Reaching FOR THE Sky.
ANNUAL REPORT 2015 Strength, Stability, Security
THE BOARDS OF CONTROL AND THE RETIREMENT SYSTEMS OF ALABAMA (RSA) STAFF ARE PLEASED TO PRESENT THE 39TH ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015.
The RSA currently manages 23 funds with aggregate assets Additionally, Paul McTear, CEO of Raycom Media, was of approximately $36.6 billion. For fiscal year 2015, the Teachers’ named Broadcast and Cable’s “Broadcaster of the Year” for 2015. Retirement System (TRS) assets totaled $21.6 billion, the Community Newspaper Holdings (CNHI) was honored to have Employees’ Retirement System (ERS) assets totaled $10.5 billion, Editor & Publisher magazine name its North of Boston Group the and the Judicial Retirement Fund (JRF) assets totaled $262.8 “Publisher of the Year.” This award usually goes to much larger million. The annualized return was 1.04% for the TRS, 1.05% for papers so this was a great achievement for CNHI. The Grand the ERS and -0.54% for the JRF. These results ranked the RSA Hotel Marriott Resort was named one of the top Southern funds in the top 12th percentile or better among the State Street Resorts by Conde Nast Traveler magazine during the year; and Public Funds Universe (59 funds over $1 billion) for the one-, 2014 guest satisfaction surveys at Marriott and Renaissance three- and five-year periods. hotels across all of North America rated four of their top five sites on Alabama’s Robert Trent Jones Golf Trail with the Market performance during fiscal year 2015 was somewhat Renaissance Ross Bridge Golf Resort and Spa being named at stable, with equity markets performing well over most of the the very top. year but turning sharply negative in August, about six weeks before fiscal year end. Domestic large-cap equities turned in Renovation continues on the historic Van Antwerp Building a slightly negative return for the year, while mid- and small- in Mobile, which the RSA purchased last fiscal year. This cap equities turned in slightly positive returns for the year. building is eleven stories high and over 58,000 square feet. The International equities returned roughly -8.4% while emerging Van Antwerp Building is one of Mobile’s oldest structures and markets returned -19.2% for the fiscal year. Fixed income joins RSA’s stable of Port City holdings that include the RSA markets experienced a solid positive return for the year as Battle House Tower, RSA Trustmark Building, 2 North Royal interest rates were choppy through June, and then steadily Street Building, Renaissance Mobile Riverview Plaza Hotel & moved lower during the last quarter of the fiscal year. Returns Spa and Battle House Renaissance Mobile Hotel & Spa. within this sector were close to 3.0% for the fiscal The staff will continue to purchase and develop investments year. Markets have continued to be somewhat that will facilitate the mission of the RSA. Our aim is to serve the reactionary around macroeconomic and global interests of our members by preserving the excellent benefits events as they have been the last few years, but and soundness of the Systems while providing these at the least we continue to see fundamentals influencing expense to the state of Alabama and all Alabama taxpayers. With performance as well as company earnings and the continued cooperative efforts of the Boards of Control, the strong balance sheets. RSA staff, and the Legislature, this goal will be achieved. Several of the RSA’s investments were honored during the fiscal year. TVNewsCheck named Raycom Media “Station Group of the Year” for 2015, citing its innovative approach to technology, David G. Bronner digital media, and programming. CHIEF EXECUTIVE OFFICER
“As a lifelong resident of Mobile, I “When I came to Mobile in 1992, this area was still have witnessed the positive impact the RSA suffering the effects of the closure of Brookley Air Force investments have had on Mobile through the Base. Without the innovative and forward looking years. RSA has been a major game changer and leadership of David, witness Airbus, downtown Mobile, their partnership is beyond significant. I look Alabama State Docks, Robert Trent Jones Golf Trail, forward to our leaders’ continued capitalization Grand Hotel and Resort, this area would not have made of these investments.” the advances Mobile and Baldwin County is enjoying.”
Joe Bullard, CEO and Chairman Howard Bronson Bullard Automotive Former Mobile Press-Register Publisher
2015 ANNUAL REPORT || 2 Section Header Section Header
Table of Contents
A Message from Dr. Bronner 1 2015 Membership/Financial Highlights 4 Legal & Legislation 8 RSA Staff 9 Downtown Mobile 10 TRS Highlights 19 ERS Highlights 23 JRF Highlights 27 Alabama's Eastern Shore 29 PEEHIP Highlights 36 RSA-1 Highlights 38 “The RSA’s investments RSA Investment Staff 42 Investment Highlights 44 in downtown Mobile General Information 52 have modernized our city center and the halo effect has meant tens of millions of dollars of private investment.” Double Take —The Battle House Tower, and graphics depicting the tower embedded in a glass Elizabeth P. Stevens wall, create a magical illusion for new event space adjacent to the historic Van Antwerp Building. President & CEO Downtown Mobile District Management Corp/Downtown Mobile Alliance
3 4 Section Header 2015 Financial Highlights Membership 2015 Total 2015 Benefits Paid in Alabama: $2.6 Billion actives drop retired
BY STATUS BY SYSTEM 2015 LAUDERDALE 2,224 LIMESTONE $47.8 1,726 MADISON JACKSON RSA Retired $36.7 6,847 1,379 $25.7 344,986 COLBERT $156.7 Members with 1,777 $36.6 2015 TOTAL MEMBERS LAWRENCE Benefits Paid FRANKLIN 676 MORGAN (AS OF SEPTEMBER 30, 2015) % % 801 $12.5 2,989 DE KALB MARSHALL COUNTY BY COUNTY $16.2 $60.6 1,389 2,058 $27.1 $41.6 TEACHERS’ RETIREMENT SYSTEM 61 63 ($ in Millions) MARION WINSTON EMPLOYEES’ RETIREMENT SYSTEM CULLMAN CHEROKEE 744 620 2,000 $14.6 $11.6 ETOWAH 454 JUDICIAL RETIREMENT FUND $40.8 2,960 $8.8 BLOUNT $60.7 activesACTIVES drop TRS ERS RETIREES LIVING 1,001 retired $19.5 TRS 130,153 ACTIVE 130,153 IN ALABAMAjrf WALKER LAMAR FAYETTE 1,832 CALHOUN ERS 80,270 RETIRED 87,363 415 483 $36.0 ST. CLAIR 3,032 actives drop $7.8 $9.0 1,561 $60.1 retired $32.5 $4.8 JRF 335 DROP 699 JEFFERSON CLEBURNE 91.5% 15,855 257 Total 210,758 Total 218,215 $365.1 $41.3 TRS TALLADEGA PICKENS 2,237 CLAY MEMBERSHIP ACTIVITY 579 TUSCALOOSA SHELBY RANDOLPH $10.0 6,870 3,812 389 593 $145.7 $93.8 $7.4 $11.2 NEW MEMBERS 94.4% BIBB RST ERS JRF TOTAL 508 COOSA $9.2 319 TALLAPOOSA CHAMBERS % % ERS GREENE CHILTON 729 11,166 9,848 18 21,032 $6.2 363 1,040 1,269 $13.7 $6.2 HALE $19.8 $28.3 574 TRS38 ERS 36 $10.2 WITHDRAWN MEMBERS PERRY 297 ELMORE LEE 3,092 4,097 RST ERS JRF TOTAL jrf $5.8 AUTAUGA $68.4 SUMTER 1,537 $100.3 419 3,988actives 5,300 2 9,290drop TRS ERS $32.3 RETIREDretired ERS $8.3 MACON DALLAS 736 Mobile County 1,133 $13.8 RUSSELL TRS 87,363 ACTIVE 80,270 jrf MARENGO SERVICE RETIREMENTS $22.6 MONTGOMERY 694 actives drop 605 8,220 $11.6 ERS 45,382 RETIREDretired 45,382 $11.9 $190.2 RST ERS JRF TOTAL 10,348 Retirees LOWNDES BULLOCK CHOCTAW 383 323 3,920 2,192 15 6,127 JRF 384 DROP 400 319 $6.9 $5.9 $199.7 $5.8 WILCOX Total 133,129 Total 126,052 Benefits Paid in 2015 383 $6.3 BARBOUR DISABILITY RETIREMENTS BUTLER PIKE 707 516 $12.7 $10.0 1,232 RST ERS JRF TOTAL 16,543 Actives CLARKE $27.6 872 $10.5 372 267 1 640 $16.3 MONROE CRENSHAW Ranks 610 537 HENRY 2nd $11.8 DALE 536 $10.4 SURVIVING SPOUSES in both number of WASHINGTON CONECUH COFFEE 1,025 members and benefits 582 382 1,180 $18.9 RST ERS JRF TOTAL % % $10.5 $6.3 $23.9 paid COVINGTON 9 TRS 10 0 19ERS 1,108 <1 <1 ESCAMBIA $21.3 HOUSTON 1,099 GENEVA 2,344 jrf $21.5 625 $48.5 NEW BENEFICIARIES $11.6 TRS ERS RST ERS JRF TOTAL actives drop 376 275 2 653 DROP retired JRFjrf TRS 699 ACTIVE 335 Baldwin County ERS 400 RETIRED 384 JRF — DROP — 4,827 Retirees Total 1,099 Total 719 $103.8 Benefits Paid in 2015
8,382 Actives Ranks in the top 10 in both number of members and benefits paid 5 || THE RETIREMENT SYSTEMS OF ALABAMA 6
TRS ERS
jrf Section Header 2015 Financial Highlights
Financial Highlights 2015 ANNUALIZED RSA RETURNS 2015 Funds Under Management (36.6 Billion) AS OF SEPTEMBER 30, 2015 ($ in thousands)
% TOTAL FUNDS MANAGED (1) Revenue Sources 5 Year Highlights Teachers’ Retirement System $ 21,608,975 FOR TRS, ERS & JRF ($ in Millions) 1.04 Employees’ Retirement System 10,489,052 ($ in Millions) TEACHERS’ TRS ERS RETIREMENT SYSTEM Judicial Retirement Fund 262,844 TRS ERS RSA INVESTMENT INCOME Alabama Cultural Resources Preservation Trust Fund 12,015 TOTAL REVENUE 2015 $2,989.2 $2,732.7 ($3000 IN MILLIONS) Alabama Firefighters Annuity & Benefit Fund 127 $ $ % 3000 2,989.2 2,732.7 $2,473.2 1.05 Division of Wildlife and Freshwater Fisheries 21,170 Alabama Nongame Wildlife Endowment Trust 16 $2,473.2 EMPLOYEES’ RETIREMENT SYSTEM Alabama Underground & Aboveground Storage Tank Trust Fund 30,436
2,261.7 $ Clerks’ & Registers’ Supernumerary Fund 11,864 1,427.9 $1,296.5 Alabama Senior Services Trust Fund 36,074 $1,427.9 $1,186.5 INVESTMENT INCOME $ % 1,296.5 Alabama State Employees’ Health Insurance Fund 72,717 $1,186.5 -0.54 Local Government Health Insurance Fund 113,532 $ JUDICIAL 352.0 $261.5 PEIRAF—Deferred Compensation Plan (RSA-1) 1,830,563 $196.9 $ RETIREMENT FUND $ 126.5 352.0 $261.5 Public Education Employees’ Health Insurance Fund 121,124 % $196.9 $126.5 These results ranked the 2011 2012 2013 2014 2015 Alabama Retired Education Employees’ Health Care Trust 1,097,546 17 Public Employees’ Individual Retirement Account Fund 83,156 2011 2012 2013 2014 2015 RSA funds in the top 12th Alabama Marine Resources Endowment Trust Fund 1,536 Alabama Trust Fund 236,120 EMPLOYEE CONTRIBUTIONS percentile Alabama Treasury Fund 251,795 RSA EMPLOYEE CONTRIBUTIONS of the State Street Public Charlotte Thorn Trust Fund 8,770 ($ IN MILLIONS) $ $ Funds Universe (59 funds County Municipal Trust Fund 107,082 500 $458.5 477.6 480.8 $477.9 over $1 billion) for the one-, $ $480.8 $ Alabama State Employees’ Retired Health Care Trust Fund 148,689 500 $323.2 $458.5 477.6 477.9 % $ three-, and five-year periods. $ $ $ State Docks Pension Plans 16,637 $ 216.9 223.6 226.0 229.3 323.2 $195.7 $ $ $ $226.0 229.3 31 $ 216.9 223.6 195.7 TOTAL ASSETS UNDER MANAGEMENT $ 36,561,840
2011 2012 2013 2014 2015 (1) Includes investments at fair value, cash, buildings net of depreciation, and land. EMPLOYER CONTRIBUTIONS 2011 2012 2013 2014 2015 Asset allocation is a strategic long-term decision in the pension investment management process. The RSA Asset Allocation is dedicated to preserving the sound financial position it has established over the years through a diversified (as of September 30, 2015) investment program. The objective of the RSA is to allocate investments in the most effective way that % reflects policy standards while maximizing returns. RSA EMPLOYER CONTRIBUTIONS % 11.4% % 52 ($ IN MILLIONS) 12.5 % 14.0 1.7 $ % % 800 779.6 $739.5 $ 1.8 0.8 737.7 0.9% 3.9% $ 3.1% 800 779.6 $618.3 $627.9 $739.5 $737.7 3.2% 2.2% $ $618.3 627.9 10.4% $ % % 51.6 $395.0 $ 410.9 51.7% % 51.8 JRF 2014 ANNUAL REVENUE $ 391.2 TRS 16.8 ERS $317.5 338.8 $ 16.8% $395.0 $391.2 410.9 $317.5 $338.8 11.9% 5,548.2 million % 2.8% 4.1 Investment Income 66.53% 10.3% 10.3% 4.6% 1.4% Employee Contribution 12.81% 2011 2012 2013 2014 2015 C&P Stock–Domestic Money Market Securities U.S. Government Guaranteed Bonds Mortgage-Backed Securities 2011 2012 2013 Employer Contribution 20.66% 2014 2015 Real Estate Bonds–Domestic U.S. Agency Securities C&P Stock–International
7 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 8 2015 Legal/Legislation/Staff Section Header The Retirement Systems of Alabama Legal STAFF, ADVISORS AND MEDICAL BOARD
chief executive officer n fiscal year 2015, the RSA Legal Division handled in reviewing and implementing policies and plan design Committee is to present any recommendations regarding David G. Bronner, ph.d., j.d. a wide variety of matters involving many areas of features to ensure consistency with the Affordable Care public pension and retiree health insurance benefits to I law that pertain to the RSA’s operations, including Act and other applicable laws and regulations. The legal the entire Legislature at the beginning of the 2016 deputy director pension law, fiduciary and trust law, constitutional law, staff also worked to ensure that PEEHIP met applicable Legislative Session. Donald L. Yancey, m.p.a., j.d. tax law, health insurance law, securities law, contract privacy and security requirements under the Health In addition, the Legislature passed Act 2015-498, Administrative Staff law, construction law, commercial real estate law and Insurance Portability and Accountability Act (HIPAA) and which will reform retirement benefits for judges who employment law. Health Information Technology for Economic and Clinical chief investment officer are newly elected or appointed after November 8, 2016. R. Marc Green, m.b.a., cfa Litigation matters have continued to comprise Health Act (HITECH), which govern the privacy and It also provides that district attorneys and circuit clerks security of PEEHIP members’ and their dependents’ health chief accountant and financial officer a significant portion of the RSA legal staff’s newly elected or appointed after this date will no longer Diane E. Scott, b.s., cpa, cgma information. responsibilities. The legal staff has worked to defend participate in the supernumerary program, but will general counsel the RSA’s interests in numerous cases involving Other major areas of practice for the RSA Legal Division participate in the Judicial Retirement Fund. The Act is Leura G. Canary, j.d. challenges to legislative changes to the pension benefit include the review and negotiation of contracts for the contingent on the passage of a constitutional amendment legislative counsel plans. The legal staff has also defended several cases RSA and PEEHIP. The legal staff also provides legal advice (Act 2015-342) to allow the district attorneys and clerks to Neah L. Mitchell, j.d. involving challenges to the authority of the ERS, and assistance daily and training as needed on all other participate in JRF. teachers’ retirement executive Christopher P. Townes, m.b.a. TRS and PEEHIP Boards of Control and has obtained aspects of the operations of the RSA, PEEHIP, and their The Legislature also enacted Act 2015-410, which favorable rulings upholding that authority. In Denson Boards of Control. employees’ & judicial retirement executive increases the return to work compensation limits to William F. Kelley, Jr., j.d. v. Bronner, one such case, the Supreme Court ordered The RSA legal staff stands ready to assist the RSA in $30,000 for calendar year 2016. This amount would be the dismissal of a suit challenging the legality of the director of public education employees’ health insurance plan meeting any new challenges that may arise for public increased every calendar year after in accordance with Donna M. Joyner, b.s., cpa RSA’s Alabama investments, which are governed by the pensions and health insurance programs and to maintain the Consumer Price Index. director of rsa-1 same fiduciary standards of prudence applicable to all and enhance the RSA’s service to its members. Rhonda H. Peters, b.s. RSA investments. The RSA achieved another significant Finally, legislation was enacted (Act 2015-82), which requires the issuance of employee benefit statements to information technology services resolution in North Baldwin County Health Care Authority Michael T. Baker, b.s. v. ERS, et al., a lawsuit brought by a local employer in an active and retired state and education employees. These Legislation member services attempt to avoid its own pension funding obligations. statements are to include information about employee, Penny K. Wilson, b.s. retirement, and health insurance benefits accrued or Through the litigation, the RSA successfully established communications received by the employee/retiree in the prior fiscal year. Michael E. Pegues, m.a. that the local employer remained liable for the benefits he 2015 Regular Legislative Session began on it promised its employees, thus protecting the interests Also, the statements are to include RSA’s funding ratio, field services March 3, 2015, and ended on June 4, 2015. During the total employer contribution to RSA, PEEHIP, and Robert J. Crowe, bba of the RSA members across the state who work for local the Regular Session, the Legislature passed the employers, as well as the financial integrity of the state T SEIB, and these contributions as a percentage of Education Trust Fund Budget (Act 2015-281), which funded employees’ plan. The RSA continues to litigate matters the budget appropriations. Advisors TRS at the requested rate and level funded PEEHIP at independent certified public accountants as necessary to protect the interests of its members. the rate of $780 per active employee per month. The Carr, Riggs and Ingram, llc In addition, the legal staff has pursued affirmative Legislature was unable to pass a General Fund Budget investment consultant litigation to recover funds for the system when during the Regular Session due to disagreements on how Regions Bank N.A., Mr. Brian Sullivan appropriate. The RSA has continued to seek recovery for to address the major shortfall in anticipated revenues losses experienced as a result of the BP oil spill, and the for the General Fund. By the Second Special Session, the investment custodian State Street Bank and RSA has also participated in securities fraud litigation Legislature reached a consensus and passed the General Trust Company to seek recovery of investment losses due to fraud. Fund Budget (Act 2015-540), which funded ERS at the consulting actuary The RSA legal staff also assisted the RSA’s real estate requested rate. Cavanaugh Macdonald holdings and other investments, providing legal advice Consulting, llc, During the 2015 Regular Session, the Legislature created Mr. Edward A. Macdonald on general operational issues and construction projects the Joint Committee on Alabama Public Pensions by joint and pursuing litigation when necessary. attorney general resolution. This Committee is composed of 16 legislators Hon. Luther Strange Another important area of practice for the RSA who are charged with meeting monthly until the 2016 chief examiner legal staff was providing legal guidance related to the Legislative Session. The resolution further required that Mr. Ronald L. Jones administration of PEEHIP, the education employees’ the Committee study public pension benefits and retiree self-funded group health plan. The legal staff assisted health insurance benefits. Pursuant to the resolution, the Medical Board chair Glenn Yates, m.d. Gregory Borg, m.d. 9 || THE RETIREMENT SYSTEMS OF ALABAMA 10 Malcolm Brown, m.d. Section Header Downtown Mobile
DOWNTOWN Look up, reach high, rise above.
