Exhibit 16: Page 1

WESTERN STATES OFFICE AND 

PROFESSIONAL EMPLOYEES PENSION FUND

THIRD SUSPENSION APPLICATION

Exhibit 16
Form 5500

Department of the Treasury

Internal Revenue Service

Department of Labor

Employee Benefits Security

Administration

Pension Benefit Guaranty Corporation

Annual Return/Report of Employee Benefit Plan

This form is required to be filed for employee benefit plans under sections 104 

and 4065 of the Employee Retirement Income Security Act of 1974 (ERISA) and 

sections 6057(b) and 6058(a) of the Internal Revenue Code (the Code).

 Complete all entries in accordance with 

the instructions to the Form 5500.

OMB Nos. 1210-0110

1210-0089

2016

This Form is Open to Public 

Inspection

Part I Annual Report Identification Information

For calendar plan year 2016 or fiscal plan year beginning and ending 

A This return/report is for: X a multiemployer plan X a multiple-employer plan (Filers checking this box must attach a list of 

participating employer information in accordance with the form instructions.)

 X a single-employer plan X a DFE (specify) _C_

B This return/report is: X the first return/report X the final return/report

 X an amended return/report X a short plan year return/report (less than 12 months)

C If the plan is a collectively-bargained plan, check here. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X

D Check box if filing under: X Form 5558 X automatic extension X the DFVC program

 X special extension (enter description) ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDE

Part II Basic Plan Information—enter all requested information

1a Name of plan

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

1b Three-digit plan 

number (PN)  001

1c Effective date of plan

YYYY-MM-DD

2a Plan sponsor’s name (employer, if for a single-employer plan)

 Mailing address (include room, apt., suite no. and street, or P.O. Box)

 City or town, state or province, country, and ZIP or foreign postal code (if foreign, see instructions)

2b Employer Identification 

Number (EIN)

012345678

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

D/B/A ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

ABCDEFGHI 

c/o ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

123456789 ABCDEFGHI ABCDEFGHI ABCDE

123456789 ABCDEFGHI ABCDEFGHI ABCDE

CITYEFGHI ABCDEFGHI AB, ST 012345678901

UK 

2c Plan Sponsor’s telephone 

number

0123456789

2d Business code (see 

instructions)

012345

Caution: A penalty for the late or incomplete filing of this return/report will be assessed unless reasonable cause is established.

Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report, including accompanying schedules, 

statements and attachments, as well as the electronic version of this return/report, and to the best of my knowledge and belief, it is true, correct, and complete.

SIGN

HERE

YYYY-MM-DD ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDE

Signature of plan administrator Date Enter name of individual signing as plan administrator

SIGN

HERE

YYYY-MM-DD ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDE

Signature of employer/plan sponsor Date Enter name of individual signing as employer or plan sponsor

SIGN

HERE

YYYY-MM-DD ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDE

Signature of DFE Date Enter name of individual signing as DFE

Preparer’s name (including firm name, if applicable) and address (include room or suite number) ABCDEFGHI Preparer’s telephone number

For Paperwork Reduction Act Notice, see the Instructions for Form 5500. Form 5500 (2016) 

v. 160205

WESTERN STATES OFFICE AND PROFESSIONAL EMPLOYEES PENSION FUND

X

X

HEMMING MORSE CPAS AND CONSULTANTS

01/01/2016

1220 SW MORRISON ST, SUITE 300

PORTLAND, OR 97205-2222

B OF T WESTERN STATES OFFICE AND PROFESSIONAL EMPLOYEES PENSION FUND

X

Filed with authorized/valid electronic signature.

X

05/03/1960

503-224-0048

12/31/2016

94-6076144

12/21/2017

155 BOVET ROAD

001

561110

MATTHEW OGLESBY
Form 5500 (2016) Page 2

3a Plan administrator’s name and address X Same as Plan Sponsor 

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

c/o ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

123456789 ABCDEFGHI ABCDEFGHI ABCDE

123456789 ABCDEFGHI ABCDEFGHI ABCDE

CITYEFGHI ABCDEFGHI AB, ST 012345678901

UK 

3b Administrator’s EIN

012345678

3c Administrator’s telephone 

number

0123456789

4 If the name and/or EIN of the plan sponsor has changed since the last return/report filed for this plan, enter the name, 

EIN and the plan number from the last return/report:

4b EIN

012345678

a Sponsor’s name

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

4c PN

012

5 Total number of participants at the beginning of the plan year 5 123456789012

6 Number of participants as of the end of the plan year unless otherwise stated (welfare plans complete only lines 6a(1), 

 6a(2), 6b, 6c, and 6d).

a(1) Total number of active participants at the beginning of the plan year................................................................................ 6a(1)

 

a(2) Total number of active participants at the end of the plan year ....................................................................................... 6a(2)

b Retired or separated participants receiving benefits............................................................................................................. 6b 123456789012

c Other retired or separated participants entitled to future benefits ......................................................................................... 6c 123456789012

d Subtotal. Add lines 6a(2), 6b, and 6c................................................................................................................................... 6d 123456789012

e Deceased participants whose beneficiaries are receiving or are entitled to receive benefits. ............................................... 6e 123456789012

f Total. Add lines 6d and 6e.................................................................................................................................................. 6f 123456789012

g Number of participants with account balances as of the end of the plan year (only defined contribution plans 

 complete this item) .............................................................................................................................................................. 6g 123456789012

h Number of participants that terminated employment during the plan year with accrued benefits that were 

 less than 100% vested ........................................................................................................................................................ 6h 123456789012

7 Enter the total number of employers obligated to contribute to the plan (only multiemployer plans complete this item)........ 7

8a If the plan provides pension benefits, enter the applicable pension feature codes from the List of Plan Characteristics Codes in the instructions:

b If the plan provides welfare benefits, enter the applicable welfare feature codes from the List of Plan Characteristics Codes in the instructions: 

 

9a Plan funding arrangement (check all that apply) 9b Plan benefit arrangement (check all that apply)

(1) X Insurance (1) X Insurance

(2) X Code section 412(e)(3) insurance contracts (2) X Code section 412(e)(3) insurance contracts

(3) X Trust (3) X Trust

(4) X General assets of the sponsor (4) X General assets of the sponsor

10 Check all applicable boxes in 10a and 10b to indicate which schedules are attached, and, where indicated, enter the number attached. (See instructions)

a Pension Schedules b General Schedules

(1) X R (Retirement Plan Information) (1) X H (Financial Information)

(2) X MB (Multiemployer Defined Benefit Plan and Certain Money 

Purchase Plan Actuarial Information) - signed by the plan 

actuary

(2) X I (Financial Information – Small Plan)

(3) X ___ A (Insurance Information)

(4) X C (Service Provider Information)

(3) X SB (Single-Employer Defined Benefit Plan Actuarial 

Information) - signed by the plan actuary

(5) X D (DFE/Participating Plan Information)

(6) X G (Financial Transaction Schedules)

X

191

2825

X

X

7253

210

X

7463

X

49

X

X

914

3619

7830

809

1A

X

Schedule MB (Form 5500) 2016 Page 2 - 1- x

2 Operational information as of beginning of this plan year:

a Current value of assets (see instructions) ............................................................................................................... 2a -123456789012345

b “RPA ‘94” current liability/participant count breakdown: (1) Number of participants (2) Current liability

(1) For retired participants and beneficiaries receiving payment ................................... 12345678 -123456789012345

(2) For terminated vested participants .......................................................................... 12345678 -123456789012345

(3) For active participants:

(a) Non-vested benefits.......................................................................................... -123456789012345

(b) Vested benefits................................................................................................. -123456789012345

(c) Total active....................................................................................................... -123456789012345

(4) Total ....................................................................................................................... 12345678 -123456789012345

c If the percentage resulting from dividing line 2a by line 2b(4), column (2), is less than 70%, enter such 

percentage ...........................................................................................................................................................

2c 123.12%

3 Contributions made to the plan for the plan year by employer(s) and employees:

(a) Date 

(MM-DD-YYYY)

(b) Amount paid by 

employer(s)

(c) Amount paid by 

employees

(a) Date 

(MM-DD-YYYY)

(b) Amount paid by 

employer(s)

c) Amount paid by 

employees

Totals ► 3(b) 3(c)

4 Information on plan status:

 a Funded percentage for monitoring plan’s status (line 1b(2) divided by line 1c(3)) ................................................ 4a %

 b Enter code to indicate plan’s status (see instructions for attachment of supporting evidence of plan’s status). If 

code is “N,” go to line 5 ..............................................................................................................

4b

c Is the plan making the scheduled progress under any applicable funding improvement or rehabilitation plan? .............................................................X Yes X No

d If the plan is in critical status or critical and declining status, were any benefits reduced (see instructions)? .................................................X Yes X No

e If line d is “Yes,” enter the reduction in liability resulting from the reduction in benefits (see instructions), 

measured as of the valuation date ...................................................................................................................... 4e -123456789012345

f If the rehabilitation plan projects emergence from critical status or critical and declining status, enter the plan 

year in which it is projected to emerge. 

 If the rehabilitation plan is based on forestalling possible insolvency, enter the plan year in which insolvency is 

expected and check here ........................................................................................................................ 

4f

5 Actuarial cost method used as the basis for this plan year’s funding standard account computations (check all that apply):

a X Attained age normal

e X Frozen initial liability

b X Entry age normal

f X Individual level premium

c X Accrued benefit (unit credit)

g X Individual aggregate

d X Aggregate

h X Shortfall

i X Other (specify):________________________________________________________________________________

 ________________________________________________________________________________

j If box h is checked, enter period of use of shortfall method................................................................................... 5j YYYY-MM-DD

k Has a change been made in funding method for this plan year? ...................................................................................................................X Yes X No

l If line k is “Yes,” was the change made pursuant to Revenue Procedure 2000-40 or other automatic approval?...........................................X Yes X No

m If line k is “Yes,” and line l is “No,” enter the date (MM-DD-YYYY) of the ruling letter (individual or class) 

approving the change in funding method ..............................................................................................................

