LOCAL 805 PENSION AND RETIREMENT FUND 

FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016
LOCAL 805 PENSION AND RETIREMENT FUND 

FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016

I N D E X 

 Page No. 

Independent Auditors’ Report 1 

Statements of Net Assets Available for Benefits 3 

Statements of Changes in Net Assets Available for Benefits 4 

 

Statements of Accumulated Plan Benefits and Changes in Accumulated Plan Benefits 5 

Notes to Financial Statements 6 
- 1 - 

INDEPENDENT AUDITORS’ REPORT 

Board of Trustees of 

Local 805 Pension and Retirement Fund 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Local 805 Pension and Retirement Fund, which 

comprise the statements of net assets available for benefits as of March 31, 2017 and 2016, the related statements 

of changes in net assets available for benefits for the years then ended, the statement of accumulated plan benefits 

as of March 31, 2016, and the related statement of changes in accumulated plan benefits for the year then ended 

and the related notes to the financial statements. 

Management's Responsibility for the Financial Statements 

Plan management is responsible for the preparation and fair presentation of these financial statements in 

accordance with accounting principles generally accepted in the United States of America; this includes the design, 

implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial 

statements that are free from material misstatement, whether due to fraud or error. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our 

audits in accordance with auditing standards generally accepted in the United States of America. Those standards 

require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements 

are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial 

statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of 

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, 

the auditor considers internal control relevant to the Plan's preparation and fair presentation of the financial 

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the Plan's internal control. Accordingly, we express no such opinion. 

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluating the overall presentation of the financial 

statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 

opinion. 

Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, information regarding 

the Plan’s net assets available for benefits as of March 31, 2017, and the changes therein for the year then ended 

and its financial status as of March 31, 2016, and the changes therein for the year then ended in conformity with 

accounting principles generally accepted in the United States of America. 
- 2 - 

INDEPENDENT AUDITORS’ REPORT (continued) 

Report on Supplemental Information 

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The 

supplemental information included in Schedule H (Form 5500), of (1) assets (held at end of year) and (2) reportable 

transactions, is presented for the purpose of additional analysis and is not a required part of the financial statements 

but is supplemental information required by the Department of Labor's Rules and Regulations for Reporting and 

Disclosure under the Employee Retirement Income Security Act of 1974. Such information is the responsibility of the 

Plan's management and was derived from and relates directly to the underlying accounting and other records used 

to prepare the financial statements. The information has been subjected to the auditing procedures applied in the 

audits of the financial statements and certain additional procedures, including comparing and reconciling such 

information directly to the underlying accounting and other records used to prepare the financial statements or to the 

financial statements themselves, and other additional procedures in accordance with auditing standards generally 

accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in 

relation to the financial statements as a whole. 

New York, NY 

September 20, 2017 
LOCAL 805 PENSION AND RETIREMENT FUND 

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 

MARCH 31, 2017 AND 2016 

The accompanying notes are an integral part of the financial statements. 

- 3 - 

ASSETS

Investments, at fair value $ 41,755,677 $ 49,441,890

Receivables:

Due from brokers for securities sold 900,000 1,200,000

Employer contributions 37,614 39,876

Total Receivables 937,614 1,239,876

Other assets:

Cash, operating accounts 4,561,762 1,056,213

Prepaid expenses 13,927 20,841

Total Other Assets 4,575,689 1,077,054

Total Assets 47,268,980 51,758,820

LIABILITIES

Accrued administrative expenses 83,266 86,613

NET ASSETS AVAILABLE FOR BENEFITS $ 47,185,714 $ 51,672,207

2017 2016
LOCAL 805 PENSION AND RETIREMENT FUND 

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 

YEARS ENDED MARCH 31, 2017 AND 2016

The accompanying notes are an integral part of the financial statements. 

