefit: 1.3% of final average compensation times credited service.

Supplemental Benefit: $15 per month per year of credited service payable from service retirement date.

Rule of Eighty Benefit: Computed in the same way as normal retirement.

Early Retirement Benefit: 1.5% of final average compensation times credited service times actuarial reduction factor.

Duty Death Benefit: For a participant who dies solely as a direct and proximate result of injuries sustained while in the actual discharge and performance of the participant’s duties of employment.

Pre-Retirement Death Benefit: The surviving spouse of a deceased vested participant (who was either active or had terminated on or after 10/26/1986) is eligible for a monthly benefit payable for life under the conditions set forth in §204.152.

Post-Retirement Death Benefits: $10,000 for participants who were receiving Early, Rule of 85, or Normal Retirement benefits at time of death.

Termination Benefits: A vested participant receives an annuity beginning on his normal retirement date of 1.3% of final average compensation times credited service.

A participant is vested if he has 7 years of credited service or if he is at least 67 and has at least three (3) years of credited service.

Final Average Compensation: Average over the 36 consecutive months from the last 120 that produce the highest average. This is based on a calendar year except for the year of retirement.

Cost of Living Adjustments: Available as the Board deems appropriate taking into consideration the changes in cost of living since retirement and the solvency of the Plans and subject to the approval of the St. Louis County Executive and St. Louis County Council.

SUMMARY OF RETIREMENT PLANS

ST. LOUIS COUNTY RETIREMENT PLANS

SUMMARY OF PRINCIPAL PLAN PROVISIONS – PLAN B- TRADITIONAL

Eligibility: All commissioned police officers of the St. Louis County Police Department.

Credited Service: Same as under Plan A.

Compensation: Same as Plan A

Service Retirement Date: Age 60 with 10 years of credited or age 65 with at least 3 years of credited service. (Not earlier than date of termination of employment.)

Rule of Eighty Retirement Date: Sum of age and credited service equals or exceeds 80.

Early Retirement Eligibility: Age 55 with 10 years of credited service.

BENEFITS:

Basic Retirement Benefit: 1.6% of final average compensation times credited service.

Supplemental Benefit: $30 per month per year of credited service payable from service retirement date to age 65, plus $5 per month per

year of credited service, payable for life.

Rule of Eighty Benefit: Basic retirement benefit plus supplement, payable from Rule of 80 date.

Early Retirement Benefit: Basic retirement benefit plus supplement, actuarially reduced.

Post-Retirement Death Benefits: $10,000 for participants who were receiving Early, Rule of 80 or Normal Retirement benefits at time of death.

Duty Death Benefit: Same as Plan A. Benefit calculation is modified in event of permanent and total disability caused by on-the-job duty.

Post-Retirement Death Benefits: Same as Plan A.

Termination Benefits:

A vested participant receives an annuity beginning on his normal retirement date of 1.6% of final average compensation times credited service. A participant is vested if he has 5 years of credited service or if he is at least 65 and his age plus credited service is at least 70, provided he has at least three (3) years of credited service.

Final Average Compensation: Same as Plan A.

Cost of Living Adjustments: Same as Plan A.

SUMMARY OF RETIREMENT PLANS

ST. LOUIS COUNTY RETIREMENT PLANS

SUMMARY OF PRINCIPAL PLAN PROVISIONS – PLAN B- CONTRIBUTORY

A Contributory Plan participant in Plan A or Plan B shall be required to contribute four percent of the participant’s compensation to the retirement fund each payroll period for purposes of funding benefits.

Eligibility: All commissioned police officers of the St. Louis County Police Department.

Credited Service: Same as under Plan A.

Compensation: Same as Plan A

Service Retirement Date: Age 60 with 10 years of credited or age 65 with at least 3 years of credited service. (Not earlier than date of termination of employment.)

Rule of 85 Retirement Date: Sum of age and credited service equals or exceeds 85.

Early Retirement Eligibility: Age 55 with 10 years of credited service.

BENEFITS:

Basic Retirement Benefit: 1.4% of final average compensation times credited service.

Supplemental Benefit: $30 per month per year of credited service payable from service retirement date to age 65, plus $5 per month per year of credited service, payable for life.

Rule of 85 Benefit: Basic retirement benefit plus supplement, payable from Rule of 85 date.

Early Retirement Benefit: Basic retirement benefit plus supplement, actuarially reduced.

Post-Retirement Death Benefits: $10,000 for participants who were receiving Early, Rule of 85 or Normal Retirement benefits at time of death.

Duty Death Benefit: Same as Plan A. Benefit calculation is modified in event of permanent and total disability caused by on-the-job duty.

Post-Retirement Death Benefits: Same as Plan A.

Termination Benefits: A vested participant receives an annuity beginning on his normal retirement date of 1.4% of final average compensation times credited service. A participant is vested if he has 7 years of credited service or if he is at least 65, provided he has at least three (3) years of

RETIREMENT FUND CONTRIBUTIONS

Funds are invested in a diversified portfolio consisting primarily of U.S equities, corporate bonds, U.S. Government securities, international equities, and real estate.

The Retirement Fund (the “Fund”) is composed of contributions received from St. Louis County plus investment earnings minus benefit payments and Fund expenses.

The market value of the assets of the Fund as of December 31, 2020, was $855,589,730. For 2021 the County’s contribution was $46,803,767 Employee contributions totaled $2,237,957 Appreciation of securities plus income from interest and dividends was $133,194,789. After the payment of retiree benefits and fund expenses of $70,977,668, the Fund’s assets increased by $111,258,845

The County’s contribution for 2021 by Plan is listed below:

Civilian Employees’ Plan A $28,006,154

Police Officers’ Plan B $18,797,613

TOTAL $46,803,767

SUMMARY OF 2021 RETIREMENT BOARD – IMPROVEMENTS, CHANGES, ACTIONS

During 2021, the Retirement Board held twelve regularly scheduled meetings. The Board typically meets the last Thursday of each month, in the 8th floor conference room of the Lawrence K. Roos Building, at 41 S. Central Avenue, Clayton, MO 63105, unless otherwise provided. However, during 2021 many of the Board’s meetings were held by video-conference due to the COVID-19 virus.

The Board performed its regular duties of approving retirement and death benefits, conducting a monthly review of investment manager performance, and reallocating funds and investment managers where warranted. At each meeting, the Board conferred with the Plans’ investment consultant, Asset Consulting Group, concerning investment strategies and investment manager performance, frequently conducting in-depth meetings with the Plans investment managers In addition, the Board conferred regularly with the Plans’ actuary.

Complete Retirement Board Minutes and Agendas are available on the Internet Site for St. Louis County.

http://www.stlouisco.com/SearchResults?xsq=retirement+board+minutes

COUNTY EMPLOYEES’ RETIREMENT PLAN

(a Fiduciary Component Unit of St. Louis County, Missouri)

ANNUAL FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT

Fiscal Years Ended December 31, 2021 and 2020

INDEPENDENT AUDITOR’S REPORT

Board of Trustees

St. Louis County, Missouri County Employees’ Retirement Plan

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of the St. Louis County, Missouri County Employees’ Retirement Plan (the Plan), a Fiduciary Component Unit of St. Louis County, Missouri (the County), as of and for the years ended December 31, 2021 and 2020, 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 accompanying financial statements present fairly, in all material respects, the fiduciary net position of the Plan as of December 31, 2021 and 2020, and the respective 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) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States Our responsibilities under these standards are further described in the Auditor's 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 opinions.

Responsibilities of Management 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 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 County’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.

Auditor’s 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 auditor's 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 and Government Auditing Standards 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 and Government Auditing Standards, 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.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and required supplementary information, as listed in 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 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 audits 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.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Plan’s basic financial statements. The supplementary information listed in the table of contents is presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplementary information is the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information

Management is responsible for the other information included in the annual report. The other information comprises the statistical section but does not include the basic financial statements and our auditor’s report thereon. Our opinion 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.

OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS

In accordance with Government Auditing Standards, we have also issued our report dated December 9, 2022, on our consideration of the Plan’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County’s internal control over financial reporting or on compliance That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Plan’s internal control over financial reporting and compliance.

St. Louis, Missouri

December 9, 2022

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Management is pleased to provide this overview and analysis of the financial activities of the St. Louis County, Missouri County Employees’ Retirement Fund (the Plan) for the year ended December 31, 2021. We encourage readers to consider the information presented in conjunction with the financial statements, notes to financial statements, and required supplementary information, which follows the management’s discussion and analysis (MD&A)

The Plan is comprised of two plan classes for membership purposes and considered to be a single plan for accounting purposes. The Plan provides for retirement and death benefits for the two membership classes known as a noncontributory plan and a contributory plan

Overview of the Financial Statements

The Plan’s 2021 financial statements, notes to the financial statements, required supplementary information, and other supplementary information were prepared on an accrual basis, in accordance with accounting principles generally accepted in the United States of America promulgated by the Governmental Accounting Standards Board (GASB) The following MD&A is intended to serve as an introduction and overview of the Plan’s financial reporting components.

The Statements of Fiduciary Net Position present information of the Plan’s assets and liabilities and the resulting net assets held in trust to meet future benefit payments. It reflects the Plan’s investments at fair value, along with cash and short-term investments, receivables, and other assets and liabilities. It indicates the resources available to pay future pension and death benefits and gives a snapshot at a particular point in time.

The Statements of Changes in Fiduciary Net Position present information showing how the Plan’s net assets held in trust for future benefits changed during the years It reflects members’ salary deferral contributions and employer contributions along with deductions for retirement benefits, distributions, and administrative expenses Investment returns during the period are also presented, showing income and/or losses from investment activities.