5m YYYY-MM-DD

334,210,200

3,744 481,304,744

2,939 227,659,065

1,027,549

105,815,526

868 106,843,075

7,551 815,806,884

40.97

07/01/2016 11,250,910

11,250,910 0

65.0

D

X

X

X

2033

X

X
Schedule MB (Form 5500) 2016 Page 3 - 1- x

6 Checklist of certain actuarial assumptions:

a Interest rate for “RPA ‘94” current liability..................................................................................................................................... 6a 123.12%

Pre-retirement Post-retirement

b Rates specified in insurance or annuity contracts.................................... X Yes X No X N/A X Yes X No X N/A

c Mortality table code for valuation purposes:

(1) Males ................................................................................... 6c(1)

(2) Females ............................................................................... 6c(2)

d Valuation liability interest rate ..................................................... 6d 123.12% 123.12%

e Expense loading ......................................................................... 6e 123.12% X N/A 123.12% X N/A

f Salary scale................................................................................ 6f 123.12% X N/A 

g Estimated investment return on actuarial value of assets for year ending on the valuation date..................... 6g -123.1%

h Estimated investment return on current value of assets for year ending on the valuation date ....................... 6h -123.1%

7 New amortization bases established in the current plan year:

(1) Type of base (2) Initial balance (3) Amortization Charge/Credit

A -123456789012345 -123456789012345

A -123456789012345 -123456789012345

A -123456789012345 -123456789012345

8 Miscellaneous information:

a If a waiver of a funding deficiency has been approved for this plan year, enter the date (MM-DD-YYYY) of 

the ruling letter granting the approval............................................................................................................

8a

YYYY-MM-DD

 b(1) Is the plan required to provide a projection of expected benefit payments? (See the instructions.) If “Yes,” 

attach a schedule......................................................................................................................................................

X Yes X No

b(2) Is the plan required to provide a Schedule of Active Participant Data? (See the instructions.) If “Yes,” attach a 

 schedule...................................................................................................................................................................

X Yes X No

c Are any of the plan’s amortization bases operating under an extension of time under section 412(e) (as in effect 

prior to 2008) or section 431(d) of the Code?................................................................................................................

X Yes X No

d If line c is “Yes,” provide the following additional information:

(1) Was an extension granted automatic approval under section 431(d)(1) of the Code?............................. X Yes X No

(2) If line 8d(1) is “Yes,” enter the number of years by which the amortization period was extended ............ 8d(2) 12

(3) Was an extension approved by the Internal Revenue Service under section 412(e) (as in effect prior 

to 2008) or 431(d)(2) of the Code?..........................................................................................................

X Yes X No

(4) If line 8d(3) is “Yes,” enter number of years by which the amortization period was extended (not 

including the number of years in line (2)).................................................................................................

8d(4) 12

(5) If line 8d(3) is “Yes,” enter the date of the ruling letter approving the extension ...................................... 8d(5) YYYY-MM-DD

(6) If line 8d(3) is “Yes,” is the amortization base eligible for amortization using interest rates applicable under 

section 6621(b) of the Code for years beginning after 2007? ..................................................................................

X Yes X No

e If box 5h is checked or line 8c is “Yes,” enter the difference between the minimum required contribution 

for the year and the minimum that would have been required without using the shortfall method or 

extending the amortization base(s)...............................................................................................................

8e

-123456789012345

9 Funding standard account statement for this plan year:

Charges to funding standard account:

a Prior year funding deficiency, if any .............................................................................................................. 9a -123456789012345

b Employer’s normal cost for plan year as of valuation date............................................................................. 9b -123456789012345

c Amortization charges as of valuation date: Outstanding balance

(1) All bases except funding waivers and certain bases for which the 

amortization period has been extended............................................

9c(1) -123456789012345 -123456789012345

(2) Funding waivers ............................................................................... 9c(2) -123456789012345 -123456789012345

(3) Certain bases for which the amortization period has been 

extended ..........................................................................................

9c(3) -123456789012345 -123456789012345

d Interest as applicable on lines 9a, 9b, and 9c................................................................................................ 9d -123456789012345

e Total charges. Add lines 9a through 9d......................................................................................................... 9e -123456789012345

3.28

X X

6F 6F

6F 6F

7.25 7.25

X X

X

6.2

0.6

1 506,616 52,686

X

X

X

X

5

X

30,872,746

0

1,228,069

301,741,198 35,938,969

0 0

0 0

2,694,610

39,861,648
Schedule MB (Form 5500) 2016 Page 4

Credits to funding standard account:

f Prior year credit balance, if any..................................................................................................................... 9f -123456789012345

 g Employer contributions. Total from column (b) of line 3................................................................................. 9g -123456789012345

Outstanding balance

h Amortization credits as of valuation date................................................ 9h -123456789012345 -123456789012345

i Interest as applicable to end of plan year on lines 9f, 9g, and 9h .................................................................. 9i -123456789012345

j Full funding limitation (FFL) and credits:

(1) ERISA FFL (accrued liability FFL)........................................................... 9j(1) -123456789012345

(2) “RPA ‘94” override (90% current liability FFL) ......................................... 9j(2) -123456789012345

(3) FFL credit.............................................................................................................................................. 9j(3) -123456789012345

k (1) Waived funding deficiency..................................................................................................................... 9k(1) -123456789012345

(2) Other credits ......................................................................................................................................... 9k(2) -123456789012345

l Total credits. Add lines 9f through 9i, 9j(3), 9k(1), and 9k(2).......................................................................... 9l -123456789012345

m Credit balance: If line 9l is greater than line 9e, enter the difference.............................................................. 9m -123456789012345

n Funding deficiency: If line 9e is greater than line 9l, enter the difference....................................................... 9n -123456789012345

9 o Current year’s accumulated reconciliation account:

(1) Due to waived funding deficiency accumulated prior to the 2016 plan year....................................... 9o(1) -123456789012345

(2) Due to amortization bases extended and amortized using the interest rate under section 6621(b) of the Code:

(a) Reconciliation outstanding balance as of valuation date ............................................................. 9o(2)(a) -123456789012345

(b) Reconciliation amount (line 9c(3) balance minus line 9o(2)(a))................................................... 9o(2)(b) -123456789012345

(3) Total as of valuation date .................................................................................................................. 9o(3) -123456789012345

10 Contribution necessary to avoid an accumulated funding deficiency. (See instructions.)........................... 10 -123456789012345

11 Has a change been made in the actuarial assumptions for the current plan year? If “Yes,” see instructions.................. X Yes X No

50,699,080

11,250,910

64,041,038 8,551,586

4,703,519

270,889,802

392,240,663

0

0

0

75,205,095

35,343,447

0

0

0

0

X
2016 Schedule MB (Form 5500)

Plan Name: Western States Office & Professional Employees Pension Fund

Employer ID Number: 94-6076144

Plan Number: 001

MB ACTUARY SIGNATURE
Attachment to: 2016 Schedule MB (Form 5500), Line 2b 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

PARTICIPANT COUNT 

The participant count excludes 376 inactive non-vested participants whose liabilities are included in 

the active non-vested current liability. 
Attachment to: 2016 Schedule MB (Form 5500), Lines 3 & 9g 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

EMPLOYER CONTRIBUTIONS

Employer contributions shown in lines 3 and 9g are paid pursuant to Collective Bargaining 

Agreements and are received monthly throughout the year. Contributions also include withdrawal 

liability payments and settlements. Contributions are assumed to occur mid-year. 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

378 VINTAGE P ARK DRIVE  F OSTER C ITY , C ALIFORNIA 94404-4813 

TELEPHONE (650) 341-3311  FAX (206) 445-1840 

WWW.RAEL - LETSON.COM

ACTUARIAL CERTIFICATION REQUIRED UNDER 

INTERNAL REVENUE CODE SECTION 432(b) 

Western States Office and Professional Employees Pension Fund 

Plan Year Beginning January 1, 2016 

TO: Secretary of the Treasury 

 Board of Trustees of the 

 Western States Office and Professional Employees Pension Fund 

FROM: Paul L. Graf, Plan Actuary 

DATE: March 30, 2016 

RE: Western States Office and Professional Employees Pension Fund 

 EIN = 94-6076144; PN = 001 

 Plan Sponsor: Board of Trustees Western States Office and Professional Employees 

Pension Fund 

 1220 S.W. Morrison St, Suite 300 

 Portland, Oregon 97205-2222 

 (503) 224-0048 

 

The following certifies that, in accordance with Internal Revenue Code Section 432(b), the Western 

States Office and Professional Employees Pension Fund (“the Plan”), as of the beginning of its 2016 

Plan Year: 

 is in critical and declining status 

 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

As of January 1, 2016, the projections used for this certification estimate the Plan’s funded 

percentage to be 64.6%, the Funding Standard Account Credit Balance to be depleted by December 

31, 2016 and the Plan is projected to be insolvent by December 31, 2035. Accordingly, the Plan is 

in critical and declining status for the 2016 Plan Year based on the criteria outlined in Internal 

Revenue Code Sections 432(b)(2)(B) and 432(b)(6) and the Multiemployer Pension Reform Act of 

2014 (“MPRA”). 

The basis for this certification is as follows: 

1. The projected present value of Plan liabilities as of the beginning of the 2016 Plan Year is 

based on the actuarial valuation as of January 1, 2015, and assumes no future liability gains 

or losses. The data, methodology, Plan provisions and assumptions utilized in the projection 

are those used for the January 1, 2015 actuarial valuation (except where noted otherwise in 

this document). The methods and assumptions are outlined in Exhibit I. 

2. An actuarial projection of the Actuarial Value of Assets is based on the preliminary 

unaudited financial statements as of December 31, 2015, as provided by the Administrator, 

and assumes no investment gains or losses on market values after that date. The January 1, 

2016 Market Value of Assets and 2015 cash flow components provided by the Administrator 

are: 

a. Market Value as of January 1, 2016 $ 334,216,189 

b. 2015 Employer Contributions 11,846,940 

c. 2015 Benefit Payments 38,945,444 

The assumptions and methodology utilized in the projection are those used for the January 1, 

2015 actuarial valuation and are outlined in Exhibit I. 

3. Contributions for the current and succeeding plan years are projected assuming the terms of 

the current collective bargaining agreements pursuant to which the Plan is maintained 

continue in effect for succeeding plan years. Contributions include the automatic 10% 

employer surcharge for those contracts which have not yet been negotiated with terms 

consistent with the adopted Rehabilitation Plan, in accordance with the adopted 

Rehabilitation Plan. 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

For purposes of evaluating critical and declining status, as outlined in Internal Revenue Code 

Section 432(b)(6), we have assumed contribution rates increase beyond the current CBA(s) 

in accordance with the adopted rehabilitation plan. The percent of total contributions 

attributable to surcharges and enhancements is assumed to be 80% of the accruing 

contributions beginning in 2016. In addition, the scheduled withdrawal liability payments 

for employers that withdrew prior to January 1, 2016 are reflected in the projections. 

Based on input from the Board of Trustees, our projections assume that total hours worked 

remain constant at 2015 work levels. 

4. The Plan received approval for a 5-year extension of charge bases effective for the Plan Year 

beginning January 1, 2009, as permitted under Internal Revenue Code Section 431(d). 

However, for the purpose of determining the Plan’s critical status, the applicable charge base 

extensions have not been reflected in these projections. 