Mobile Fast-forward to 2016. The RSA’s gleaming 34-story office tower lights up the downtown skyline. Historic
office buildings, hotels and resorts throughout the Mobile Bay area have been lovingly restored to their original
The 20th century was drawing to a close. Businesses glory. Businesses, conventions and travelers rush to claim space in these first-class facilities, generating jobs for across America were abandoning their downtown Alabama workers and taxes for the city and the state. Impressed by the growth, outside companies have moved in at a record pace, sending a message to the world that Alabama is a great place to do business. Investing in headquarters and heading for the suburbs, leaving empty Alabama and its people is at the heart of the RSA’s strategy. Our financial commitment to Mobile not only helped breathe new life into the city, but is also generating superior returns for our members. This year we streets and buildings behind. But for the RSA and the city of highlight the stunning assets that make up our Mobile portfolio, each one proof that Mobile, surrender was not an option. Their decision? Reach the sky is something worth reaching for. for the sky instead.
The RSA Battle House Tower & Hotel ST. MICHAEL STREET
T E E R T S R E T A W The RSA
Trustmark Building ST. FRANCIS STREET The RSA
Renaissance TE RTS ORY AL Riverview SJORT EPH S T . Hotel
The RSA DAUPHIN STREET Van Antwerp Building
The RSA Royal St. Building CONTI STREET
“The Four Diamond RSA Hotels and meeting space have been great for supporting Senior Bowl functions and housing the many NFL and media professionals attending Senior Bowl week in Mobile. The Mobile skyline, as shown in the national and international publicity during the Senior Bowl, makes Mobile look impressive and shows the quality of life we all appreciate and enjoy in our Port City.”
Angus R. Cooper II, Chairman & CEO Reese’s Senior Bowl
11 2015 ANNUAL REPORT || 12 Downtown Mobile
OVER 80,000 GUESTS EACH YEAR
AAA FOUR DIAMOND RATED
Shooting skyward from the heart of Mobile’s reemerging downtown, this NEARLY 17,000 SPA TREATMENTS
modern office tower stands as a testament to the city’s amazing renaissance. OVER 200 ANNUAL CONVENTIONS As the tallest building on the Gulf Coast at 34 stories, it offers breathtaking views of downtown and the shimmering Mobile Bay. Businesses are attracted to its upscale decor featuring the finest materials and finishes, as well as first-class amenities like a health club, 20 high-speed elevators and state-of-the-art climate control.
The RSA Battle House Tower and adjacent Battle House Renaissance Hotel & Spa
The Tower’s pinnacle lights up Mobile Bay with different colors for each season as well as special occasions such as Mardi Gras and Christmas. The lighted crown is visible for 30 miles.
As the hotel’s ambassador, Mr. George Moore has toured thousands of guests through the historic Battle House Hotel. From helping royalty during Mardi Gras to welcoming international business leaders to our city, Mr. Moore goes out of his way to make every guest’s experience exceptional.
Evoking the opulence of gracious Southern living, The Battle House Hotel is the last of Mobile’s grand hostelries. The hotel was first established in 1852 on the site of Andrew Jackson’s headquarters during the War of 1812, but it burned in 1905. The RSA saved the hotel after years of neglect with a painstaking renovation in 2008.
13 2015 ANNUAL REPORT || 14 Section Header Downtown Mobile
The RSA Trustmark Building
Built in 1965, this 34-story diamond-in-the- “Businesses now rush to rough was transformed into an international find space close to RSA, and office tower with a $50 million makeover from that makes you take pride the RSA. The building’s elegant lobby includes porcelain in working downtown and and granite tile, as well as an original Mardi Gras themed mural makes you want to spend composed of parade beads. Each year thousands gather here to ring time in its open air plazas, in the New Year at MoonPie Over Mobile, where a giant 600-pound parks, shops and flavorful MoonPie drops 28 stories to the delight of midnight revelers. restaurants.” Heralded as one of the most fun and unique celebrations in the Scott A. Riddle, country, it brings national media attention and packs hotels. Executive Vice President Dynamic Security, Inc.
15 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 16 Downtown Mobile Section Header In order to create a unique street-level element to hide a service entrance for deliveries to the Van Antwerp Building, the RSA challenged the project architects to An 11-story legend, The Van develop a memorable design feature. The Antwerp Building was Mobile’s first result is a glass wall highlighting important skyscraper and one of the tallest historic sites along Mobile Bay that is buildings in the Southeast when it not only educational but creates a “wow” factor for downtown Mobile. The wall is was constructed in 1909. A stunning example enhanced with dramatic lighting at night of Beaux Arts architecture, it is one of the most historically with an almost unlimited spectrum of color significant structures in Alabama. The majestic building choices. Service vehicles have fast access to was renovated by the RSA in 2015, with special care given the building and the design incorporates a to ensure that it was restored to its original character. second floor event space that serves as an important amenity for the tenants of the Van Antwerp Building.
The RSA Van Antwerp Building
17 18 Downtown Mobile Section Header Teachers’ Retirement System
Gracefully connected by skywalk to Revenue Sources Mobile’s state-of-the-art convention center, this premier RSA property Investment TRS TOTAL REVENUES THE TRS % Income provides convention guests and other CONSISTS ($ IN MILLIONS) visitors with 375 beautifully appointed OF 5,00018 rooms in the heart of downtown. Piercing 5,0005,0005,000 18 the sky at 28 stories, the hotel completed a major renovation 209 UNITS $4,066.0 in 2007, and since then has served as one of the city’s most $3,838.2 18 $ $ 3,693.5 4,066.0$4,066.0$4,066.0 popular convention hotels. Over 125,000 guests each year $3,838.2$Employee3,838.2$3,838.2 Contributions$ $ $ enjoy sweeping views of downtown and the bay, as well as % 3,693.53,693.53,693.5 1832 exceptional service befitting a AAA Four Diamond hotel. 14 UNIVERSITIES 32 27 32 49 POSTSECONDARY INSTITUTIONS $ 32 $1,454.8 1,477.1 The RSA Renaissance Riverview Plaza Hotel Employer Contributions$ $ $ $ $ $ 1,477.1 49 138 1,454.81,454.81,454.8% 1,477.11,477.1 K-12 SYSTEMS 30 50 49 STATE & MISCELLANEOUS AGENCIES 2011 2012 2013 2014 2015 25 $ 22.2 $ 21.5 TIER 1 $ 13 12.51% TIER 1 20112011 2012 20122011 2012 201320132013201420142014201520152015 2525 25 20.6 % TIER 2 % TIER 2 $ 11.71 % 11.71 % TRS MEMBERS 2015 $ $ $ 18.7 11.08 The11.05 Teachers’ Retirement System of Alabama (TRS) provides 22.222.222.2$ TIER 1 $ $ % % $ 21.521.521.5 13 $ % % % TIERTIER 1 1TIER 1 TIERTIER 1 1TIER 1 10.00 TIER 2 20.6$ $ 13 13 15.912.51 TIER 2 TIER 2 10.08 retirement allowances and other specified benefits for qualified 20.620.6 12.5112.51 % % %TIER 2TIER 2 %% TIER% 2TIER 2 % + 4,419 $ 11.7111.7111.71 % 11.71 9.44 18.7$18.7$18.7 11.08 % 11.71% 11.71 %% % TIERTIER 1 1TIER 1 11.0811.08 11.0511.0511.05 persons employed by state-supported educational institutions. over 2014 number % % $ $ $ 10.0010.0010.00% 10.08% % TIERTIER% 2 2TIER 2 15.915.9 15.9 10.0810.08 % 218,215 9.449.44%9.44%
TRS INVESTMENT INCOME 3,500 TRS EMPLOYEE CONTRIBUTIONS TRS EMPLOYER CONTRIBUTIONS ($ IN MILLIONS) ($ IN MILLIONS) ($ IN MILLIONS) $ $64 MILLION RSA RENOVATION 2,989.2 3,500 $ 800 “When you’re hosting business 3,5003,500 2,732.7 $ $2,473.2 779.6 prospects in such a world-class AAA FOUR DIAMOND RATED $2,989.2$2,989.2$2,989.2 $739.5 $737.7 $ $ $ 800800 800 $ 2,732.72,732.72,732.7 $ $ $ $ 627.9 $ $ $ 779.6 618.3 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2,473.22,473.22,473.2 779.6779.6 $ $ environment it gives them a SKYWALK TO CONVENTION CENTER $ 739.5$$739.5$739.5737.$ $7 500 $458.5 477.6 480.8 477.9737.737.7 7 $ $618.3$618.3$618.3627.9$627.9$627.9 good impression20112011 of201120122012 Mobile201220132013201320142014 and2014201520152015 20112011 2012 20122011 2013 2013 2012 2013 201420142014 201520152015 $ OVER 200 ANNUAL CONVENTIONS 352.0 $ $ $ $ $ $ $ 477.6$ $ 480.8 $ $ 323.2 500500 500 458.5$458.5$458.5477.6477.6480.8480.8477.9477.9477.9 Alabama.” $ $ 261.5 352.0$352.0$352.0 $ Bill Sisson, President and CEO Mobile Chamber of Commerce 323.2$323.2$323.2 $261.5$261.5$261.5 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
20112011 2012 20122011 2013 2013 2012 2013 201420142014201520152015 20112011 2012 20122011 2012 201320132013201420142014201520152015 20112011 2012 20122011 2012 201320132013201420142014201520152015
19 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 20 5,000
$4,066.0 $3,838.2 $3,693.5
Teachers’Section Header Retirement System ||| Section Header $ $1,454.8 1,477.1 2015 TRS BOARD OF CONTROL Benefits Retirement 5,000 Administration Benefits $2,075.3 $1,997.6 TRS PORTFOLIO AT FAIR VALUE TRS TOTAL ANNUAL PAYMENTS $1,893.3 $4,066.0 $ ($ IN BILLIONS) ($ IN MILLIONS) $ 1,800.8 $ 3,838.2 $ 2,075.3 1,673.9 $ $ 2011 2012 2013 2014 2015 25 $ 1,997.6 3,693.5 $ 1,567.8 $ $ $ $ 1,512.3 1,893.3 2,075.3 22.2 $ 1,486.9 $1,800.8 $ 21.5 % $ $TIER 1 TIER 1 1,997.6 $ 13 12.51 1,207.3 1,397.8 $ $ 20.6 11.71% TIER 2 % TIER 2 1,673.9 1,893.3 $18.7 % 11.71 $ % $ TIER 1 11.08 $ 1,567.811.05 1,800.8 $ 1,512.3 $ $ % % TIER 2 1,486.9 1,673.9 10.00 10.08 2006 2007$ 2008 2009 2010 2011 2012 2013 2014 2015 15.9 $ % 1,397.8 $ 9.441,207.3 $ 1,567.8 $1,486.9 1,512.3 Dr. Thomas R. Bice Hon. Young Boozer Mr. Richard Brown Dr. Susan Williams Brown $1,207.3 $1,397.8 STATE SUPERINTENDENT OF EDUCATION STATE TREASURER PRINCIPAL POSITION POSTSECONDARY POSITION 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EX OFFICIO EX OFFICIO VICE CHAIR 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3,500 $ 2,989.2$ $ 1,454.8 1,477.1$ 800 2,732.7 $ $ 779.6 2,473.2 $739.5 $737.7 TRS AVERAGE MONTHLY BENEFITS $ $ 1,817 $ (IN ACTUAL DOLLARS) 1,793 $618.3 627.9 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 $1,772 $ $ $ $ $ 1,753 $ 477.6 480.8 477.9 1,741 $ $ $1,732 500 458.5 $ 1,690 1,716 $ 1,681 $ 1,817 1,793 $ $1,564 $ 352.0 $ $ 1,772 $ 323.2 $ $ 1,753 $ 1,817 1,741 $ $1,716 1,732 1,793 $ $ 1,690 $ 261.5 1,681 $ 1,772 $ $ 1,753 TRS EMPLOYER RATE 1,5642006 2007 2008 20091,741 $ $1,7162010 2011$1,732 2012 2013 2014 2015 2011 2012 2013 2014 2015 25 $ 1,690 Mr. Luther P. Hallmark Mr. C. Ray Hayes Dr. Donald L. Large, Jr. Mrs. Susan Lockridge (% OF COVERED PAYROLL) 1,681 $ $1,564 SUPERINTENDENT POSITION HIGHER EDUCATION POSITION HIGHER EDUCATION POSITION SUPPORT PERSONNEL POSITION 22.2 $ 21.5 TIER 1 $ 13 12.51% TIER 1 2006 2007 2008 2009 2010 2011 2012 2013 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 20.6 11.71% TIER 2 % TIER 2 2014 2015 $18.7 % 11.71 % TIER 1 11.08 11.05 % 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $15.9 10.00 10.08% TIER 2 9.44%