- 4 - 

ADDITIONS TO NET ASSETS

Investment income:

Net appreciation (depreciation) in fair value of investments $ 5,203,986 $ (707,588)

Interest, dividends and other 1,064,451 1,019,426

6,268,437 311,838

Less - Investment fees 202,233 214,327

Net Investment Income 6,066,204 97,511

Employer contributions 1,807,322 1,582,883

Withdrawal liability contributions 174,773 0

Other income 622 4

Total Additions 8,048,921 1,680,398

DEDUCTIONS FROM NET ASSETS

Pension benefits 11,901,461 11,704,972

Administrative expenses 633,953 452,499

Total Deductions 12,535,414 12,157,471

Net (decrease) in net assets available for benefits (4,486,493) (10,477,073)

Net assets available for benefits:

Beginning 51,672,207 62,149,280

Ending $ 47,185,714 $ 51,672,207

2017 2016
LOCAL 805 PENSION AND RETIREMENT FUND 

STATEMENT OF ACCUMULATED PLAN BENEFITS 

MARCH 31, 2016 

AND 

STATEMENT OF CHANGES IN ACCUMULATED PLAN BENEFITS 

YEAR ENDED MARCH 31, 2016 

The accompanying notes are an integral part of the financial statements. 

- 5 - 

ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS

Vested benefits:

Pensioners and beneficiaries currently receiving benefits $ 113,013,788

Other vested benefits 49,961,337

Total Vested Benefits 162,975,125

Non-vested benefits 452,189

Total actuarial present value of accumulated plan benefits $ 163,427,314

CHANGES IN ACCUMULATED PLAN BENEFITS

Actuarial present value of accumulated plan benefits - Beginning $ 158,912,439

Increase (decrease) during period attributable to:

Passage of time 10,331,547

Benefits accumulated, net experience gain or loss, changes in data 3,350,036

Change in actuarial assumptions 2,538,264

Benefits paid (11,704,972)

Net Increase 4,514,875

Actuarial present value of accumulated plan benefits - Ending $ 163,427,314

2016
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 6 - 

NOTE 1 – DESCRIPTION OF PLAN 

 The following brief description of Local 805 Pension and Retirement Fund (the “Plan”) is provided for 

general information purposes only. Participants should refer to the Plan document and the Summary Plan 

Description for a more complete description of the Plan’s provisions. 

General: The Plan is a defined benefit pension plan established on December 20, 1954 that is subject to 

the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. It is funded by 

negotiated employer contributions typically set for multiyear periods under collectively bargained agreements. The 

Plan operates as a trust to provide retirement benefits to participants who are covered employees of participating 

employers under collective bargaining agreements between certain employers (the “Employer”) and Local 805 

International Brotherhood of Teamsters (the “Union”). 

Plan Administration: The administration of the Plan is the responsibility of a Board of Trustees composed 

of Union and Employer Trustees. The Union Trustees and Employer Trustees have equal voting rights. The 

investments of the Plan are managed by investment managers and maintained by separate Plan custodians. 

Pension Benefits: Participants become fully vested after 5 years of vesting service, as defined by the 

Plan. Participants are entitled to a normal pension beginning at age 65 after the fifth anniversary of plan 

participation. An early service retirement pension benefit is available for those participants who retire at age 55 

with at least 15 years of continuous credited service. The pension benefit amount for regular pension for a 

participant with no covered employment after December 31, 1998 is based on a fixed rate of $2,000 per month for 

eligible participants. For those participants with credited service after December 31, 1998, the pension benefit 

amount for a regular pension shall be the greater of $2,100 at age 65 with 15 years of credited service and the 

accrued benefit schedule delineated in Section 5.6 of the Plan. For participants with no credited service prior to 

December 31, 1998, the regular pension benefit amount shall be calculated as stated in Section 5.6 of the Plan. 

For participants of YRC (“Yellow Freight”), the amount of $2,500 shall be substituted for $2,100 in the description 

above. The early service retirement pension benefit is the normal pension benefit amount described above, 

reduced for early commencement. 