5. The projections reflect the provisions of the Multiemployer Pension Reform Act of 2014 

(MPRA). This includes the scheduled increase in PBGC premiums from $26 per participant 

to $27 per participant effective for plan years beginning in 2016 as well as relevant 

inflationary increases under the MPRA subsequent to 2016. Assumed operating expenses 

are $1,000,000 for the 2016 and 2017 plan years, and $700,000 per year thereafter. 

6. The Plan was initially certified in critical status as of January 1, 2009. On October 16, 2009 

the Board of Trustees adopted a Rehabilitation Plan under the guidelines of 432(e), which is 

updated and monitored annually. The Rehabilitation Plan includes certain adopted 

reductions in adjustable benefits effective January 1, 2010, and the Rehabilitation Period 

began January 1, 2012. Based on reasonable actuarial assumptions and upon exhaustion of 

all reasonable measures, the Plan cannot emerge from Critical Status, as described in Code 

Section 432(e)(3)(A)(ii). In 2012, the adopted Rehabilitation Plan was updated by the Plan 

Sponsor to include reasonable measures to forestall possible insolvency. 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

Comments and Certification 

This certification has been prepared in accordance with our understanding of the requirements of 

Internal Revenue Code Section 432, the Preservation of Access to Care for Medicare Beneficiaries 

and Pension Relief Act of 2010, and the Multiemployer Pension Reform Act of 2014. To the best of 

our knowledge, the information supplied in this certification is complete and accurate and, in our 

opinion, the individual assumptions used in the projections: (a) are reasonably related to the 

experience of the Plan and to reasonable expectations; and (b) represent our best estimate of 

anticipated experience under the Plan. 

As an actuary for Rael & Letson, I am a member of the American Academy of Actuaries and meet 

the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion 

contained herein. 

March 30, 2016 _________________________________________ 

Date Paul L. Graf, A.S.A., E.A., F.C.A., M.A.A.A. 

 Enrolled Actuary Number 14-05627 

 Rael & Letson 

999 Third Avenue, Suite 1530 

Seattle, Washington 98104-3853 

(206) 456-3340 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

EXHIBIT I 

ACTUARIAL METHODS AND ASSUMPTIONS 

METHODS:

Asset Valuation: Assets are valued according to a method which recognizes 20% of each year’s excess (or deficiency) 

of actual investment return on the Market Value of Assets over the expected return on the Market 

Value of Assets in the year the excess (or deficiency) occurs. An additional 20% of the excess (or 

deficiency) is recognized in each of the succeeding four years until it is totally recognized. In no 

event will the Actuarial Value be less than 80% or more than 120% of the Market Value. 

Actuarial Cost Method: Unit Credit Cost Method 

Under this method, we determine the present value of all benefits earned through the valuation date. 

An individual's normal cost is the present value of the benefit expected to be earned in the valuation 

year. The total accrued liability is the sum of the individual present values for all participants. The 

Unfunded Accrued Liability is the difference between the accrued liability and the assets of the 

Trust. If the assets exceed the accrued liability, the Plan is in a surplus position. This method requires 

that each year’s contributions be applied first to the normal cost, and the balance of the contributions 

applied to amortize the Unfunded Accrued Liability. The normal cost is adjusted at the close of the 

Plan Year to reflect the actual level of contributions received during that Plan Year. 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

ASSUMPTIONS:

Interest Discount Rate: 7.25% for funding. 

Assumed Rate of Return on 

Investments: 

7.25% compounded annually, net of all expenses. 

Derivation of Net Investment 

Return and Discount Rate for 

FASB ASC 960 Accounting: 

The expected return assumptions are established based on a long run outlook and are based on past 

experience, future expectations and professional judgement. We have modeled the assumptions 

based on average long-term future expected returns and their respective capital market assumptions 

as provided by several investment professionals. Based on the inputs of the Plan’s specific target 

asset allocation, we have established the reasonability of the Plan’s assumption. 

Operating Expenses: Assumed covered by investment earnings for 2015. 2016 and later years include explicit operating 

expenses. 

Mortality: Healthy Lives: 1983 GAMF Mortality Table 

Disabled Lives: 1983 GAMF Mortality Table with ages set forward 17 years until age 62 

Mortality Improvement: The current mortality assumption, with no mortality improvement reflected, is assumed to be 

reasonable at this time. 

Turnover: Table T-7, The Actuary's Pension Handbook. Non-Vested Participants are assumed to earn one year 

of vesting credit annually until vested. 

Retirement Rates: Active participants are assumed to retire based on the following rate table: 

Age Rate of Retirement 

 55 20% 

 56 15% 

 57-59 12% 

 60 15% 

 61 20% 

 62 40% 

 63-70 35% 

 71+ 100% 

Inactive Vested participants are assumed to retire at age 62. 

Disability Incidence: 1952 Society of Actuaries Table, Period 2, Benefit 5. 

Form of Payment: For those not yet in pay status, all participants are assumed to elect a Life Annuity. 

Marital Status: 80% of non-retired participants are assumed to be married. Spouses are assumed to be the same age 

as participants in the population. 

Active Employment: Worked at least 200 hours in covered employment. 

Future Employment: Each active participant is assumed to work the same amount of hours worked in the prior plan year. 

Missing Data: If not specified, participants are assumed to be female and the same age as the average of participants 

with the same status code. 
Attachment to: 2016 Schedule MB (Form 5500), Line 4a 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

ILLUSTRATION SUPPORTING ACTUARIAL CERTIFICATION OF STATUS1

Calculation of Funded Percentage as of January 1, 2016:2

 Projected Actuarial Value of Assets $ 347,973,428 

 Projected Present Value of Accumulated Benefits $ 538,253,063 

 Funded Percentage 64.6% 

The Plan was initially certified in critical status for its 2009 Plan Year and over the next 10 years 

commencing January 1, 2016, the Plan is projected to incur an accumulated funding deficiency. The 

credit balance in the Funding Standard Account is projected to be depleted by December 31, 2018. 

Accordingly, the Plan has not emerged (including the Plan’s approved 2009 5-year charge base 

amortization extension under Section 431(d)(1)) from critical and declining status and remains in 

critical and declining status for the 2016 Plan Year. The Plan’s Funding Standard Account Credit 

Balance projection is as follows: 

December 31, 2016 32,536,905 

December 31, 2017 14,165,548 

December 31, 2018 (2,948,160) 

December 31, 2019 (21,948,454) 

December 31, 2020 (42,709,660) 

December 31, 2021 (63,959,837) 

December 31, 2022 (86,498,554) 

December 31, 2023 (109,196,284) 

December 31, 2024 (131,144,458) 

December 31, 2025 (160,049,767) 

December 31, 2026 (189,347,420) 

 

1

 Does not reflect the 5-year extension of charge bases effective January 1, 2009, as required for purposes of determining critical 

status. 2

 Reflects projected assets and liabilities as determined for the January 1, 2016 actuarial certification. 
Attachment to: 2016 Schedule MB (Form 5500), Line 4c 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

DOCUMENTATION REGARDING PROGRESS UNDER REHABILITATION PLAN

On October 16, 2009, the Trustees adopted a rehabilitation plan under the guidelines of 432(e), 

which is updated and monitored annually. The Plan’s rehabilitation period began January 1, 2012. 

In 2012, the adopted rehabilitation plan was updated by the Plan Sponsor to include reasonable 

measures to forestall possible insolvency. Based on reasonable actuarial assumptions and upon 

exhaustion of all reasonable measures, the Plan cannot emerge from Critical Status as described in 

Code section 432(e)(3)(A)(ii). 
Attachment to: 2016 Schedule MB (Form 5500), Line 6 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

STATEMENT OF ACTUARIAL ASSUMPTIONS / METHODS 

METHODOLOGY: 

Asset Valuation Assets are valued according to a method which recognizes 20% of each year’s 

excess (or deficiency) of actual investment return on the Market Value of Assets 

over the expected return on the Market Value of Assets in the year the excess (or 

deficiency) occurs. An additional 20% of the excess (or deficiency) is recognized 

in each of the succeeding four years until it is totally recognized. In no event will 

the Actuarial Value of Assets be less than 80% or more than 120% of the Market 

Value of Assets. 

Actuarial Cost Method Unit Credit Cost Method 

Under this method, we determine the present value of all benefits earned through 

the valuation date. An individual's normal cost is the present value of the benefit 

expected to be earned in the valuation year. The total accrued liability is the sum 

of the individual present values for all participants. The Unfunded Accrued 

Liability is the difference between the accrued liability and the assets of the Trust. 

If the assets exceed the accrued liability, the Plan is in a surplus position. This 

method requires that each year’s contributions be applied first to the normal cost, 

and the balance of the contributions applied to amortize the Unfunded Accrued 

Liability. The normal cost is adjusted at the close of the Plan Year to reflect the 

actual level of Contributions received during that Plan Year. 

Withdrawal Liability Basis The present value of accrued vested benefits for withdrawal liability 

determination uses an interest rate of 7.25% along with all other valuation 

assumptions. Assets for this purpose are based on the Market Value of Assets. 

Adjustable benefits are recognized using the Simplified Method pursuant to 

PBGC Technical Update 10-3. 
Attachment to: 2016 Schedule MB (Form 5500), Line 6 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

STATEMENT OF ACTUARIAL ASSUMPTIONS / METHODS 

(CONTINUED) 

ASSUMPTIONS: 

Interest Discount Rate 7.25% for funding and FASB ASC 960, 7.25% for withdrawal liability, and 3.28% for 

current liability. 

Assumed Rate of Return on 

Investments 

7.25% compounded annually, net of all expenses. 

Derivation of Net Investment 

Return and Discount Rate for 

FASB ASC 960 Accounting 

The expected return assumptions are established based on a long run outlook and are 

based on past experience, future expectations and professional judgement. We have 

modeled the assumptions based on average long-term future expected returns and their 

respective capital market assumptions as provided by several investment professionals. 

Based on the inputs of the Plan’s specific target asset allocation, we have established the 

reasonability of the Plan’s assumption. 

Operating Expenses Assumed covered by investment earnings. 

Mortality Healthy Lives: 1983 GAMF Mortality Table 

Disabled Lives: 1983 GAMF Mortality Table with ages set forward 17 years until age 62 

Current Liability: RP-2000 Mortality Tables (static, separate for annuitants and nonannuitants), projected forward to the valuation year plus seven years for annuitants and 

15 years for non-annuitants, as prescribed by IRS regulations. 

Mortality Improvement The current mortality assumption, with no mortality improvement, is assumed to be 

reasonable at this time. 

Turnover Table T-7 of The Actuary's Pension Handbook. Non-vested participants are assumed to 

earn one year of vesting credit annually until vested. 