TRS PRERETIREMENT DEATH BENEFITS ($ IN MILLIONS) 3,500 $5.8 $5.7 $ $2,989.2 $ 5.5 5.4 $$5.3 800 $ 2,732.7 $ 5.8 $ 779.6 $ 2,473.2$ $ 5.1 $ 5.7 739.5 $ $ 4.9 $ 737.7 $ $ 5.5 $ 4.7 4.3 4.2 $ 5.8 $ 5.4 $5.3 $5.7 $618.3 627.9 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 $ $ $ 5.5 $ $ $ 5.1 $ $ $ 477.6 480.8 477.9 Ms. Charlene McCoy Mr. Bill Newton Mrs. Sarah S. Swindle Mrs. Teresa Harbison Swindall 5.4 $ 500 458.5 $2006 2007 2008 2009 2010 2011 2012 20134.9 5.3 20144.7 2015 TEACHER POSITION ACTING STATE FINANCE DIRECTOR RETIRED POSITION TEACHER POSITION 4.3 $4.2 $ $ EX OFFICIO CHAIR 5.1 352.0 $ $ $ 4.9 $4.7 323.2 4.3 $4.2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $261.5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
$2.1 billion IN RETIREMENT BENEFITS RETIREES AND BENEFICIARIES Mr. Russell J. Twilley Mr. Joe Ward Mr. John R. Whaley 7,363 PAID IN SUPPORT PERSONNEL POSITION RETIRED POSITION TEACHER POSITION 2015 8
21 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 22 20
Employee Retirement Systems
$ $10.0 10.8 $10.4 $9.1 H-1 $7.7
$ $ $ 250 $ 223.6 226.0 229.3 H-7 $195.7 216.9
2011 2012 2013 2014 2015
40 TIER 1 TIER 1 38.37% 35.81% 2011 2012 2013 2014 2015 TIER 2 TIER 1 % TIER 2 % % % 31.61 % 32.45 30.57 29.92 TIER 2 29.52 25.32%
450 $ H-2 $395.0 $391.2 410.9
$338.8 $317.5 H-8
2011 2012 2013 2014 2015
36 2011 2012 2013 2014 2015
TIER 1 TIER 2 TIER 1 TIER 1 TIER 2 TIER 2 % % % % % 13.45 13.31 11.94 % % % 12.02 11.96 9.42 10.12 10.04 1,500 $ 1,427.9 $ 1,296.5 $1,186.5
2011 2012 2013 2014 2015
Section Header H-9 Section Header Teachers’ Retirement System FINANCIAL STATEMENTS $196.9
Employees’ Retirement System $126.5 Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position AS OF SEPTEMBER 30, 2015, AND 2014 FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2015, AND 2014 ($ IN THOUSANDS) ($ IN THOUSANDS) Revenue Sources Assets 2015 2014 Additions 2015 2014 2011 2012 2013 2014 2015 $1,018.5 $948.5 CASH $ 28,969 $ 31,935 CONTRIBUTIONS $ $ 895.5 Investment 848.5 THE ERS ERS TOTAL REVENUES Employee $783.0 $ 473,903 $ 477,300 Income $ % ($ IN MILLIONS) 725.7 CONSISTS RECEIVABLES $ Employer 695.4 737,671 739,547 $ H-3 $ OF 2,000 1,962.2 20 Employee Contributions 38,581 38,809 $615.7 655.4 Transfers$551.8 from Employees’ Employer Contributions 61,317 61,300 Retirement System 4,015 3,549 $1,858.9 $1,803.7 Investment Sales Receivable 62,797 18,787 TOTAL CONTRIBUTIONS 1,215,589 1,220,396 Employee2006 2007 2008 2009 Retirement2010 2011 2012 2013 Systems2014 2015 Real Estate Investment Receivable 957 998 983 16 $ $ INVESTMENT INCOME UNITS Dividends$10.0 and Interest10.8 10.4 68,900 68,125 $9.1 $ Miscellaneous Receivable 115 – From Investing Activities H-1 7.7 $ Net (Decrease)/Increase in Fair Value 1,730 Employee TOTAL RECEIVABLES 232,667 188,019 of Investments (381,400) $ 1,853,288 $ $ $ 1,662 $ 223.6 226.0 229.3 250 $ 216.9 Contributions Interest and Dividends 640,$9101,632 618,861 H-7 195.7 $ % INVESTMENTS, AT FAIR VALUE 1,600 Total Investment Income $1,559 Domestic Equity 11,102,304 11,820,999 from Investing Activities 259,510 2,472,149 127 $ 2011 2012 2013 2014 2015 H-4 $1,520 1,528 STATE AGENCIES Domestic Fixed Income 4,888,919 4,736,010 Less Investment$1,496 Expenses, Net 6,407 5,732 $1,355 $1,449 International Equities 2,688,554 2,985,814 40 TIER 1 Net Investment Income TIER 1 % from Investing Activities 253,103 2,466,417 30 Real Estate 38.37 2,209,180 2,095,289 35.81% H-6 $ Short-Term 595,981 522,791 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2011 2012652013 2014 787.6 $ From Securities Lending Activities 2015 766.7 TIER 2 TIER 1 COUNTIES TOTAL% INVESTMENTS TIER 2 21,484,938% 22,160,903 Securities Lending Income 11,512 9,629 % % 31.61 % 32.45 30.57 29.92 TIER 2 29.52 INVESTED SECURITIES25.32% Less Securities Lending20 Expenses Employer LENDING COLLATERAL 1,742,858 1,096,592 Borrower Rebates 365 65 % Contributions $ PROPERTY AND EQUIPMENT Management Fees 5.2 2,782 2,829 292 $ $ LESS ACCUMULATED DEPRECIATION 95,068 92,633 $ 5.0 5.0 CITIES 4.9 $ Employee Retirement Systems Total Securities$ Lending Expenses 4.8 3,147 2,894 450 $ TOTAL ASSETS 23,584,500 23,570,082 4.8 $ $ 410.9 H-2 $ 395.0 391.2 4.5 $ $ Net$ 4.4Income from Securities $10.0 10.84.4 $10.4 H-5 Lending Activities $9.1 8,365 6,735 $ 54 DEFERRED OUTFLOWS $ 338.8 H-1$4.1 7.7 $ OF RESOURCES 2,981 – 499317.5 TOTAL NET INVESTMENT INCOME 261,468 2,473 ,152 OTHER PUBLIC $ $ $ H-8 ENTITIES $ 223.6 226.0 229.3 TOTAL ASSETS AND DEFERRED 250 $ 216.9 H-7 2011 2012 2013 2014195.7 2015 OUTFLOWS OF RESOURCES 23,587,481 23,570,082 TOTAL ADDITIONS 1,477,057 3,693,548 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 The Employees’ Retirement System of Alabama (ERS) provides ERS MEMBERS 2015 2011 2012Liabilities2013 2014 2015 Deductions 2011 2012 2013 2014 2015 retirement allowances and other specified benefits for qualified Retirement Allowance Payments 2,075,302 1,997,595 TIER 1 + 1,322 Accounts Payable and Other Liabilities 5,302 4,731 40 state employees, state police, and, on an elective basis, employees TIER 1 % over 2014 number 36 Return of Contributions and Death Benefits 58,060 54,699 38.37 Investment Purchases Payable 69,309 23,739 35.81% of cities, counties,2011 2012 towns and2013 quasi-public2014 2015 organizations. 126,052 ransfers to Employees’ Retirement System ,432 ,880 Other Postemployment Benefits 4,408 3,713 T 3 2 2011 2012 2013 2014 2015 TIER 2 20 TIER 1 Net Pension Liability 16,626 – Administrative Expenses %15,074 13TIER,103 2 % TIER 1 TIER 2 % % 31.61 % 32.45 ERS INVESTMENT INCOME ERS EMPLOYEE CONTRIBUTIONS ERS EMPLOYER CONTRIBUTIONS TIER 1 30.57 29.92 TIER 2 29.52 TIER 1 TIER 2 TIER 2 % % Depreciation 4,258 4,336 ($ IN MILLIONS) ($ IN MILLIONS) ($ IN MILLIONS) % Securities Lending Collateral% % 13.45 113.31,742,858 1,096,592 % 11.94 % % % 12.02 11.96 25.32 9.42 10.12 10.04 1,500 $ Employee Retirement Systems 1,427.9 $ TOTAL LIABILITIES 1,838,503 1,128,775 TOTAL DEDUCTIONS 2,156,126 2,072,613 1,296.5 $1,186.5 $ $ 10.8 $ $ 10.0 10.4 450 $ 2011 2012 DEFERRED 2013 INFLOWS 2014 9.12015 Net (Decrease)/Increase (679,069) 1,620,935 $ $ 410.9 $ H-2 395.0 391.2 OH-1F RESOURCES 7.7 1,247 – TOTAL LIABILITIES AND DEFERRED $ Net Position Restricted $ $ $ 338.8 INFLOWS OF RESOURCES 1,839,750 1,128,775 H-9 250 $216.9 223.6 226.0 229.3 $317.5 For Pension Benefits $196.9 H-7 $195.7 BEGINNING OF YEAR 22,441,307 20,820,372 H-8 Net Position Restricted (as previously reported) $126.5 For Pension Benefits2011 2012 $ 21,747,7312013 2014$ 22,441,307 ADJUSTMENT FOR APPLICATION 2015 OF GASB 68 (14,507) – 2011 2012 2013 2014 2015 BEGINNING OF YEAR 22,426,800 20,820,372 40 TIER 1 TIER 1 % (as adjusted) % 38.37 35.81 END OF YEAR 36 $ 21,747,731 $ 22,441,307 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 TIER 2 TIER $1 %1,018.5 TIER 2 % % % $ % 32.45 || THE RETIREMENT SYSTEMS OF ALABAMA 948.531.61 Separately issued, audited financial statements are available upon request. 2015 ANNUAL REPORT || 23 30.57 29.92$ TIER 2 29.52 24 $ 895.5 TIER 1 TIER 2 848.5 % TIER 1 $ 25.32 TIER 1 TIER 2 TIER 2 % % $ 783.0 % % % 13.45 13.31 725.7 11.94 % % % 12.02 11.96 $ 9.42 10.12 10.04 1,500 $ 695.4 $ 1,427.9 H-3 $ 2,000 1,962.2 $ $615.7 655.4 1,296.5 $ $551.8 1,186.5 $ 450 1,858.9 $ $ 1,803.7 $ 410.9 H-2 2011 2012 2013 2014 2015 $395.0 391.2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $338.8 $317.5 H-9 $196.9 $1,730 H-8 $1,662 $126.5 $1,632 $1,600 $1,559 2011 2012 2013 2014 2015 $ H-4 $1,520 1,528 $1,496 $1,355 $1,449 36 2011 2012 2013 2014 2015 $1,018.5 2011 2012 2013 2014 2015 $ 948.5 $ $ H-6 787.6 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $848.5 895.5 766.7 $ TIER 1 TIER 2 $ 783.0 TIER 1 TIER 2 % 725.7 % TIER 1 TIER 2 % $ % % 13.45 13.31 695.4 $ 11.94 % % % 12.02 11.96 H-3 $ 1,962.2 10.12 10.04 $ 655.4 1,500 2,000 9.42 $ 615.7 $ 551.8 1,427.9 $ 1,296.5 $ $ 1,186.5 1,858.9 $ $5.2 1,803.7 $ $ $ 5.0 5.0 4.9 $ 2015 $4.8 20114.8 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 4.5 $ H-5 $4.4 4.4 $4.1 $1,730 H-9 $196.9 $1,662 $1,632 2011 2012 2013 2014 2015 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1,600 $ $1,559 126.5 $ H-4 $1,520 1,528 $1,496 $1,355 $1,449
H-6 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 787.6 $766.7 $1,018.5 $948.5 $ $848.5 895.5 $783.0 $725.7 $ $ 695.4 5.2 $ H-3 $655.4 $5.0 $5.0 2,000 1,962.2 $615.7 $4.9 $551.8 $4.8 $4.8 $ $ 4.5 $ 1,858.9 $ H-5 $4.4 4.4 1,803.7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $4.1
2011 2012 2013 2014 2015 $1,730 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $1,662 $1,632 $1,600 $1,559 $ H-4 $1,520 1,528 $1,496 $1,355 $1,449
H-6 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 787.6 $766.7
$5.2 $5.0 $5.0 $4.9 $4.8 $4.8 $ 4.5 $ H-5 $4.4 4.4 $4.1
2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
20 Employee Retirement Systems
$ $ 20 $10.0 10.8 10.4 $9.1 Employee Retirement Systems H-1 $7.7 $ $ $ 10.8 $ $ 10.0 10.4 Employee Retirement Systems $ $ 9.1 250 $216.9 223.6 226.0 229.3 $7.7 H-7 $195.7 H-1 $ $ 10.8 $ $ 10.0 10.4 9.1 $ $ $ $ $ 223.6 226.0 229.3 7.7 250 $ 216.9 H-1 2011 2012 2013 2014 2015 H-7 195.7
