2015 Strength, Stability, Security
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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 TRS 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 TRS 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 TRS ERS JRF TOTAL 10,348 Retirees LOWNDES BULLOCK CHOCTAW 383 323 JRF 384 DROP 400 3,920 2,192 15 6,127 319 $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 TRS 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 TRS 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 TRS 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 $ $ 3000 2,989.2 2,732.7 ($ 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.