Retirement Rates Active participants are assumed to retire based on the following rate table: 

Age Rate of Retirement 

 55 20% 

 56 15% 

 57-59 12% 

 60 15% 

 61 20% 

 62 40% 

 63-70 35% 

 71+ 100% 

Inactive vested participants are assumed to retire at age 62.

Disablement 1952 Society of Actuaries Table, Period 2, Benefit 5. 

Form of Benefit For those not yet in pay status, all participants are assumed to elect a Life Annuity.
Attachment to: 2016 Schedule MB (Form 5500), Line 6 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

STATEMENT OF ACTUARIAL ASSUMPTIONS / METHODS 

(CONTINUED) 

Marital Status 80% of non-retired participants are assumed to be married. Spouses are assumed to be 

the same age as participants in the population. 

Active Participant Worked at least 200 hours in covered employment.

Future Employment Each active participant is assumed to work the same amount of hours worked in the prior 

plan year. 

Missing Data If not specified, participants are assumed to be female and the same age as the average of 

participants with the same status code.

CHANGES SINCE PRIOR 

VALUATION 

The current liability interest rate was changed from 3.51% to 3.28% due to a change in 

the allowable interest rate range, and the current liability mortality table was updated as 

required. 
Attachment to: 2016 Schedule MB (Form 5500), Line 6 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

SUMMARY OF PLAN PROVISIONS 

The Western States Office and Professional Employees Pension Plan was established on 1959. It has been amended from time 

to time since that date. The most recent restatement of the Plan is effective October 15, 2014. The principal provisions of the 

Plan as of January 1, 2016 are summarized below. 

NORMAL RETIREMENT 

Eligibility Age 65 and vested. Special eligibility if age 65 with 2 years of Vesting Credit (one 

immediately prior to retirement) and $10.00 Total Service Benefit.

Monthly Benefit Service after 2009: 0.75% of Employer Contributions. 

2004 - 2009: 1.8% of Employer Contributions. 

2003 Service: 2.2% of Employer Contributions up to $6,240, plus 1.8% of excess. 

2001 - 2002 Service: 3.2% of Employer Contributions up to $6,240 each year; plus 1.8% 

of excess. 

1997 - 2000 Service: 3.65% of Employer Contributions up to $6,240 each year, plus 

1.8% of excess. 

Prior to 1997: 3.65% of Employer Contributions. 

Past Service: $8.20 per year of past service (maximum 15 years). 

EARLY RETIREMENT 

Eligibility Age 55 and vested.

Monthly Benefit Normal Retirement Benefit actuarially reduced from age 62 for benefits earned before 

January 1, 2010 and from age 65 for benefits earned on or after January 1, 2010.

POSTPONED RETIREMENT 

Eligibility After Normal Retirement Age.

Monthly Benefit Normal Retirement Benefit increased 6% per year (1⁄2% per month) past age 62 for 

benefits earned before January 1, 2010 and past age 65 for benefits earned on or after 

January 1, 2010. 

Effective for annuity starting dates on or after September 1, 2015, participants who 

continue working for a contributing employer will receive the greater of (a) or (b) below: 

(a) Normal Retirement Benefit increased 1⁄2 of 1% for each full month retirement is 

postponed. 

(b) Accrued benefit as of the participant’s postponed retirement date. 

DISABILITY RETIREMENT (Effective January 1, 2010) 

Eligibility Vested with at least 200 hours in year prior to onset of Total and Permanent Disability.

Monthly Benefit 50% of Normal Retirement Benefit payable until age 55.
Attachment to: 2016 Schedule MB (Form 5500), Line 6 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

SUMMARY OF PLAN PROVISIONS (CONTINUED) 

PRE-RETIREMENT DEATH BENEFIT 

Eligibility Vested at time of death.

Monthly Benefit Married : 50% Spousal Joint and Survivor Annuity (reduced for Early Retirement and 

for joint lives) 

All Others: Lump sum payment of $500 per year of service (maximum of $5,000 total). 

FORMS OF ANNUITY PAYMENTS

Normal Form For Married Participants: An actuarially reduced benefit payable as a 50% Spousal Joint 

and Survivor Annuity. 

For Unmarried Participants: A life annuity.

Optional Forms Straight Life Annuity 

50%, 66-2/3% or 100% Spousal Joint and Survivor Annuity 

50%, 66-2/3% or 100% Spousal Joint and Survivor Annuity with Pop-up 

50%, 66-2/3% or 100% Non-Spousal Joint and Survivor Annuity 

Lump Sum if present value of accrued benefit ≤ $5,000

OTHER 

Vesting Credit A Participant will receive one year of Vesting Credit if 200 or more hours are worked in 

a plan year.

Break in Service Rules A one-year break in service is incurred if a Participant works less than 200 hours in a 

plan year. 

CHANGES SINCE PRIOR 

VALUATION Postponed Retirement – effective September 1, 2015, participants working for a 

contributing employer after Normal Retirement Age receive the greater of: 

(a) Normal Retirement Benefit increased 1⁄2 of 1% for each full month retirement is 

postponed, OR

(b) Accrued benefit as of the postponed retirement date (Normal Retirement 

Benefit increased by benefits earned after Normal Retirement Age). 
Attachment to: 2016 Schedule MB (Form 5500), Line 8b(1) 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

SCHEDULE OF PROJECTION OF EXPECTED BENEFIT PAYMENTS

Plan Year Expected Annual Benefit Payments 

2016 $39,153,7221 

2017 41,863,172 

2018 42,860,011 

2019 43,578,019 

2020 44,240,201 

2021 44,872,488 

2022 45,154,553 

2023 45,307,557 

2024 45,664,758 

2025 45,490,316 

1

Actual benefit payments for the 2016 Plan Year as provided by Hemming Morse LLP.
Attachment to: 2016 Schedule MB (Form 5500), Line 8b(2) 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

SCHEDULE OF ACTIVE PARTICIPANT DATA

DISTRIBUTION OF ACTIVE PARTICIPANTS BY AGE AND (FOR 2016 SCHEDULE MB)1

YEARS OF CREDITED SERVICE 

AGE GROUP < 1 1 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 + TOTAL 

Under 25 0 13 0 0 0 0 0 0 0 0 13

25 - 29 0 42 12 0 0 0 0 0 0 0 54

30 - 34 0 38 34 8 1 0 0 0 0 0 81

35 - 39 0 25 31 10 19 0 0 0 0 0 85

40 - 44 0 20 19 17 19 5 0 0 0 0 80

45 - 49 0 21 20 19 27 13 8 2 0 0 110

50 - 54 0 15 22 24 30 16 14 6 1 0 128

55 - 59 0 22 28 19 30 18 15 7 4 1 144

60 - 64 0 8 17 27 14 21 13 5 9 2 116

65 - 69 0 6 7 10 8 8 5 5 2 1 52

70 and Over 0 1 1 1 1 1 0 0 0 0 5

Unknown 0 0 0 0 0 0 0 0 0 0 0 

Total 0 211 191 135 149 82 55 25 16 4 868
2016 Schedule MB (Form 5500), Lines 9c and 9h

Plan Name: Western States Office & Professional Employees Plan

Employer ID Number: 94-6076144

Plan Number: 001

Type of Date Remaining

Base Description Established Balance Period Payment 

Charges 7 Initial Liability 1/1/1976 $ 2,840,781 5.00 $ 650,335

4 Actuarial Assumption 1/1/1978 420,443 5.00 96,252

3 Plan Amendment 1/1/1980 156,392 9.00 22,619

3 Plan Amendment 1/1/1981 1,575,395 10.00 211,562

3 Plan Amendment 1/1/1983 559,496 2.00 289,534

3 Plan Amendment 1/1/1984 472,385 3.00 168,603

3 Plan Amendment 1/1/1985 563,537 4.00 156,003

3 Plan Amendment 1/1/1986 877,718 5.00 200,933

3 Plan Amendment 1/1/1987 1,251,413 6.00 246,686

3 Plan Amendment 1/1/1988 2,482,913 7.00 433,319

3 Plan Amendment 1/1/1989 2,360,371 8.00 372,143

3 Plan Amendment 1/1/1990 845,349 9.00 122,268

3,4 Plan Amendment+Act Assump 1/1/1991 1,812,073 10.00 243,346

3 Plan Amendment 1/1/1992 1,181,854 11.00 148,790

3 Plan Amendment 1/1/1993 4,405,168 12.00 524,040

3,4 Plan Amendment+Act Assump 1/1/1994 3,416,976 13.00 386,626

3 Plan Amendment 1/1/1995 2,462,992 14.00 266,543

4 Actuarial Assumption 1/1/1996 1,531,193 15.00 159,236

3 Plan Amendment 1/1/1996 12,938,350 15.00 1,345,523

3 Plan Amendment 1/1/1997 8,283,032 16.00 831,144

3 Plan Amendment 1/1/1998 9,198,580 17.00 893,747

4 Actuarial Assumption 1/1/1998 4,050,694 17.00 393,572

4 Actuarial Assumption 1/1/1999 372,174 18.00 35,122

3 Plan Amendment 1/1/1999 16,089,326 18.00 1,518,376

3 Plan Amendment 1/1/2000 6,113,977 19.00 561,942

4 Actuarial Assumption 1/1/2000 3,381,085 19.00 310,759

3 Plan Amendment 1/1/2001 10,127,202 20.00 908,708

3 Plan Amendment 1/1/2002 1,853,521 21.00 162,714

3 Plan Amendment 1/1/2003 2,486,157 22.00 213,933

1 Experience Loss 1/1/2003 5,417,832 7.00 945,524

1 Experience Loss 1/1/2004 11,804,205 8.00 1,861,090

1 Experience Loss 1/1/2005 7,109,855 9.00 1,028,346

3 Plan Amendment 1/1/2005 877,852 24.00 72,938

4 Actuarial Assumption 1/1/2005 932,771 24.00 77,502

1 Experience Loss 1/1/2006 4,102,016 10.00 550,865

3 Plan Amendment 1/1/2006 1,305,416 25.00 106,809

3 Plan Amendment 1/1/2007 1,344,061 26.00 108,429

3 Plan Amendment 1/1/2008 1,027,001 12.00 122,173

1 Experience Loss 1/1/2009 97,625,335 13.00 11,046,176

1 Experience Loss 1/1/2011 4,336,688 10.00 582,379

1 Experience Loss 1/1/2012 32,363,677 11.00 4,074,425

1 Experience Loss 1/1/2013 28,877,326 12.00 3,435,249

1 Experience Loss 1/1/2016 506,616 15.00 52,686

$ 301,741,198 $ 35,938,969

Type of Date Remaining

Base Description Established Balance Period Payment 

Credits 1 Experience Gain 1/1/2010 $ (19,661,928) 9.00 $ (2,843,835)

3 Plan Amendment 1/1/2010 (23,040,921) 9.00 (3,332,562)

1 Experience Gain 1/1/2014 (13,386,199) 13.00 (1,514,630)

1 Experience Gain 1/1/2015 (7,951,990) 14.00 (860,559)

$ (64,041,038) $ (8,551,586)

SCHEDULE OF FUNDING STANDARD ACCOUNT BASES1

Beginning Of Year

Beginning Of Year
Attachment to: 2016 Schedule MB (Form 5500), Line 11 

Plan Name: Western States Office & Professional Employees Pension Fund 

Employer ID: 94-6076144 

Plan Number: 001 

JUSTIFICATION FOR CHANGE IN ACTUARIAL ASSUMPTIONS 

The current liability interest rate was changed from 3.51% to 3.28% to be within the permissible 

corridor under IRC Section 431 (c)(6)(E). Additionally, the current liability mortality table was 

updated in accordance with IRS Regulations 1.431(c)(6)-1 and 1.430(h)(3)-1. 
SCHEDULE R

(Form 5500)

Department of the Treasury

Internal Revenue Service

Department of Labor

Employee Benefits Security Administration

Pension Benefit Guaranty Corporation

Retirement Plan Information

This schedule is required to be filed under sections 104 and 4065 of the 

Employee Retirement Income Security Act of 1974 (ERISA) and section 

6058(a) of the Internal Revenue Code (the Code).