$ $ $ TIER 1 250 $ 223.6 226.0 229.3 40 $195.7 216.9 TIER 1 38.37% H-7 2011 2012 2013 2014 35.812015% 2011 2012 2013 2014 2015 TIER 1 TIER 2 40 2011 2012 2013TIER 1 2014 2015 % % TIER 1 TIER 2 38.37 % % % 31.61 % % 32.45 30.57 29.92 TIER 2 35.81 29.52 40 % TIER 1 2011 2012 2013 2014 2015 25.32 TIER 1 % TIER 2 TIER 1 38.37 % 35.81% TIER 2 % 30.57% % 31.61 29.52% 32.45 29.92 TIER 2 2011 2012 2013 2014 2015 % TIER 2 TIER 1 25.32 % TIER 2 % 450 $ % % 31.61 % 32.45 $ $ 410.9 H-2 30.57 29.92 TIER 2 29.52 395.0 391.2 25.32% $ 450 338.8 $ H-2 $395.0 $317.5 $391.2 410.9 H-8 450 $ $ $ 338.8 $391.2 410.9 H-2 395.0 $317.5 H-8 $338.8 2011 2012 2013 2014 2015 $317.5 H-8 36 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 36 TIER 1 TIER 2 TIER 1 2011 2012 2013 2014 2015 TIER 1 TIER 2 TIER 2 % % % % % 13.45 13.31 11.94 % % % 12.02 11.96 36 9.42 10.12 10.04 1,500 $ 2011 2012 1,427.9 $2013 2014 2015 TIER 1 TIER 2 1,296.5 $ TIER 1 1,186.5 TIER 1 TIER 2 TIER 2 % % % % % 13.45 13.31 11.94 % % % 12.02 11.96 9.42 10.12 10.04 1,500 $ 2011 2012 2013 2014 TIER 20151 TIER 2 1,427.9 $ TIER 1 TIER 2 1,296.5 $ TIER 1 TIER 2 % % 1,186.5 % % % 13.45 13.31 Section Header 11.94 % % % 12.02 11.96 Section Header Employees’ Retirement System 9.42 10.12 10.04 1,500 $ 1,427.9 $ 2011 2012 2013 2014 2015 H-9 1,296.5 $1,186.5 $196.9 Benefits Retirement2011 2012 2013 2014 2015 H-9 $ 2015 ERS BOARD OF CONTROL Administration Benefits $196.9 126.5 H-9 $196.9 $126.5 ERS PORTFOLIO AT FAIR VALUE ERS TOTAL ANNUAL PAYMENTS ($ IN BILLIONS) ($ IN MILLIONS) $ 20 2011 2012 2013 2014 126.52015 $1,018.5 $948.5 $ $848.5 895.5 2011 2012 2013 2014 2015 Employee$783.0 Retirement$ Systems $725.7 1,018.5 $ $ 20 $ $ 695.4 948.5 $ $ 10.8 H-3 $ $ 2,000 20111,962.2 2012 2013 2014 2015 $ 10.0 10.4 $ 655.4 $ 895.5 9.1 $ 615.7 848.5 $ 551.8 $783.0 1,018.5 $7.7 $ $ $ H-1 725.7 948.5 1,858.9 $ $ $ 1,803.7 Employee695.4 Retirement$ 895.5 Systems $ H-3 $ 848.5 2,000 1,962.2 20 $ 655.4 $ $ $ $ Hon. Robert Bentley Mr. Christopher Blankenship Mr. David Bollie Hon. Young Boozer $ 615.7 783.0 $ 223.6 226.0 229.3 $ 2006551.8 2007 2008 2009 $2010 2011 2012 2013 2014 2015 250 $ 216.9 $ 725.7 195.7 $ GOVERNOR GOVERNOR APPOINTEE ACTIVE STATE EMPLOYEE POSITION STATE TREASURER $ 10.8 $ H-7 $ 10.0 10.4 695.4 $ 1,858.9 $ EX OFFICIO, CHAIR EX OFFICIO 9.1 H-3 $655.4 2,000 1,962.2 1,803.7 $ $615.7 H-1 7.7 $551.8 Employee Retirement Systems 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $1,858.9 2011 2012 2013 2014 2015 $ $ 1,730 $ $ $ 1,803.7 $ $ $ 223.6 226.0 229.3 $ 10.8 250 $ 216.9 $ 10.0 10.4 ERS AVERAGE MONTHLY BENEFITS $ 195.7 9.1 TIER 1 2006 2007 2008 2009 2010 2011 2012 2013 1,6622014 2015 H-7 40 (IN ACTUAL DOLLARS) $ TIER 1 % $ H-1 7.7 38.37 1,632 $ 35.81% $1,600 1,730 $ $ ERS EMPLOYER RATE (STATE POLICE RATE) 1,559 $ 2011$ 2012 $ 2013 2014 2011 2012 2013 2014 2015 1,662 250 $ 223.6 226.0 229.3 2015 (% OF COVERED PAYROLL) TIER 2 $ $ 216.9 TIER 1 $ 1,528 $ $ 195.7 % TIERH-4 2 % 1,520 1,632 1,730 H-7 % % 31.61 TIER 1 % 32.45 $1,496 $1,600 30.57 29.92 29.52 $ $ 40 TIER 2 % 1,355 1,449 $ $ TIER 1 % 38.37 1,559 1,662 25.32% $ 35.81 $ 1,632 2011 2012 2013 2014 2015 H-4 $1,520 1,528 $1,600 $1,496 2011 2012 2013 2014 2015 TIER 2 $ $ $ H-6 $ TIER 1 20061,355 2007 20081,449 2009 2010 2011 20121,559 2013 2014 2015 787.6 $ % TIER 2 TIER 1 % 766.7 40 % % % 32.45 $ 30.57 31.61 TIER 1 29.52 %H-4 $ 1,528 450 29.92 TIER 2 38.37 $ 1,520 $ % 1,496 $ $ 410.9 H-2 % 35.81 $ $1,449 395.0 391.2 Mr. James Fibbe Mrs. Jackie B. Graham Ms. Wendy S. Hester Mr. Bill Newton 25.32 1,355 H-6 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 787.6 $ TIER 2 766.7 RETIRED LOCAL EMPLOYEE POSITION STATE PERSONNEL DIRECTOR, GOVERNOR APPOINTEE ACTING STATE FINANCE DIRECTOR TIER 1 $ % TIER 2 % 338.8 EX OFFICIO, VICE CHAIR EX OFFICIO % % 31.61 % 32.45 $ 30.57 29.92 29.52 $ 317.5 H-6 $ TIER 2 2006 2007 2008 2009 20105.2 2011 2012 2013 2014 2015 450 787.6 $ % $ $ $ 766.7 25.32 $ 5.0 5.0 H-8 $ $ 410.9 H-2 4.9 $ 395.0 391.2 $4.8 4.8
ERS PRERETIREMENT$ DEATH$ BENEFITS $ 5.2 4.5 $4.4 $ ($ IN MILLIONS)4.4 $ $ 338.8 H-5 $ 5.0 5.0 $ 4.9 $ 450 317.5 $ $ 4.8 $ 2011 2012 2013 2014 2015 4.1 4.8 $ $ 410.9 $ 395.0 391.2 H-2 5.2 $ H-8 $ 4.5 $ $ $ 4.4 $ 4.4 5.0 5.0 H-5 4.9 $ $4.8 4.8 $ $ 338.8 2011 2012 2013 2014 2015 36 4.1 $ $ 4.5 $ 317.5 2006 2007 2008$4.4 2009 2010 2011 2012 2013 4.4 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015H-5 H-8 $4.1 2011 2012 2013 2014 2015 TIER 1 TIER 2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TIER 1 TIER 2 % 36 % TIER 1 TIER 2 % 11.94 % % 13.45 13.31 % 10.12% 10.04% 12.02 11.96 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Mr. Ben Powell Mr. James H. Rowell Mr. Curtis E. Stewart Mr. Stephen C. Walkley ERS EMPLOYER2011 2012 RATE9.42 2013(STATE EMPLOYEE2014 RATE)2015 1,500 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1,427.9 $ ACTIVE LOCAL EMPLOYEE POSITION RETIRED STATE EMPLOYEE POSITION GOVERNOR APPOINTEE ACTIVE STATE EMPLOYEE POSITION (% OF COVERED PAYROLL) 1,296.5 $1,186.5
TIER 1 TIER 2 36 TIER 1 2011TIER 2012 1 2013TIER 2 TIER 2 2014 % % % % % 13.45 13.31 2015 2011 2012 2013 2014 2015 11.94 % 10.12% 10.04% 12.02 11.96 9.42 1,500 $ 1,427.9 $ 1,296.5 $1,186.5 TIER 1 TIER 2 H-9 TIER 1 TIER 2 % $ % TIER 1 TIER 2 13.45 % 196.9 11.94 % % 12.02% % 13.31 2011 2012 2013% 10.12 10.04 201411.96 2015 1,500 9.42 $1.0 $ billion 1,427.9 $ IN RETIREMENT BENEFITS 1,296.5 $1,186.5 $126.5 H-9 2011 2012 2013 2014 2015 PAID IN 2015 $196.9 $ H-9 126.5 $196.9 2011 2012 2013 2014 2015 Mr. Steven W. Williams $1,018.5 ACTIVE LOCAL EMPLOYEE POSITION $948.5 RETIREES AND BENEFICIARIES $ $848.5 895.5 $126.5 $783.0 $725.7 $ 2011 2012 2013 2014 2015 695.4 $ H-3 $ $ 45,382 2,000 1,962.2 $615.7 655.4 1,018.5 25 || THE RETIREMENT SYSTEMS OF ALABAMA $551.8 $948.5 2015 ANNUAL REPORT || 26 $ $ $ 895.5 1,858.9 848.5 $1,803.7 $783.0 $725.7 2011 2012 2013 2014 2015 2006 2007 2008$ 2009 2010 2011 2012 2013 $ 2014 2015 695.4 1,018.5 $ H-3 $ $ 2,000 1,962.2 $615.7 655.4 948.5 $ $ 551.8 $ 895.5 848.5 $ $ 1,858.9 $ $ 783.0 1,803.7 725.7 $ $ 695.4 1,730 $ H-3 2006 2007 2008 2009$655.4 2010 2011 2012 2013 2014 2015 2,000 1,962.2 $615.7 $ $551.8 1,662 $1,632 $1,858.9 $1,600 $1,803.7 $ 1,559 $ 2006 2007 2008 2009 2010 2011 2012 2013$ 2014 1,7302015 H-4 $ 1,528 $ 1,520 $ $ 1,496 1,662 $ 1,449 1,355 $1,632 $1,600 $1,559 $1,730 $ $ H-6 H-4 2006 2007 2008$ 2009 1,528 2010 2011 2012 2013 $ 2014 2015 787.6 $ $ 1,520 1,662 766.7 1,496 $ $ $1,449 1,632 1,355 $1,600 $1,559 $ H-4 $ 1,528 $ 1,520 H-6 787.6 $ 2006 2007 2008 2009$1,496 2010 2011 2012 2013 2014 2015 766.7 $1,355 $1,449 $5.2 $5.0 $5.0 $4.9 $4.8 $4.8 $ 4.5 $ H-6 $ H-5 2006 2007 2008 2009 $4.4 2010 2011 2012 2013 2014 4.42015 787.6 $766.7 $ $4.1 5.2 $ $5.0 5.0 $4.9 $4.8 $4.8 $ 4.5 $ $4.4 4.4 2011 2012 2013 2014 2015 H-5 $ 2006 2007 2008 2009 5.2 2010 2011 2012 2013 $ 2014 2015 $ $5.0 5.0 4.1 $4.9 $4.8 $4.8 $ $ 4.5 $ H-5 4.4 4.4 2011 2012 2013 2014 2015 2006$4.1 2007 2008 2009 2010 2011 2012 2013 2014 2015
2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 300 Judicial Retirement Fund $273.5 $260.6 $233.1 $253.0 12 $207.4
I-1 I-7
$ $3.7 $3.9 3.8 $3.7 $2.7
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
35.24% 35.24% 300 35 %Judicial Retirement Fund 32.06 $ 16 15.8 $ $253.0 $273.5 $260.6 15.1 $233.1 $ 12 13.9 $207.4 24.20% 24.35% $10.9 $10.7 I-1 I-2 I-7 I-8
$ $3.7 $3.9 3.8 $3.7 $2.7
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
35.24% 35.24% 35 % 32.06 $ 16 15.8 $15.1 $ $29.8 30.3 $13.9 $29.1 % 24.20% 24.35 $27.2 $26.4 $10.9 $10.7 $24.5 I-2 Employees’Section Header Retirement System FINANCIAL STATEMENTS Section Header I-3 $23.8 45 $ $22.6 I-8 I-9 39.0 Statement of Fiduciary Net Position $21.4 Statement of Changes in Fiduciary Net Position Judicial Retirement Fund $32.2 $31.3 AS OF SEPTEMBER 30, 2015, AND 2014 $18.8 FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2015, AND 2014
($ IN THOUSANDS) ($ IN THOUSANDS) 300 Judicial Retirement Fund 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $253.0 $273.5 $260.6 Assets 2015 2014 Additions 2015 2014 $2.0 $233.1 2011 2012 2013 2014 2015 ($0.9) 12 CASH $ 3,786 $ 5,884 CONTRIBUTIONS Revenue2011 2012 2013 2014 2015 $207.4 Benefits 2011 2012 2013 2014 2015 RECEIVABLES Employee $ 225,767 $ 223,135 Sources Administration Employee Contributions 17,745 17,881 Employer 410,932 391,181 $6,652 I-1 I-7 Employer Contributions 33,650 32,044 Transfers from Teachers’ $6,648 $6,568 75 $ Retirement System 3,432 2,880 300 Judicial Retirement Fund Investment Sales Receivable 33,822 30.310,116 $6,566 $ $29.8 $273.5 $ $ $3.9 3.8 $ $29.1 Transfers$6,552 from Judicial $253.0 260.6 3.7 3.7 $233.1 $ Real Estate Investment Receivable 479 499 Retirement Fund 55 1 2.7 $27.2 300 $6,348 Judicial Retirement Fund $ 12 $26.4 53.4 $ $ Dividends and Interest 32,630 32,187 $6,237 50.1 50.9 $207.4 I-4 $273.5TOTAL$ CONTRIBUTIONS 640,186 617,197 300 Judicial Retirement Fund $24.5 $6,092 $253.0 260.6 $233.1 $273.5 $ I-3 Miscellaneous Receivable$23.8 126 $5,991 – 45 12 $253.0 260.6 2011 2012 2013 2014 2015 INVESTMENT INCOME $ $233.1 $22.6 $5,701 $207.4 39.0 2011 2012 2013 2014 2015 TOTAL RECEIVABLES 118,452 92,727 I-9 I-6 I-1 I-7 12 From Investing Activities $ $21.4 300 32.2 $31.3 Judicial Retirement$207.4 Fund $18.8 Net (Decrease)/Increase in Fair Value % $ INVESTMENTS, AT FAIR VALUE $273.5 $ $ % 35.24 $ $3.9 3.8 $ I-1 2006 2007 2008 2009 o2010f Investments 2011 2012 2013 2014 2015 (186,154) 888,303 I-7 $253.0 260.6 $ 17.9 35.24 3.7 3.7 $233.1 15.6 35 % $ Domestic Equity 5,405,737 5,674,052 32.06 2.7 $ Interest and Dividends 311,516 298,049 I-1 12 I-7 16 15.8 $15.1 Domestic2006 2007 2008Fixed 2009 Income 2010 2011 2012 2013 2,340,213 2014 2,2502015,969 $207.4 $ $ $ $ $ Total Investment Income 2.0 $ $3.7 3.9 3.8 3.7 13.9 from Investing Activities 125,362 1,186,352 ( 0.9) $ $ $ International Equities 1,194,073 1,324,703 2.7 $ 3.9 3.8 $ % % 2011 2012 3.7 2013 2014 20153.7 24.20 24.35 $ Real Estate 1,072,930 1,017,338 Less Investment Expenses, Net 2,771 2,766 I-1 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 I-7 2.7 $ $ Short-Term 426,257 490,538 Net Investment Income JRF INVESTMENT INCOME JRF TOTAL REVENUES JRF PORTFOLIO AT FAIR VALUE 10.9 10.7 $ from Investing Activities 122,591 1,183,586 2011I-2 2012 2013 2014 2015 $6,648 6,652 ($ IN MILLIONS) ($ IN MILLIONS) ($ IN MILLIONS) % % $ $ $ TOTAL INVESTMENTS 10,439,210$6,568 10,757,6002011 2012 2013 2014 2015 35.24 35.24 $3.7 3.9 3.8 3.7 I-8 2011 2012 2013 2014 2015 75 35 % $ $6,566 From Securities Lending Activities 2011 2012 32.062013 2014 2015 2.7 $15.8 $6,552 16 $15.1 % INVESTED SECURITIES Securities35.24% Lending35.24 Income 5,353 4,199 $13.9 LENDING COLLATERAL $6,348 754,43735 523,848 % $ % % 32.06 Less Securities Lending Expenses 53.4 $ $ $ 35.24 $6,237 50.1 50.9 15.8 $ % % 35.24 2011 2012 2013 2014 2015 I-4 16 15.1 35 24.20 24.35 % $6,092 Borrower Rebates 164 21 2011 2012 2013 2014 2015 32.06 $ 300 Judicial Retirement Fund $ 15.8 $ PROPERTY AND EQUIPMENT 13.9 16 $ $5,991 10.9 $10.7 15.1 LESS ACCUMULATED DEPRECIATION$273.5 $ 46,056 46,121 Management Fees 1,290 1,235 2014 $ $5,701 $253.0 260.6 % % I-6 I-2 2011 2012 2013 2015 13.9 $233.1 24.20 24.35 % % Total Securities 12 35.24 35.24 % 2011 2012 2013 2014 2015 35 % 24.35 I-8 Lending Expenses 1,454 1,256 % $ 24.20 TOTAL ASSETS$207.4 11,361,941 11,426,180 32.06 10.9 $10.7 $15.8 $ 16 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 15.1 $ $ I-2 2015 Net Income from Securities $15.6 17.9 10.9 10.7 Lending Activities 3,899 2,943 $13.9 DEFERRED OUTFLOWS I-8 I-2 I-1 OF RESOURCES 896 – I-7 % 24.35% $ I-8 TOTAL NET INVESTMENT INCOME 126,490 1,186,529 24.20 $29.8 30.3 $29.1 $ $ TOTAL ASSETS AND DEFERRED $ $ $ 10.9 10.7 OUTFLOWS OF RESOURCES 11,362,837 11,426,180 TOTAL ADDITIONS 766,676 1,803,726 2011 2012 $3.7 20133.9 20143.8 20153.7 2011 2012 $27.22013 2014 2015 I-2 $ $26.4 2.7 I-8 2011 2012 2013 2014 2015 Liabilities $24.5 Deductions I-3 $23.8 45 2011 2012 2013 2014 2015 $39.0 2011 2012 2013 2014 2015 $22.6 I-9 Accounts