The Plan also offers a vested pension to participants who do not meet the eligibility requirements for a 

normal or early service retirement pension and who have either met the retirement age of 65 and have at least 5 

years of continuous credited service or who have attained age 55 with at least 5 years of continuous credited 

service. The benefit amount shall be based on the normal or early service retirement pension benefit amount; 

however, the benefit derived from the schedule in effect prior to January 1, 1999 shall be multiplied by a fraction, 

the numerator being the number of years of credited service and the denominator being 30.

If an active and vested participant dies before reaching the earliest retirement age under the Plan, the 

participant’s surviving spouse, or designated beneficiary, if not married, would receive 50% of the benefit that the 

participant would have received had he retired the day before he died and elected the 50% joint and survivor 

option. The benefit commences when the participant would have first been eligible to retire. Active employees who 

become totally and permanently disabled, during a period in which they are working in covered employment and 

have met the same requirements as with the early service retirement pension are eligible for disability retirement 

pension benefit. The benefit amount is equal to the accrued benefit of the participant, with no actuarial age 

reduction. 

As a result of the Pension Protection Act of 2006, the Plan was certified as being in “Critical Status” 

effective with the Plan Year beginning April 1, 2008. As a result, future accruals after entering Critical Status are 

determined in accordance with the Rehabilitation Plan that was adopted and included in the Plan as Appendix A. 

Certain Yellow Freight employees participate in a defined contribution retirement plan that is part of the 

Plan. The Plan’s net assets at March 31, 2017 and 2016 include $127,504 and $112,477, respectively, which is 

the total of the participants’ accounts in the defined contribution plan. 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 7 - 

NOTE 1 – DESCRIPTION OF PLAN (continued) 

 Pension Benefits (continued): A full description of plan benefit provisions is available in the Rules and 

Regulations of the Plan as amended and restated. 

Funding: Employers make contributions for covered participants based on hours worked. The contribution 

rates are determined by the collective bargaining agreements in effect at the time. 

Contributions for the year ended March 31, 2017 did not meet the minimum funding requirements of ERISA 

as amended by the Pension Protection Act of 2006. The plan sponsor determined that, based on reasonable 

actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reasonably be expected to 

emerge from critical status by the end of the Rehabilitation Period and that the Rehabilitation Plan can only be 

expected to forestall insolvency, as required by IRC §432(e)(3)(A)(ii). The Rehabilitation Plan is forestalling 

insolvency, and as a result, is meeting its scheduled progress as required by IRC §432(b)(3)(A)(ii). Since the Plan 

is meeting its scheduled progress, its employers are exempt from the excise taxes under IRC §4971. 

 Other: Although they have not expressed any intention to do so, the Trustees have the right under the Plan 

to modify benefits provided to participants. The Plan may be terminated only by the Board of Trustees, subject to 

the provisions set forth in ERISA. 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 Basis of Accounting: The financial statements of the Plan are prepared under the accrual method of 

accounting except for employer withdrawal liability and payroll audit contributions which, because of the uncertainty 

of collection, are recognized on the cash basis. 

 Payment of Benefits: Benefit payments to participants are recorded upon distribution.

Employer Contributions: Employer contributions receivable and employer contribution income does not 

include estimates of amounts due from employers where reports were not received by the Plan office nor any 

amounts due but unpaid as a result of payroll audits. 

Investment Valuation and Income Recognition: Investments are reported at fair value. Fair value is the 

price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market 

participants at the measurement date. See Note 9 for a discussion of fair value measurements. 

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the 

accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan’s gains and 

losses on investments bought and sold as well as held during the year. Unrealized gains or losses are the 

differences between the fair value of the investments held at year-end and those held at the beginning of the year. 

Realized gains or losses on the sale of investments are based on the historical costs of the individual investments 

sold for financial reporting purposes, whereas the revalued cost (fair value at the beginning of the year) is used for 

determining the realized gain or loss for Form 5500 purposes. 