 File as an attachment to Form 5500.

OMB No. 1210-0110

2016

This Form is Open to Public 

Inspection.

For calendar plan year 2016 or fiscal plan year beginning and ending 

A Name of plan

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

ABCDEFGHI ABCDEFGHI 

B Three-digit

plan number 

(PN)  001

C Plan sponsor’s name as shown on line 2a of Form 5500

ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 

ABCDEFGHI 

D Employer Identification Number (EIN)

012345678

Part I Distributions

1 Total value of distributions paid in property other than in cash or the forms of property specified in the 

instructions .................................................................................................................................................................................................. 1 -123456789012345

Part II Funding Information (If the plan is not subject to the minimum funding requirements of section of 412 of the Internal Revenue Code or 

ERISA section 302, skip this Part.)

If you completed line 5, complete lines 3, 9, and 10 of Schedule MB and do not complete the remainder of this schedule.

If you completed line 6c, skip lines 8 and 9.

7 Will the minimum funding amount reported on line 6c be met by the funding deadline?................................................................................. X Yes X No X N/A 

8 If a change in actuarial cost method was made for this plan year pursuant to a revenue procedure or other 

authority providing automatic approval for the change or a class ruling letter, does the plan sponsor or plan 

administrator agree with the change? ..........................................................................................................................................................

 

X Yes X No X N/A 

Part III Amendments

9 If this is a defined benefit pension plan, were any amendments adopted during this plan 

year that increased or decreased the value of benefits? If yes, check the appropriate 

box. If no, check the “No” box................................................................................................................................. X ...................................... Increase X Decrease X Both X No

Part IV ESOPs (see instructions). If this is not a plan described under Section 409(a) or 4975(e)(7) of the Internal Revenue Code, skip this Part.

10 Were unallocated employer securities or proceeds from the sale of unallocated securities used to repay any exempt loan? ......................X Yes X No 

11 a Does the ESOP hold any preferred stock?................................................................................................................................. X Yes X No

b If the ESOP has an outstanding exempt loan with the employer as lender, is such loan part of a “back-to-back” loan? 

(See instructions for definition of “back-to-back” loan.)............................................................................................................... X Yes X No

12 Does the ESOP hold any stock that is not readily tradable on an established securities market?....................................................... X Yes X No

For Paperwork Reduction Act Notice, see the Instructions for Form 5500. Schedule R (Form 5500) 2016

v. 160205

All references to distributions relate only to payments of benefits during the plan year.

2 Enter the EIN(s) of payor(s) who paid benefits on behalf of the plan to participants or beneficiaries during the year (if more than two, enter EINs of the two 

payors who paid the greatest dollar amounts of benefits):

EIN(s): _______________________________ _______________________________

Profit-sharing plans, ESOPs, and stock bonus plans, skip line 3.

3 Number of participants (living or deceased) whose benefits were distributed in a single sum, during the plan 

year ............................................................................................................................................................................................................. 3

12345678

4 Is the plan administrator making an election under Code section 412(d)(2) or ERISA section 302(d)(2)? ................................................................ X Yes X..... No X N/A 

If the plan is a defined benefit plan, go to line 8.

5 If a waiver of the minimum funding standard for a prior year is being amortized in this 

plan year, see instructions and enter the date of the ruling letter granting the waiver. Date: Month _________ Day _________ Year _________

6 a Enter the minimum required contribution for this plan year (include any prior year accumulated funding 

deficiency not waived)........................................................................................................................................................................... 6a -123456789012345

 b Enter the amount contributed by the employer to the plan for this plan year................................................................ 6b ........................... -123456789012345

 c Subtract the amount in line 6b from the amount in line 6a. Enter the result

 (enter a minus sign to the left of a negative amount) ................................................................................................ 6c.............................. -123456789012345

WESTERN STATES OFFICE AND PROFESSIONAL EMPLOYEES PENSION FUND

001

6

01/01/2016

B OF T WESTERN STATES OFFICE AND PROFESSIONAL EMPLOYEES PENSION FUND

X

94-6076144

X

12/31/2016

X
 Schedule R (Form 5500) 2016 Page 2 - 1- x

Part V Additional Information for Multiemployer Defined Benefit Pension Plans

13 Enter the following information for each employer that contributed more than 5% of total contributions to the plan during the plan year (measured in 

dollars). See instructions. Complete as many entries as needed to report all applicable employers.

a Name of contributing employer 

b EIN c Dollar amount contributed by employer 

d Date collective bargaining agreement expires (If employer contributes under more than one collective bargaining agreement, check box X 

and see instructions regarding required attachment. Otherwise, enter the applicable date.) Month _______ Day _______ Year _______

e Contribution rate information (If more than one rate applies, check this box X and see instructions regarding required attachment. Otherwise, 

complete lines 13e(1) and 13e(2).)

(1) Contribution rate (in dollars and cents) _____________

(2) Base unit measure: X Hourly X Weekly X Unit of production X Other (specify): 

a Name of contributing employer 

b EIN c Dollar amount contributed by employer

d Date collective bargaining agreement expires (If employer contributes under more than one collective bargaining agreement, check box X 

and see instructions regarding required attachment. Otherwise, enter the applicable date.) Month _______ Day _______ Year _______

e Contribution rate information (If more than one rate applies, check this box X and see instructions regarding required attachment. Otherwise, 

complete lines 13e(1) and 13e(2).)

(1) Contribution rate (in dollars and cents) _____________

(2) Base unit measure: X Hourly X Weekly X Unit of production X Other (specify): _______________________________

a Name of contributing employer 

b EIN c Dollar amount contributed by employer

d Date collective bargaining agreement expires (If employer contributes under more than one collective bargaining agreement, check box X 

and see instructions regarding required attachment. Otherwise, enter the applicable date.) Month _______ Day _______ Year _______

e Contribution rate information (If more than one rate applies, check this box X and see instructions regarding required attachment. Otherwise, 

complete lines 13e(1) and 13e(2).)

(1) Contribution rate (in dollars and cents) _____________

(2) Base unit measure: X Hourly X Weekly X Unit of production X Other (specify): _______________________________

a Name of contributing employer

b EIN c Dollar amount contributed by employer

d Date collective bargaining agreement expires (If employer contributes under more than one collective bargaining agreement, check box X 

and see instructions regarding required attachment. Otherwise, enter the applicable date.) Month _______ Day _______ Year _______

e Contribution rate information (If more than one rate applies, check this box X and see instructions regarding required attachment. Otherwise, 

complete lines 13e(1) and 13e(2).)

(1) Contribution rate (in dollars and cents) _____________

(2) Base unit measure: X Hourly X Weekly X Unit of production X Other (specify): _______________________________

a Name of contributing employer

b EIN c Dollar amount contributed by employer

d Date collective bargaining agreement expires (If employer contributes under more than one collective bargaining agreement, check box X 

and see instructions regarding required attachment. Otherwise, enter the applicable date.) Month _______ Day _______ Year _______

e Contribution rate information (If more than one rate applies, check this box X and see instructions regarding required attachment. Otherwise, 

complete lines 13e(1) and 13e(2).)

(1) Contribution rate (in dollars and cents) _____________

(2) Base unit measure: X Hourly X Weekly X Unit of production X Other (specify): _______________________________

a Name of contributing employer

b EIN c Dollar amount contributed by employer

d Date collective bargaining agreement expires (If employer contributes under more than one collective bargaining agreement, check box X 

and see instructions regarding required attachment. Otherwise, enter the applicable date.) Month _______ Day _______ Year _______

e Contribution rate information (If more than one rate applies, check this box X and see instructions regarding required attachment. Otherwise, 

complete lines 13e(1) and 13e(2).)

(1) Contribution rate (in dollars and cents) _____________

(2) Base unit measure: X Hourly X Weekly X Unit of production X Other (specify): _______________________________

X

1

12

3.25

91-2003015

ILWU-PMA WELFARE PLAN

31

398733

2016
Schedule R (Form 5500) 2016 Page 3

14 Enter the number of participants on whose behalf no contributions were made by an employer as an employer 

of the participant for:

a The current year................................................................................................................................................

123456789012345

14a

b The plan year immediately preceding the current plan year.............................................................................. 14b 123456789012345

c The second preceding plan year ...................................................................................................................... 14c 123456789012345

15 Enter the ratio of the number of participants under the plan on whose behalf no employer had an obligation to make an 

employer contribution during the current plan year to:

a The corresponding number for the plan year immediately preceding the current plan year............................... 15a 123456789012345

b The corresponding number for the second preceding plan year ....................................................................... 15b 123456789012345

16 Information with respect to any employers who withdrew from the plan during the preceding plan year:

a Enter the number of employers who withdrew during the preceding plan year ............................................... 16a 123456789012345

b If line 16a is greater than 0, enter the aggregate amount of withdrawal liability assessed or estimated to be 

assessed against such withdrawn employers................................................................................................... 16b 123456789012345

17 If assets and liabilities from another plan have been transferred to or merged with this plan during the plan year, check box and see instructions regarding 

supplemental information to be included as an attachment. ....................................................................................................................... X

Part VI Additional Information for Single-Employer and Multiemployer Defined Benefit Pension Plans

18 If any liabilities to participants or their beneficiaries under the plan as of the end of the plan year consist (in whole or in part) of liabilities to such participants 

and beneficiaries under two or more pension plans as of immediately before such plan year, check box and see instructions regarding supplemental 

information to be included as an attachment .......................................................................................................................................................................X

19 If the total number of participants is 1,000 or more, complete lines (a) through (c)

a Enter the percentage of plan assets held as: 

Stock: _____% Investment-Grade Debt: _____% High-Yield Debt: _____% Real Estate: _____% Other: _____%

b Provide the average duration of the combined investment-grade and high-yield debt: 

 X 0-3 years X 3-6 years X 6-9 years X 9-12 years X 12-15 years X 15-18 years X 18-21 years X 21 years or more 

c What duration measure was used to calculate line 19(b)?

