354

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(4) Fair Value Measurements (Continued)

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

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize the use of unobservable inputs,

The following is a description of the valuation methodologies used for assets measured at fair value.
There have been no changes in the methodologies used at May 31, 2017 and 2016.

Common stocks: Valued at the closing price reported on the active market on which the individual
securities are traded and are classified as Level 1 of the fair value hierarchy.

Preferred Stocks: Preferred Stocks are valued based on yields currently available on comparable
securities of issuers with similar credit ratings.

Corporate Debt Instruments: Valued using pricing models maximizing the use of observable inputs for
similar securities, This includes basing value on yields currently available on comparable securities of
issuers with similar credit ratings.

Registered Investment Companies: Valued at the daily closing price as reported by the fund. Registered
investment companies held by the Plan are open-end funds that are registered with the Securities and
Exchange Commission, These funds are required to publish their daily NAV and to transact at that
price, The registered investment companies held by the Plan are deemed to be actively traded.

Common Collective Trusts and 103-12 Investment Entities: Valued at the net asset value (NAV) of units
of a bank collective trust, The NAV, as provided by the trustee, is used as a practical expedient to
estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund
less its liabilities. The practical expedient is not used. when it is determined to be probable that the find
will sell the investment for an amount different than the reported NAV.

Partnership/Joint Venture Interests: Valued based on the Plan's ownership percentage and the net asset
value (NAV) of the partnerships’ investments. The NAV, as provided by the trustee, is used as a
practical expedient to estimate fair value. The NAV is based on the fair value of the underlying
investments held by the fund less its liabilities. The practical expedient is not used when it is determined
to be probable that the find will sell the investment for an amount different than the reported NAV.

U.S. Government Securities: U.S. Government securities classified as Level 1 are valued based upon
quoted market prices reported on the active market on which they are traded. U.S. government securities
classified as Level 2 are valued using pricing models maximizing the use of observable inputs for similar
securities.

18

eos

oak


375

PENSION FUND OF THE WELFARK AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN #13-6043977
PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

(a) (b) (s) (d) ©
Identity of Issue, Description of Investment,
Borrower, Including Maturity Date,
Lessor, or Rate of Interest, Collateral Current
Similar Party Par or Maturity Value Cast Value
Total U.S, Government Securities - Forwarded $9,550,442 $ 9,720,585
Total Corporate Bonds - Forwarded 6,331,509 6.464,846
Total Preferred Stock - Forwarded 925,066 ____ 947,687
Common Stock (Continued):

Totals - Forwarded 46,513,190 58,211,433
Exxon Mobil Corp 7,640 633,575 615,020
Fastenal Co 15,200 614,170 656,184
Foot Locker Inc 5,400 391,191 320,814
General Electric Co 8,765 230,413 239,986
Halliburton Co 7,030 352,184 317,686
Hershey Co/The 3,780 410,792 435,721
Hewlett Packard Enterprise Co 16,690 272,199 313,939
Hill-Rom Holdings Ine 2,650 172,605 205,004
Home Depot Inc/The 1,700 156,084 260,967
Huntington Bancshares Inc/Oh 36,920 477,994 462,977
Intel Corp 9,265 298,120 334,559
JPMorgan Chase & Co 15,295 716,166 1,256,484
Johnson & Johnson 3,640 278,822 466,830
Kroger Co/The 9,210 278,254 274,274
Eli Lilly & Co 4,580 336,094 364,431
MasterCard Inc 8,150 173,302 1,001,472
Maximus Inc 16,000 958,150 993,280
MetLife Inc 4,695 207,473 237,520
Microsoft Corp 7,525 353,952 525,546
Middleby Corp/The 7,100 644,915 911,356
Morgan Stanley 7,730 337,396 322,650
Northrop Grumman Corp 2,150 298,064 $37,323
Novo Nordisk A/S 18,000 192,151 762,660
Nucor Corp 6,990 426,354 406,119
Oracle Corp 13,850 615,076 628,652
PVH Corp 3,360 376,647 355,992
Parker-Hannifin Corp 3,800 541,529 598,386
PepsiCo Inc 7,000 441,486 818,090
PepsiCo Inc 4,890 460,516 $71,494
Totals - Forward $ 58,158,864 $ 73,426,849

See Independent Auditors’ Report.