 Actuarial Present Value of Accumulated Plan Benefits: Accumulated plan benefits are those future 

periodic payments, including lump-sum distributions, which are attributable under the Plan's provisions to the 

service employees have rendered. Accumulated plan benefits include benefits expected to be paid to: 

a. Retired or terminated participants, 

b. Beneficiaries of participants who have died; and 

c. Present participants or their beneficiaries. 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 8 - 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

Actuarial Present Value of Accumulated Plan Benefits: (continued) Benefits under the Plan are based 

on employee’s years of service in covered employment. Benefits payable under all circumstances are included to 

the extent they are deemed attributable to employee service rendered to the valuation date. 

The actuarial present value of accumulated plan benefits is determined by an actuary from O’ Sullivan 

Associates Inc. and is the amount that results from applying actuarial assumptions to adjust the accumulated plan 

benefits to reflect the time value of money (through discounts for interest) and the probability of payment (by means 

of decrements such as for death, disability, withdrawal, or retirement) between the valuation date and the expected 

date of payment. The significant actuarial assumptions used in the valuation as of March 31, 2016 were as follows: 

Interest 6.50% (previously 6.75% ) compounded annually

Mortality:

Healthy RP-2014 healthy mortality with blue collar adjustment, separate for male 

and female participants, adjusted with mortality improvement Scale

MP-2014 from 2015

Disabled RP-2014 disabled mortality, separate for male and female participants,

adjusted with mortality improvement Scale MP-2014 from 2015

Termination

Retirement age Percent

Retiring

55 20%

56-61 5%

62 25%

63-64 5%

65 70%

66 50%

67+ 100%

If the participant had at least 20 years of Credited Service as of April 1, 2009

there is a one-time additional retirement incidence of 60% when the

participant reaches age 55 and at least 25 years of Credited Service.

This additional incidence applies immediately for participants who are

already age 55 with 25 years of Credited Service. 

Employment 4,997 total months annually

Percent Married 80%

Age of Spouse Females are 3 years younger than their spouses.

Expenses $440,000 payable at the beginning of the year

Value of Assets Average Fair Market Value (without-phase-in). Averaging period is 

3 years. Adjusted under the Pension Relief Act of 2010 for a 10-year

recognition of the 2008/2009 Plan Year loss.

Funding Method

Interest rate for Withdrawal

Liability 6.50% per annum

Sarason T-8 Table

Age

Unit Credit
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 9 - 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

Actuarial Present Value of Accumulated Plan Benefits: (continued)

RPA '94 Current Liability Interest: 3.23% ; Last year 3.40% was used

Assumptions Mortality: As per IRC § 1.430(h)(3)-1

Defined Contribution Dollars

contribution plan for certain YRCW participants. Pursuant to the audit, this

amount is $112,477 as of March 31, 2016

Assumption Changes The retirement assumption was change from: 

Participants with 20 years of Credited Service as of April 1, 2009 are 

assumed to retire 3.25 years following 25 years of Credited Service for 

those credits accrued through March 31, 2005. The remaining credits 

accrued after April 1, 2005 are assumed to be payable at age 55. 

Participants with fewer than 20 years of Credited Service as of April 1, 2009

are assumed to retire upon age 65 and 5 Years of Participation. 

To the following table: 

Percent

Retiring

55 20%

56-61 5%

62 25%

63-64 5%

65 70%

66 50%

67+ 100%

If the participant had at least 20 years of Credited Service as of April 1, 2009

there is a one-time additional retirement incidence of 60% when the

participant reaches age 55 and at least 25 years of Credited Service.

This additional incidence applies immediately for participants who are

already age 55 with 25 years of Credited Service. 

The future service assumption was reduced from 5,910 months per year to

4,997 months, due to an employer withdrawal

The liabilities were grossed up to include the value of the defined 

Age

The interest rate was changed from 6.75% to 6.50%

The foregoing actuarial assumptions are based on the presumption that the Plan will continue. If the Plan 

were to terminate, different actuarial assumptions and other factors might be applicable in determining the actuarial 

present value of accumulated plan benefits. 

 

 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 10 - 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 Use of Estimates: The preparation of financial statements in conformity with accounting principles 

generally accepted in the United States of America requires management to make estimates and assumptions that 

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of 

the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual 

results could differ from those estimates. 