Payable and Other Liabilities 2,959 2,520 Retirement Allowance Payments 1,018,515 948,478 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 $21.4 $32.22011 2012$31.3 2013 2014 2015 Investment Purchases Payable 36,413 12,054 JRF EMPLOYEE JRF EMPLOYER $18.8 JRF EMPLOYER RATE $ Return of Contributions and $29.8 30.3 Other Postemployment Benefits 4,374 3,806 Death Benefits 51,024 47,937 CONTRIBUTIONS CONTRIBUTIONS (% OF COVERED PAYROLL) $29.1 % % ($ IN MILLIONS) ($ IN MILLIONS) Net Pension Liability 35.24 35.24 11,991 – Transfers to Teachers’ 2011 2012 2013 2014 2015 $27.2 35 % $ 2006 2007 2008 2009 2010 2011 2012 2013 $26.42014 2015 32.06 Retirement System 30.3 4,015 3,549 $ $29.8 15.8 $ 2011 2012 2013 2014 2015 $ Securities Lending Collateral 754,437 523,848 $29.1 16 15.1 $ 2.0 $ Transfers to Judicial Retirement Fund 44 83 $24.5 $29.8 30.3 ( 0.9) $ $27.2 13.9 I-3 $23.8 $29.1 45 $ Administrative$26.4 Expenses 11,136 9,612 2011 2012 2013 201439.0 2015 TOTAL LIABILITIES% 810,174 542,228 $22.6 $27.2 I-9 % 24.35 24.20 Retirement $26.4 $ $24.5Depreciation 2,046 2,055 $21.4 32.2 $31.3 I-3 $23.8 $ 45 $ $18.8 $ DEFERRED INFLOWS 10.9 $10.7 $29.8$39.030.3 $24.5 $6,648 6,652 OF RESOURCES 759 $22.6– BenefitsI-9 $29.1 I-3 $23.8 $6,568 I-2 TOTAL DEDUCTIONS 1,086,780 1,011,714 75 45 $ $ 39.0 TOTAL LIABILITIES AND DEFERRED $21.4 $27.2 32.2 $31.3 $22.6 $6,566 I-9 $18.8 I-8 $26.4 2006 2007 2008 2009 $6,552 2010 2011 2012 2013 INFLOWS OF RESOURCES 810,933 542,228 $21.4 2014 2015 $ $ (320,104) 792,012 $ 32.2 31.3 Net (Decrease)/Increase $18.8 2.0 $ $24.5 $6,348 $53.4 ( 0.9) I-3 $23.8 $6,237 $50.1 $50.9 Net Position Restricted I-4 45 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $22.6 $6,092 39.0 2011 2012 2013 2014 2015 Net Position Restricted $ I-9 For Pension Benefits 2.0 $ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $21.4 ( 0.9)$5,991 $32.2 $ For Pension Benefits $ 10,551,904 $ 10,883,952 31.3 $ BEGINNING OF YEAR 10,883,952 10,091,940 $18.8 $5,701 $6,652 I-6 2.0 ($0.9) (as previously reported) 2011 2012 2013 2014 2015 $6,648 2011 2012 2013 2014 2015 $6,568 75 2011 2012 2013 2014 2015 ADJUSTMENT FOR APPLICATION 2011 2012 2013 2014 2015 $6,566 2006 2007 2008 2009 2010 2011 2012 2013 $6,5522014 $ OF GASB 68 $ (11,944) – 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 $15.6 17.9 $6,648 6,652 $ $6,568 $ 2.0 $ BEGINNING OF YEAR 10,872,008 10,091,940 75 $6,348 $6,648 6,652 ( 0.9) $53.4 (as adjusted)$6,566 JRF TOTAL ANNUAL PAYMENTS JRF AVERAGE MONTHLY BENEFITS$6,237 $6,568 $50.1 $50.9 $6,552 I-4 75 ($ IN MILLIONS) ($ IN ACTUAL DOLLARS) $6,092 $6,566 2011 2012 2013 2014 2015 $ END OF YEAR $ 10,551,904 $ 10,883,952 $6,552 $29.8 30.3 $6,348 $ $5,991 53.4 $ $ 2014 $29.1 $6,237 $ 50.1 50.9 $5,701 I-6 2011 2012 2013 2015 I-4 $6,648 6,652 $6,348 $ 27 || THE RETIREMENT SYSTEMS OF ALABAMA$27.2 $6,092 Separately issued, audited financial statements are available upon request. $6,568 $6,237 2015 ANNUAL REPORT || 28 53.4 $ $50.9 $26.4 I-4 75 50.1 $5,991 $6,566 $6,092 $5,701 $6,552 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ $24.5 I-6 $5,991 2015 $15.6 17.9 I-3 $23.8 45 $ $5,701 I-6 39.0 $6,348 $53.4 $22.6 I-9 $6,237 $50.1 $50.9 2006 2007 2008 2009 2010 2011 2012 2013 2014 I-4 $ $21.4 2015 $6,092$32.2 $31.3 $15.6 17.9 $18.8 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ $5,991 2015 $15.6 17.9 $5,701 I-6 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ 20062.0 2007 2008 2009 2010$ 2011 2012 2013 2011 20122014 2013 2014 2015 $ ( 0.9) 2015 $15.6 17.9 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
$6,652 $6,648 2014 $6,568 75 2011 2012 2013 2015 $6,566 $6,552
$6,348 $53.4 $6,237 $50.1 $50.9 I-4 $6,092 $5,991 $5,701 I-6
2006 2007 2008 2009 2010 2011 2012 2013 2014 $ 2015 $15.6 17.9
2011 2012 2013 2014 2015 JudicialSection Header Retirement Fund FINANCIAL STATEMENTS Section Header
Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position AS OF SEPTEMBER 30, 2015, AND 2014 FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2015, AND 2014
($ IN THOUSANDS) ($ IN THOUSANDS) Assets 2015 2014 Additions 2015 2014 CASH $ 2,197 $ 2,195 CONTRIBUTIONS RECEIVABLES Employee $ 3,639 $ 3,681 Employee Contributions 169 169 Employer 15,077 15,790 Employer Contributions 532 533 Transfers from Employees’ Retirement System 44 83 Dividends and Interest 1,006 922 TOTAL CONTRIBUTIONS 18,760 19,554 TOTAL RECEIVABLES 1,707 1,624 INVESTMENT INCOME INVESTMENTS, AT FAIR VALUE From Investing Activities
Domestic Equity 134,526 153,148 Net (Decrease)/Increase in Fair Value of Investments (7,695) 24,197 Domestic Fixed Income 74,039 60,695 Interest and Dividends 6,698 7,030 International Equities 36,551 39,814 Total Investment Income Real Estate 3,622 3,395 from Investing Activities (997) 31,227 Short-Term 11,909 16,453 Less Investment Expenses, Net – – TOTAL INVESTMENTS 260,647 273,505 Net Investment Income from Investing Activities (997) 31,227
INVESTED SECURITIES From Securities Lending Activities LENDING COLLATERAL 32,092 25,328 Securities Lending Income 195 167 TOTAL ASSETS 296,643 302,652 Less Securities Lending Expenses Borrower Rebates 7 1
DEFERRED OUTFLOWS Management Fees 47 49 OF RESOURCES 17 – THE Total Securities Lending Expenses 54 50 Eastern Shore Net Income from Securities TOTAL ASSETS AND DEFERRED Lending Activities 141 117 OUTFLOWS OF RESOURCES 296,660 302,652 Aiming higher, reaching farther, raising the bar. TOTAL NET INVESTMENT INCOME (856) 31,344
Liabilities TOTAL ADDITIONS 17,904 50,898
Accounts Payable and Other Liabilities 25 38 Investment Purchases Payable 378 155 Deductions Other Postemployment Benefits 39 35 Retirement Allowance Payments 30,348 29,826 Check any listing of the best places to live in America, Net Pension Liability 170 – Return of Contributions and Death Benefits 100 54 Securities Lending Collateral 32,092 25,328 Transfers to Employees’ Retirement System 55 1 and the cities of the Eastern Shore will be near the top. Administrative Expenses 356 281 TOTAL LIABILITIES 32,704 25,556 TOTAL DEDUCTIONS 30,859 30,162 Since the 1990s the RSA has staked a major claim on the DEFERRED INFLOWS OF RESOURCES 82 – Net (Decrease)/Increase (12,955) 20,736 TOTAL LIABILITIES AND DEFERRED future economic success of the area with investments that INFLOWS OF RESOURCES 32,786 25,556 Net Position Restricted For Pension Benefits continue to draw tourists and newcomers, and generate Net Position Restricted BEGINNING OF YEAR 277,096 256,360 For Pension Benefits $ 263,874 $ 277,096 (as previously reported) millions in tax revenue for the area as well as returns for ADJUSTMENT FOR APPLICATION OF GASB 68 (267) – BEGINNING OF YEAR 276,829 256,360 (as adjusted) our members. END OF YEAR $ 263,874 $ 277,096
29 || THE RETIREMENT SYSTEMS OF ALABAMA 30 Alabama’s Eastern Shore Section Header
Known throughout the South as “The Queen of Southern Resorts,” the storied Grand Hotel in Point Clear, Alabama, has hosted celebrities and dignitaries as diverse as Dolly Parton, Margaret Thatcher and Patti Labelle. Originally built in 1847, this crown jewel of Southern elegance was graciously restored to its present luster with a $50 million renovation by the RSA in 2006. Encompassing 550 acres of beautifully manicured grounds, the — Upscale homes from the low $300s and up resort features a luxury spa, a free-form pool with waterfalls and access to world-class courses along the Robert Trent Jones Golf Trail. — Luxury amenities and access to 36 holes of golf
— High demand has driven growth
The Grand Hotel Marriott Resort, Golf Club and Spa — Adjacent to Lakewood Golf Club
The Colony at the Grand Nestled among majestic moss-draped oak trees, this exclusive collection of single family homes and condominiums represents a unique addition to our properties in Point Clear. Located adjacent to The Grand Hotel, The Colony is now entering its third phase of development thanks to high demand for these luxury residences. In addition to gorgeous golf course and bay views, residents have access to amenities such as a fresh- water lake, manicured parks and 36 holes of championship play along Alabama’s world-class Robert Trent Jones Golf Trail.
— 405 guest rooms
— 37,000 sq. ft. of meeting and convention space
— 396 conventions hosted annually
— Approximately 170,000 guests each year
31 || THE RETIREMENT SYSTEMS OF ALABAMA 32 Section Header Alabama’s Eastern Shore … honored as one of Golf Magazine’s “Best Golf Resorts in America.”
— 36 challenging holes of RTJ golf
— 33,000 rounds played yearly
— 44 outside events with 3,000 rounds of play
— 90% of visiting golfers stay at The Grand Hotel
Lakewood Club at the Grand
Lakewood Club at The Grand is a membership-based club with ten professional tennis courts, a luxurious 20,000 square foot European-style spa and a fabulous array of exceptional dining options. The club’s two Robert Trent Jones courses feature fairways lined with 200-year-old oak trees and offer players challenges galore. Over the years the club has hosted such luminaries as President “RSA’s investments in Alabama’s Gerald Ford, Dr. Billy Graham and Bob Hope, to name hospitality industry allowed me to but a few. Beautifully renovated by the RSA, it has succeed in my career while staying repeatedly been honored as one of Golf Magazine’s “Best in Alabama, a place my family and Golf Resorts in America.” I love.” Pete Kiernan, VP of Finance PCH Hotels & Resorts
33 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 34 Alabama’s Eastern Shore Alabama’s Eastern Shore
Sales are strong at Battles Trace, part of The Colony at The Grand in Point Clear, site of the The Robert Trent Jones Golf Trail at Magnolia Grove—Mobile 2015 Showcase Home for the Baldwin County Home Builder’s Association Parade of Homes. In addition, the neighborhood was honored with a gold award in 2016 for Best Architectural Design by The Nationals, an organization that showcases homebuilders in a distinguished national competition.
— 54 holes carved through native hardwood and pine
— Hosted national events like the LPGA Tour
— 56,000 rounds of golf annually
— Dozens of yearly events, including 15 for local charities
— Named a “Top 50 Public Course” by Golf World magazine These three freshly renovated courses feature — Named one of the best creeks, marshlands and lakes that attract top par-3s by Golf Digest golfing events from all around the country. National events like the LPGA Tour result in thousands of hotel room nights and a tremendous financial impact on the local economy. Magnolia Grove was recently named one of Golf World magazine’s “Top 50 Public Courses,” and groups like the USA Men’s Golf team and the Alabama Oilmen’s Association bring in hundreds of visitors from around the country to sample the hospitality of Mobile Bay.