39



371

PENSION FUND.OF THE WELFARE-AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701
EIN #13-6043977
PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

(a) (b) ) (d) ©)
Identity of Issue, Peseription of Investment,
Borrower, Including Maturity Date.
Lessor, or Rate of Interest, Collateral Current
Similar Party Par or Maturity Value Cost Value
Total U.S. Government Securities - Forwarded $ 9.550442 $§ 9,720,585
Corporate Bonds: (Continued):
Totals - Forwarded 5,436,748 5,556,269
Toyota Motor Credit Corp 75,000 75,000 75,342
Transalta Corp 55,000 54,956 55,000
21st Century Fox America Inc 3,000 3,911 3,770
21st Century Fox America Inc 26,000 30,092 31,824
Union Pacific Corp 30,000 32,340 32,619
Us Bancorp 27,000 27,106 26,965
United Technologies Corp 28,000 30,095 30.453
Verizon Communications Inc 16,000. 15,231 15,764
Verizon Commumications Inc 32,000 33,559 31,806
Verizon Communications Inc 5,000 4,985 5,101
Voya Financial Inc. 35,000 34,925 35,365.
Voya Financial Inc 11,000 10,845 11,440
Wamu Mortgage Pass-Throu Ar8.A 64,139 64,929 65,351
WFRBS Commercial Mortgag C9.A3 65,000 66,622 66,225
Wal-Mart Stores Ine 60,000 57,895 61,000.
Walgreens Boots Alliance Inc 20,000 19,945 20,236
Wells Fargo & Co 140,000 104,748 106,847
Williams Partners LP 20,000 21,104 23,638
Williams Partners LP 33,000 31,502 33,498
Wee Energy Group Inc §,000 4,999. 5,196
World Financial Network Cr BA 80,000 79,987 81,209
World Omni Automobile Lea A-A3 40,000 39,995 39,852
World Omni Auto Receiyabl A A3 50,000 49,990 _ 50.076
Total Corporate Bonds + Forward 6.331.509 6,464,846
Preferred Stock:

BNSF Funding Trust I 25,000 Var 12/15/55 23,750 28,563
Bank of New York Mellon Corp/T 24,000 Var 12/29/49 23,541 23,880
Chubb Corp/The 63,000 Var 03/29/67 62,393 62,685
Nextera Energy Capital Holding 19,000 Var 09/01/67 19,310 19,291
First Maryland Capital } 30,000 Var 01/15/27 26,738 28,200
Totals - Forward $ 155,732 $ 162,619

See Independent Auditors’ Report.

35



348

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(3) Accumulated Plan Benefits (Continued)

Marriage - 80% of participants are assumed to be married, Husbands are assumed to be three years older
WIVES.

Form of Payment - Participants are assumed to elect the normal form for married and single participants.

Pro-rata Pensions - 25% of the accrued benefit liability for inactive participants without vested rights in
the database are included in the Actuarial Accrued Liability to estimate the emerging liability for pro-rata
pensions commencing in the future,

Cost Method - The Entry Age Normal Cost Method is employed in the June 1, 2016 valuation. Under
this method, the normal cost is the annual level dollar contribution that would have been required from
the age of plan entry in order to fund the participant's retirement, termination and ancillary benefits if the
current plan provisions had always been in effect. The actuarial accrued liability is the present value of
all future benefits for inactive participants and is the excess of the present value of all future benefits
over the present value of future normal costs for active participants. The present value of all future
benefits is determined by discounting to the valuation date, the total future expected cash flow from the
plan using the aforementioned actuarial assumptions. The present value of future normal costs is
determined by discounting to the valuation date, all of the normal costs anticipated to result from future
valuations using the aforementioned actuarial assumptions. The normal cost and actuarial accrued
liability for the entire plan are the sums of the individually computed normal costs and actuarial accrued
liabilities for all current plan participants.

Asset Method - The Five-Year Weighted Average of Asset Gains/Losses Method is used in the June 1,
2015 valuation. The actuarial value of assets is determined by adjusting the market value of assets to
reflect the asset gains and losses (the difference between expected investment return and actual
investment retum) during each of the previous five years at the rate of 20% per year (10% per year for
ten years for the 2008 net investment loss). The actuarial value is subject to a restriction that it not be
less than 80% or more than 120% of market value.

Changes in Assumptions and Methods
There were no changes in the actuarial assumptions or methods since the last actuarial valuation.

The foregoing actuarial assumptions are based on the presumption that the Plan will continue. In the
event the Plan was to terminate, different actuarial assumptions and other factors might be applicable in
determining the actuarial present value of accumulated plan benefits.

{4) Investments
‘The Plan's investments are held in custody by a bank and are managed by an advisor, operating under an
investment advisory agreement, During the years ended May 31, 2017 and 2016, the Plan's investments

(including investments bought, sold and held during the years) appreciated (depreciated) in fair value by
$26,033,150 and (17,431,492), respectively.

12



358

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(14) Fair Value Measurements (Continued)
EB DV Large Cap Stock Index Fund:

EB DV Large Cap Stock Index Fund of The Bank of New York Mellon (the "Fund") is authorized by

The Bank of New York Mellon Employee Benefit Collective Investment Fund Plan (the "Plan”). The

Bank of New York Mellon (the "Trustee”) serves as the Trustee, Investment Manager, Custodian, and

Transfer Agent of the Fund. As Trustee of the Fund, The Bank of New York Mellon is a fiduciary with

regard to the Fund. The Fund is operated in accordance with Section 9.18 of Regulation 9 issued by the

Ottice of the Comptroller of the Currency and by other applicable laws and regulations as defined by the
an,