X Effective duration X Macaulay duration X Modified duration X Other (specify):

Part VII IRS Compliance Questions

20a Is the plan a 401(k) plan? If “No,” skip b ..................................................................................................... X Yes X No

20b How did the plan satisfy the nondiscrimination requirements for employee deferrals under section

401(k)(3) for the plan year? Check all that apply: ......................................................................................

X Design-based 

safe harbor X “Prior year” ADP test

X “Current year” 

ADP test X N/A

21a What testing method was used to satisfy the coverage requirements under section 410(b) for the plan 

year? Check all that apply: ........................................................................................................................ X

Ratio 

percentage 

test

X Average 

benefit test X N/A

21b Did the plan satisfy the coverage and nondiscrimination requirements of sections 410(b) and 401(a)(4) 

for the plan year by combining this plan with any other plan under the permissive aggregation rules? ....... X Yes X No

22a If the plan is a master and prototype plan (M&P) or volume submitter plan that received a favorable IRS opinion letter or advisory letter, enter the date of 

the letter _____/_____/_____ and the serial number ______________.

22b If the plan is an individually-designed plan that received a favorable determination letter from the IRS, enter the date of the most recent determination 

letter _____/_____/______.

1.8 25.3

X

23477602

1557

1661

11

1515

X

0.97

35.4 18.6 18.9

1.00
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

FINANCIAL STATEMENTS 

December 31, 2016 and 2015 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

FINANCIAL STATEMENTS 

December 31, 2016 and 2015 

TABLE OF CONTENTS

 Page 

 Independent auditor's report 2-3 

EXHIBIT A: Statements of net assets available for benefits as of 

 December 31, 2016 and 2015 4 

EXHIBIT B: Statements of changes in net assets available for 

 benefits for the years ended December 31, 2016 and 

 2015 5-6 

 Notes to the financial statements 7-21 

ATTACHMENTS: Schedule of Assets Held for Investment 

 Schedule of 5% Reportable Transactions 
INDEPENDENT AUDITOR'S REPORT

Board of Trustees 

Western States Office & Professional 

 Employees Pension Fund 

Report on the Financial Statements 

We have audited the accompanying financial statements of Western States Office & 

Professional Employees Pension Fund (the “Trust”), which comprise the statements of net assets 

available for benefits as of December 31, 2016 and 2015, and the related statements of changes 

in net assets available for benefits for the years then ended and supplemental schedules as 

indicated in the table of contents and the related notes to the financial statements. 

Management's Responsibility for the Financial Statements 

Trust 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. 

Auditor's 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 auditor's 

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 Trust’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 

Trust’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. 
Board of Trustees 

Western States Office & Professional 

 Employees Pension Fund 

(Continued)

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 Western States Office & Professional Employees Pension Fund’s net 

assets available for benefits as of December 31, 2016, and changes therein for the year then ended 

and its financial status as of December 31, 2015, and changes therein for the year then ended in 

conformity with accounting principles generally accepted in the United States of America. 

Report on Supplemental Information 

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

whole. The supplemental schedules of Assets Held for Investment and 5% Reportable 

Transactions as of December 31, 2016, referred to as “supplemental information,” 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 Trust’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 audit 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. 

San Francisco, CA 

October 12, 2017 
EXHIBIT A

2016 2015

Investments (Notes 2C and 5):

Cash equivalents $ 2,800,372 $ 397 

Mutual funds 12,748,047 - 

Common collective funds 200,652,274 248,416,874 

103-12 investment entities 48,644,555 39,041,116 

Limited partnerships 45,342,595 27,326,331 

Other: 

Cash overlay 4,762,789 5,034,377 

Infrastructure investment fund 9,957,177 8,077,926 

Due from broker 108,020 - 

323,300,146 329,612,704

Receivables:

Employer contributions (Notes 2B and 3B) 584,491 728,012

Withdrawal liability contributions

receivable (Note 7) - - 

584,491 728,012

Cash accounts 791,812 87,054 

Other:

Prepaid benefits 3,297,661 3,230,166 

Prepaid insurance 67,515 149,254 

 3,379,420 3,365,176 

Total assets 327,336,867 334,511,948 

Liabilities:

Accounts payable 301,748 404,536 

Unprocessed Contributions 12,377 - 

Total liabilities 416,913 301,748 

Net Assets Available for Benefits $ 326,919,954 $ 334,210,200 

WESTERN STATES OFFICE & PROFESSIONAL EMPLOYEES PENSION FUND

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2016 and 2015

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

LIABILITIES

ASSETS

4
EXHIBIT B

2016 2015

Additions: 

Employer contributions (Notes 2B and 3B) $ 4,318,217 $ 4,883,040

Withdrawal liability income (Note 7) 3,872,245 3,337,192

Supplemental contributions (Note 3C) 3,016,465 3,509,909 

Surcharge contributions (Note 3C) 43,983 81,811

Liquidated damages 27,650 35,624

 11,847,576 11,278,560 

Investment income: 

Realized and unrealized gains

 on investments, net 3,246,089 22,339,020 

Interest and dividends 1,584,823 1,904,728 

 5,150,817 23,923,843 

Less: investment expenses (1,591,828) (1,479,482) 

 3,671,335 22,332,015 

Other income 11,425 39,792 

Total additions 33,622,000 15,558,703 

Deductions: 

Pension benefits (Note 1B) 39,153,722 39,045,991 

Administrative fees 453,277 429,000 

Professional services: 

Legal 297,579 174,816

Consultant and actuary 251,970 215,223

Investment consulting 205,000 214,687

Auditing:

 Financial 39,181 35,804

 Payroll 61,177 64,224

 704,754 854,907 

WESTERN STATES OFFICE & PROFESSIONAL EMPLOYEES PENSION FUND

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 

For the Years Ended December 31, 2016 and 2015

(Continued)

5

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

2016 2015

General expenses: 

Insurance 157,238 140,754 

PBGC insurance 210,087 198,770

Printing, postage and storage 22,826 22,882

Educational seminars and meetings 45,702 52,029

Miscellaneous 14,487 22,994

 437,429 450,340 

Total operating expenses 1,758,524 1,571,183 

Total deductions 40,912,246 40,617,174 

Decrease in net assets

 available for benefits (25,058,471) (7,290,246) 

Net Assets Available for Benefits:

Beginning of year 359,268,671 334,210,200 

End of year $ 326,919,954 $ 334,210,200 

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

6

WESTERN STATES OFFICE & PROFESSIONAL EMPLOYEES PENSION FUND

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - (Continued)

For the Years Ended December 31, 2016 and 2015
7 

WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 1 - DESCRIPTION OF THE TRUST

The following brief description is provided for general information purposes only. Participants 

should refer to the Summary Plan Description for more complete information. 

A. General: 

The Western States Office and Professional Employees Pension Fund (the “Trust”) is a defined 

benefit plan which was established on May 3, 1960 for the purpose of providing pension, 

disability and death benefits to eligible participants covered by collective bargaining agreements 

between the local unions and various employers in the union’s jurisdiction. 

The Trust is subject to the provisions of the Employee Retirement Income Security Act of 1974 

(ERISA) and is exempt from federal and state taxes on income under the current provisions of 

the Internal Revenue Code and applicable state law. However, the Trust is subject to federal and 

state taxes on its unrelated business taxable income (“UBTI”). UBTI is derived from a trade or 

business that is unrelated to the exempt organization’s purpose. For this Trust, UBTI is mainly 

derived from investing in entities that also use third party debt financing. The trust management 

believes that the Trust, as amended, continues to qualify and to operate in accordance with 

applicable provision of Internal Revenue Code for which the Trust has received a favorable tax 

exemption letter. 

B. Plan Benefits: 

In general, participants who are age 65 and have five years of credited service are entitled to a 

normal pension benefit. A disability pension benefit, a death benefit, a reduced early pension 

benefit and pension enhancement benefits are available for qualified participants. 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Accounting:

The Trust’s financial statements are prepared on the accrual basis of accounting. 

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. 

B. Employer Contributions: 

Employer contributions reported in the financial statements include amounts relating to hours 

worked by participants through December 31, plus material delinquent contributions. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

8 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (Continued) 

B. Employer Contributions: - (Continued) 

The Trust has an employer payroll audit system in place in which the employers are randomly 

audited to verify that they are contributing in accordance with their signed agreement. 

Delinquencies may arise due to these payroll audits, but due to the uncertainty of collections, 

no estimates of the contributions will be accrued. 

C. Valuation of Investments: 

The Trust management determines valuation policies utilizing information provided by its 

investment advisors, managers, and custodians. 

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. 

Common stock and mutual funds are recorded at fair value, based on closing market quotations 

at December 31. Cash equivalents are valued at cost, which equals fair value. 

The Blackrock Equity Index Non-Lendable Fund is a common collective funds which are 

valued depending on the type of investment included in the portfolio. Equity investments are 

valued at the last reported sales prices on the day of valuation. Fixed income securities other 

than government obligations are valued based upon the last available bid price received from 

independent pricing services. Government obligations are valued based upon bid quotations 

for similar obligations. Futures contracts are valued at closing market prices on the exchange 

on which the contracts are traded. Collective investment funds are valued based on the unit 

value established for each fund on the valuation date. 

The INTECH US Managed Volatility Fund, LLC is a 103-12 entity whose underlying assets 

are common stock. The investment is valued based upon the last reported sale price on the 

valuation date for investments which market quotations are readily available. 

The Loomis Core Plus Full Discretion Trust is a common collective trust. The portfolio 

securities listed on a securities exchange for which market quotations are readily available are 

valued at the last sales price or official closing price on each business day. Securities for 

which quotations are not readily available are valued at fair value as determined in good faith 

by Loomis Sayles Trust Company, LLC. 

The Invesco Real Estate II Fund is a real estate investment whose underlying assets are valued 

based upon subjective judgments. Real estate investments are valued on at least an annual basis 

and are appraised by an external third party every three years.
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

9 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

C. Valuation of Investments: – (Continued) 

The EB DV Global Alpha I Fund of the Bank of New York Mellon is a common collective 

trust whose underlying assets are primarily affiliated collective investment funds. These 

investments are generally valued at the net asset value as reported by the respective fund at 

each valuation date unless the Trustee determines that a significant difference exists between 

the transactional net asset value and the market value. 