35 2015 ANNUAL REPORT || 36 PublicSection Education Header Employees’ Health Insurance Fund FINANCIAL STATEMENTS FINANCIAL STATEMENTS Alabama Retired Education Employees’ HealthSection Care Header Trust
Statement of Revenues, Expenses & Statement of Net Position Changes in Fund Net Position Statement of Plan Net Position Statement of Changes in Plan Net Position AS OF SEPTEMBER 30, 2015, AND 2014 FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2015, AND 2014 AS OF SEPTEMBER 30, 2015, AND 2014 FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2015, AND 2014
($ IN THOUSANDS) ($ IN THOUSANDS) ($ IN THOUSANDS) ($ IN THOUSANDS)
Assets 2015 2014 Operating Revenues 2015 2014 Assets 2015 2014 Additions 2015 2014 CURRENT PREMIUMS $ 880,915 $ 741,903 RECEIVABLES CONTRIBUTIONS
CASH $ 7,848 $ 7,711 TOTAL OPERATING REVENUES 880,915 741,903 Prescription Drug Rebates $ 14,479 $ 10,813 Employee $ 106,776 $ 101,356 Medicare Part D Subsidy – 33 Employer 271,634 323,753 Premiums Receivable 1,674 1,947 Operating Expenses Interest and Dividends 4,157 3,915 Employer Group Waiver Plan (EGWP) 55,848 46,210 Prescription Drug Rebates Receivable 6,813 5,851 Claims 871,040 795,270 Investment Sales Receivable 3 1 Medicare Part D Retiree Drug Subsidy – 1,132 Interest Receivable 20 10 Fees and Assessments 6,753 9,675 Employer Group Waiver Plan (EGWP) 67,506 45,998 Deposit with Claims-Paying Agent 9,702 913 TOTAL CONTRIBUTIONS 434,258 472,451 Administrative 2,419 3,465 TOTAL RECEIVABLES 86,145 60,760 TOTAL CURRENT ASSETS 26,057 16,432 INVESTMENT INCOME TOTAL OPERATING EXPENSES 880,212 808,410 NONCURRENT DEPOSIT WITH CLAIMS-PAYING AGENT 11,116 539 From Investing Activities INVESTMENTS, AT FAIR VALUE 113,276 118,733 OPERATING INCOME/(LOSS) 703 (66,507) Net (Decrease)/Increase in Fair Value of Investments (25,372) 81,960 TOTAL ASSETS 139,333 135,165 INVESTMENTS, AT FAIR VALUE Investment Revenues Interest and Dividends 28,736 27,653 DEFERRED OUTFLOWS Commercial Paper 22,997 87,989 OF RESOURCES 275 – Interest Income 202 309 Total Investment Income Money Market Funds 17,456 42,207 from Investing Activities 3,364 109,613 TOTAL ASSETS AND DEFERRED TOTAL INVESTMENT REVENUES 202 309 U.S. Government Guaranteed Bonds 115,062 99,371 OUTFLOWS OF RESOURCES 139,608 135,165 From Securities Lending Activities U.S. Agency Securities 29,064 31,930 CHANGE IN NET POSITION 905 (66,198) Securities Lending Income 883 851 Liabilities Mortgage-Backed Securities 60,716 52,964 Less Securities Lending Expenses CURRENT Corporate Bonds 168,384 146,349 Net Position-Unrestricted Borrower Rebates 15 3 Accounts Payable 386 311 International Securities 105,250 118,507 BEGINNING OF YEAR 49,748 115,946 Management Fees 221 252 Due to Other Governments 8,302 9,514 (as previously reported) Common Stocks 574,813 601,740 Total Securities Lending Expenses 236 255 Compensated Absences, Current 41 40 ADJUSTMENT FOR APPLICATION Preferred Stocks 3,803 3,844 OF GASB 68 (2,402) – Income from Securities Reported Claims Payable 27,674 28,982 PEEHIP Graph for Financial Page TOTAL INVESTMENTS 1,097,545 1,184,901 Lending Activities, Net 647 596 BEGINNING OF YEAR 47,346 115,946 Claims Incurred But Not Reported 50,943 45,381 (as adjusted) TOTAL INVESTMENT INCOME 4,011 110,209 END OF YEAR $ 48,251 $ 49,748 INVESTED SECURITIES TOTAL CURRENT LIABILITIES 87,346 84,228 LENDING COLLATERAL 78,299 72,522 TOTAL ADDITIONS 438,269 582,660 TOTAL ASSETS 1,273,105 1,318,722 NONCURRENT Deductions Compensated Absences 441 428 Liabilities Net Pension Liability 2,468 – Total Claims Expense Active and Retired BENEFITS 489,747 447,312 FEES AND ASSESSMENTS 1,268 1,887 Other Postemployment Benefits 917 761 ($ IN THOUSANDS) Reported Claims Payable 10,526 11,756 ADMINISTRATIVE EXPENSES 1,263 – Investment Purchases Payable 1,982 1,139 TOTAL DEDUCTIONS 492,278 449,199 TOTAL NONCURRENT LIABILITIES 3,826 1,189 Due to Other Governments 1,594 1,855 TOTAL LIABILITIES 91,172 85,417 $ $1,254,144 1,360,787 Claims Incurred But Not Reported 26,312 23,049 Change in Net Position (54,009) 133,461 1,200,000 $ DEFERRED INFLOWS $ 1,181,939 $ 1,144,864 Securities Lending Collateral 78,299 72,522 OF RESOURCES 185 – 1,123,192 Net Position Restricted For Other TOTAL LIABILITIES AND DEFERRED 1,000,000 TOTAL LIABILITIES 118,713 110,321 INFLOWS OF RESOURCES 91,357 85,417 Postemployment Benefits
NET POSITION-UNRESTRICTED 48,251 49,748 Net Position Restricted For Other BEGINNING OF YEAR 1,208,401 1,074,940 Postemployment Benefits Total Liabilities, Deferred $ 1,154,392 $ 1,208,401 END OF YEAR $ 1,154,392 $ 1,208,401 Inflows of Resources, and Net Position $ 139,608 $ 135,165
2011 2012 2013 2014 2015
37 || THE RETIREMENT SYSTEMS OF ALABAMA Separately issued, audited financial statements are available upon request. 2015 ANNUAL REPORT || 38 Section Header Section Header
Public Employees' Individual Retirement Account Fund HIGHLIGHTS Allocations
Established in 1986 to allow members of the RSA and certain other eligible public employees to defer receipt of a percentage of their salary, thereby deferring payment of taxes on that income. RSA-1 Short % New in 2015 RSA-1 Highlights Term Investment 100
12-MONTH PERIOD ENDING INCOME MARKET TOTAL TOTAL NET PARTICIPATING
YIELD VALUE RETURN ASSETS MEMBERS % % 0.2% 0.4% (IN %) CHANGE (IN %) ($ IN MILLIONS) 0.2 0.4 (IN %) 0.2% 0.4% SEPTEMBER 30, 2011 (FIXED INVESTMENT OPTION) 4.01 0.38 4.39 1,196.4 33,624 AS OF SEPTEMBER 30, AS OF SEPTEMBER 30, SEPTEMBER 30, 2011 AS OF SEPTEMBER 30, AS OF SEPTEMBER 30, % % 99.6% (STOCK INVESTMENT OPTION) 2.02 -0.98 1.04 223.1 16,170 99.8% 99.6 RSA-1 / Investment AS2015 OF SEPTEMBER 30, 99.8 AS2014 OF SEPTEMBER 30, 2015 2014 % SEPTEMBER 30, 2012 Allocation Stock Fund 99.8% 99.6 (FIXED INVESTMENT OPTION) 3.79 1.67 5.46 1,301.2 34,039 2015 2014 SEPTEMBER 30, 2012 (STOCK INVESTMENT OPTION) 2.29 27.51 29.80 293.0 16,203 SEPTEMBER 30, 2013 (FIXED INVESTMENT OPTION) 3.57 -3.68 -0.11 1,294.4 34,199
% % 0.9% % SEPTEMBER 30, 2013 % 0.9 12.4 % 14.1% 12.4 1.0% (STOCK INVESTMENT OPTION) 2.34 16.76 19.10 369.1 16,889 14.1 % 1.0 0.9% 7.0% % % % 12.4 % SEPTEMBER 30, 2014 14.1 1.6% 1.0 % 7.0% (FIXED INVESTMENT OPTION) 6.5% 3.60 0.56 4.17 1,313.6 34,059 1.6% % % % 12.9% SEPTEMBER 30, 2014 1.2%6.5 AS OF SEPTEMBER 30, 12.9 AS OF SEPTEMBER 30, % AS OF SEPTEMBER 30, % (STOCK INVESTMENT OPTION) 41.6% 39.0% 2.14 17.53 19.67 476.6 18,068 % % 1.2% AS OF SEPTEMBER 30, 12.9 AS OF SEPTEMBER 30, 7.3% RSA-1 / Investment 7.3 2015 41.6% 2014 39.0% SEPTEMBER 30, 2015 Allocation Fixed Fund 7.3% 2015 2014 (FIXED INVESTMENT OPTION) 3.42 -0.50 2.91 1,328.7 34,226
% % % 28.0% 0.4% 25.7% SEPTEMBER 30, 2015 28.0 0.4 25.7 % 0.4% (STOCK INVESTMENT OPTION) 2.14 -2.76 -0.61 491.4 19,188 0.4 28.0% 0.4% 25.7% 0.4% SEPTEMBER 30, 2015 Money Market U.S. Agency Securities Corporate Bonds Private Placements (STIF INVESTMENT OPTION) 0.07 0.00 0.07 13.9 383 GNMAMoney Market CollateralizedU.S. Agency Securities PreferredCorporate Stock Bonds U.S.Private Government Placements Mortgage Obligations Guaranteed GNMADomestic Stocks Collateralized Preferred Stock U.S. Government Mortgage Obligations Guaranteed Domestic Stocks
Public Employees’ Individual Retirement Account Fund ALLOCATIONS PEIRAF DEDUCTIBLE EMPLOYEE CONTRIBUTION PLAN % % 13.2% 15.0% 13.2 % 8.3% % The Public Employees’ Individual Retirement Account Fund (PEIRAF) was established to allow public % 8.3 13.2 % 15.0 % 8.6% 1.6% employees to conveniently and economically receive the fullest benefits offered by the Economic Recovery 8.6 1.6 8.3% % % %8.6 1.6 Tax Act (ERTA) of 1981 as it relates to individual retirement accounts. PEIRAF has operated as a fixed-income 1.3% % 1.3 AS OF SEPTEMBER 30, 9.7% AS OF SEPTEMBER 30, % AS OF SEPTEMBER 30, AS OF SEPTEMBER 30, 3.6% portfolio since its creation in 1982. Funds are invested in fixed-income investments such as corporate bonds, PEIRAF / Investment 1.3% 9.7% AS OF SEPTEMBER 30, % AS OF SEPTEMBER 30, % U.S. agency obligations, government national mortgage association securities, and commercial paper. Allocation 3.6% 2015 42.1% 2014 39.9% 42.1% 39.9% The Tax Reform Act of 1986 prohibited contributions to deductible voluntary employee contribution plans, 2015 2014
% % such as PEIRAF, for years after 1986. Accordingly, the PEIRAF Board of Control discontinued receiving 28.4% 26.4% % contributions to this plan after December 31, 1986. However, the PEIRAF continues to reinvest the interest % 1.0% % % 28.4 1.0 26.4 0.9% earnings of existing PEIRAF member accounts. % 1.0 0.9% Money Market U.S. Agency Securities Corporate Bonds Private Placements GNMAMoney Market CollateralizedU.S. Agency Securities DomesticCorporate PreferredBonds U.S.Private Government Placements Mortgage Obligations Stock Guaranteed GNMA Collateralized Domestic Preferred U.S. Government Mortgage Obligations Stock Guaranteed 39 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 40 Section Header Section Header Public Employees’ Individual Retirement Account Fund FINANCIAL STATEMENTS FINANCIAL STATEMENTS PEIRAF Deferred Compensation Plan
Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position AS OF SEPTEMBER 30, 2015, AND 2014 AS OF SEPTEMBER 30, 2015, AND 2014 AS OF SEPTEMBER 30, 2015, AND 2014 AS OF SEPTEMBER 30, 2015, AND 2014
IN ACTUAL DOLLARS IN ACTUAL DOLLARS IN ACTUAL DOLLARS IN ACTUAL DOLLARS Assets 2015 2014 Additions 2015 2014 Assets 2015 2014 Additions 2015 2014 CASH $ 1 $ 1 INVESTMENT INCOME CASH $ 5 $ 51 MEMBER CONTRIBUTIONS $142,674,343 $141,903,626 INTEREST RECEIVABLE 723,230 693,357 From Investing Activities INTEREST AND DIVIDENDS INVESTMENT INCOME RECEIVABLE 10,491,464 9,797,893 Interest and Dividends $2,991,788 $3,186,917 From Investing Activities INVESTMENTS, AT FAIR VALUE Net (Decrease)/Increase in Fair INVESTMENTS, AT FAIR VALUE Interest and Dividends 54,321,044 53,136,165 Commercial Paper 999,383 2,998,896 Value of Investments (569,735) 435,267 Commercial Paper 36,994,033 90,489,060 Net (Decrease)/Increase in Fair Money Market and Mutual Funds 1,976,999 5,164,689 Total Investment Income Money Market Funds 74,265,930 79,869,345 Value of Investments (21,288,721) 72,815,095 from Investing Activities 2,422,053 3,622,184 U.S. Government Guaranteed Bonds 23,636,937 22,252,647 U.S. Government Guaranteed Bonds 370,702,254 335,395,570 Total Investment Income from Investing Activities 33,032,323 125,951,260 U.S. Agency Securities 7,168,064 7,046,934 From Securities Lending Activities U.S. Agency Securities 86,754,968 91 ,685,825 Mortgage-Backed Securities 13,614,274 12,505,615 Securities Lending Income 67,277 75,238 Mortgage-Backed Securities 202,917,463 182,885,999 From Securities Lending Activities Corporate Bonds 34,973,580 33,648,241 Corporate Bonds 551,892,527 509,854,511 Less Securities Lending Expenses Securities Lending Income 1,712,237 2,076,508 Preferred Stock 786,586 795,214 Private Placements 4,672,272 5,745,096 Borrower Rebates 8,261 2,145 Less Securities Lending Expenses TOTAL INVESTMENTS 83,155,823 84,412,236 Common and Preferred Stocks 502,364,025 486,802,864 Borrower Rebates 64,647 16,301 Management Fees 15,110 21,702 TOTAL INVESTMENTS 1,830,563,472 1,782,728,270 Management Fees 419,971 611,444 INVESTED SECURITIES Total Securities LENDING COLLATERAL 3,358,214 9,615,050 Lending Expenses 23,371 23,847 Total Securities Lending Expenses 484,618 627,745 INVESTED SECURITIES TOTAL ASSETS 87,237,268 94,720,644 Income from Securities LENDING COLLATERAL 124,828,997 108,608,018 Income from Securities Lending Activities, Net 43,906 51,391 Lending Activities, Net 1,227,619 1,448,763 Liabilities NET INVESTMENT INCOME 2,465,959 3,673,575 TOTAL ASSETS 1,965,883,938 1,901,134,232 NET INVESTMENT INCOME 34,259,942 127,400,023 Investment Purchases Payable 427,452 144,682 TOTAL ADDITIONS 2,465,959 3,673,575 Liabilities TOTAL ADDITIONS 176,934,285 269,303,649 Securities Lending Collateral 3,358,214 9,615,050 Deductions Accounts Payable 220 – TOTAL LIABILITIES 3,785,666 9,759,732 Deductions Investment Purchases Payable 6,818,261 2,245,073 Normal Distributions 3,975,269 3,974,899 Normal Distributions 132,548,655 142,018,196 Net Position Restricted Securities Lending Collateral 124,828,997 108,608,018 TOTAL DEDUCTIONS 3,975,269 3,974,899 Emergency Withdrawals 430,311 470,207 for PEIRAF Benefits $ 83,451,602 $ 84,960,912 TOTAL LIABILITIES 131,647,478 110,853,091 TOTAL DEDUCTIONS Change in Net Position (1,509,310) (301,324) 132,978,966 142,488,403 Net Position Restricted For Deferred Change in Net Position 43,955,319 126,815,246 Net Position Restricted Compensation Benefits for PEIRAF Benefits $ 1,834,236,460 $ 1,790,281,141 Net Position Restricted For Deferred BEGINNING OF YEAR 84,960,912 85,262,236 Compensation Benefits END OF YEAR $ 83,451,602 $ 84,960,912 BEGINNING OF YEAR 1,790,281,141 1,663,465,895
END OF YEAR $ 1,834,236,460 $ 1,790,281,141
41 || THE RETIREMENT SYSTEMS OF ALABAMA Separately issued, audited financial statements are available upon request. Separately issued, audited financial statements are available upon request. 2015 ANNUAL REPORT || 42 RSA Investments Investment Staff
Investments has achieved outstanding results while having the lowest investment expenses in the industry. The public pension fund average of 187 pension funds is 47 basis points annually, while the RSA’s is only 2 basis points.