The objective of the Fund is to track the performance of the Russell 1000® Index. In meeting this
objective, the assets of the Fund may be invested in securities and a combination of other collective
funds (each an affiliate of the Fund and collectively referred herein as the "Collective Investment
Funds”) that together are designed to track the performance of the Russell 1000® Index. The Fund may
also invest in the EB Temporary Investment Fund, an affiliate of the Fund. Financial futures may be used
to obtain exposure, to provide liquidity for cash flows, to hedge dividend accruals or for other purposes
that facilitate meeting the Fund's objective. Financial futures may be used up to 5% of the value of the
Fund, Cash investments or assets used as collateral underlying the derivatives positions may be
comprised of other collective funds and short to medium-term debt of investment grade that may include,
without limitation, Treasury bills and notes, corporate obligations, commercial paper (including paper
issued or resold under Section 3(a)(3), Section 4(2) and Rule 144A of the Securities Act of 1933),
repurchase agreements, and obligations of government sponsored enterprises,

The Trustee may from time to time, in its sole discretion, lend any, or all, of the securities held in the
Fund, upon such terms and conditions as are deemed necessary and appropriate, to brokers, dealers or
banks upon such terms and secured in such manner as may be advisable and may permit the loaned
securities to be transferred into the name of the borrower, or others, and may permit the borrower to
exercise such rights of ownership over the loaned securities as may be required under the terms of any
such loan; provided that, any loans made from the Fund shall be made in conformity with such laws or
regulations governing such lending activities which may have been. promulgated by any appropriate
regulatory body at the time of such loan. To the extent that.a loan of securities is secured by cash
collateral, such collateral shall be invested in the EB MCM Securities Lending Temporary Investment
Fund, an affiliate of the Fund, or its successor or assignee.

Participants may purchase or redeem units of the Fund for cash or securities (in-kind transactions at the
sole discretion of the Trustee) based on the unit value determined as of the valuation date, Unit value is
generally determined on adaily basis. All participants have a proportionate undivided interest in the net
assets of the Fund. The Fund's policy is to not make any distributions to its participants. At May 31,
2017, there were no unfunded commitments due from the Plan. The fair market value of the Plan's
investments in the Fund at May 31, 2017 was $6,008,560.

Crescent Capital High Income Fund B, L.P.

Crescent Capital High Income Fund B, L.P. (the "Crescent Fund") is an open-end Delaware Limited
Partnership formed on July 1, 2012 for the purpose of seeking to provide high current income consistent
with reasonable risk as determined by Crescent Capital Group LP, a Delaware limited parinership as the
Investment Manager, through investment in a multi-asset class, diversified portfolio of primarily below
investment grade debt securities. The Fund's secondary objective is to seek capital appreciation
consistent with its primary objective,

22



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EEN #13-6043977
PLAN NO. 001 ~ PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

376

(a) _(b) () (a)
Identity of Issue, Description of Investment,
Borrower, Including Maturity Date,
Lessor, or Rate of Interest, Collateral
Similar Party Pat or Maturity Value Cost
Total U.S. Government Securities - Forwarded 9 42
Total Corporate Bonds - Forwarded 6,331,509
Total Preferred Stock - Forwarded 925.066
Common Stock (Continued):
Totals - Forwarded 58,158,864
Pfizer Inc 19,144 561,730
Phillips 66 13,800 715,537
Priceline Group Ine/The 850. $08,562
Procter & Gamble Co/The 5,520 429,948
Prologis Inc 7,790 381,794
Public Service Enterprise Grou 12,310 $32,049
Pultegroup Inc 17,850 356,614
Qualcomm Inc 7,850: 475,340
Quanta Services Inc 10,340 380,892
Raytheon Co 1,740 152,747
Sherwin-Williams Co/The 3,600 933,432
Stanley Black & Decker Inc 3,370 412,495
Starbucks Corp 21,000 766,274
State Street Corp 6,940 427,335
SunTrust Banks Inc 14,630 468,329
TIX Cos Inc/The 16,100 803,100
Thermo Fisher Scientific Inc 8,200 525,334
Tyson Foods Ine 6,250 391,777
Union Pacifie Corp 8,620 859,508
United Technologies Corp 6,600 406,969
UnitedHealth Group Inc 2,440 348,188
Valero Energy Corp $5,070 335,939
Visa Ine 10,200 229,201
Walgreens Boots Alliance Inc $8,900. 732,889
Waste Management Inc 6,830 369,475
Wells Fargo & Co 17,800 615,216
Wells Fargo & Co 9,920 421,878
Westrock Co 9,200 381,284
Xcel Energy Inc 10,060 420,029
Totals - Forward 3 72,502,729

See Independent Auditors’ Report.