The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the audited financial statements.

The Required Supplementary Information provides the Schedules of Changes in the County’s Net Pension Liability, Schedules of Employer’s Net Pension Liability and Ratios, Schedule of Employer Contributions, and Schedule of Investment Returns.

The Other Supplementary Information includes a detailed schedule of investment expenses and 10 years of historical trend information.

LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

2021 Financial Highlights

• The Plan’s fiduciary net position increased by $108.8 million, or 12.7%, to $965.6 million as of December 31, 2021 primarily as a result of employer and member contributions and earnings from investments.

• Investments as of December 31, 2021 increased from the prior year by $111.4 million to $966.7 million Unprecedented Central Bank measures and large fiscal stimulus packages both in the US and abroad helped guide equities higher for the year.

• Total Plan liabilities as of December 31, 2021 increased to $2.6 million from the prior year that was $1.4 million, or 83.9%.

• The Plan’s funding objective is to meet long-term benefit obligations through contributions and investment income. As of December 31, 2021, the date of the last actuarial evaluation, the funded ratio for the Plan was 81.19% based on the ratio of market value of assets over actuarial liability. In general, this indicates that for every dollar of benefits due we had approximately $0.81 of assets available for this payment as of that date. Fiduciary net position as a percentage of total pension liability was 81.19%, 76.19%, and 69.67% as of December 31, 2021, 2020, and 2019, respectively.

• Total Additions, as reflected in the Statement of Changes in Fiduciary Net Position, were $179.7 million resulting from investment earnings and employer and members’ salary deferral contributions. Total additions increased in 2021, equal to $1.1 million or 0.6% more than the amounts realized in 2021, primarily due to higher plan contributions. Employer and members’ contributions for the year were $49.0 million, an increase of $2.0 million, or 4.3%, from the prior year’s $47.0 million.

• Total Deductions from net position totaled $71.0 million, an increase of $3.9 million or 5.9% from the prior year The increase was attributable to an increase in pension benefits paid to retired members.

Changes in active Members’ benefits resulted from:

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Comparative Financial Statements

As of December 31, 2021, the Plan’s financial net position increased by $108.8 million, or 12.7%, from the prior year. The increase in net position is primarily a result of the fair value of investments increasing due to a positive performance in the markets in 2021 As of December 31, 2021, the Plan had $965.6 million in fiduciary net position, where the amount of total assets of $968.2 million exceeded the total liabilities of $2.6 million Over time, increase and decreases in fiduciary net position are one of the indicators of whether the Plan’s financial situation is improving or deteriorating. Additional factors such as market conditions also need to be considered in assessing the Plan’s overall financial position.

Condensed financial information comparing the Plan’s fiduciary net position for the last three fiscal years is presented below:

STATEMENTS OF FIDUCIARY NET POSITION (in millions)

The primary sources that finance the promised retiree benefits are the collection of employer and member retirement contributions and realized investment income. For fiscal years ended 2021 and 2020, Total Additions amounted to $179.7 million and $178.7 million, respectively, and were primarily the result of a diverse investment strategy producing positive investment performance

As of December 31, 2021 employer and employee contributions totaled $49.0 million and net investment income totaled $130.7 million The 2021 increase in investments from 2020 reflects an annual money-weighted rate of return of 16.23%. The increase in investments for 2020 from 2019 reflects an annual money-weighted rate of return of 17.91%.

In December 2017, the County created a new contributory plan requiring all newly hired civilian employees on or after January 17, 2018 and newly hired police on or after February 1, 2018 to contribute 4% pre-tax of their compensation to the Plan. Total employee contributions for the 2021 year totaled $2.2 million, an increase of $0.6 million or 34.7% from the prior year

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

The primary uses of Plan assets include the payment of promised benefits to retirees and their beneficiaries, refunds of contributions to terminated employees, and costs of administering the Plan. These deductions totaled $71.0 million for fiscal year 2021, an increase of $3.9 million or 5.9% from the prior year. The increase in deductions is attributable to the increase in pension benefits paid to retired members

Condensed financial information comparing the statements of changes in fiduciary net position for the last three fiscal years is presented below:

Economic Factors, Investment Returns, and Other Important Matters

The Plan’s purpose is to grow plan assets at a rate sufficient to meet promised benefits to its members while minimizing the risks associated with achieving that growth. Through its investment policy, the Plan has a well-diversified investment portfolio to achieve this long-term objective.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

In addition, to maximize investment returns and preserve fund assets, the Plan carefully monitors the performance of each of its investment managers and takes the necessary corrective action to ensure acceptable investment results.

Requests for Information

This financial report is designed to provide a general overview of the Plan’s finances Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to St. Louis County, Missouri, Division of Fiscal Management, 41 South Central Avenue, Clayton, Missouri, 63105.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN STATEMENTS OF FIDUCIARY NET POSITION

DECEMBER 31, 2021 AND 2020

ST. LOUIS COUNTY, MISSOURI

COUNTY EMPLOYEES’ RETIREMENT PLAN STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

ST.

COUNTY

LOUIS COUNTY, MISSOURI

EMPLOYEES’

RETIREMENT

PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

1. PLAN DESCRIPTION

A. General

In December 2017, the St. Louis County, Missouri (the County) created a new defined benefit trust fund designated the County Employees’ Retirement Fund (the Plan) for the purpose of accumulating funds for distribution of the benefits provided under the existing noncontributory plan and a newly established contributory plan The noncontributory plan closed to newly hired Civilian employees on January 17, 2018 and to newly hired Police on February 1, 2018.

The Plan is considered to be part of the County’s financial reporting entity and is included in the County’s financial reporting entity as a Fiduciary Component Unit The assets of the Plan are available for the payment of pension benefits to either class of members The Plan covers substantially all civilian employees (Civilian) and commissioned police officers (Police) employed by St. Louis County.

B. Membership

Membership statistics as of January 1, 2021 and 2020 (the latest actuarial valuation) are as follows:

The Plan is under the management and control of the Board of Trustees, as provided in the St. Louis County Retirement Plan Ordinance. The Board of Trustees consists of seven members, appointed by the County Executive. One member must be a commissioned police officer of the County’s Police Department; two members must be Civilian participants in the County’s retirement plan and from different departments;

COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

and four members are appointed from the general public and must not be County employees. Additionally, two of the members appointed from the general public require recommendation by the County Council.

C. Pension Benefits

Under the noncontributory plan, all regular full-time Civilian employees hired through January 16, 2018 and Police hired through January 31, 2018 are eligible for participation and are considered vested when they have attained five years of credited service. The retirement benefit is calculated as 1.5% of average compensation for Civilian (age 65 and rule of 80) and 1.6% of average compensation for Police (age 55 and rule of 80) during the highest consecutive 36 months of the last 120 months of service multiplied by the years of credited service

Under the new contributory plan, all newly hired Civilian employees on or after January 17, 2018 and newly hired Police on or after February 1, 2018 are considered vested when they have attained seven years of credited service. The retirement benefit is calculated at 1.3% of average compensation for Civilian (age 67 and rule of 85) and 1.4% of average compensation for Police (age 57 and rule of 85) during the highest consecutive 36 months of the last 120 month of service multiplied by the years of credited service. Additionally, the Plan provides early retirement, death benefits, and disability benefits. Participants grandfathered under the existing noncontributory plan benefits have not changed.

D. Contributions

The new contributory plan requires employees to contribute 4% pre-tax of their compensation to the Plan each payroll. Annually, participants accumulated contribution accounts are credited with an interest rate equal to a short-term U.S. Treasury Bill rate. Nonvested participants who incur a termination of employment and a beneficiary of a deceased participant may apply for a refund of accumulated contributions and interest credited thereon, provided they are eligible for retirement benefits provided by the Plan. Participants grandfathered under the existing noncontributory plan benefits have not changed.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS

A. Measurement Focus and Basis of Accounting

The Plan’s financial statements were prepared in accordance with accounting principles generally accepted in the United States of America as applicable to governmental organizations. In doing so, the Plan adheres to the reporting requirements established by the Governmental Accounting Standards Board (GASB) Employer contributions

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

are recognized in the period in which the contributions are due Investment income is recognized as earned. Benefits are recognized when due and payable in accordance with the terms of the Plan. Certain administration expenses of the Plan are paid by the County at no charge to the Plan Investment sales and purchases are recorded on a tradedate basis (the date upon which the transaction is initiated).

B. Methods Used to Value Investments

Investments are stated at fair value, as defined by accounting principles generally accepted in the United States of America. Fair values for investments are determined by closing market prices at year-end as reported by the investment custodian. Mortgage-backed securities are valued at fair value based on future principal and interest payments and are discounted at prevailing interest rates for similar instruments Alternative investments are carried at estimated fair value provided by the management of the alternative investment partnerships or funds Alternative investments in real estate investment trusts are valued at least annually by external independent appraisal firms. On a quarterly basis, the appraised values are updated by the appraisers or management of the real estate investment trusts for changes in factors such as occupancy levels, lease amendments, lease incentives, capital improvements, and growth assumptions, as well as other financial and industry market conditions Because alternative investment funds are not readily marketable, the estimated value is subject to uncertainty and, therefore, may differ materially from the value that would have been used had a ready market for the investments existed.

C. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management and the Plan’s actuary to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of additions and deductions to the Plan net position during the reporting period Accordingly, actual results could differ from those estimates.