Steve R. Lambdin, M.B.A., CFA G. Allan Carr, Jr., M.B.A., CFA Adam Rogers, M.A., CFA Hunter Bronson, M.S. Julie S. Barranco, M.B.A., Trent Green, M.B.A. Nicholas A. Prillaman, M.S., CFA Jeff Silverman, M.B.A., CFA C. Lance Lachney, M.B.A., CFA ASSISTANT DIRECTOR OF EQUITIES DIRECTOR OF EQUITIES EQUITY ANALYST / PORTFOLIO MANAGER EQUITY ANALYST CFA EQUITY ANALYST FIXED INCOME ANALYST / PORTFOLIO MANAGER EQUITY ANALYST CHIEF ECONOMIST DIRECTOR OF FIXED INCOME R. Marc Green, M.B.A., CFA Rachel Daniels, M.A. M. Hunter Harrell, M.B.A., Kevin W. Gamble, M.B.A., Major Lee, B.S. Catherine S. Ray, B.A. Michael McNair, M.B.A., CFA Bobby Long, M.B.A., CFA DIRECTOR OF INVESTMENTS PRIVATE PLACEMENTS ANALYST J.D., CFA CFA EQUITY ANALYST CASH MANAGEMENT & OPERATIONS EQUITY ANALYST EQUITY ANALYST / PORTFOLIO MANAGER DIRECTOR OF PRIVATE PLACEMENTS EQUITY ANALYST / PORTFOLIO MANAGER
ANNUALIZED RETURN* 2015 RSA funds rank in the TOP 12 PERCENTILE THE RSA MANAGES 23 FUNDS WORTH 1.04% 1.05% -0.54% 2015FOR THE FOR THE FOR THE $ BILLION TRS ERS JRF 36.6 The annualized return was 1.04% for the TRS, 1.05% for the ERS, and -.54% for the JRF. These results ranked the RSA funds in the top 12th percentile of the State Street Public Funds Universe (59 funds over $1 billion) for the one-, three-, and five-year periods.
43 || THE RETIREMENT SYSTEMS OF ALABAMA RSA Investments RSA Investments
Equity Activity Fixed Income Activity FISCAL YEAR 2015, cont.
fter a swoon in the first month of the fiscal -9.83% for JRF. The combined total return for the overall stock market dropped substantially, as approximately voted down by Greek citizens. The “risk off” trade year, the stock market traded in a tight range equity portfolios was -2.07%, -2.06%, and -2.13% for TRS, 70% of the country’s GDP is export-driven. A week later, quickly reemerged among market participants with A until mid-August. After months of speculation ERS, and JRF, respectively. Three-, five-, and ten-year the European Central Bank launched its own public treasury yields declining in short order. The Greek on the true health of the Chinese economy, when the annualized global equity returns were 10.81%, 10.78%, sector purchase program with recent inflation numbers Prime Minister ultimately agreed to a bailout package Chinese government devalued the yuan, the market and 6.10% for TRS, 10.85%, 10.84%, and 6.12% for ERS, falling below zero. The culmination of these events led in order to avoid a potential exit from the Eurozone. In voted with its feet. As a follow up, the push out of the and 10.88%, 11.19%, and 6.24% for JRF, respectively. to a short-term run in the treasury market, providing the meantime, investor anxiety over Chinese growth prospective Fed Funds rate hike that was talked down a 2.50% return for the sector during the month of had taken center stage. These concerns, coupled with by the Federal Reserve further spooked the markets, January. As expected, high-yield debt underperformed the weakness in commodities, provided additional thinking that they knew something that everyone else Fixed Income Activity the market once again. Mortgage-backed spreads downward pressure on interest rates. China, in a move did not. widened as well, as its negatively convex profile was to support its export-driven economy, devalued its In not so unusual style, late summer and early t the beginning of fiscal year 2015, the fixed transparent during the large treasury rally. currency by 2%, leading to significant drops in global fall proved to be the witching hour for the equity income market had recently experienced an February turned out to be quite a reversal from the equity markets and interest rates. By late August, Fed markets. Subsequent to closing the books at the end of A abrupt increase in interest rates on the heels of previous month. Strong employment numbers and Fund futures were pricing in a 30% chance of an initial September, the markets have clawed their way back to stronger economic data. This move proved to be short- the stabilization in crude prices provided a healthy Fed hike in September, down substantially from the within 2% of the all-time high set in mid-May. lived as weakness in European manufacturing put backdrop for credit. The treasury yield curve backed up beginning of the month. a lid on any near-term optimism. Inflation numbers With the earnings degradation the market has and steepened, while corporate spreads rallied 15-20bps. Risk assets have been unable to find their footing within the Eurozone also fell to their lowest point in experienced the past several quarters, valuation is more The metals and mining sector, as well as the oil and in September as the Federal Open Market Committee five years. In response, treasury securities performed of an issue now than it was this time last year. Much gas credits, tightened substantially leading to a 400bp not only pushed out its initial rate hike, but also well during the first half of October as investors sought of the damage done was a result of the commodity outperformance in the junk bond market. Corporate highlighted concerns about global weakness in its safety within risk-free assets. However, encouraging complex collapse. The capex spigots have been virtually issuance was extremely robust during this time, with statement. High-yield securities posted its fourth economic news here at home once again magnified the turned off in the whole energy space, with marginal March posting one of the highest monthly supply consecutive month of negative returns, losing roughly resiliency of the U.S. economy. The Federal Reserve also producers only running so that they can pay the totals on record. 7% over this time period. U.S. investment grade and ended its bond-buying stimulus program, commonly interest cost on debt. As it was hard to see the collapse Due to the sheer size and scope of the ECB’s program, high yield credit spreads are now at their widest referred to as QE3. Treasury yields retraced most of of crude to current levels, it is hard to envision it the amount of demand meeting limited supply was levels since June 2012. While corporate bond issuance their recent decline as the equity market climbed to moving substantially higher, but it will eventually. bound to cause curious sightings within government has remained robust throughout most of the year, new highs. Over the next several weeks, interest rates debt markets. In fact, yields on German debt extending the average concession on new issues has steadily Much of the underlying support the market has moved modestly lower despite the continued strength out to the intermediate part of the curve had turned increased as well. The corporate market has benefitted seen through dividend increases, share buybacks and in stocks. Quantitative easing actions enacted by negative by mid-April. At these levels however, a from easy monetary conditions and unprecedented merger and acquisition activity remain in place. Also, other global central banks placed additional downside slight improvement in the Eurozone economy and a demand for yield over the last several years. In fact, the sentiment and investor positioning are fairly negative, pressure on the long end of the curve. With the positive inflation print was all that was needed for a high grade market has nearly doubled in size relative to so there are lots of dollars looking to earn a return that exception of high-yield debt, other sectors of the bond swift reversal. In a matter of weeks, German yields GDP during this time. This past year was an unpleasant are currently sitting on the sidelines. With that said, we market were able to post positive returns through had exploded 65bps to the upside and the unwinding one for credit in general, especially for those further are cautiously optimistic that a lot of the damage has year-end, despite trailing its treasury counterparts. of positions within safe-haven assets had taken hold. down the quality curve with exposure to energy, already been done. We should expect a modest uptick The falling price of oil and OPEC’s insistence on Domestically, the long bond eclipsed 3.00%, an 80bps commodities, and emerging markets. In contrast to in the global economy as the European Central Bank maintaining current production levels hit the high- increase since the beginning of February. A gradual 2014, when duration was the main determinant in and Bank of Japan continue their own quantitative yield market hard during this time as it is heavily steepening within treasury and credit markets ensued performance, this fiscal year quality and safety carried easing programs, as well as less austerity on the fiscal exposed to the energy sector. the day. front coming out of Washington. as inflation expectations had moved considerably Entering the new calendar year, investors were higher over a three-month period. High-yield logged For the fiscal year, the total annual returns for the For the year, the RSA domestic equity portfolios caught off guard as the Swiss National Bank in its best quarter of the fiscal year, outperforming public domestic fixed income portfolios were 2.96% for declined -0.08%, -0.17%, and -0.02% for TRS, ERS, and unexpectedly ended its three-year peg to the euro and corporate debt largely due to its lower duration profile. the TRS and 2.97% for the ERS and 3.15% for the JRF. The JRF funds, respectively. Developed international reduced its deposit rate further into negative territory. In the next few weeks, volatility arose once again. five-year annualized returns were 3.71% for the TRS and equity returns lagged domestic equity returns by a Unpredictable moves by central banks, especially ones Greece, never a stranger to turmoil, was in danger of 3.71% for the ERS and 3.64% for the JRF. The ten-year wide margin, and emerging market equity returns the that possess a safe-haven asset like the Swiss franc, missing a debt payment owed to the International annualized returns were 5.41% for the TRS and 5.43% same vs. developed international. Total international often result in a fair amount of volatility. The franc Monetary Fund. A referendum on additional bailout for the ERS and 5.47% for the JRF. equity returns were -9.58% for TRS, -9.67% for ERS, and quickly gained value against the euro and the Swiss money in exchange for more austerity was held and
45 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 46 RSA Investments Section Header 2015 Broker Commissions Paid For Fiscal Year Ended September 30, 2015
Maturity Structure Investment Returns / 2015 COMMISSIONS FIXED SECURITIES For the period ended September 30, 2015 (In %) STOCK TRANSACTIONS COMMISSIONS ($ IN THOUSANDS) ($ IN THOUSANDS) he management of maturities for the bond 1-Year 3-Years 5-Years 10-Years portfolio is an integral part of the RSA’s Total Portfolio objective of providing a stable cash flow to meet ...... BANK...... OF...... AMERICA...... /...... MERRILL...... LYNCH...... _. . . ______...... $...... 133...... $ 233 T TRS 1.04 9.20 9.42 5.41 ...... BARCLAYS...... _...... ______...... 247...... 53 retirement benefit needs. The RSA has historically ERS 1.05 9.06 9.37 5.16 BERNSTEIN ______337 structured its purchases in longer-term securities JRF -0.54 8.45 8.81 6.10 with intermediate call protection or average lives in BTIG ______51 CANTOR FITZGERALD ______8 order to meet its retirement obligations. Total Domestic Equity ...... 68...... CITIGROUP...... _. . . . ______...... 430...... TRS -0.08 12.45 12.96 6.89 CONVERGEX ______310 MATURITY STRUCTURE (IN %) ERS -0.17 12.42 12.90 6.87 CORNERSTONE______21 JRF -0.02 12.55 13.39 7.11 TRS ERS COWEN______70 Years to Maturity 2015 2014 2013 2015 2014 2013 ...... CREDIT...... SUISSE...... _. ______...... 42...... 102 Domestic Equity Benchmarks 0 TO <5 24 24 26 24 22 26 ...... DEUTSCHE...... BANK...... _. . ______...... 323 ...... 65 S&P 500 -0.61 12.40 13.34 6.80 FIRST DISCOUNT______9 5 TO <10 15 17 19 14 17 18 DJIA -2.11 9.26 11.37 7.17 ...... GOLDMAN...... SACHS ...... _. . . . . ______...... 66...... 152 Midcap 400 1.40 13.12 12.93 8.25 10 TO <30 60 58 54 61 60 55 HARBOR FINANCIAL______12 Smallcap 600 3.81 13.02 14.04 7.65 HOWARD WEIL______12 = OR >30 1 1 1 1 1 1 IBERIA______46 Total International Equity ISI______425 TRS -9.58 4.85 3.64 3.36 ISSUER DESIGNATED______345 ERS -9.67 4.75 3.59 3.35 JANNEY CAPITAL MARKETS______5 JRF -9.83 4.69 3.50 N/A JEFFERIES ______108 ...... JP...... MORGAN...... CHASE...... _...... ______...... 38...... 288 Quality Evaluation International Equity Benchmarks KEYBANC CAPITAL MARKETS______58 ______61 Morgan Stanley EAFE -8.66 5.63 3.98 2.97 LEERINK SWANN______25 MSCI Emerging Markets -19.28 -5.27 -3.58 4.27 he RSA continued its long-standing policy of MORGAN KEEGAN______12 investing in high-quality fixed-income products. Total Fixed Income and Alternatives MORGAN STANLEY______762 ______143 TBond ratings, however, provide only a starting TRS 7.33 7.12 7.78 4.64 NBC SECURITIES______70 point in the evaluation of the relative investment ERS 7.28 7.09 7.82 4.25 RAYMOND JAMES______45 ______4 qualities of a bond. Times have changed dramatically JRF 3.30 2.71 3.78 5.18 RENMAC______68 over the past decade, and few companies today have RBC BANK______64 a rating of AAA to A. Many companies are now rated Fixed Income Benchmarks SANDLER O’NEIL______28 BAA or lower. Citigroup Big 2.85 1.67 3.06 4.72 SECURITIES CAPITAL______13 SOUTHWEST SECURITIES______12 QUALITY EVALUATION (IN %) Barclays 2.94 1.71 3.10 4.64 STERNE, AGEE & LEACH______148 TRS ERS ...... STIFEL...... NICOLAUS...... _. . . . . ______...... 318...... 60 Rating 2015 2014 2013 2015 2014 2013 “The RSA investments in the senior living, tourism, STRATEGAS______336 AAA 26 26 26 25 25 25 service, and manufacturing industries in Mobile have SUNTRUST______22 UBS WARBURG______24 AA 1 2 1 1 1 1 created jobs and improved the quality of life. I have WELLS FARGO______378 ______151 A 8 8 9 8 8 8 noticed this enhancement through many of the patients
I have treated through the years.” BAA 14 15 13 13 14 13 Total $ 5,046 $ 1,755 BA 1 1 1 1 1 1 Richard Palesano, MD, Premier Medical Ear, Nose, and Throat NOT RATED 50 48 50 52 51 52
47 || THE RETIREMENT SYSTEMS OF ALABAMA 2015 ANNUAL REPORT || 48 0.800 2.60 18000