Recently Adopted Accounting Pronouncements: On May 1, 2015 the Financial Accounting Standards 

Board issued Accounting Standards Update (ASU) No. 2015-07, Disclosures for Investments in Certain Entities 

That Calculate Net Asset Value per Share (or Its Equivalent), which removes the requirement to categorize within 

the fair value hierarchy all investments for which the fair value is measured using the net asset value per share 

practical expedient. The ASU also removes the requirement to make certain disclosures for all investments that 

are eligible to be measured at fair value using the net asset value per share practical expedient. The ASU is 

effective for public business entities for fiscal years beginning after December 15, 2015, and the interim periods 

within those fiscal years. The effective date for all other entities is fiscal years beginning after December 15, 2016, 

and interim periods within those fiscal years. Early adoption is permitted for all entities. Management has elected 

to early adopt this new accounting standard update on the Plan’s financial statements 

In July 2015, the FASB issued ASU 2015-12, Plan Accounting-Defined Benefit Pension Plans (Topic 960), 

Defined Contribution Pension Plans (Topic 962) and Health and Welfare Benefit Plans (Topic 965), I. Fully BenefitResponsive Investment Contracts, II. Plan Investment Disclosures, III. Measurement Date Practicable Expedient. 

The standard amends three parts of plan accounting. The amendments in Part I removes the requirement to 

measure fully-benefit responsive investment contracts to be measured at fair value and now requires contracts to 

be measured, presented, and disclosed only at contract value. Part II of the amendment eliminates the requirement 

to disclose (1) individual investment that represent 5 percent or more of net assets available for benefits and (2) the 

net appreciation or depreciation for investment by general type. Finally, Part III of the amendment provides a 

practical expedient to permit plans to measure investments and investment-related accounts as of a month-end 

date that is closest to the plan’s fiscal year-end, when the fiscal period does not coincide with a month-end. The 

amendments in Parts I, II and III of the ASU are effective for fiscal years beginning after December 15, 2015. 

NOTE 3 – EVALUATION OF SUBSEQUENT EVENTS 

 The Plan has evaluated subsequent events through September 20, 2017, the date the financial statements 

were available to be issued. 

NOTE 4 – PLAN TERMINATION PRIORITIES 

In the event the Plan terminates, the net assets of the Plan will be allocated, as prescribed by ERISA and 

its related regulations, generally to provide the following benefits in the order indicated: 

• Vested benefits insured by the Pension Benefit Guaranty Corporation (PBGC) up to the applicable 

limitations. 

• All non-vested benefits. 

 Benefits under the plan are insured by the PBGC. Should the Plan terminate at some future time, its net 

assets generally will not be available on a pro-rata basis to provide participants’ benefits. Whether a particular 

participant’s accumulated plan benefits will be paid depends on both the priority of those benefits and the level of 

benefits guaranteed by the PBGC at that time. Some benefits may be fully or partially provided for by the then 

existing assets and the PBGC guaranty, whereas other benefits may not be provided for at all. 

 

 A full description of the Plan’s termination priorities is available in the Plan’s rules and regulations, as 

amended and restated. 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 11 - 

NOTE 5 – TAX STATUS 

The Internal Revenue Service has determined and informed the Plan, by letter dated November 24, 2015 

that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code 

(IRC). The Plan has been amended since receiving the determination letter. However, the Plan’s administrator 

believes that the Plan currently is designed and is being operated in compliance with the applicable requirements 

of the IRC and, therefore, believes that the related trust is tax exempt. Consequently, no provision for income 

taxes has been included in the Plan’s financial statements. The Plan’s tax filings for years prior to 2014 are no 

longer subject to examination by the tax authorities. 

NOTE 6 – CONCENTRATION OF CREDIT RISK

 Financial instruments that subject the Plan to concentration of credit risk include cash and short-term 

investments. The Plan maintains accounts at high quality financial institutions. While the Plan attempts to limit any 

financial exposure, its cash deposit balances may, at times, exceed federally insured limits. Short-term investments 

are not covered by the Federal Deposit Insurance Corporation (FDIC). 