D. Income Tax Status

The Plan meets the requirements of a governmental plan under section 414(d) of the Internal Revenue Code (IRC). The Plan is not subject to the provision of the Employee Retirement Income Security Act of 1974; however, the Plan obtained its latest determination letter on May 12, 2014, in which the Internal Revenue Service (IRS) stated that the Plan, as then designed and being operated, was in compliance with applicable requirements of the IRC.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

E. Reclassifications

Certain reclassifications to the December 31, 2020 statement of changes in fiduciary net position were made to match the December 31, 2021 classification. The change did not change the Plan’s net position at December 31, 2020.

3. DEPOSITS AND INVESTMENTS

A. General

As outlined in the St. Louis County Retirement Plan Ordinance, the Plan is under the management and control of the Board of Trustees. The Plan is authorized to invest in U.S Government obligations, other marketable equity and nonequity securities, deposit administration contracts, and other investments as outlined in the investment portfolio guidelines issued by the Board of Trustees to each investment manager.

As of December 31, 2021 and 2020, the Plan had the following cash deposits and investments:

For the years ended December 31, 2021 and 2020, the annual money-weighted rate of return on plan investments, net of investment expense, was 16.23% and 17.91%, respectively. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for changing amounts invested.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

The Plan’s investments are continuously exposed to various types of inherent risks. These risks are mitigated by the Plan’s development and continual monitoring of sound investment policies. The following information addresses the exposure to certain common risks.

B. Interest Rate Risk

Interest Rate Risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Investments held for longer periods are subject to increased risk of adverse interest rate changes. The Plan’s portfolio is allotted among specialist managers for equity only, real estate only, fixed income only, and hedge fund only management. The Plan requires each manager to diversify by issue and manage the effective duration of their portfolio type relative to specific indices outlined in the Plan’s policy. Specifically, the Plan requires fixed income managers to diversify by issue and manage the effective duration of fixed income securities relative to the Barclays index.

Investment in Corporate and Municipal bonds are subject to interest rate risk. The risk that changes in interest rates will adversely affect the fair value of these investments These fixed income investments are managed in accordance with monitoring and control policies established by the Board that are specific as to the degree of interest rate risk that can be taken The Plan's policies manage the interest rate risk within the portfolio using various methods, including average maturity, credit rating, and broad market indexes The Plan does not have a specific investment policy on interest rate risk.

The Plan also invests in mortgage-backed securities, such as collateralized mortgage obligations. These securities are reported at fair value and are based on the cash flows from interest payments by the underlying mortgages. As a result, they are sensitive to prepayments by mortgagees, which may result from a decline in interest rates. For example, if interest rates decline and homeowners’ refinance mortgages, thereby prepaying the mortgages underlying these securities, the cash flow from interest payments is reduced and the value of these securities declines Likewise, if homeowners pay on mortgages longer than anticipated, the cash flows are greater and the return on the initial investment would be higher than anticipated.

The following schedule provides a summary of the investment maturities by investment type, which helps demonstrate the current level of interest rate risk assumed by the Plan as of December 31, 2021 and 2020:

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

C. Credit Risk

Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Plan’s policy is that fixed income managers will be monitored to identify changes in quality and conformity with guidelines as well as detect style changes, if any Fixed income performance will be managed relative to the Barclays index.

The Plan’s fixed income investments current exposure to credit risk at December 31, 2021 and 2020, is presented below by investment category as rated by Moody’s rating service:

ST. LOUIS COUNTY, MISSOURI

COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

D. Custodial Credit Risk

Custodial Credit Risk for deposits and investments is the risk that in the event of a financial institution’s failure, the Plan would not be able to recover its deposits Deposits are exposed to custodial credit risk if they are not insured or not collateralized. Protection of the Plan’s deposits is provided by the Federal Deposit Insurance Corporation, by eligible securities pledged by the financial institution, or by a single collateral pool established by the financial institution in accordance with state statutes.

Custodial Credit Risk for investments is the risk that, in the event of the failure of a counterparty, the County will not be able to recover the value of the investments that are in the possession of the counterparty. The Plan does not have a general policy addressing custodial credit risk, but it is the practice that all investments are held by the

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Plan’s agent in the Plan’s name, except the real estate investment trusts (REITs) where the assets in the real estate trusts are held in the name of the trust. The Plan retains investment managers that specialize in the investment of a particular asset class. Investment managers are subject to the guidelines and controls established in the investment policy and contracts executed with the Board of Trustees. The Plan utilizes a third party (State Trust Corporation) as custodian over the Plan’s assets.

E. Foreign Currency Risk

Foreign Currency Risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The Plan has six international investment fund portfolios. The Plan’s policy is to allow the individual investment managers to decide what action to take regarding their respective portfolio’s foreign currency exposure management and measure results relative to other managers with similar characteristics and the Europe, Australia, and Far East (EAFE) index.

The Plan’s exposure to foreign currency risk by portfolio orientation in U.S. Dollars as of December 31, 2021 and 2020, is as follows:

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

The Plan’s exposure to foreign currency risk in U.S Dollars as of December 31, 2021 and 2020, is as follows:

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

F. Concentration of Credit Risk

Concentration of credit risk is the risk of loss attributed to the magnitude of the Plan’s investment in a single issuer The Plan’s policy does not allow the concentration per issuer to exceed 5% of the investment manager’s portfolio except for U.S. Treasuries and Agencies It is the Plan’s policy to establish asset class allocation guidelines based on fair values.

The Plan’s target asset allocation and the acceptable degree of variation in the portfolio are shown below:

G. Investments Exceeding 5% of Plan Net Position

The following individual investments (excluding investments issued or explicitly guaranteed by the U.S. Government, investments in mutual funds, external investment pools, or other pooled investments) represent more than 5% of the Plan’s net position as of December 31, 2021 and 2020:

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

H. Fair Value

The Plan categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The Plan has the following recurring fair value measurements as of December 31, 2021 and 2020:

Investments Measured at Fair Value

Debt and equity securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. Commercial and residential mortgage-backed securities classified in Level 3 are valued using discounted cash flow techniques.

Investments Measured at Net Asset Value (NAV)

Real estate investments - the Plan invests in three real estate investment trusts (REITs) which invests in real estate located in the United States.

Real estate investments are carried at fair value. Properties are initially recorded at the purchase price plus closing costs Development costs and major renovations are capitalized as a component of cost, and routine maintenance and repairs are charged to expense as incurred. Real estate costs include the cost of acquired property, including all the tangible and intangible assets Tangible assets include the value of all land, building, and tenant improvements at the time of acquisition. Intangible assets include the value of any above and below market leases, in-place leases, and tenant relationships at the time of acquisition.

In general, fair value estimates are based upon property appraisal reports prepared by independent real estate appraisers (members of the Appraisal institute or an equivalent organization) within a reasonable amount of time following acquisition of the real estate and no less frequently than annually thereafter. The real estate trust's General Partner is responsible to assure that the valuation process provides independent and reasonable property fair value estimates. Unaffiliated third-party appraisal firms assist the General Partner in maintaining and monitoring the independence and the accuracy of the appraisal process.

Determination of estimated fair value of real estate involves subjective judgment because the actual fair value of real estate can be determined only by negotiation between parties in a sale transaction and amounts ultimately realized may vary from the fair values presented. The General Partner's approval is required to approve the buyer before the sale of real estate investment properties can be completed.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS FOR

THE YEARS ENDED DECEMBER 31, 2021 AND 2020

The REITs at times invest in real estate joint ventures The REITs do not consolidate investments in joint ventures in which the REIT has significant influence but not overall control. For the investments in unconsolidated joint ventures, the investments are initially recorded at the original investment amounts, are subsequently adjusted for the REIT's share of undistributed earnings and losses (including unrealized and realized gain (loss)) from the underlying entities from the dates of formation, are increased by additional contributions, and are reduce by distributions received.

The following tables sets forth by level, within the fair value hierarchy, the Plan's assets at fair value:

ST.

LOUIS COUNTY, MISSOURI COUNTY

EMPLOYEES’

RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

The valuation method for investments measured at the NAV per share (or its equivalent) is presented on the following tables:

ST. LOUIS COUNTY, MISSOURI

COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(a) Real estate investment trust This trust is an open-ended core fund organized to serve as a collective investment vehicle through which eligible investors may invest in a professionally managed real estate portfolio consisting of multi-family, industrial, retail, and office properties in targeted metropolitan areas within the continental United States (including leased properties, vacant properties, and development and redevelopment properties) The principal investment objective of the trust is to generate attractive, predictable investment returns from a target portfolio of low-risk equity investments in income-producing real estate while maximizing the total return to unit holders through cash dividends and appreciation in the value of REIT limited partner units.

(b) Real estate investment trust. This trust is organized as a perpetual-life, open ended comingled fund for the objective and purpose of creating a high-quality, low risk, diversified portfolio of stabilized, income-producing real estate investments diversified by property type and economic exposure The fund accomplishes this by acquiring assets in infill locations within major metropolitan areas within the continental United States with strong site attributes (such as proximity to amenities, employment centers, and transportation networks) and that are well constructed, with features that will appeal to tenants over long periods of time. The fund’s real estate investments consist of direct and venture investments with third-party owner/operators.