40

6.464.846

947,687

73,426,849

625,052
1,050,318
1,593,527

486,257

432,657

552,842

404,660

449,570

317,024

285,377
1,194,372

463,347
1,335,810

365,332

620,693
1,210,881
1,416,878

358,375

950,786

800,448

427,439

311,653

971,346

721,078

497,975

910,292

507,309

391,824

481.975

$ 93,764,446



339

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Statements of Net Assets Available for Benefits

Assets:

Investments at Fair Value:
Common Collective Trusts
Common Stock
Preferred Stock
U.S. Government Securities
Corporate Debt Instruments
Registered Investment Companies
Partnership/Joint Venture Interests

Total Investments Held

Investments on Loan Under Securities Lending Agreement:
U.S. Government Securities
Corporate and Other Bonds
Equities

Total Investments on Loan
Total Investmenis at Fair Value

Reecivables:
Employers' Contributions
Withdrawal Liability
Accrued Interest and Dividends
Due from Broker for Securities Sald

Total Receivables

Other Assets:
Cash
Securities Lending Collateral
Property and Equipment, Net
Prepaid Expenses

Total Other Assets
Total Assets
Liabilities:
Accrued Expenses
Deposits
Due to Broker for Securities Purchased
Due to Affiliated Funds, Net
Obligation to Refund Collateral
Total Liabilities
Net Assets Available for Benefits

See Accompanying Notes to Financial Statements.

Mav 31,
2017 2016

$ 33,273,707: $ 44,543,037
98,349,342 93,643,188
947,687 894,511
9,720,585 6,452,972
6,464,846 6,110,856
32,984,646 38,077,226
$2,679,087 35,872,780

234.419.900 __ 225,594,870

2,454,117
~ 498,326
_ - 5,758,863

8,711,306

234,419,900 __ 234,305,876

409,026 545,352
235,857 256,190
351,894 374,524

1,150,816 2.238.049

2,147,593 3.414.115

3,503,879 3,562,552
-- 9,139,485
1,504,145 1,501,837
62.085 58.481

5,070,109 14,262,355
241,637,602 _ 251,982

352,956 342,206
6,989 6,587
3,472,277 3,978,582
12,729 16,803

“ 9.139.485
3.844.951 13,483,663

$237,792.65] §238,498.683

ew


369

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN #13-6043977
PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

(a) (b) (©) (a) ©)
Identity of Issue, Description of Investment
orrower, Including Maturity Date,
Lessor, or Rate of Interest, Collateral Current
Similar Party Par or Maturity Value Cost Value
Total U.S. Government Securities - Forwarded $ 9,550,442 $ 9,720,585
Corporate Bonds: (Continued):

Totals - Forwarded 2,960,784 3,006,603
Ford Credit Auto Owner Tr A A3 37,000 36,999 36,956
Forest Laboratories LLC 144A. 16,000 16,809 16,549
Wells Fargo Dealer Floorp! 1 A 60,000 59,686 60,114
GE Capital International Fundi 40,000 40,309 40,409
GS Mortgage Securities Gel3 AS 45,000 46,253 48,884
GM Financial Automobile L 3 A3 12,000 12,000 12,000
GM Financial Automobile 1 A2a 25,000 24,997 25,031
HSBC Holdings Ple 65,000 66,746 67,582
Home Depot Inc/The 31,000 31,529 31,637
Honda Auto Receivables 20 3 A3 49,836 49,835 49,812
Huntington Bancshares Inc/Oh 90,000 90,706 103,487
Hyundai Auto Receivables A A2a 50,000 50,000 30,017
JPMorgan Chase & Co 195,000 196,695 199,957
JP Morgan Chase Commerci C8 A3 70,000 72,182 71,347
JP Morgan Chase Commere Le9 AS 100,000 102,500 101,376
JPMBB Commercial Mortga C14 A4 30,000 30,900 32,390
JPMBB Commercial Mortga C26 A4 75,000 75,598 77,870
John Deere Owner Trust 20 B A3 20,000 19,998 19,915
Johnson & Johnson 28,000 27,926 27,824
Kansas City Southern 23,000 23,896 24,590
Kinder Morgan Energy Partners 20,000 22,105 23,319
Kroger Co/The 30,000 31,705 40,917
LB Commercial Mortgage T C3 Am 45,000 50,395 45,014
Lincoln National Corp 22,000 22,334 24,914
Lockheed Martin Corp 45,000 48,446 50,210
Loews Corp 76,000 T7097 79,479
Lowe's Cos Inc 16,000 15,839 17,109
Lyondellbasell Industries Nv 26,000 24,410 25,478
Macy's Retail Holdings Inc 13,000 10,019. 9,960
McDonald's Corp 9,000 8,967 9,963
Medtronic Inc 55,000 55,862 57,166
Mercedes-Benz Auto Receiv 1 A3 $5,000 54,993 54,722
MetLife Inc 50,000 50,175 54,848
Totals - Forward $ 4,508,695 $ 4,597,449

See Independent Auditors’ Report.

33



355

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL.NO, 701

Notes to Financial Statements

(14) Fair Value Measurements (Continued)

The preceding methods described may produce a fair value calculation that may not be indicative ofnet
realizable value or reflective of future fair values., Furthermore, although the Plan believes its valuation
methods are appropriate and consistent with other market participants, the use of different methodologies
or assumptions to determine the fair yalue of certain financial instruments could result in a different fair
value measurement at the reporting date.