The IFM Global Infrastructure Fund is a limited partnership whose underlying assets are 

valued based upon independent valuations prepared to estimate the fair value of investments 

on a quarterly basis. 

The Grosvenor Institutional Partners L.P. is a limited partnership. The investment is valued 

based upon an amount generally equal to the net asset value of the investment in the portfolio 

funds as determined by the investment fund’s general partner or investment manager. 

Generally, the net asset values of the investments in Portfolio Funds are determined whereby 

the Fund records the investment and subsequent subscriptions at acquisition cost and adjusts 

the value to reflect the Fund’s share of net investment income or loss and unrealized and 

realized gain or loss net of fees and performance-based compensation. 

Invesco Balanced-Risk Allocation Trust is a common collective trust investing primarily in 

U.S Treasury Securities and Short-Term Investments. Securities for which market quotations 

are not readily available or became unreliable are valued at fair value as determined in good 

faith by or under the supervision of the Trust’s officers following procedures approved by the 

Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and 

information providers and other market data may be reviewed in the course of making a good 

faith determination of a security’s fair value. 

The Parametric Clifton investments are overlay investments which are obtained via futures. 

These instruments are marked-to-market daily based on the daily settlement prices produced 

by the exchange. 

The JP Morgan IIF ERISA LP is an infrastructure investment fund with investments valued by 

independent appraisers on an annual basis. Asset valuations and the salient valuation-sensitive 

assumptions of each interest are reviewed by the Adviser and values are adjusted quarterly. 

The Panagora US Small Cap Core Fund is a 103-12 entity. The investments are valued based 

upon the basis of market valuations provided by independent pricing services. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

10 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

C. Valuation of Investments: – (Continued) 

The JP Morgan Special Situation Property Fund is a common collective whose underlying 

assets are primarily direct real estate properties. Properties are externally appraised generally 

on an annual basis, conducted by reputable, independent appraisal firms. Property valuations 

and the salient valuation-sensitive assumptions of each direct investment property are reviewed 

by the Trustee quarterly and values are adjusted if there has been a significant change in 

circumstances related to the investment property since the last valuation. 

The ASB Allegiance Real Estate Fund is a common collective primarily composed of real 

estate assets. The valuation of the real estate investments is based on real estate appraisals 

prepared externally by independent real estate appraisers, unless the real estate investment was 

acquired during the current quarter or is expected to be sold in the near term. If market data is 

not readily available, fair value is based upon other significant unobservable inputs, such as 

assumptions about the inputs market participants would use in valuing the investment. 

The WCM Focused Intl Growth Fund is a limited partnership whose underlying assets are 

valued based upon estimate fair value of investments on a recurring basis. 

The Brandes Intl S/C Equity Fund is a 103-12 entity, which uses the principal market, or 

market with the greatest volume and level of activity, in which its portfolio investment exist to 

determine the fair value of the investments. Fixed income securities are valued on the basis of 

quotes obtained from brokers and dealers or independent pricing services or sources. 

D. Uncertain Tax Positions: 

The Trust has adopted guidance on accounting for uncertainty in income taxes issued by the 

Financial Accounting Standards Board. The Plan management believes that the Trust has not 

taken uncertain tax positions that require adjustment to the financial statements as a tax 

liability. The Plan management believes it is no longer subject to income tax examinations for 

fiscal years prior to December 31, 2013. 

E. Concentration of Risk: 

The Trust maintains its cash balances at high credit quality financial institutions. Accounts at 

these institutions are insured by the Federal Deposit Insurance Corporation up to $250,000. At 

times, such cash balances may be in excess of the insurance limit. 

F. Reclassification: 

Certain prior year amounts may have been reclassified to conform to current year financial 

statement presentation. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

11 

NOTE 3 – FUNDING POLICY

A. General: 

The participating employers contribute such amounts as are specified in the collective bargaining 

agreements. The Trust’s actuary has advised that the minimum funding requires of ERISA were 

met as of December 31, 2015. 

B. Contributions: 

During the years ended December 31, 2016 and 2015, the Trust received contributions from 

employers in various contracted payment types and amounts. The principal types of 

contributions were received as follows: 

Hourly

January 1, 2015 - December 31, 2016 $0.05 - 9.95

C. Pension Protection Act of 2006: 

On March 31, 2009, the Trust’s actuary certified that the Trust was in critical status or in the 

“red zone” under the Pension Protection Act of 2006 (the “Act”) for the plan year beginning 

January 1, 2009. The Trust was initially certified in the “red zone” because the credit balance 

in the Funding Standard Account was projected to be depleted by 2011 at that point in time. 

On October 16, 2009 the Board of Trustees approved implementing the Trust’s Rehabilitation 

Plan (the “RP”) as required under the Act. The RP was originally effective November 25, 

2009, and was subsequently amended effective January 1, 2010. As required under the Act, a 

10% surcharge automatically applies to pension contributions on hours worked on or after 

January 1, 2010 and continues until the employer is subject to the RP. The RP applies to 

collective bargaining agreements expiring on or after November 25, 2009. Bargaining parties 

negotiate to adopt the RP and the Supplemental Employer Contribution Schedule as part of 

their new agreement. The Default Supplemental Employer Contribution Schedule 

automatically applies under the Act if the bargaining parties fail to adopt the RP within 180 

days after the CBA expires. Effective January 1, 2013, the Board of Trustees revised the 

Rehabilitation Plan to cap supplemental employer contributions at 80%. The Board has not 

changed the default schedule under the 2013 Rehabilitation Plan. The current rules regarding 

imposition of the default schedule continue to apply.

For the plan year beginning January 1, 2017, the Trust’s actuary has certified that the Trust is in 

critical and declining status. The Trust is projected to be insolvent by December 31, 2034. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

12 

NOTE 4 - PLAN TERMINATION 

The Board of Trustees has the right to discontinue or terminate the Trust in whole or in part. The 

rights of all affected participants to any benefit accrued to the date of the termination, partial 

termination or discontinuance will be governed by ERISA sections 404A and 4281 and the 

regulations there under. 

Certain benefits under the Plan are covered by the insurance protection of the Pension Benefit 

Guaranty Corporation (“PBGC”) if the Plan terminates. The PBGC does not guarantee all 

benefits under the Plan, and the amount of protection is subject to certain limitations. Whether 

participants receive the full amount of benefits to which they are entitled should the Plan 

terminate at some future time will depend on the sufficient of the Plan’s net assets on the date of 

payment to provide for accumulated benefit obligations and may also depend on the financial 

condition of the Plan and the level of benefits guaranteed by the PBGC. 

NOTE 5 - INVESTMENTS 

A. General: 

The investment assets of the Trust are held by U.S. Bank under the terms of a custodian 

agreement, effective April 22, 2016. Assets are invested in accordance with a program directed 

by the investment manager. 

The following information, included in the Trust’s financial statement as of December 31, 2016, 

was prepared by U.S. Bank and furnished to the Administrator. The information included in the 

Trust’s financial statements as of December 31, 2015, was prepared by the investment managers. 

2016 2015

Fair Value Fair Value 

Cash equivalents $ 2,800,372 $ 397 

Mutual funds 12,748,047 - 

Common collective funds 200,652,274 248,416,874

103-12 investment entities 48,644,555 39, 041,116

Limited partnerships 45,342,595 27, 326,331

Other:

Cash overlay 5,034,377 4, 762,789

Infrastructure investment fund 8,077,926 9, 957,177

Due from broker - 108,020

$ 323,300,146 $ 329,612,704
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

13 

NOTE 5 - INVESTMENTS – (Continued) 

B. Fair Value Measurements: 

The Trust has adopted the Fair Value Measurement Topic of the Financial Accounting 

Standards Board Accounting Standards Codification No. 820 (ASC 820). In accordance with 

ASC 820, fair value is defined as the price that the Trust would receive upon selling an 

investment in a timely transaction to an independent buyer in the principal or most 

advantageous market of the investment. As amended, ASC 820 permits entities to use Net 

Asset Value (NAV) as a practical expedient to measure fair value when the investment does 

not have a readily determinable fair value and the net asset value is calculated in a manner 

consistent with the investment company accounting. ASC 820 established a three-tier 

hierarchy to maximize the use of observable market data and minimize the use of unobservable 

inputs and to establish classification of fair value measurements for disclosure purposes. 

Inputs refer broadly to the assumptions that market participants would use in pricing the asset 

or liability, including assumptions about risk, for example, the risk inherent in a particular 

valuation technique used to measure fair value including such a pricing model and/or the risk 

inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. 

Observable inputs are inputs that reflect the assumptions market participants would use in 

pricing the asset of liability developed based on market data obtained from sources 

independent of the reporting entity. Unobservable inputs are assets that reflect the reporting 

entity’s own assumptions about the assumptions market participants would use in pricing the 

asset or liability developed based on the best information available in the circumstances. 

The three-tier hierarchy of inputs is summarized in the three broad Levels listed below. 

 Level 1 – quoted prices in active markets for identical investments 

 Level 2 – other significant observable inputs (including quoted prices for 

similar investments, interest rates, prepayment speeds, credit risk, etc.) 

 Level 3 – significant unobservable inputs (including the Trust’s own 

assumptions in determining the fair value of investments) 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

14 

NOTE 5 - INVESTMENTS – (Continued) 

B. Fair Value Measurements: - (Continued) 

The following is a summary of the inputs used as of December 31, 2016 in valuing the Trust’s 

investments carried at value: 

Level Level Level Total 

1 2 3 2016

Cash equivalents $ $ - 2,800,372 $ - $ 2, 800,372

Mutual fund 12,748,047 - - 12, 748,047

Total assets in the fair value hierarchy $ $ - 15,548,419 $ - $ 15, 548,419

Investments measured at net asset value (*) $ 307,751,727 

 Total $ 323,300,146 

(*) In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not be

 classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair va

 hierarchy to the line items presented in the statement of net assets available for benefits.