4. CONTRIBUTIONS

Member Contributions

Member contributions are based upon plan membership: the contributory plan or the noncontributory plan

Noncontributory plan members do not contribute to the Plan. Contributions are paid solely by the County. The contributory plan requires all newly hired Civilian employees on or after January 17, 2018 and newly hired Police on or after February 1, 2018 to contribute 4% pretax of their compensation to the Plan Participants grandfathered under the previous noncontributory plan benefits have not changed whereby plan participants do not contribute to the Plan

Member contributions are credited with interest accruing after 12 months of employment. Upon termination of employment prior to retirement, a member may elect to withdraw his or her accumulated member contributions and interest, terminating Plan membership and forfeiting all related rights and benefits.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Member salary deferral contributions made to the Plan for the years ended December 31, 2021 and 2020 are as follows:

The contributions are actuarially determined using the Project Unit Cost actuarial cost method and are sufficient to pay benefits when due County contributions made to the Plan for the years ended December 31, 2021 and 2020 are as follows:

For The Year Ended December 31, 2021

For The Year Ended December 31, 2020

ST. LOUIS COUNTY, MISSOURI

COUNTY

EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

5. NET PENSION LIABILITY

The components of net pension liability of the County at December 31, 2021 and 2020, were as follows:

Provided by Foster & Foster Consulting Actuaries, Inc. for 2021 and Buck Global, LLC for 2020, the Plan’s actuary.

Actuarial Assumptions

The total pension liability was determined using the provisions of the GASB Statements No 67 and No. 82 actuarial valuation as of January 1, 2021 and 2020 (the measurement date), projected to the end of each year using the following actuarial methods and assumptions:

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

Valuation Date January 1 January 1

Actuarial cost method:

3.75% Civilian, 3.25% Police, and thereafter, plus additional increases from 0% to 18% based upon date of employment

3.75% Civilian, 3.25% Police, and thereafter, plus additional increases from 0% to 18% based upon date of employment

Mortality or death rates:

Civilian

The base table utilizes a blend of 85% PubG-2010 and 15% PubS-2010 mortality tables using scale MP-2020.

For disabled participants, the base table utilizes a blend of 85% PubNS-2010 disability and 15% PubS-2010 disability mortality tables using scale MP-2020.

The base table utilizes a blend of 85% PubG-2010 and 15% PubS-2010 mortality tables.

For disabled participants, the base table utilizes a blend of 85% PubNS-2010 disability and 15% PubS-2010 disability mortality tables.

Police

The base table utilizes 100% PubS-2010 mortality tables using scale MP-2020.

For disabled participants, the base table utilizes 100% PubS-2010 disability mortality tables using scale MP-2020.

The base table utilizes 100% PubS-2010 mortality tables.

For disabled participants, the base table utilizes 100% PubS-2010 disability mortality tables.

Asset valuation method: Funding requirements 4-year smooth market4-year smooth market GASB reporting Market value Market value

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Long-term Expected Rate of Return

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and an adjustment for the effect of rebalancing/diversification. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

The rates of return are shown net of inflation (assumed at 2.75%) and net of investment expenses.

Discount Rate

The discount rate used to measure the total pension liability at December 31, 2021 and 2020, was 7.25% and 7.50%, respectively. The projection of cash flows used to determine the discount rate assumed that County contributions will continue to follow the current funding policy of contributing employer normal cost plus Plan expenses plus a 25-year closed layered amortization method of unfunded liabilities. Based on this assumption, the Plan’s fiduciary net position was projected to be sufficient to make all projected future benefit payments of current plan employees, retirees, and beneficiaries. Therefore, the long-term expected rate of return on pension plan investments (7.25 percent) was applied to all periods of projected benefit payments to determine the total pension liability.

Changes in the Net Pension Liability

A schedule of changes in the net pension liability for the years ending December 31, 2014 through 2021 and related notes to the schedule is presented in the required supplemental information

ST.

COUNTY

LOUIS COUNTY, MISSOURI

EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the Plan’s 2021 net pension liability calculated using the discount rate of 7.25%, as well as what the Plan’s net pension liability would be if it were calculated using a discount rate that is 1% point lower (6.25%) or 1%-point higher (8.25%) than the current rate:

The following presents the Plan’s 2020 net pension liability calculated using the discount rate of 7.50%, as well as what the Plan’s net pension liability would be if it were calculated using a discount rate that is 1% point lower (6.50%) or 1% point higher (8.50%) than the current rate:

The County’s Pension Expense

For the County's fiscal years ended December 31, 2021 and 2020, the County recognized pension expense of $25,478,858 and $53,570,944, respectively.

The County records and discloses its pension expense and related pension liability using the January 1 (beginning of year) actuarial valuation in its annual comprehensive financial report.

6. PRIORITIES UPON TERMINATION

In the event the Plan is partially or totally terminated, or if complete discontinuance of contributions to the Plan occurs, the assets of the Plan will be allocated to the participants, after providing for necessary expenses, in a priority order as defined in the Plan. If the assets of the Plan are insufficient to give full effect to all provisions of this priority order, the assets available will be prorated in the payment of accrued benefits so that all eligible participants will receive the same percentage of their full monthly benefits.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED

DECEMBER 31, 2021 AND 2020

7. RISKS AND UNCERTAINTIES

Investment Risks

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, foreign currency, regulatory, and credit risks 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 such changes could materially affect the amounts reported in the statements of fiduciary net position.

Experience Risks

Actuarial present value of accumulated plan benefits are reported based on certain assumptions pertaining to interest rates, inflation rates, and employee demographics, all of which are subject to change. Due to uncertainties inherent in the estimations and assumptions process, it is at least reasonably possible that changes in these estimates and assumptions in the near term would be material to the financial statements.

Risk Management

The Plan is exposed to various risks of loss related to natural disasters, errors and omissions, loss of assets, torts, etc. The County has chosen to cover such losses through the purchase of commercial insurance. There has been no material insurance claims filed or paid during the past four fiscal years.

8. SUBSEQUENT EVENTS

The Board of Trustees approved and enacted by the County Council a Cost-of-Living Adjustment (COLA) of 10%. The COLA is effective for benefits that accrue on or payable on or after January 1, 2022 for eligible participants or their beneficiary who were in pay status prior to January 1, 2011 The COLA does not apply to participants or their beneficiary who retired or first received benefits after January 1, 2011, supplemental benefits in lieu of social security, or to lump-sum death benefits

The Plan has performed an evaluation of subsequent events through December 9, 2022, the date the basic financial statements were available to be issued No additional material events were identified.

REQUIRED SUPPLEMENTARY INFORMATION SECTION

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULES OF CHANGES IN THE NET PENSION LIABILITY (UNDER GASB 67)

For The Years Ended December 31

LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULES OF CHANGES IN THE NET PENSION LIABILITY (UNDER GASB 67)

(Continued)

NOTES TO SCHEDULE

(A) The total pension liability as of the end of each measurement year is measured as of the measurement date (January 1) at the beginning of each year and is projected to the end of each year.

(B) Because the beginning and ending values for the year ended December 31, 2014 are based upon the same actuarial valuation (December 31, 2013) and there were no significant events, no liability gains or losses due to experience or assumption changes reported.

(C) Changes in actuarial methods and assumptions.

The discount rate assumption for 2014 through 2021 changed as follows:

Since 2018 the fiduciary net position was projected to be sufficient to make all projected future benefit payments of the current plan members and their beneficiaries; therefore, the discount rate used to measure the Plan’s actuarial pension liabilities continues to be the long-term rate of return.

January 1, 2021 Assumption Changes:

The actuarial assumptions and methods applied in measuring pension liabilities of the Plan and the County’s annual contribution to the plan where updated based on an actuarial experience study The changes resulting from the actuarial study, approved by the Pension Board, became effective with the January 1, 2021 actuarial valuation. The changes include: 1) updated the most recent mortality scale of MP-2020, 2) lowered the long-term rate of return 7.25%, 3) implemented an administrative expense load to normal cost based on trend and inflation, and 4) implemented an interest adjustment to reflect the timing of the County’s contribution These actuarial changes reflected in the 2021 actuarial valuation are reflected in the 2021 pension liability reported by the Plan. These actuarial changes will be reflected in the County’s 2022 Annual Comprehensive Financial Report, they also will be used in determining the County’s 2022 contribution to the Plan. These actuarial changes increased the Plan’s liabilities by approximately $4.3 million

ST. LOUIS COUNTY, MISSOURI COUNTY

EMPLOYEES’

RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULES OF CHANGES IN THE NET PENSION LIABILITY (UNDER GASB 67)

(Continued)

January 1, 2020 Assumption Changes:

For the Police Plan, the unreduced retirement rates changed to 30% from age 50 to 54 and 20% from age 55 to 59 with an additional 10% assumed to retire in the first year of eligibility The unreduced retirements rates changed to 20% at age 60 and 61, 40% at age 62, and 25% at age 63 and 64.

For the Police Plan, the reduced retirement rates changed for all eligible ages to 5% prior to normal retirement date.

For the Police Plan, the PTO conversion load for participants hired prior to 1/1/2002 increased FAC by 10% The PTO conversion load for participants hired after 12/31/2001 increased the participant’s credited service by 6 months.

January 1, 2019 Assumption Changes:

The Plan’s funding policy for amortization of the unfunded net pension liabilities was changed to a 25-year closed-layered amortization method for the actuarial valuations prior periods used a 25-year rolling amortization method.

The actuarial assumption for salary increases was changed: 1) Civilian from 4.25% to 3.75% and 2) Police from 4.25% to 3.25%. The changes decreased the liability by $10.9 million.

There were no other changes in assumptions.

(D) GASB 67 was implemented in 2014. This schedule is being built prospectively. Ultimately, 10 years of data will be presented.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULES OF EMPLOYER’S NET PENSION LIABILITY AND RATIOS (UNDER GASB 67)

For The Years Ended December 31

NOTES TO SCHEDULE

(A) The “net pension liability” and “plan fiduciary net position as a percentage of the total pension liability” are measured on a market value of assets basis. These items presented may be appropriate for evaluating the need and level of future contributions but make no assessment regarding the actual future cost to settle the Plan’s liabilities to members and their beneficiaries.