The following tables sets forth by Jevel, within the fair value hierarchy, the Plan's assets at fair value as

of May 31, 2017 and 2016:
Assets at Fair Value as of May 17
Level] Level? Level 3 Total
Common Stocks $ 98,349,342 °$ ~ $ ++ § 98,349,342
Preferred Stocks ae 947,687 a 947,687
U.S. Government Securities 3,708,199 6,012,386 ~ 9,720,585
Corporate Debt Instruments ~ 6,464,846 - 6,464,846
Registered Investment Companies 32,984,646 ss = _32.984.646
‘Total Assets in the Pair Value Hierarchy $135,042,187 $.13.424,919 $. = 148,467,106
Investments Measured at Net Asset Value __85,952,794
Total Investments $135,042.187 $.13,424.919 g__ s+ $234,419,900
Assets at Fair Valuie-ag of May 31, 2016
Level t Level 2 Level 3 Total
Comimon Stocks $93,643,188 $ ~~ § ~ $ 93,643,188
Preferred Stocks co 894,511 ” 894,511
U.S, Government Securities TA,T78 5,741,194 ~ 6,452,972
Corporate Debt Instruments o 6,110,856 ol 6,110,856
Registered Investinent Companies 38.077.226 = on 38,077,226
Total Assets inthe Fair Value Hierarchy $132,432,192 $32,746,561 Qusccmuseetz 145,178,753
{investments Measured at Net Asset Value 80.415.817
Total Investments $132.432,192 $12,746,561. $. =; $225,594,570

Assets at Fair Value as of May 31, 2016
evel T Level 2 Level3 Total

Assets Held. in Securities Lending Program;

Common Stock $ 5,758,863 $ - $ ~- $ 5,758,863

1,8. Government Securities 2,454,117 ~ ~ 2,454,117
Corporate Debt Instruments ore 498.326 = 498.326
Total Investments $8,212,980 498.326 § = $8,711,306

19



361

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(16) Retirement Plans (Continued)

‘The Plan's participation in the multiemployer plan for the annual periods ending May 31, 2017 and May
31, 2016 is outlined in the table below. The "EIN/Pension Plan Number" column provides the employer
identification number (EIN) and the three-digit. plan nuniber. The zone status is based on information
that the Plan received from the plan and is certified by the plan's actuary, The "FIP/RP" Status" column
indicates whether a funding improvement plan (FIP) ora rehabilitation plan (RP) is either pending or has
been implemented. ‘The Plan's participation agreement with the plan does not have an expiration date.
There have been no significant changes that affect the comparability of 2017 and 2016 contributions.

EIRP a
Pension Protection Status Contributions Collective
EIN/Pension Zone. Pending? oftheLocal Surcharge Bargaining
Pension Fund Plan Number 2017 "2016 Implemented 20/7 2016 Imposed Agreement

Local 701 Pension Fund 13-6043977/001 Yellow Green N/A $37,557. $37,195 No N/A

The Local 701 Pension Fund'was certified as Endangered Status (Yellow) as of June 1, 2016. The
contributions represent the Plan's allocated share-of the total contributions made on behalf of its

employees,

Subsequent to May 31, 2017, the Plan's actuary has certified that the Pension Plan is in "Critical and
Declining Status" (a Red Zone category) as.of June 1, 2017 as per MEPRA. The certification indicated
that the Pension Plan is projected to become. insolvent in the current or next 19 years.

Other Multiemployer Plans - The Plan also contributes to amultiemployer plan that provides health and
welfare benefits, including post-retirement health and. welfare benefits. The Plan's allocated share of
contributions to this other nvultiemployer plan for the years ended May 31, 2017 and 2016 amounted to
$33,705 and $33,059, respectively,

25



357

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(14) Fair Value Measurements (Continued)

EB DV Non-SL Small Cap Stock Index Fund:

The EB DV Non-SL Small Cap Stock Index Fund ("SIF-1") is authorized by the Bank of New York
Mellon Employee Benefit Collective Investment Fund Plan (the "Plan"). The Bank of New York Mellon
(the Trustee") serves as the Trustee, Investment Manager, Custodian, and Transfer Agent of the Fund,
The objective of the SIF-1 is to track the performance of the Russell 2000 Index. In meeting this
objective, the assets of the Fund may be invested in securities and a combination of other collective
funds (each an affiliate of the Fund and collectively referred herein as the "EB Collective Investment
Funds") that together are designed to track the performance of the Russell 2000 Index, The SIF-] may
also invest in the EB Temporary Investment Fund, an affiliate of the Fund. The SIF-1 indirectly bears its
proportionate share of expenses paid by the underlying funds in which it may invest, if any. Financial
futures may be used to obtain exposure, to provide liquidity for cash flows, to hedge dividend accruals or
for other purposes that facilitate meeting the SIF-1 objective. Cash investments or assets used as
collateral underlying the derivatives positions may be comprised of other collective funds and short to
medium-term debt of investment grade that may include, without limitation, Treasury bills and notes,
corporate obligations, commercial paper, repurchase agreements, and obligations of government
sponsored enterprises,

Participants may purchase or redeem units of the Fund for cash or securities (in-kind transactions at the
sole discretion of the Trustee) based on the unit value determined as of the valuation date. Unit value is
generally determined each business day of the year. All participants have a proportionate undivided
interest in the net assets of the Fund. The SIF-I‘s policy is to not make any distributions to its
participants. At May 31, 2017, there were no unfunded commitments due from the Plan. The fair market
value of the Plan's investment in the SIF-1 at May 31, 2017 was $8,907,574.