NOTE 7 – RISKS AND UNCERTAINTIES

 The Plan invests in various investment securities. Investment securities are exposed to various risks such 

as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is 

at least reasonably possible that changes in the values of investment securities will occur in the near term and that 

such changes could materially affect the amounts reported in the statement of net assets available for benefits. 

 Plan contributions are made and the actuarial present value of accumulated plan benefits are reported 

based on certain assumptions pertaining to interest rates, inflation rates and employee demographics, all of which 

are subject to change. Due to uncertainties inherent in the estimations and assumptions process, it is at least 

reasonably possible that changes in these estimates and assumptions in the near term would be material to the 

financial statements. 

NOTE 8 – WITHDRAWAL LIABILITY 

 

The Plan has a default judgment of $2.6M against Gutlove & Shirvint for withdrawal liability owed the Plan. 

The employer appears to lack assets and may be unable to pay the judgment. The trustees are in the process of 

engaging an independent investigator to ascertain whether this is the case. No accrual has been made for this 

item in the financial statements.

 

On May 17, 2016, YRC Worldwide, Inc. signed a withdrawal liability settlement agreement with the Plan. 

YRC’s partial withdrawal liability consisting of 80 initial quarterly installments of $34,026 was determined by the 

Plan’s actuary and is the amount the Plan could expect to receive. For the year ended March 31, 2017, $136,104 

was received. 

 On August 5, 2016, Center Candy Corporation signed a withdrawal liability settlement agreement with the 

Plan. Center Candy’s complete withdrawal consisting of 80 quarterly installments of $19,335 was determined by 

the Plan’s actuary and is the amount the Plan could expect to receive. For the year ended March 31, 2017, 

$38,669 was received. 

 On February 4, 2015, the Plan filed a proof of claim in bankruptcy against RT Liquidation Corp. f/k/a Rose 

Trucking Corp., requesting payment of withdrawal liability to the Plan in the amount of $3,806,618. On February 4, 

2015, the Plan also filed a proof of claim in bankruptcy against WR Liquidation, Inc. f/k/a White Rose, Inc, 

requesting payment of withdrawal liability to the Plan in the amount of $9,699,368. As of the date of the audit 

report, the foregoing proofs of claim have not been resolved and there has been no indication of potential creditor 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 11 - 

recoveries. It is uncertain whether the Plan would receive any payment of the aforementioned withdrawal liabilities. 

 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 12 - 

NOTE 9 – FAIR VALUE MEASUREMENTS 

 Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value 

Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value 

hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest 

priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the 

lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB 

ASC 820 are described as follows: 

• Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in 

active markets that the plan has the ability to access. 

• Level 2: Inputs to the valuation methodology include: 

o Quoted prices for similar assets or liabilities in active markets;

o Quoted prices for identical or similar assets or liabilities in inactive markets; 

o Inputs other than quoted prices that are observable for the asset or liability; 

o Inputs that are derived principally from or corroborated by observable market data by correlation or 

other means. 

 If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially 

the full term of the asset or liability. 

• Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. 

 The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level 

of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of 

observable inputs and minimize the use of unobservable inputs. 

 Following is a description of the valuation methodologies used for assets at fair value. There have been no 

changes in the methodologies used at March 31, 2017 and 2016. 

Interest bearing cash: Interest bearing cash is reported at cost, which approximates fair value. 

The preceding methods may produce a fair value calculation that may not be indicative of net realizable value 

or reflective of future fair values. Furthermore, although the plan believes its valuation methods are appropriate and 

consistent with other market participants, the use of different methodologies or assumptions to determine the fair value 

of certain financial instruments could result in a different fair value measurement at the reporting date. 