(B) Proposition P was passed by the County voters in April 2017 which approved a 0.5% over sales tax to be used to improve police and public safety. As a result of Proposition P, commissioned police officers pay, new positions, and overtime increased covered payroll by approximately $24 million and $2 million for the years ended December 31, 2018 and 2017, respectively.

(C) GASB 67 was implemented in 2014. This schedule is being built prospectively. Ultimately, 10 years of data will be presented.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF EMPLOYER’S CONTRIBUTIONS (UNDER GASB 67)

NOTES TO SCHEDULE

(A) Actuarially determined contribution rates are calculated as of December 31, which is 12 months prior to the beginning of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the most recent valuation, dated January 1 each year

(B) Covered payroll. The payroll on which contributions are based.

COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) SCHEDULE OF EMPLOYER CONTRIBUTIONS (UNDER GASB 67) (Continued)

Methods and Assumptions Used in Calculations of Actuarially Determined Contributions

Valuation date January 1, 2021

Measurement date December 31, 2021

Actuarial cost method:

GASB reporting Entry Age Normal

Funding Projected Unit Credit Method

Amortization method 25-year closed-layered amortization of the unfunded liability

Asset valuation method

Rate of investment return

Municipal bond 20-year high grade return

Inflation

Return on employee contributions

Salary increases

Turnover rates

Retirement Rates:

Civilian-Achieving Rule of 80 or 85

Actuarial value of assets with 4 years smoothing of gains and losses, subject to a 20% corridor arround fair value.

7.25% per year

2.25% per year

2.40% per year

1.5% per year

3.75% Civilian, 3.25% Police, and thereafter, plus additional increases from 0% to 18% based upon date of employment

Varies by age and year of membership based on plan experience

From age 50 to 59 a rate of 5% is used, except at age 55, a rate of 12% is used, from age 60 to 66 the rate varies from 10% to 50%, except that the rate is 100% at age 65 and up for Traditional Plan participants and the rate is 100% at age 67 and up for Contributory Plan participants.

Civilian-Prior to Achieving Rule of 80 or 85

Police-Unreduced

From age 50 to 54 a rate of 0% is used, from age 55 to 66 the rate varies between 5% and 20% except that the rate is 100% at age 65 and up for Traditional Plan participants and the rate is 100% at age 67 and up for Contributory Plan participants.

From age 50 to 54 the rate is 30%, from age 55 to 61 the rate is 20%, at age 62 the rate is 40%, from age 63 to 64 the rate is 25%, and the rate is 100% at age 65 and up for the Traditional and Contributory Plan participants.

Police-Reduced

Mortality and disability tables:

Civilian

Police

From age 50 to 44 the rate varies between 0% and 5% and the rate is 100% at age 65 and up for the Traditional and Contributory Plan participants.

The base table utilizes a blend of 85% PubG-2010 and 15% PubS2010 mortality tables using Scale MP-2020. For disabled participants, the base table utilizes a blend of 85% PubNS-2010 disability and 15% PubS-2010 disability mortality tables using Scale MP-2020.

The base table utilizes 100% PubS-2010 mortality tables using Scale MP-2020. For disabled participants, the base table utilizes 100% PubS-2010 disability mortality tables using Scale MP-2020.

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED SCHEDULE OF INVESTMENT RETURNS (UNDER GASB 67)

For The Plan

Rate Of Return Net Of Annual Money-Weighted

Investment Expenses

NOTES TO SCHEDULE

(A) The annual money-weighted rate of return incorporates both the size and the timing of cash flows to determine an internal rate of return. The money-weighted rate of return considers the changing amounts actually invested during a period and weights the amount of pension plan investments by the proportion of time they are available to earn a return during that period. The rate is determined net of investment expenses and uses external monthly cash flows (i.e., contributions, benefit payments, and administrative expenses) as inputs to the calculation.

(B) GASB 67 was implemented in 2014. This schedule is being built prospectively. Ultimately, 10 years of data will be presented.

SUPPLEMENTARY INFORMATION SECTION

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN SUPPLEMENTARY INFORMATION (UNAUDITED)

STATISTICAL INFORMATION SECTION

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN STATISTICAL INFORMATION (UNAUDITED) HISTORICAL TREND INFORMATION

For The Years Ended December 31

INTERNAL CONTROL AND COMPLIANCE SECTION

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the comptroller General of the United States, the statement of fiduciary net position and the related statement of changes in fiduciary net position of ST. LOUIS COUNTY, MISSOURI COUNTY EMPLOYEES’ RETIREMENT PLAN (the Plan), a Fiduciary Component Unit of St. Louis County, Missouri, as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the Plan’s basic financial statements, and have issued our report thereon dated December 9, 2022.

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audit of the financial statements, we considered the Plan’s internal control over financial reporting (internal control) as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Plan’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Plan’s financial statements will not be prevented, detected, or corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

The Board of Trustees

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

REPORT ON COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether the Plan’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

PURPOSE OF THIS REPORT

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Plan’s internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Plan’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

St. Louis, Missouri

December 9, 2022

June 21, 2021

Board of Trustees

St. Louis County Retirement Plan Administration Annex, 5th Floor

41 S. Central Avenue

Clayton, Missouri 63105

Board Members:

Buck Global, LLC. was retained to complete the actuarial valuation of the St. Louis County Retirement Plan for the plan year beginning January 1, 2021. The results of the valuation presented in this report are to be used in determining the contribution for the 2021 plan year.

The computations herein were performed as of January 1, 2021. They were determined using employee data and audited financial data provided by St. Louis County. These data were not audited by Buck, although they were reviewed for reasonableness and consistency with the prior year's information.

Except as noted below, for 2021, all actuarial assumptions and methods used in this report are the same as those used in the previous valuation. The following changes in assumptions and methods have been made effective with the January 1, 2021 valuation:

1. Plan A and Plan B updated to the most recent mortality improvement scale of MP-2020.

2. Plan A and Plan B updated the valuation interest rate to 7.25%.

3. Plan A and Plan B implemented an administrative expense load to normal cost based on prior year’s administrative expenses, adjusted one year at the assumed inflation rate.

4. Plan A and Plan B implemented an interest adjustment of one-half year’s interest at the valuation interest rate to better reflect the timing of contributions.

In selecting economic assumptions, the interest rate of 7.25% is based upon a review of the existing portfolio structure, a review of recent experience, and information considered by the Board. The salary increase assumption is based on actual experience and future expectations of inflation, merit, and productivity components in light of current economic conditions and budget considerations. All other actuarial assumptions and methods have been adopted based on anticipated experience and our annual review of the emerging experience.

Please see Schedule L for more detail on the actuarial assumptions and methods.

Comments on the Valuation Results

The total employer contribution amount for 2021 is $46,803,767, which is 20.68% of covered payroll. Contributions for Plan A increased from $27,325,716 for 2020 to $28,006,154 for 2021. As a percentage of covered payroll the contribution rate decreased from 19.16% to 18.19%. For Plan B, contributions increased from $18,045,355 for 2020 to $18,797,613 for 2021. As a percentage of covered payroll the contribution rate increased from 25.41% to 25.98%. The 2021 contributions are based on the County's contribution policy, which is to contribute the normal cost plus a 25-year closed, layered amortization of unfunded accrued liability (or 10-year amortization if the assets exceed the accrued liability).

The rate of return on the actuarial value of assets was 11.8%. This was more than the assumed return of 7.50% for the 2020 plan year. The trust fund experienced a 17.9% rate of return on market value. A detailed analysis of the change in costs may be found in Schedule G.

The funded ratio at January 1, 2021 obtained by comparing the actuarial value of assets to the accrued liability is 77.2% for Plan A and 59.2% for Plan B. On a combined plan basis, the funded ratio is 71.9%.

The funded ratio at January 1, 2021 obtained by comparing the market value of assets to the accrued liability is 84.0% for Plan A and 64.4% for Plan B. On a combined plan basis, the funded ratio is 78.3%.

Where presented, references to “funded ratio” and “unfunded accrued liability” typically are measured on an actuarial value of assets basis. It should be noted that the same measurements using market value of assets would result in different funded ratios and unfunded accrued liabilities. Moreover, the funded ratio presented is appropriate for evaluating the need and level of future contributions but makes no assessment regarding the funded status of the plan if the plan were to settle (i.e. purchase annuities) for a portion or all of its liabilities.

Valuation of Current Accrued Benefits

Based on a 7.25% discount rate, the market value of plan assets is less than the value of current accrued benefits (see Schedule H). From January 1, 2020 to January 1, 2021, the funded ratio of Plan A and Plan B increased from 80.4% to 87.6% and from 62.5% to 70.0%, respectively. On a combined plan basis, the funded ratio is 82.6%. The increase in the funded ratios is primarily due to the favorable investment results. Please note that the valuation of current accrued benefits does not account for expected future compensation and service expected to be received by active participants. The measurements in Schedule H are also based on assets at market value. The measurements are not used to determine the contribution requirements of the fund nor the amount of unfunded accrued liability amortized to determine such contribution requirements. The funded status on this basis is higher than the funded status shown in development of contribution requirements shown in Schedule B.

GASB

Disclosure information in accordance with GASB Statements 67 and 68 will be presented in a separate communication, as needed.