EB DV Non-SLE International Stock Index Fund:

‘The EB DV Non-International Stock Index Fund (the "SIF-3") is authorized by the Bank of New York
Mellon Employee Benefit Collective Investment Fund Plan (the "Plan"). The Bank of New York Mellon
(the "Trustee") serves as the Trustee, Investment Manager, Custodian, and Transfer Agent of the SIF-3.
The objective of the SIF-3 is to track the performance of the MSCI EAFE Index. In meeting this
objective, the assets of the SIF-3 may be invested in securities and a combination of other collective
funds (each an affiliate of the SIF-3 and collectively referred herein as the "EB Collective Investment
Funds") that together are designed to track the performance of the MSCI EAFE Index. The SIF-3 may
also invest in the EB Temporary Investment Fund, an affiliate of the Fund. The SIF-3 indirectly bears its
proportionate share of expenses paid by the underlying funds in. which it may invest, if any. Financial
futures, over the counter foreign currency forward contracts, and swaps may also be used from time to
time to obiain exposure, to provide liquidity for cash flows, to hedge dividend accrual or for other
purposes that facilitate meeting the SIF-3's objective. Cash investments or assets used as collateral
underlying the derivatives positions may be comprised of other collective funds and short to medium-
term debt of investment grade that may include, without limitation, Treasury bills and notes, corporate
obligations, commercial paper, repurchase agreements, and obligations of government sponsored
enterprises.

Participants may purchase or redeem units of the SIF-3 for cash or securities (in-kind transactions at the
sole discretion of the Trustee) based on the unit value determined as of the valuation date, Unit value is
generally determined each business day of the year. All participants have a proportionate undivided
interest in the net assets of the Fund. The SIF-3’s policy is to not make any distributions to its
participants. At May 31, 2016, there were no unfunded commitments due from the Plan. The fair market
value of the Plan's investment in the SIF-3 at May 31, 2017 was $13,725,811.

21



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

EIN #13-6043977

PLAN NO. 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

370

(a) (b)
Identity of Issue,
Borrower,

Lessor, or

Similar Party

Total U.S. Government Securities - Forwarded

Corporate Bonds; (Continued):
Totals - Forwarded

Berkshire Hathaway Energy Co
Molson Coors Brewing Co
Molson Coors Brewing Co
Morgan Stanley

Morgan Stanley Bank of C20 A3
Morgan Stanley Capital Ubs9 A4
NiSource Finance Corp
NiSource Finance Corp

Nissan Auto Lease Trust B A2a
Nissan Auto Receivables 2 A A3
Nissan Auto Receivables 2 C A3
Noble Energy Inc

Noble Energy Inc

Oracle Corp

Pacific Gas & Electric Co

Plains All American Pipeline L
Plains All American Pipeline L
Plains All American Pipeline L
Plains All American Pipeline L
President & Fellows of Harvard
Principal Financial Group Inc
Prudential Financial Inc

Regions Financial Corp

Sempra Energy

Sempra Energy

Sempra Energy

Southern California Edison Co
Southern Co/The

Teachers Insurance & Annu 144A
Telefonica Emisiones Sau
Toledo Edison Co/The

Toyota Auto Receivables 2 B A3
Toyota Auto Receivables 2 D A3

Totals - Forward

See Independent Auditors' Report.

© (d)
Description of Investment,
Including Maturity Dat
Rate of Interest, Collateral
Par or Maturity Value Cost
$9,550,442
4,508,695
30,000 32,411
20,000 18,577
20,000 20,153
45,000. 46,437
60,000 60,597
20,000 21,500
25,000 26,131
10,000 11,021
30,842 30,839
25,000 24,994
28,000 27,997
6,000 5,047
17,000 12,493
12,000 11,736
25,000 30,323
25,000 24,514
5,000 3,684
15,000 11,331
25,000 22,997
7,000 6,988
30,000 29,552
40,000 39,999
40,000 40,508
70,000 69,617
24,000 24,933
24,000 23,501
20,000 21,332
43,000 42,217
50,000 49,840
40,000 45,190
10,000 11,602
30,000 29,998
50,000 49,994
$ 5,436,748
34

(e)

Current
Value

9.720.585

4,597,449

38,339
21,854
19,229
46,964
60,290
20,873
26,173
10,847
30,812
24,953
27,823

6.241
17,618
11,885
32,125
28,553

4.870
13,836
23,627

6,667
29,721
44,353
40,985
70,354
25,439
24,183
21,256
42,245
$1,277
43,137
12,468
30,093

49.730

$ 5,556,269

Po
geen


352

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(10) Withdrawal Liability (Continued)

During the year ended May 31, 2012, an employer withdrew from the Plan and was assessed withdrawal
liability. The assessment calls for 80 quarterly installments of $4,067, At May 31, 2017, 58 installments
were remaining totaling $235,857.