The following tables set forth by level, within the fair value hierarchy, the Plan's assets at fair value as of 

March 31, 2017, and 2016: 

Investment

Interest bearing cash $ 4,554 $ 0 $ 0 $ 4,554

Investments measured at NAV 41,751,123

Total Investments at fair value $ 4,554 $ 0 $ 0 $ 41,755,677

March 31, 2017

Level 1 Level 2 Level 3 Total
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 13 - 

NOTE 9 – FAIR VALUE MEASUREMENTS (continued)

Investment

Interest bearing cash $ 4,538 $ 0 $ 0 $ 4,538

Investments measured at NAV 49,437,352

Total Investments at fair value $ 4,538 $ 0 $ 0 $ 49,441,890

Level 1 Level 2 Level 3 Total

March 31, 2016

The following table summarizes investments measured at net asset value (NAV) per share as of March 31, 

2017, and 2016, respectively. 

March 31. 2017 Fair Market Value

Unfunded 

Commitment

Redemption 

Frequency (if 

currently 

eligible)

Redemption 

Notice Period

Prudential Trust Company $ 14,527,027 N/A see below see below 

ALF-CIO Equity $ 17,654,298 N/A see below see below 

Seligman $ 4,574,935 N/A see below see below 

Prudential PRISA SA $ 2,331,939 N/A see below see below 

Entrust Capital Diversified Fund QP $ 1,069,728 N/A see below see below 

U.S. Real Estate Investment Fund, LLC $ 1,593,196 N/A see below see below 

Total Investments measured at NAV $ 41,751,123 

March 31, 2016 Fair Market Value

Unfunded 

Commitment

Redemption 

Frequency (if 

currently 

eligible)

Redemption 

Notice Period

Prudential Trust Company $ 7,109,245 N/A see below see below 

ALF-CIO Equity $ 23,085,832 N/A see below see below 

Columbia (Seligman) $ 9,477,532 N/A see below see below 

Prudential PRISA SA $ 5,494,301 N/A see below see below 

Entrust Capital Diversified Fund QP $ 1,911,286 N/A see below see below 

U.S. Real Estate Investment Fund, LLC $ 2,359,156 N/A see below see below 

Total Investments measured at NAV $ 49,437,352 

Prudential Trust Company 

The Plan is invested in a collective investment trust fund which was declared and established by Prudential 

Trust Company, a Pennsylvania trust company, for the collective investment and management of the assets of 

certain pension, profit sharing, stock bonus, and other trusts on behalf of entities that are qualified under Section 

401(a) and exempt from taxation under Section 501(a) of the Code. The trust shall receive, hold and administer all 

moneys and other property contributed thereto, in trust, upon all the terms and conditions set forth herein. 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 14 - 

NOTE 9 – FAIR VALUE MEASUREMENTS (continued)

Prudential Trust Company (continued) 

If the Plan desires to withdraw totally or partially from participation in the trust it shall deliver a written 

request of withdrawal to the trustee specifying the dollar amount or the number of units to be withdrawn and the 

valuation date with respect to which the withdrawal shall be made. The trustee in its sole discretion may require a 

participating trust desiring to make withdrawals to notify the trustee in writing five (5) business days prior to the 

valuation date with respect to which the withdrawal will be made. The trustee shall have the discretion to limit the 

maximum withdrawal as of any valuation date to the greater of $2,000,000 or five percent (5%) of the value of the 

assets in the fund as of the valuation date. 

ALF-CIO Equity 

This AFL-CIO Equity Index Fund (the “Index Fund”) is established and maintained exclusively for the 

collective investment and reinvestment of moneys contributed thereto by Chevy Chase Trust Company, Bethesda, 

Maryland acting in its fiduciary capacity as an investment manager and custodian to the Index Fund. The Index 

Fund is established primarily for the benefit of certain plans, which cover: members of union and other 

organizations affiliated with the AFL-CIO; members of other labor organizations; employees of all of these entities; 

or certain government plans. 

Admissions and withdrawals shall be effected upon the written request to the trustee of the Index Fund by 

the trustees of the Plan or a duly authorized TPA pursuant to the investment manager’s participation agreement 

with the Plan. Such admission or withdrawal shall take place on the same day as the request or on the next 

following valuation date unless a later valuation date is requested in writing by the Plan. 