Use of Models

Actuarial Standard of Practice No. 56 provides guidance to actuaries when performing actuarial services with respect to designing, developing, selecting, modifying, using, reviewing, or evaluating models. Buck uses third-party software in the performance of annual actuarial valuations and projections. The model is intended to calculate the liabilities associated with the provisions of the plan using data and assumptions as of the measurement date under the funding rules specified in this report. The output from the third-party vendor software is used as input to an internally developed model that applies applicable funding rules to the derived liabilities and other inputs, such as plan assets and contributions, to generate many of the exhibits found in this report. Buck has an extensive review process in which the results of the liability calculations are checked using detailed sample life output, changes from year to year are summarized by source, and significant deviations from expectations are investigated. Other funding outputs and the internal model are similarly reviewed in detail and at a higher level for accuracy, reasonability, and consistency with prior results. Buck also reviews the third-party model when significant changes are made to the software. This review is performed by experts within Buck who are familiar with applicable funding rules, as well as the manner in which the model generates its output. If significant changes are made to the internal model, extra checking and review are completed. Significant changes to the internal model that are applicable to multiple clients are generally developed, checked, and reviewed by multiple experts within Buck who are familiar with the details of the required changes.

Purpose of This Report

This report is prepared for St. Louis County for its use in its review of the operation of the Plan. It is expected that the County will use the results in this report for the purpose of determining contributions and the funding status of plan benefits. The report will also be used in the preparation of any required reports, including the audited financial report prepared by the plan accountant. Use of this report by other parties or for any other purpose may not be appropriate and may result in mistaken conclusions due to failure to understand applicable assumptions, methodologies, or the inapplicability of the report for that purpose. Because of the risk of misinterpretation of actuarial results, Buck recommends requesting its advance review of any statement, document, or filing to be based on information contained in this report. Buck will accept no liability for any such statement, document or filing made without its prior review.

Future actuarial measurements may differ significantly from current measurements due to plan experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in plan provisions, applicable law or regulations. Because of limited scope, Buck performed no analysis of the potential range of such future differences. However, in accordance with the requirements of ASOP 51, a risk assessment for the plan is presented in Schedule J of this report.

Actuarial Status

In our opinion, the actuarial assumptions and methods used to value the plan, as selected by the Board in consultation with the actuary, are reasonable, and in combination represent a reasonable estimate of anticipated experience under the plan.

Michael A. Ribble is a Fellow of the Society of Actuaries, an Enrolled Actuary, and a Member of the American Academy of Actuaries. Murtaza Rawat is an Associate of the Society of Actuaries and a Member of the American Academy of Actuaries. They meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained in this report. This report has been prepared in accordance with all applicable Actuarial Standards of Practice and appropriately discloses the actuarial position of the plan. We are available to answer any questions on the material contained in the report, or to provide explanations or further details as may be appropriate.

Michael A. Ribble, FSA, EA, MAAA, FCA

Murtaza Rawat, ASA, MAAA Principal, Wealth Consulting Director, Wealth Consulting Buck Global, LLC. Buck Global, LLC.

Schedule A: Contribution Schedule for 2021

Schedule B: Summary of Valuation Results

Includes estimated administrative expense based on prior year’s actual administrative expense, plus inflation for 2021

Schedule B: Summary of Valuation Results

Plan B: Police

Includes estimated administrative expense based on prior year’s actual administrative expense, plus inflation for 2021

Schedule B: Summary of Valuation Results

Total as of January 1, 2021

5 Includes estimated administrative expense based on prior year’s actual administrative expense, plus inflation for 2021

See Schedule C for detailed calculation

Schedule C: Amortization Schedule

Plan A: Civilian

Schedule C: Amortization Schedule

Plan B: Police

Schedule D: Total Benefit Liabilities

Schedule D: Total Benefit Liabilities

Schedule E: Investment Experience of the Fund

Schedule F: Development of Actuarial Value of Plan Assets

Schedule G: Analysis of Change in Cost

Schedule G: Analysis of Change in Cost

Schedule G: Analysis of Change in Cost

Plan B: Police

Schedule G: Analysis of Change in Cost

Schedule H: Valuation of Current Accrued Benefits

Schedule I: Reconciliation of Plan Participants

Schedule J: Summary of Reported Compensation Increases from 2019 to 2020

Plan A – Civilian

Plan B – Police

Schedule K: ASOP 51 Disclosures

Funding future retirement benefits prior to when those benefits become due involves assumptions regarding future economic and demographic experience. These assumptions are applied to calculate actuarial liabilities, current contribution requirements and the funded status of the plan. However, to the extent future experience deviates from the assumptions used, variations will occur in these calculated values. These variations create risk to the plan. Understanding the risks to the funding of the plan is important. Actuarial Standard of Practice No. 51 (“ASOP 51”) requires certain disclosures of potential risks to the plan and provides useful information for intended users of actuarial reports that determine plan contributions or evaluate the adequacy of specified contribution levels to support benefit provisions.

Under ASOP 51, risk is defined as the potential of actual future measurements deviating from expected future measurements resulting from actual future experience deviating from actuarially assumed experience.

It is important to note that not all risk is negative, but all risk should be understood and accepted based on knowledge, judgement and educated decisions. Future measurements may deviate in ways that produce positive or negative financial impacts to the plan.

In the actuary’s professional judgment, the following risks may reasonably be anticipated to significantly affect the plan’s future financial condition.

 Investment risk – potential that the investment return will be different than the 7.25% expected in the actuarial valuation

 Longevity risk – potential that participants live longer than expected from the valuation mortality assumptions

 Contribution risk – potential that the contribution will be different than the recommended contribution in the actuarial valuation

The following information is provided to comply with ASOP 51 and furnish beneficial information on potential risks to the plan. This list is not all-inclusive; it is an attempt to identify the most significant risks and how those risks might affect the results shown in this report.

Schedule K: ASOP 51 Disclosures

Note that ASOP 51 does not require the actuary to evaluate the ability or willingness of the plan sponsor to make contributions to the plan when due, or to assess the likelihood or consequences of potential future changes in law. In addition, this valuation report is not intended to provide investment advice or to provide guidance on the management or reduction of risk. Buck welcomes the opportunity to assist in such matters as part of a separate project or projects utilizing the appropriate staff and resources for those objectives.

Investment Risk

Plan costs are very sensitive to the market return. Any lower than assumed return on assets will increase costs:

 The lower market return will cause the market value of assets to be lower than expected.

 The plan uses an actuarial value of assets that smooths the difference between the prior year’s expected actuarial value and the market value at year-end. This helps control some of the volatility associated with investment risk.

 Actual returns consistently above or below the assumed return may indicate a need to update the longterm return on asset assumption.

 See page 9 for historical investment returns on market value to see past volatility of returns.

Longevity Risk

Plan costs will be increased as participants are expected to live longer. This is because:

 Benefits are paid over a longer lifetime when life expectancy is expected to increase. The longer duration of payments leads to higher liabilities.

 The mortality assumption for the Plan does assume future improvement in mortality. Any improvement in future mortality greater than that expected by the current mortality assumption would lead to increased costs for the Plan.

Contribution Risk

There is a risk associated with the employer’s contribution when the actual amount and recommended amount differ. This is because:

 When the actual contribution is lower than the recommended contribution the Plan may not be sustainable in the long term.

 Any underpayment of the contribution will increase future contribution amounts to help pay off the additional Unfunded Actuarial Accrued Liability associated with any lower than recommended contribution amounts.

 The funding policy has been to make the actuarially determined contribution amount and actual contributions have followed this policy. Therefore, this risk is mitigated at this time.

Historical Information

Schedule N shows past plan participant counts and how the costs of the plans, including past actuarially determined contributions, have varied over time. This past information helps to show potential volatility introduced by risks to the plan.

Schedule K: ASOP 51 Disclosures

Plan A – Civilian

Plan Maturity Measures:

There are certain measures that may aid in understanding the significant risks to the plan.

A mature system will often have a ratio above 60 - 65 percent. A higher percentage will generally indicate an increased need for asset / liability matching

When this cash flow ratio is negative more cash is being paid out than deposited in the fund. Negative cash flow means the fund needs to rely on investment returns to cover benefit payments and at the same time may need to invest in more liquid assets to cover the benefit payments. More liquid assets may not garner the same returns as less liquid assets and therefore increase the investment risk. However, the low magnitude of the ratio implies there may already be enough liquid assets to cover the benefit payments, less investment return is needed to cover the shortfall, or only a small portion of assets will need to be converted to cash. Therefore, the investment risk is likely not amplified at this time. This maturity measure should be monitored for continual negative trend with greater magnitude.

Schedule K: ASOP 51 Disclosures

Plan A – Civilian

Plans that have higher asset-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return. For example, a plan with an asset-to-payroll ratio of 10 may experience twice the contribution volatility due to investment return volatility than a plan with an asset-to-payroll ratio of 5. Plans that have higher liability-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to changes in liability. For example, if an assumption change increases the liability of two plans by the same percent the plan with a liability-to-payroll ratio of 10 may experience twice the contribution volatility than a plan with a liability-to-payroll ratio of 5.

Schedule K: ASOP 51 Disclosures

Plan B – Police

Plan Maturity Measures:

There are certain measures that may aid in understanding the significant risks to the plan.

A mature system will often have a ratio above 60 - 65 percent. A higher percentage will generally indicate an increased need for asset / liability matching.

When this cash flow ratio is negative more cash is being paid out than deposited in the fund. Negative cash flow means the fund needs to rely on investment returns to cover benefit payments and at the same time may need to invest in more liquid assets to cover the benefit payments. More liquid assets may not garner the same returns as less liquid assets and therefore increase the investment risk. However, the low magnitude of the ratio implies there may already be enough liquid assets to cover the benefit payments, less investment return is needed to cover the shortfall, or only a small portion of assets will need to be converted to cash. Therefore, the investment risk is likely not amplified at this time. While cashflow ratio moved to positive in 2020, this maturity measure should be monitored.