During the year ended May 31, 2017, an employer withdrew from the Plan and was assessed withdrawal
liability, The assessment calls for 80- quarterly installments of $339,719. At May 31, 2017, 80
installments were remaining totaling $27,177,520.

(2) Pension Accrual Rate

During the year ended May 31, 2008, the Board of Trustees approved increases in the pension accrual
rates effective September 1, 2007, The accrual rate for active participants of Plan A was increased from
$275 to $350 per year for Pension Credits earned October 1, 2001 through September 30, 2003. The
acorual rate for Plan.A active participants remains at $350 for Pension Credits earned prior to October 1,
2001 and at $275 for years of credited service earned on. or after October 1, 2003 through June 30, 2009.
Effective July 1, 2009, the accrual rate. was reduced by 50% for Plan A active participants, except for
participants employed by YRC Worldwide, Inc. ("YRC") whose accruals were reduced by 98%. Due to
the cessation of contributions to the Plan. by YRC, eniployees of YRC did not receive pension accruals
effective September 1, 2009. YRC resumed participation in the Fund on June 1, 2011 at 25% of therate
at which YRC was obligated to contribute prior to the termination of its:participation in the Fund in July
2009, The YRC participants willreceive reduced pension accruals commensurate with the reduction in
the contribution rate. As of May 31, 2017, the reduced contribution rate is still in effect.

(12) Securities Lending

The Board of Trustees of the Plan, as plan administrator, had an agreement with Bank of New York
Mellon authorizing the bank to lend securities held in the Plan accounts to third party borrowers. The
bank must obtain collateral from the borrower in the form of'cash, letters of credit issued by a bank other
than the borrower, or accéptable securities to.secure each loan. The collateral requirement is either 102
percent or 105-percent of the market value of loaned securities depending upon the nature of the loaned
securities and/or collateral. Both the collateral and securities loaned are marked-to-market on a daily
basis so. that all loaned securities are fully collateralized at all times.. In the event. that the loaned
securities are nat returned by the borrower, the bank will either replace the loaned securities or, if unable
to purchase those securities, credit the Plan's account with cash equal to the market value of the loaned
secutities,

The Plan and the bank each receive'a percentage of the net income derived ftom the securities lending
activities. Income camed during the years ended May 31,2017 and 2016 was $8,149 and $17,951, net of
fees retained by the bank,

Although the Plan's securities lending activities are collateralized as described above, they involve both
market and credit risk. In this context, market risk refers to the possibility that the borrowers of
securities will be unable to collateralize the loan upon.a sudden material change in the market value of
the loaned securities or the collateral. Credit risk refers to the possibility that counterparties involved in
the securities lending program may fail to perform in accordance with the terms of their contracts,

The fair value of securities loaned by the Plan was $8,711,306 at May 31,2016. Cash collateral received
was $9,139,485 at May 31, 2016.

This agreement was terminated on August 18, 2016, and no securities lending existed at May 31, 2017.

16



344

PENSION FUND. OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(1) Description of the Plan (Continued)

Plan Termination-In the event the Plan terminates, the net assets of the Plan will be allocated as
prescribed by ERISA and its related regulations generally to provide the following benefits in the order
indicated:

1, Pension benefits to retirees or beneficiaries that are or could have been on the Pension Roll as of the
beginning of the 3-year period ending on the termiriation-date of the Plan;

nN

Benefits generally guaranteed by the Pension Benefit Guaranty Corporation (BGC) (a U.S.
government agency);

sad

Benefits that are not forfeitable (vested) under the Plan; and

All other benefits under the plan.

yo

If all liabilities of the Plan to participants and their beneticiaries have been satisfied any residual
assets of the Plan shall be apportioned among the participants.

Certain benefits under the Plan are insured by the PBGC if the Plan-terminates. Generally, the PBGC
guarantees. most vested normal retirement age benefits, early retirement benefits, and certain disability
and survivor pensions. However, the PBGC does not guarantee all types of benefits under the Plan, and
the amount of benefit protection is subject to certain limitations. Vested benefits under the Plan-are
guaranteed at the level in effect on the date of the Plan's termination, - However, there is a statutory
ceiling on the amount of an individual's monthly benefit that the PBGC guarantees, which is adjusted
periodically.

Whether all participants receive their benefits shauld the Plan terminate at some future time will depend
onthe sufficiency, at that time, of the Plan's assets to provide for accuniulated benefit obligations. and the
level of benefits guaranteed by the PBGC.