Seligman 

The Seligman Large-Cap Value Pooled Trust (the “Trust”) was established under a trust agreement by and 

between J. & W. Seligman & Co. Incorporated and State Street Bank and Trust Company, as directed trustee in 

order to provide for the collective investment by the Trust’s investment manager of assets of trusts or accounts 

which may from time to time be transferred to the Trust. 

 Upon the written notification by the Plan signatory to the investment manager, given not less than 5 

business days prior to a valuation date, the Plan may withdraw in whole or in part from the trust, subject, however, 

to the terms and provisions of the trust agreement. 

Prudential PRISA SA 

 

 The Prudential Insurance Company of America ("Prudential"), a wholly owned subsidiary of Prudential 

Financial Inc. ("PFI"), established the PRISA Separate Account ("PRISA SA") in accordance with the laws of the 

State of New Jersey. PRISA SA is an open-ended commingled insurance company separate account designed for 

use as a funding vehicle for tax-qualified pension plans. Its investments are comprised primarily of real estate 

investments either directly owned or through partnership interests and mortgage and other loans on income 

producing real estate. 

 Redemptions will only be made as of valuation dates and will be disbursed as soon as practical thereafter. 

Unless waived by the general partner, all written requests for redemptions must be received by the general partner 

not less than three months before the valuation date on which the redemption is desired, to be eligible for payment. 
LOCAL 805 PENSION AND RETIREMENT FUND 

NOTES TO FINANCIAL STATEMENTS 

MARCH 31, 2017 AND 2016 

- 15 - 

NOTE 9 – FAIR VALUE MEASUREMENTS (continued)

Entrust Capital 

The Plan is invested in EnTrust Capital Diversified Fund QP Ltd. (EnTrust), a company formed under the laws 

of the Cayman Islands. The objective of EnTrust is to seek above-average rates of return and long-term capital growth 

through an investment in EnTrust Capital Diversified Fund Ltd., a fund of funds with a diversified portfolio of private 

investment entities and/or separately managed accounts managed by investment managers selected by the adviser. 

The adviser is EnTrust Partners Offshore LLC, a limited liability company organized under the laws of the State of 

Delaware, and registered with the U.S. Securities and Exchange Commission. 

The Plan shall have the right to redeem shares having a value of up to a maximum of 50% of the net asset 

value of their shares, as of the close of business on the last business day of any calendar quarter, or any other date 

determined by the board in its sole discretion (“Redemption Date”) after the expiration of an initial 12-month lock-up 

period (the “Lock-Up Period”), provided, however, that the board shall permit a shareholder to redeem shares on a 

Redemption Date during the Lock-Up Period subject to a redemption charge equal to 3% of the amount sought to be 

redeemed. 

U.S. Real Estate Investment Fund, LLC

U.S. Real Estate Investment Fund, LLC (the “Fund”) is a limited liability company organized under the laws 

of the State of Delaware. The Fund’s investment objectives are to invest in a pool of real estate assets that are 

diversified by geography and property type, with a focus on yield-driven investment and, to a lesser extent, on 

value-added investments. The manager of the Fund is Intercontinental Real Estate Corporation. 

The Plan may request redemption of its investment at any time after the later of (i) the first anniversary of 

the initial closing (Oct 1, 2016), and (ii) the date upon which the net asset value first exceeds $200 million by 

providing written notice to the Fund manager. 

NOTE 10 – ADMINISTRATIVE EXPENSES

Professional fees:

Legal $ 286,779 $ 103,391

Third party administrator 171,105 170,960

Actuary and consultant 60,850 51,066

Auditing 18,000 18,000

Pension Benefit Guaranty Corporation 53,919 53,894

Insurance 31,907 38,743

Bank fees 4,338 3,763

Stationery, printing and office 3,814 6,840

Postage 2,068 482

Meetings and educational conferences 1,173 5,360

Total Administrative Expenses $ 633,953 $ 452,499

2017 2016