Schedule K: ASOP 51 Disclosures

Plan B – Police

Plans that have higher asset-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return. For example, a plan with an asset-to-payroll ratio of 10 may experience twice the contribution volatility due to investment return volatility than a plan with an asset-to-payroll ratio of 5. Plans that have higher liability-to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to changes in liability. For example, if an assumption change increases the liability of two plans by the same percent the plan with a liability-to-payroll ratio of 10 may experience twice the contribution volatility than a plan with a liability-to-payroll ratio of 5.

Comparing asset and liability volatility ratios of the Civilian and Police plans shows the Civilian plan carries slightly more contribution volatility risk due to both assets and liability than the Police plan. In particular, the Civilian plan may experience 1.5 times the contribution volatility due to assets and 1.14 times the contribution volatility due to liability than the Police plan.

Schedule L: Actuarial Assumptions and Methods

Interest:

Current Year: 7.25% per year (net of investment expenses)

Prior Year: 7.50% per year

Salary Increases: 3.75% for Plan A per year

3.25% for Plan B per year

Inflation:

Current Year: 2.40% per year

Paid Time Off (PTO) Conversions:

Plan A

Employed prior to 1/1/2002: Final Year of Pay increased by the following:

Plan B

Employed prior to 1/1/2002: Final Average Compensation increased by 10% at retirement to account for PTO conversions

Employed after 12/31/2001: Credited Service increased by 6 months at retirement to account for PTO conversions

Schedule L: Actuarial Assumptions and Methods

Mortality:

Current Year: Plan A

 The base table utilizes a blend of 85% PubG-2010 and 15% PubS-2010 mortality tables.

 For disabled participants, the base table utilizes a blend of 85% PubNS-2010 disability and 15% PubS-2010 disability mortality tables.

Plan B

 The base table utilizes 100% PubS-2010 mortality tables.

 For disabled participants, the base table utilizes 100% PubS-2010 disability mortality tables.

Applicable to Plan A and Plan B

 For beneficiaries, the base table utilizes the Pub-2010 contingent survivor mortality tables. Rates prior to age 45 were calculated based on a constant ratio of the age 45 rates in the PubG-2010 table and the Pub-2010 contingent survivor table.

 All mortality rates are projected from 2010 using generational improvement with Scale MP-2020.

Schedule L: Actuarial Assumptions and Methods

7 An additional 10% assumed to retire in the first year of unreduced retirement eligibility from ages 50 to 59.

8 An additional 10% assumed to retire in the first year of unreduced retirement eligibility from ages 50 to 59.

Schedule L: Actuarial Assumptions and Methods

Expenses:

The total normal cost is increased by the expected administrative expenses based on the actual such expenses in the prior year, adjusted for one year of assumed inflation. For 2021, the total contribution is increased by 100,634.

Administrative expenses are allocated to each plan by the Market Value of Assets as of December 31, 2020 in each plan in comparison to the total Market Value of Assets between both plans. For 2021, the expected administrative expenses allocated to Plan A is 76,637 and Plan B is 23,997.

Assumed Rate of Return on Employee Contributions:

1.5% per year

Service Connected Death and Disability (Police Plan only):

0.1% per year; disability benefits should be offset by any long term disability or worker’s compensation benefits and death benefits should be offset by the benefit to which the surviving spouse is entitled under the Federal Social Security Act, whether or not actually received. However, as experience for duty related deaths and disabilities are extremely low, estimating the offsets for future death or disability benefits can be difficult. This valuation does not offset the benefits. We believe costing these benefits in this way is conservative and does not materially impact the results.

Service Connected Death and Disability (Civilian Plan only):

None assumed.

Cost Method

Projected Unit Credit Method. Under this method, the projected benefit of each participant is allocated to his years of service by level proration. The actuarial present value of benefits allocated to the current plan year is the normal cost, and the value of benefits allocated to prior plan years is the accrued liability. Actuarial gains and losses are recognized in the accrued liability as they emerge.

Amortization of Unfunded Liability

Amortization is based on a 25-year closed, level dollar amount. All future changes in the accrued liability due to amendments, gains and losses, and assumption changes are amortized over a 25-year closed, layered method. The initial amortization base was created for the contribution payable during 2019.

Full Funding Policy

If, at any valuation date, the value of plan assets exceeds the Projected Unit Credited Accrued Liability, then all amortizations will be accelerated to ten years. In effect, the contribution determined for the year will be the annual normal cost less a ten-year amortization of the overfunding. For this purpose, the value of plan assets will be the lesser of market or actuarial value.

Schedule L: Actuarial Assumptions and Methods

Ancillary Benefits

These benefits are funded on the same basis as other benefits.

Pre-Retirement Death Benefit

100% of participants are married at death with spouse the same age as participant. Spouses of members not eligible for early retirement at the time of death are costed with a deferred benefit payable at the member’s normal retirement date.

Benefit Commencement of Active Terminations

Active terminations are assumed to commence benefits at age 65 for Plan A and at age 62 for Plan B.

Asset Valuation Method

The actuarial value of assets is determined using a method that spreads over a four-year period the difference between the actual investment income and the expected income (based on the funding interest rate). The resulting value is constrained to be within the corridor from 80% to 120% of market value.

Employer Contribution – interest adjustment

The total contributions apply an interest adjustment of one-half year’s interest at the valuation interest rate to better reflect the timing of contributions.

Changes in Actuarial Assumptions or Methods

1. Plan A and Plan B updated to the most recent mortality improvement scale of MP-2020.

2. Plan A and Plan B updated the valuation interest rate to 7.25%.

3. Plan A and Plan B implemented an administrative expense load to normal cost based on prior year’s administrative expenses, adjusted for one year at the assumed inflation rate.

4. Plan A and Plan B implemented an interest adjustment of one-half year’s interest at the valuation interest rate to better reflect the timing of contributions.

Schedule M: Summary of Principal Plan Provisions

Plan A – Civilian

Eligibility: In general, all salaried civilian employees are eligible. Entry date is the first of the month coinciding with or next closest in time to the date of commencement of full time employment. Exclusions: Members of Boards and Commissions, and employees whose customary employment is less than 30 hours per week, or less than 9 months per year. Members hired prior to February 1, 2018, are “Traditional” participants and members hired on or after February 1, 2018, are “Contributory” participants.

Employee Contributions: Contributory participants are required to contribute four percent (4%) of participant’s compensation to the retirement fund each payroll period. Beginning December 31, 2019 and each December 31 thereafter, interest on an employee’s contribution balance is credited at an interest crediting rate equal to the 52-week Treasury rate published nearest to July 1 prior.

Credited Service: All periods of participation. Credited Service terminates on earlier of date of termination or retirement.

Compensation: Aggregate compensation including any salary reduction amounts excluding reimbursed expenses and all other unusual compensation. For those participants hired on or after January 1, 1996, compensation is limited to the amounts allowed by Section 401(a)(17) of the Internal Revenue Code $280,000 in 2019 and $285,000 in 2020).

Normal Retirement Date: Traditional: Age 65 and 3 years of credited service.

Contributory: Age 67 and 3 years of credited service.

Rule of Eighty Retirement Date: Traditional: Sum of age and credited service equals or exceeds eighty (80).

Rule of Eighty-Five Retirement Date: Contributory: Sum of age and credited service equals or exceeds eighty (85).

Early Retirement Eligibility: Any combination of age and credited service from table below.

Schedule M: Summary of Principal Plan Provisions

Plan A – Civilian

Benefits:

Normal Retirement Benefit Traditional: 1.5% of final average compensation times credited service.

Contributory: 1.3% of final average compensation times credited service.

Supplemental Benefit $15 per month per year of credited service payable from service retirement date.

Rule of Eighty or Eighty-Five Retirement Computed in the same way as normal retirement.

Early Retirement Benefit Normal Retirement Benefit plus Supplement, reduced by 0.28% per month preceding normal retirement date but not more than 60 months.

Late Retirement Benefit Computed in the same way as normal retirement.

Pre-Retirement Death Benefit The spouse of a deceased vested participant (who was either active or had terminated on or after 10/26/86) is eligible for a monthly benefit payable for life.

The amount of the Pre-Retirement Death Benefit is as follows:

If the Participant has attained the earliest retirement age, the amount of monthly income that would have been payable to the spouse if the Participant had retired the day before he died and the income was payable under the Survivor Annuitant Option with 100% continued to the spouse. This benefit would commence immediately.

Schedule M: Summary of Principal Plan Provisions

Plan A – Civilian

Post-Retirement Death Benefits

If the Participant had not attained the earliest retirement age, the amount of monthly income that would have been payable to the spouse had the participant terminated employment the day before his death, survived to the earliest retirement age and retired electing the Survivor Annuitant Option with 100% continued to the spouse. This benefit would be payable when the Participant would have attained the earliest retirement age.

1. For participants eligible for Early, Rule of Eighty, Rule of Eighty-Five or Normal Retirement at date of termination: $10,000.

2. For other participants: None.

Duty Death Benefit

For a participant who dies as a direct and proximate result of injuries sustained while in performance of employment, (and death occurs within 2 years) the following monthly benefits are payable:

1. To the surviving spouse: 40% of participant's last monthly compensation.

2. To each surviving unmarried child under 18, 10% of last monthly compensation.

However, total benefits shall not exceed 75% of final compensation. Benefits above reduced by Social Security Benefits.

Benefits on Termination of Employment

A nonvested participant receives a refund of employee contributions with interest at date of termination.