0.700 17000 2.40 1 0 0 1 0.600 15000 2.20 14000 0.500 2.00 13000 0.400 12000
1.80 11000 0.300 1 1 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 01 01 01 01
US Treasury 2-Year Note Spread Di erence DOW Jones - 5 years
01 3.00 2.400 2100 01 2.50 0.800 2050 2.200 2.60 18000 2.00 0.700 17000 0 2000 1.50 2.40 1 0 2.000 0 1 0.600 1950 15000 1.00 2.20 1 0 0 14000 1.800 0.500 0.50 1900 13000 0.800 2.00 1.600 0.00 1850 0.400 2.60 1200018000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y 0.700 1.80 1100017000 0.300 01 01 01 01 1 1 2.40 1 0 0 1 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 0.600 010 011 01 01 01 01 15000 US Treasury 10-Year Bond US Treasury Yield Curve S & P 01 500 - One Year 01 01 01 2.20 14000 RSA Investments 0.500 RSA Investments US Treasury 2-Year Note 0.800 Spread Di erence 2.00 DOW Jones - 5 years 13000 2.60 18000 0.400 12000 0.700 17000 1.80 11000 2.40 1 0 0.3000 1 1 1 0.600 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 15000 0.800 U.S. Treasury 18000 01 01 2.20 01 01 14000 2.60 3.200 18000 2000 0.500 0.700 17000 2-Year Note 13000 17500 1 0 0 2.00 01 US Treasury 2-Year Note 3.00 Spread Di erence DOW Jones - 5 years 2.40 3.000 1 0 1800 0.400 (Yield) 0 1 2.400 120002100 0.600 Dow Jones 01 1500017000 2.50 1.80 11000 2.20 1600 0.300 2050 Industrial 14000 2.200 1 1 0.500 2.00 16500 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.600 Oct Nov Dec Jan Feb Mar Apr May1400 Jun Jul Aug Sept 010 011 01 01 01 01 Average2.00 13000 0 01 01 2000 1 0 01 01 1.50 0.8000.400 12000 2.000 16000 1200 2.60 2.400 18000 1950 1-Year1.80 11000 US Treasury 2-Year Note 1.00 Spread Di erence 01 DOW Jones - 5 years 17000 0.7000.300 1000 1.800 3.00 1 0 0 1 1 2.200 15500 2.400 19002100 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.40 1 0 0.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 01 0 1 010 011 01 01 01 01 010 011 01 01 01 01 2.50 0.600 01 01 01 01 01 01 01 01 15000 1.600 0.00 18502050 2.20 2.200 U.S. Treasury 2.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 14000 OctS & P 500Nov - 5 YearsDec Jan Feb Mar Apr May Jun Jul Aug Sept 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y 0.5000.800 US Treasury 2-Year Note SpreadUS Treasury Di erence 30-Year Bond Dow JonesDOW Industrial Jones - 5 Average years - One Year 0 2000 13000 01 01 1.50 01 01 2.002.60 18000 2.000 10-Year Bond (Yield) 0.4000.700 1200017000 1950 1.00 01 US Treasury 10-Year Bond 3.00 US Treasury Yield Curve S & P 500 - One Year Dow1.802.40 Jones 1 0 11000 1.8002.400 1 0 0 2100 0 1 1900 0.3000.600 0.50 01 1 1 Industrial 15000 2.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.20 010 011 01 01 01 01 2050 14000 1.6002.200 0.00 1850 01 01 0.500 01 01 Average 2.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.00 01 13000 0 2000 1.50 3.00 5-Year 01 01 2.000 01 01 US Treasury 2-Year Note 2.4000.400 Spread Di erence DOW Jones - 5 years 120002100 01 1950 2.50 1.80 11000 1.00 0.300 2050 US Treasury 10-Year Bond US Treasury Yield Curve 18000 S & P 500 - One Year 1.800 20001 0 0 2.200 1 1 3.200 1900 2.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 0.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 1 0 0 0 01 01 2000 17500 01 01 1.50 3.0001.600 0.00 18001850 2.000 1950 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept U.S.1D Treasury1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 17000 50Y Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept US Treasury 2-Year Note 1.00 Spread Di erence DOW Jones - 5 years 01 01 01 01 1600 1.800 01 1 0 0 3.000.50 1900 16500 2.400 2100 2.600 30-Year Bond 1400 01 US Treasury 10-Year Bond (Yield) US Treasury Yield Curve 1 018000 S & P 500 - One Year 2.50 1850 1.600 0.00 3.200 2000 2050 2.400 16000 1200 2.200 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.00 17500 1 0 0 01 01 S&P 500 Index 01 01 3.000 10001800 0 2000 2.200 15500 1.50 0.800 2.000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.60 18000 17000 010 011 01 01 01 01 1-Year 01 1600 US Treasury 10-Year Bond 3.00 US Treasury Yield Curve S & P 500 - One Year 1950 01 01 01 01 2.400 1.00 2100 0.700 17000 1.800 01 1 0 0 2.40 1 0 16500 2.50 1900 0 1 2.600 S & P 500 - 5 Years 1400 0.50 0.600 US Treasury 30-Year Bond Dow Jones Industrial Average - One Year 18000 2050 15000 1 0 2000 2.200 0.800 2.20 3.200 2.00 1850 2.400 14000 16000 1200 1.600 0.00 0.500 18000 2.60 17500 1 0 0 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2000 13000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1.50 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y 2.00 3.000 1800 2.000 0.700 2.200 1550017000 1000 01 01 01 01 0.400 12000 1950 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.40 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 170001 0 1.00 0 1 1.80 11000 010 011 01 01 01 01 1600 18000 1 0 0 0.6000.300 01 01 01 01 3.2001.800 2000 1 1 Spread Difference 15000 US Treasury 10-Year Bond US Treasury Yield Curve S & P 500 - One Year 1900 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.20 16500 0.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.600 010 011 01 01 01 01 1400 14000 S & P 500 - 5 Years 17500 1 0 0 0.500 01 01 01 01 US Treasury 30-Year Bond Between 2-YearDow Jones & Industrial Average - One Year 1 0 3.0001.600 0.00 S&P 500 Index 18001850 13000 2.002.400 16000 1200 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 30-Year Treasuries Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y17000 50Y US Treasury 2-Year Note 0.400 Spread Di erence DOW Jones - 5 years 12000 5-Year 1600 01 01 01 01 1000 1.802.200 1550011000 16500 0.300 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 2.600 1400 Oct Nov Dec Jan 1 1Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 US Treasury 10-Year Bond US Treasury Yield Curve 1 0 S & P 500 - One Year Oct 01 Nov Dec Jan Feb Mar Apr May 01 Jun Jul Aug Sept 01 01 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 18000 2.400 16000 01 1200 01 01 01 3.200 2000 S & P 500 - 5 Years 1 0 0 US Treasury 30-Year Bond Dow Jones Industrial Average - One Year 2.200 1750015500 1000 01 US Treasury 2-Year Note 3.00 Spread Di erence DOW Jones - 5 years 3.000 1800 2.400 2100 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 2.50 01 01 01 17000 01 01 2050 1600 2.200 2.00 U.S. Treasury S & P 500 - 5 Years US Treasury 30-Year Bond Dow Jones Industrial Average - One Year 1650018000 0 2000 2.600 1400 1.50 Yield Curve 3.200 1 0 2000 2.000 2015 vs. 2014 1950 16000 12001 0 0 1.00 2.400 17500 1 0 0 3.000 1800 1.800 0.50 01 1900 2.200 15500 1000 3.00 17000 2.400 2100 1600 1850 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1.600 0.00 010 011 01 01 01 01 2.50 01 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 01 01 01 01 16500 2050 2.600 01 1400 01 2.200 01 01 2.00 1 0 S & P 500 - 5 Years US Treasury 30-Year Bond Dow Jones Industrial Average - One Year 2000 || THE RETIREMENT SYSTEMS16000 OF ALABAMA US Treasury1200 10-Year Bond 0 US Treasury Yield Curve S &2015 P 500 - ANNUALOne Year REPORT || 2.400 49 1.50 50 2.000 1000 1950 2.200 15500 1.00 1 0 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 1.800 01 01 01 01 0.50 1900
S & P 500 - 5 Years 1.600 0.00 1850 US Treasury 30-Year Bond Dow Jones Industrial Average - One Year Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 18000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 3.200 1D 1Y4M3Y 5Y 7Y 9Y 11Y 15Y 20Y 25Y 30Y 40Y 50Y 2000 01 01 01 01 17500 1 0 0 3.000 1800
US Treasury 10-Year Bond US Treasury Yield Curve 17000 S & P 500 - One Year 1600
16500 2.600 1400 1 0
2.400 16000 1200
2.200 15500 1000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 01 01 01 01 18000 3.200 2000 S & P 500 - 5 Years US Treasury 30-Year Bond Dow Jones Industrial Average - One Year 17500 1 0 0 3.000 1800
17000 1600
16500 2.600 1400 1 0
2.400 16000 1200
2.200 15500 1000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept 010 011 01 01 01 01 01 01 01 01
S & P 500 - 5 Years US Treasury 30-Year Bond Dow Jones Industrial Average - One Year Section Header Section Header RSA Investments in Mobile — Daniel Senior Living, LLC* || Assisted Living Facilities in Real Estate and Huntsville and Birmingham and Baldwin County Alternative Investments — Dole Foods* || Birmingham — Alabama Cruise Terminal* || Mobile — Drummond Company* || Birmingham — CIBA-GEIGY Chemical Company* || Mobile — Embassy Suites* || Montgomery There is not another pension fund in the country that has done more to help — Dominion Senior Living of West Mobile || Mobile — Fairway Outdoor Advertising || Statewide — Dynamit Nobel Chemical Company* || Mobile its citizens or its state than the RSA. Our alternative investments in real estate, — First Alabama Bancshares* || Birmingham — Gulf Coast Exploration & Science Theatre* || Mobile — GKN Aerospace || Tallassee businesses and recreational facilities help create jobs, drive tourism, enhance the — IPSCO Saskatchewan, Inc.* || Mobile — Gordon Persons Building* || Montgomery state’s image and the quality of life by providing ongoing economic assets for — Kay Fairs, Inc.* || Theodore — IDB Southwire Med. Volt Cable Company* || Heflin Alabama. Our efforts have been credited with helping attract international business — Kvaerner Oilfields Products* || Mobile — Mercedes-Benz U.S.* || Tuscaloosa to the state—like Mobile’s new ThyssenKrupp Steel USA plant and the Airbus USA — Office Buildings and Parking Decks: — National Alabama Corporation || Florence > Mobile Parking Garage || Mobile manufacturing facility—creating a wealth of new jobs and opportunities. — National Village || Auburn/Opelika > RSA Battle House Tower || Mobile — Navistar Diesel of Alabama, LLC* || Huntsville > RSA North Royal Street || Mobile — Navistar Big Bore Diesels, LLC* || Huntsville > RSA Trustmark Building || Mobile — Office Buildings and Parking Decks: > RSA Van Antwerp Building || Mobile > Alabama Center for Commerce || Montgomery — PCH Hotels and Resorts/ Alabama Real Estate > Alabama Community College System Holdings || Hotels, Statewide Building || Montgomery — Perdido Beach Hilton* || Gulf Beach Hotel > Alabama State Bar Building* || Montgomery — P oint Clear Partners, LLC || Point Clear, Real Estate and Condo Development > RSA Criminal Justice Center || Montgomery — Rohr* || (IDB City of Foley) > RSA Dexter Avenue || Montgomery — Signal International || Mobile > RSA Headquarters || Montgomery — Springhill Medical Center* || Mobile > RSA Plaza || Montgomery — SunBelt Golf Corporation || Golf Courses, Statewide > RSA Tower Complex || Montgomery — The Explore Center, Inc.* || Mobile > RSA Union || Montgomery — PCH Hotels and Resorts/ Alabama Real Estate Holdings || Hotels, Statewide RSA Investments in Alabama — PPG Industries* || Huntsville — ACON Alabama Energy Investors || Tuscaloosa — Raycom Media || Montgomery — ADEM Laboratory* || Montgomery — SiO2 Medical Products || Auburn — Alabama River Group, Inc.* || Monroeville — The Shops of Grand River || Leeds — Alabama River Chip Mill* || Monroeville — USB-IDB United Technology* || Huntsville — Alabama River Recycling* || Monroeville — U.S. Steel* || Fairfield — Bell Microproducts* || Montgomery — Walmart Distribution Center* || Cullman — Circle S Industries* || Selma — Williamson Commerce Center* || Anniston — Community Newspaper Holdings, Inc. || Montgomery — Wise Metals* || Florence — Con ventional Mortgages* || Alabama Loans, Residential Funding, MGIC, FBS – RSA was the servicer *FULLY PAID — Danberry at Inverness || Birmingham (sold 2014)
51 2015 ANNUAL REPORT || 52 General Information
www.rsa-al.gov THE RETIREMENT SYSTEMS OF ALABAMA Member Services Contact Center lease visit the Retirement Systems of ake advantage of Member Services’ Alabama website. All RSA members can personalized assistance concerning your register and easily change their address P retirement and health care benefits by online, and add or update their phone number and T contacting the Member Services Contact Center email address. In addition, TRS, ERS, JRF and RSA- at 877.517.0020 or 334.517.7000. You may also 1 members can view their account information send an email to [email protected]. online. PEEHIP members can also view their current PEEHIP coverages, change coverages, Map and Directions enroll in new coverages, and/or enroll or re-enroll in flexible spending accounts during Open Enrollment.
RSA Headquarters 201 South Union St. Montgomery, AL 36104 FROM THE WEST Follow Highway 80 to I-65. Follow I-65 North to Montgomery. Approaching Montgomery, stay in the right-hand lane and exit onto I-85 North to Atlanta. Continue in the right-hand lane; then take the first exit, which is Court Street. Stay on the service road until you reach Union Street. Turn left on Union Street. Continue on Union Street through two traffic lights. The RSA Head- quarters is on the right side before Adams Avenue. Members may park in the open lot in front of the parking deck.
FROM THE EAST Follow I-85 South to downtown Montgomery and take the Union Street THE RETIREMENT SYSTEMS OF ALABAMA exit on the right. Take the first right on the service road onto Union Street. Continue on Union Street through one traffic light. The RSA Headquarters is Organizational Chart on the right before Adams Avenue. Members may park in the open lot in front of the parking deck.
FROM THE SOUTH Follow I-65 North to Montgomery. Approaching Montgomery, stay in the right-hand lane and exit onto I-85 North to Atlanta. Continue in the right- hand lane; then take the first exit, which is Court Street. Stay on the service road until you reach Union Street. Turn left on Union Street. Continue on Union Street through two traffic lights. The RSA Headquarters is on the right before Adams Avenue. Members may park in the open lot in front of the parking deck. FROM THE NORTH Follow I-65 South into Montgomery. Take the I-85 North exit to the right to Atlanta. Stay in the right-hand lane and take the first exit on I-85, which is the Court Street exit. Stay on the service road until you reach Union Street. Turn left on Union Street. Continue on Union Street through two traffic lights. The RSA Headquarters is on the right before Adams Avenue. Members may park in the open lot in front of the parking deck.
53 || THE RETIREMENT SYSTEMS OF ALABAMA RSA Headquarters 201 South Union St. Montgomery, AL 36104 877.517.0020 || rsa-al.gov