FINANCIAL Statements | 2018 PBUCC.ORG/ANNUAL REPORT FOR YEARS ENDED: DECEMBER 31, 2018 AND 2017 REPORT OF MANAGEMENT REPORT OF INDEPENDENT AUDITORS A FAITH AND FINANCE MINISTRY 2018 Annual REPORT OUR MISSION Operating at the intersection of faith and finance, we are caring professionals partnering with those engaged in the life of the Church to provide valued services leading to greater financial security and wellness. OUR VISION The Pension Boards delivers benefits and services from the intersection of faith and finance, providing clergy, lay employees, and all persons served with the peace 2018 Annual REPORT 2018 of mind that comes through greater financial security and better health. The Pension Boards achieves these results through: • Thought leadership regarding faith-based, socially responsible investing • Professional investment expertise that enhances returns, • A comprehensive mix of products and services that meet diverse needs, • Innovative application of technology, • Outreach to all settings of the UCC and the greater Church, and • Fees and expenses that are at or below industry average 2 Report of Management Report of Management We have prepared the accompanying combined financial statements of The Pension Boards-United Report of Management Report of Management Church of Christ, Inc. (the “Pension Boards”) for the years ended December 31, 2018 and 2017. We are We have prepared the accompanying combined financial statements of The Pension Boards- We have prepared the accompanying combined financial statements of The Pension Boards-United responsible for the content, We haveUnited prepared Church the of Christ,accompanyingintegrity Inc. (the , combined“Pensionand objectivity of the financial information presented in this Boards”)financial forstatements the years of ended The Pension December Boards- 31, 2017 and Annual Report. The financial statements have been prepared in conformity with accounting principles Church of Christ, Inc. (the “Pension Boards”) for the years ended December 31, 2018 and 2017. We are United2016. Church We areof Christ, responsible Inc. (the for “Pension the content, Boards”) integrity, for the and years objectivity ended ofDecember the financial 31, 2017information and responsible for the content, 2016.presented We are responsible in this Annual forintegrity Report.the content, , Theand objectivity of the financial information presented in this financialintegrity, statements and objectivity have of been the preparedfinancial informationin conformity with generally accepted in the United States of America. The statements include amountsaccounting principles generally accepted in the United States of America. The statements based on include Annual Report. The financial statements have been prepared in conformity with accounting principles presented in this Annual Report. The financial statements have been prepared in conformity with management’s best estimates and judgments.accountingamounts principles based on generally management’s accepted best in theestimates United and States judgments. of America. The statements include generally accepted in the United States of America. The statements include amountsamounts based on management’s best estimates and judgments. based on management’s best estimates and judgments.We believe that the financial statements present fairly in all material aspects the financial condition and We believe that the financial statements present fairly in all material aspects the financial results of operations for the Pension Boards for the periods presented in this report.We believecondition that and the results financial of operationsstatements for present the Pension fairly in Boards all material for the aspects periods the presented financial in this We believe that the financial statements present fairly in all material aspects the financial condition and conditionreport. and results of operations for the Pension Boards for the periods presented in this results of operations for the Pension Boards for the periods presented in this report.The 13-mreport. ember Board of Trustees, all of whom are independent of the Pension Boards’ internal The 15-member Board of Trustees, all of whom are independent of the Pension Boards’ management, oversees the financial statements through its Audit Committee. The Audit Committee is internal management, oversees the financial statements through its Audit Committee. The The 13-mThe 15-memberember Board of Trustees, all of whom are independent of the Pension Boards’ internal Board of Trustees, all of whom are independent of the Pension Boards’ responsible for the appointment of independent public accountants and forinternalAudit management, Committee overseesis responsible the financial for the appointmentstatements through of independent its Audit publicCommittee. approving their accountants The and for compensation.management, oversees the financial statements through its Audit Committee. The Audit Committee is Auditapproving Committee their is responsiblecompensation. for the appointment of independent public accountants and for responsible for the appointment of independent public accountants and forapproving their compensation. approving their compensation.The Pension Boards’ financial statements have been audited by RSM US LLP, independent auditors, The Pension Boards’ financial statements have been audited by RSM US LLP, independent The Pensionauditors, Boards’ whose financialreport appears statements on Page have 3. been The independentaudited by RSM auditors, US LLP, engaged independent to express an whose report appears on opinion on the financialpage 3. The independent auditors, engaged to express an opinion on the statements, meet periodically with, and have been given free access to, The Pension Boards’ financial statements have been audited by RSM US LLP, independent auditors, auditors, whose report appears on Page 3. The independent auditors, engaged to express an financial statements, meet periodiopinionthe onAudit the Committee,financial statements, without cally with, and have been given free access tomanagement meet periodically present, with, to and discuss have internal been given controls, free, the Audit Committee auditing,access to, and without management present, to discuss internal controls, auditing, and financial reporting matters.whose report appears on the Auditfinancial Committee, reporting without matters.page management4 and 5. The independent auditors, engaged to express an opinion on present, to discuss internal controls, auditing, and the financial statements, meet periodifinancial reporting matters. cally with, and have been given free access to, the Audit CommitteeThe Pension Boards’ recognizes its system of internal control plays an important role The Pension without management present, to discuss internal controls, auditing, and financial reporting Boards recognizes its system of internal control plays an important rolefor reliable for reliable The Pensionfinancial Boardsstatements. recognizes The system its system is designed of internal to provide control reasonableplays an important assurance role that for assets reliable are matters.financial statements. The system is designed to provide reasonable assurance that assets are financialsafeguarded statements. and The that system transactions is designed are recorded to provide properly reasonable and executed assurance in thataccordance assets are with safeguarded and that transactions are recorded properly and executed in accordance with safeguardedmanagement’s and that authorization. transactions The are recordedcontrol environment properly and is executedenhanced in by accordance the selection with and training The Pension Boards’ recognizes its system of internal control plays an important role management’s authorization. The control environment is enhancemanagement’sof competent authorization. management; The maintaining control environment the highest is standardsenhanced ofbyd by the selection and training of conductthe selection by employees; andfor reliable training of competentappropriately management; segregating maintaining duties and the delegating highest standardsauthority; ofand conduct communicating by employees; accounting and financial statements. The system is designed to provide reasonable assurance that assets are competent management; maintaining the highest standards of conduct by employees; appropriately safeguarded and that transactions are recorded properly and executed in accordance with appropriatelyoperating segregating policies and duties procedures and delegating to Pension authority; Boards’ employees.and communicating The Pension accounting Boards and appointed segregating duties and delegating authority; and communicating accounting and operating policies and operatinga general policies auditor and inprocedures 2018, to independently to Pension Boards’ evaluate employees. the effectiveness The Pension of theBoards system appointed of internal management’s authorization. The control environment is enhanceprocedures to Pension Boards’ employees.a generalcontrol. auditor in 2018, to independently evaluate the effectivenessd by the selection and training of of the system of internal competent management; maintaining the highest standards of conduct by employees; appropriately control. segregating duties and delegating authority; and communicating accounting and operating policies and procedures to Pension Boards’ employees. Brian R. Bodager John E. Linzey Brian R. Bodager John E. Linzey President/Chief