A vested participant receives an annuity, beginning on his normal retirement date equal to his normal retirement benefit

A Traditional participant is vested if he has five (5) years of credited service or if he is at least age 65 and his age plus credited service is at least 70, provided he has at least three (3) years of credited service.

A Contributory participant is vested if he has seven (7) years of credited service or if he is at least age 65 and his age plus credited service is at least 70, provided he has at least three (3) years of credited service.

Schedule M: Summary of Principal Plan Provisions

Plan A – Civilian

Final Average Compensation

Average over the 36 consecutive months from the last 120 that produce highest average.

Cost of Living Adjustments

No automatic adjustments are made. A one-time increase was made for all retirees who retired prior to January 1, 1984. This increase was 5% of each retiree's original pension for each full year elapsed since retirement. This increase was doubled to 10% per year for retirees who retired prior to August 1977. No increase was greater than 100%. This increase was effective January 1, 1986.

An additional increase was made effective for benefits payable on or after March 1, 1990. The increase was 12% for those who retired prior to January 1, 1984 and 6% for those who retired on or after January 1, 1984 but before January 1, 1988. There was no increase for those who retired on or after January 1, 1988.

An additional increase was made effective for benefits payable on or after March 1, 1993 for retirees and survivors. The increase is 10% for those who retired prior to January 1, 1988 and 5% for those who retired on or after January 1, 1988 but before January 1, 1991. There was no increase for those who retired on or after January 1, 1991.

An additional increase was made effective for benefits payable on or after September 1, 1997 for retirees, survivors, service connected disability benefits and service connected death benefits. The increase is 15% for those retired prior to January 1, 1991 and 7.5% for those who retired on or after January 1, 1991 but before January 1, 1996. There was no increase for those retired on or after January 1, 1996.

An additional increase was made effective for benefits payable on or after May 1, 2001 for retirees, survivors, service connected disability benefits and service connected death benefits. The increase is 9% for those retired prior to January 1, 1997 and 4.5% for those who retired on or after January 1, 1997 but before January 1, 1999. There was no increase for those retired on or after January 1, 1999.

Schedule M: Summary of Principal Plan Provisions

Plan A – Civilian

Cost of Living Adjustments (continued)

An additional increase was made effective for benefits payable on or after September 1, 2005 for retirees, survivors, service connected disability benefits and service connected death benefits. The increase is 9% for those retired prior to January 1, 2001 and 4.5% for those who retired on or after January 1, 2001, but before January 1, 2003. There was no increase for those retired on or after January 1, 2003.

Changes in Provisions from Prior Valuation

None.

Schedule M: Summary of Principal Plan Provisions

Plan B – Police

Eligibility: All commissioned police officers of the St. Louis County Police Department. Members hired prior to February 1, 2018, are “Traditional” participants and members hired on or after February 1, 2018, are “Contributory” participants.

Employee Contributions: Contributory participants are required to contribute four percent (4%) of participant’s compensation to the retirement fund each payroll period. Beginning December 31, 2019 and each December 31 thereafter, interest on an employee’s contribution balance is credited at an interest crediting rate equal to the 52-week Treasury rate published nearest to July 1 prior.

Credited Service: Same as under Plan A.

Compensation: Aggregate compensation including any salary reduction amounts excluding reimbursed expenses and all other unusual compensation. For those participants hired on or after January 1, 1996, compensation is limited to the amounts allowed by Section 401(a)(17) of the Internal Revenue Code $280,000 in 2019 and $285,000 in 2020).

Service Retirement Date: Age 60 with 10 years of credited service or age 65 with 3 years of credited service. (Not earlier than date of termination of employment.)

Rule of Eighty Retirement Date: Traditional: Sum of age and credited service equals or exceeds eighty (80).

Rule of Eighty-Five Retirement Date: Contributory: Sum of age and credited service equals or exceeds eighty (85).

Early Retirement Date: Traditional: Age 55 with 10 years of credited service.

Contributory: Age 57 with 10 years of credited service.

Benefits:

Normal Retirement Benefit Traditional: 1.6% of final average compensation times credited service.

Contributory: 1.4% of final average compensation times credited service.

Supplemental Benefit $30 per month per year of credited service, payable from service retirement date to age 65 plus $5 per month per year of credited service, payable for life.

Schedule M: Summary of Principal Plan Provisions

Plan B – Police

Rule of Eighty or Eighty-Five Retirement

Early Retirement Benefit

Late Retirement Benefit

Post-Retirement Death Benefit

Normal Retirement Benefit plus Supplement, payable from Rule of Eighty or Eighty-Five Retirement Date, as applicable.

Normal Retirement Benefit plus Supplement, reduced by 0.52% per month preceding normal retirement date but not more than 60 months.

Computed in the same way as normal retirement.

1. For participants eligible for Early, Rule of Eighty, Rule of Eighty-Five, Normal Retirement, or Service Disability Retirement at date of termination: $10,000.

2. For other participants: None.

Duty Death Benefit

For a participant who dies as a direct and proximate result of injuries sustained while in performance of employment, (and death occurs within 2 years) the following monthly benefits are payable:

1. To the surviving spouse: 40% of participant's last monthly compensation.

2. To each surviving unmarried child under 18, 10% of last monthly compensation.

However, total benefits shall not exceed 75% of final compensation. Benefits above reduced by Social Security Benefits.

Duty Disability Benefit

For Total and Permanent Disability resulting from employment, the following monthly benefits are payable:

1. 50% of last monthly compensation, plus

2. 10% of last monthly compensation for each unmarried child under 18.

However, total benefit not to exceed 80% of final monthly compensation. Benefit above reduced by:

1. 64% of Social Security benefits, and

2. 100% of Worker's Compensation benefits.

Schedule M: Summary of Principal Plan Provisions

Plan B – Police

Pre-Retirement Death Benefit

The spouse of a deceased vested participant (who was either active or had terminated on or after 10/26/86) is eligible for a monthly benefit payable for life.

The amount of the Pre-Retirement Death Benefit is as follows:

If the Participant has attained the earliest retirement age, the amount of monthly income that would have been payable to the spouse if the Participant had retired the day before he died and the income was payable under the Survivor Annuitant Option with 100% continued to the spouse. This benefit would commence immediately.

If the Participant had not attained the earliest retirement age, the amount of monthly income that would have been payable to the spouse had the participant terminated employment the day before his death, survived to the earliest retirement age and retired electing the Survivor Annuitant Option with 100% continued to the spouse. This benefit would have payable when the Participant would have attained the earliest retirement age.

Benefits on Termination of Employment

A nonvested participant receives a refund of employee contributions with interest at date of termination.

A vested participant receives an annuity, beginning on his normal retirement date equal to his normal retirement benefit.

. A Traditional participant is vested if he has five (5) years of credited service or if he is at least age 65 and his age plus credited service is at least 70, provided he has at least three (3) years of credited service.

A Contributory participant is vested if he has seven (7) years of credited service or if he is at least age 65 and his age plus credited service is at least 70, provided he has at least three (3) years of credited service.

Schedule M: Summary of Principal Plan Provisions

Plan B – Police

Final Average Compensation

Average over the 36 consecutive months from the last 120 that produce highest average.

Cost of Living Adjustments

No automatic adjustments are made. A one-time increase was made for all retirees who retired prior to January 1, 1984. This increase was 5% of each retiree's original pension for each full year lapsed since retirement. This increase was doubled to 10% per year for retirees who retired prior to August 1977. No increase was greater than 100%. This increase was effective January 1, 1986.

An additional increase was made effective for benefits payable on or after March 1, 1990. The increase was 12% for those who retired prior to January 1, 1984 and 6% for those who retired on or after January 1, 1984 but before January 1, 1988. There was no increase for those who retired on or after January 1, 1988.

An additional increase was made effective for benefits payable on or after March 1, 1993 for retirees and survivors. The increase is 10% for those who retired prior to January 1, 1988 and 5% for those who retired on or after January 1, 1988 but before January 1, 1991. There was no increase for those who retired on or after January 1, 1991.

An additional increase was made effective for benefits payable on or after September 1, 1997 for retirees, survivors, service connected disability benefits and service connected death benefits. The increase is 15% for those retired prior to January 1, 1991 and 7.5% for those who retired on or after January 1, 1991 but before January 1, 1996. There was no increase for those retired on or after January 1, 1996.

Schedule M: Summary of Principal Plan Provisions

Plan B – Police

Cost of Living Adjustments

(continued)

An additional increase was made effective for benefits payable on or after May 1, 2001 for retirees, survivors, service connected disability benefits and service connected death benefits. The increase is 9% for those retired prior to January 1, 1997 and 4.5% for those who retired on or after January 1, 1997 but before January 1, 1999. There was no increase for those retired on or after January 1, 1999.

An additional increase was made effective for benefits payable on or after September 1, 2005 for retirees, survivors, service connected disability benefits and service connected death benefits. The increase is 9% for those retired prior to January 1, 2001 and 4.5% for those who retired on or after January 1, 2001, but before January 1, 2003. There was no increase for those retired on or after January 1, 2003.

Changes in Provisions from Prior Valuation

None.

Schedule N: Plan History

Plan A – Civilian

2018 figures restated since the January 1, 2018 Valuation.

Schedule N: Plan History

Plan B – Police

2018 figures restated since the January 1, 2018 Valuation.

Schedule O: Active Participant Distributions

Schedule O: Active Participant Distributions

Schedule O: Active Participant Distributions

Plan A – Civilian

As of January 1, 2021

Schedule O: Active Participant Distributions

Plan B – Police

Schedule O: Active Participant Distributions

Plan B – Police

Schedule O: Active Participant Distributions

Plan B – Police