The following is a summary of the inputs used as of December 31, 2015 in valuing the Trust’s 

investments carried at value: 

Level Level Level Total 

1 2 3 2015

Due from broker $ $ - 108,020 $ - $ 108,020

Total assets in the fair value hierarchy $ $ - 108,020 $ - $ 108,020

Investments measured at net asset value (*) $ 329,504,684 

 Total $ 329,612,704 

(*) In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not be

 classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair va

 hierarchy to the line items presented in the statement of net assets available for benefits.
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

15 

NOTE 5 - INVESTMENTS – (Continued) 

B. Fair Value Measurements: - (Continued) 

At December 31, 2016, unfunded commitments and redemption rules of those investments are 

as follows: 

Fair Unfunded Redemption Redemption 

Value Commitment Frequency Notice 

Loomis Sayles 71,532,207 - Daily 3 Days 

BlackRock Index Non-Lending 41,524,516 - Daily Daily

Invesco Balanced Risk 27,550,269 - Daily Daily 

ASB Allegiance Real Estate Fund 31,710,310 - Quarterly 60 Days 

Intech US Managed Volitility 25,837,269 - Daily 1 Day 

EB DV Dynamic Growth 16,226,952 - Daily Daily

Grosvenor Institutional Partners 16,641,558 - Quarterly 70 Days 

Panagora US Small Cap Core Fund - 16,589,936 Bi-monthly 2 Days

JP Morgan Special Situation 12,108,019 - Quarterly 45 Days 

JP Morgan ERISA II 8,077,926 - March 31 or Sept. 30 45 Days 

IFM Global Infrastructure 9,172,162 - Quarterly 90 Days

Clifton Group Cash Overlay 5,034,377 - n/a n/a

Invesco Real Estate Fund II 35,796 959,600 n/a n/a

WCM Focused Intl Growth Fund 19,493,080 - Monthly 5 Days 

Brandes Intl S/C Equity Fund 6,217,350 - Monthly 30 Days 

 959,600 307,751,727 

December 31, 2016
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

16 

NOTE 5 - INVESTMENTS – (Continued) 

B. Fair Value Measurements: - (Continued) 

At December 31, 2015, unfunded commitments and redemption rules of those investments are 

as follows:

Fair Unfunded Redemption Redemption 

Value Commitment Frequency Notice 

Loomis Sayles 66,340,052 - Daily 3 days

BlackRock Index Non-Lending 40,635,472 - Daily Daily

Invesco Balanced Risk 38,529,318 - Daily Daily

BlackRock MSCI ACWI Ex-US 37,293,673 - Daily Daily

ASB Allegiance Real Estate Fund 30,338,966 - Quarterly 60 Days

Intech US Managed Volitility 24,439,431 - Daily 1 Day

EB DV Dynamic Growth 24,151,809 - Daily 2 Days

Grosvenor Institutional Partners 16,283,417 - Quarterly 70 Days

Panagora US Small Cap Core Fund 14,601,685 - Bi-monthly 2 Days

JP Morgan Special Situation 11,127,980 - March 31 or Sep. 30 45 Days

JP Morgan ERISA II 9,957,177 - Quarterly Written Notice

IFM Global Infrastructure 8,887,246 - Daily Written Notice

Clifton Group Cash Overlay 4,762,789 - n/a n/a

Invesco Real Estate Fund II 2,155,669 959,600 n/a n/a

 959,600 329,504,684 

December 31, 2015

Grosvenor Institutional Partners, L.P. invests in Portfolio Funds which generally implement 

“non-traditional” or “alternative” investment strategies. 

JP Morgan IIF ERISA is an infrastructure investment fund whose strategy is to focus on 

core/core-plus infrastructure assets that offer stable yield and inflation-linked return 

characteristics through an open-ended investment vehicle that is diversified both 

geographically and by sub-sector. The fund seeks to avoid competitive trophy auction 

processes, instead investing in middle-market opportunities with a target investment size of 

$200-500 million equity each. 

IFM Global Infrastructure (US), L.P. seeks to acquire and maintain a diversified portfolio of 

global infrastructure investments (in the target sub-sectors with varied maturities) that returns 

10% per annum (net of advisory fees, any performance fee, allocable expenses and investmentlevel taxes) over a rolling three year period. 

Invesco Real Estate Fund II seeks to provide returns based on investment in portfolio 

companies, portfolio investments, and real estate assets. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

17 

NOTE 5 – INVESTMENTS - (Continued) 

B. Fair Value Measurements: – (Continued) 

WCM Focused International Growth Fund invests in quality growth exchange traded securities 

from around the world, with high ROE, high ROIC and a good valuation. 

NOTE 6 – ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS 

Accumulated plan benefits are those future periodic payments that are attributable, under the 

Fund's provisions, to the service participants have rendered. Accumulated plan benefits include 

benefits expected to be paid to: (a) retired or terminated participants or their beneficiaries, (b) 

beneficiaries of participants who have died, and (c) present participants or their beneficiaries. 

The actuarial present value of accumulated benefits 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 reductions 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 performed by the actuary 

at January 1, 2016, the most recent valuation, were (a) life expectancy of participants (the RP2000 Mortality Table was used) (b) retirement age assumptions (age 65 and 5 years of service) 

and (c) investment return (assumed at 7.25% per annum). 

The computations of the actuary present value of accumulated plan benefits were made as of 

January 1, 2016. Had the valuation been performed on December 31, 2015 there would be no 

material differences. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

18 

NOTE 6 – ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS –

(Continued) 

The actuarial present value of accumulated plan benefits, at January 1, 2016 and the changes in 

accumulated plan benefits for the year then ended, as developed by the Fund's actuary, follows: 

2016

Actuarial present value of accumulated

plan benefits:

Vested benefits in a payment status $ 354,476,819 

Other participants' vested benefits 179,801,794 

Total vested benefits 534,278,613 

Nonvested benefits 582,342 

Total year end actuarial present valu $ 534,860,955 

2016

Actuarial present value of accumulated

plan benefits at beginning of plan year $ 537,887,774 

Increase/(decrease) during year due to:

Benefits accumulated (1, 562,274)

Increase for interest 37,581,446 

Benefits paid (39,045,991) 

Net increase (3,026,819) 

Actuarial present value of accumulated

plan benefits at end of plan year $ 534,860,955 

STATEMENTS OF ACCUMULATED PLAN BENEFITS

(as of January 1, 2016)

STATEMENTS OF CHANGE IN ACCUMULATED PLAN BENEFITS

(as of January 1, 2016)
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

19 

NOTE 7 – EMPLOYER WITHDRAWAL LIABILITY

The Multi-Employer Pension Plan Amendments Act of 1980, as amended by the Deficit 

Reduction Act of 1984 imposes a liability on employers that withdraw from the Trust. The 

amount due to the Trust from a withdrawn employer is based on the history of contributions to 

the Trust and the related unfunded vested benefits. 

As of year-end, the Trust is in withdrawal liability status. There have been employers that 

have withdrawn from this Trust during the withdrawal liability period. They are now required 

to contribute to the Trust to reduce their withdrawal liability. The present value for future 

stream of payments from those employers at December 31, 2016 and 2015 is $46,517,678 and 

$46,902,470, respectively. Due to the uncertainty of the going concern of the employers over 

an extended period of time, complete payment and timing of payment, this receivable has been 

fully reserved. 

NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS 

Derivatives are financial instruments whose values are derived from an underlying entity, such 

as other financial instruments or market indices. Derivatives that may be utilized by the Trust 

include Exchange Traded Funds, exchange traded index options, options on futures, 

commodity and commodity index futures, international and domestic equity index futures, 

domestic and foreign fixed income futures, and currency futures. Financial futures, one of the 

most common types of derivative instruments, are agreements to buy or sell a quantity of a 

financial instrument, index, or currency at a predetermined future date and rate or price. All 

changes in the value of open futures positions are settled on a daily basis through what is 

known as the margin variation process. An option is an agreement that conveys to the 

purchaser the right, but not the obligation, to buy or sell quantity of a particular financial 

instrument, index or currency at a predetermined rate or price during a period or a time in the 

future. 

Objectives - The Trust has exposure to derivatives as part of a cash overlay program, which 

constitutes approximately 1.56% and 1.44% of the Western States Office & Professional 

Employees Pension Fund investment portfolio for the year ended December 31, 2016 and 

2015 respectively. The futures contracts are used to efficiently gain long exposure to specified 

capital markets indices in the aggregate amount of the cash in the portfolio. Additionally, 

short positions in futures contracts may be utilized to reduce exposure to specific capital 

markets indices as part of the futures-based rebalancing program. The fund also uses 

derivatives to gain long exposure to the Russell 2000 Index for their small cap equity 

exposure. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

20 

NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS – (Continued) 

Information Risk - The overlay manager will maintain index market exposures based on 

designated asset values provided by third parties. The overlay manager cannot verify these 

values but will rely on this information as being reflective of true fund values. If actual fund 

values are different from the values provided by such third parties, losses may result from over 

or under exposure to the desired index. This is a general risk associated with overlay 

programs. 

Futures – The use of futures entails risks. These risks include: 

 Market Risk – The potential that the market moves in a manner adverse to the 

futures position causing a mark-to-market loss of capital. 

 Liquidity Risk – To the extent the futures position generates a loss in excess of 

margin available, the fund will require liquid assets to satisfy any outstanding 

commitments or may experience liquidation of positions. 

 Collateral Risk – The fund may experience losses on the underlying designated 

assets in addition to potential losses on the index market exposure overlaying 

these assets.

NOTE 9 – RISKS AND UNCERTAINTIES 

The Trust 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 

amounts reported in the statements of net assets available for benefits. 
WESTERN STATES OFFICE & PROFESSIONAL 

EMPLOYEES PENSION FUND 

NOTES TO THE FINANCIAL STATEMENTS - (Continued) 

21 

NOTE 10 - COMMITMENTS 

In the course of investing, the Trust has committed assets to invest with a new manager. 

Below is a list of the total commitment as well as how much the investment manager has 

drawn down on that commitment as of years ended December 31, 2016 and 2015 respectively: 

Investment Manager 

Invesco Real Estate Fund II $ 12,000,000 $ 11,040,400 $ 959,600 

Total 

Commitment 

Drawn 

to Date 

Remaining 

Commitment

December 31, 2016

Investment Manager 

Invesco Real Estate Fund II $ 12,000,000 $ 11,040,400 $ 959,600 

December 31, 2015

Total 

Commitment 

Drawn 

to Date 

Remaining 

Commitment

NOTE 11 – SUBSEQUENT EVENTS 

Management has evaluated subsequent events through the date on which the financial 

statements were available to be issued. This date is approximately the same as the independent 

auditor’s report date. Management has concluded that no material subsequent events have 

occurred since December 31, 2016 that required recognition or disclosure in the financial 

statements.
Attached

Asset

Statement

Cost Fair Value Page #

 307,572,330 242,301,886 5

 16,226,952 14,517,398 6

 n/a (499,136)

Investments per Financial Statements 256,819,284 323,300,146 

Western States Office and Professional Employees Pension Fund

EIN: 94-6076144, Plan No. 001

Schedule H, line 4i - Summary Schedule of Assets (Held at End of Year) as of 

December 31, 2016

Account #

US Bank

Identity of Financial 

Institution

BNY Mellon

19-517619

MAOF0563542

Fair Value Adjustment