(2) Significant Accounting Policies and Information
Basis of Accounting + The accounting records of the Plan are maintained on the accrual basis.

Jn May 2015, the Financial Accounting Standards Board issued Accounting Standards Update No. 201 5-
07, Fair Value Measurement (Topic 820): Disclosures for Investments In Certain Entities That Calculate
Net Asset Value per Share (or Its Equivalent) ("ASU 2015-07"), This ASU removes the requirement to.
include investments in the fair value hierarchy for which fair value is measured using the net asset value
per share practical expedient under ASC 820. This ASU is effective forthe Plan retrospectively for the
year ending May 31, 2017 with early adoption permitted. Plan management has adopted ASU 2015-07
and its application was applied retrospectively.


PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

EIN #13-6043977

PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

367

(a) (b) © {d)
Identity of Issue, Description of Investment,
Borrower, Including Maturity Date,
Lessor, or Rate of Interest, Collateral
Similar Party Par or Maturity Value Cost
Total U.S, Government Securities - Forwarded $9,550,442
Corporate Bonds:
AT&T Inc 35,000 37,328
AT&T Ine 24,000 24,736
AT&T Inc 20,000 19,906
Allergan Funding Ses 40,000 41,245
American Electric Power Co Inc 52,000 52,007
Amgen Inc 25,000 24,313
Anadarko Petroleum Coy 13,000 15,383
Anheuser-Busch Inbev Finance I 37,000 39,411
Apple Inc 26,000 25,970
Arizona Public Service Co 20,000 19,907
BMW Vehicle Lease Trust 1 A2 25,000 24,997
BMW Vehicle Lease Trust 2 2 A2 42,003 42,000
Bank of America Corp 75,000 76,173
Bank of America Co: 105,000 105,039
Becton Dickinson and Co 11,000 11,642
Becton Dickinson and Co 40,000 40,000
Berkshire Hathaway Inc 13,000 13,497
Broadcom Corp / Broadcom 144A 61,000 61,865
Burlington Northern Santa Fe L 10,000 10,100
CMS Energy Corp 15,000 14,952
CNA Financial Corp 70,000 72,404
CNH Equipment Trust 2014- C A3 18,362 18,362
CNH Equipment Trust 2016- C A3 9,000 8,998
CNH Equipment Trust 2017- A A2 55,000 34,998
CSX Corp 37,000 36,955
Cabela's Credit Card Mast 2 Al 30,000 29,988
Canadian Natural Resources Lid 20,000 19,072
Canadian Natural Resources Ltd 30,000 33,690
Canadian Pacific Railway Co 25,000 27,791
Capital One Financial Corp 56,000 54,487
Capital One Multi-Asset A2 A2 75,000 74,997
Capital One Multi-Asset A3 A3 75,000 74,966
CarMax Auto Owner Trust 2 4 A3 35,000 34,991
CarMax Auto Owner Trust 2 1 A3 25,000 24,995
Totals - Forward $ 1,267,165

See Independent Auditors’ Report.

©

Current
Yalue

9,720,585

36,457
24,499
20,967
4Lall
51,999
25,284
15,473
40,804
28,959
19,125
25,041
41,974
16,337
106,593
11,171
40,008
14,307
62,014
11,264
15,291
78,416
18,340
8,949
55,166
37,464
30,268
23,842
36,713
27,181
55,141
75,695
76,261
34,767

25,185

$ 1,292,366



364

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL.NO, 704

Schedules of Investment Expenses

Years-ended
May 31,
2017 2016
Investment Expenses:
Portfolio Management Fees $ 1,166,579 $ 1,063,669
Custodial Fees 92,363 73,161

Investment Performance Review

68,808 69,000

Total Investment Expenses $ 1,307,750 $1,205,830

See Independent Auditors’ Report.

28


PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

Statements of Accumulated Plan Benefits

Actuarial Present Value of Accumulated Plan Benefits:
Vested Benefits:
Participants Currently Receiving Benefits
Participants Entitled to Deferred Benefits
Other Participants
Total Vested Benefits
Nonvested Benefits

Total Actuarial Present Value of Accumulated Plan Benefits

See Accompanying Notes to Financial Statements.

$ 285,640,398 $ 291,824,704
13,060,834 -
33,432,968 46,011,663

332,134,200 337,836,367
228,549 ___8,567.570
$24,362,749 $3.46,404,037



340

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

Statements of Changes in Net Assets Available for Benefits

Additions to Net Assets Attributed to:
Investment Income:

Net Appreciation (Depreciation) in Fair Value of Investments

Interest and Dividends

Securities Lending Income

Rents

Gain (Loss) on Foreign Currency Exchange

Totals
Less: Investment Expenses

Net Investment Income (Loss)
Employers' Contributions
Other Income
Total Additions
Deductions from Net Assets Attributed to:
Benefits Paid Directly to Participants
Administrative Expenses
Total Deductions
Net (Decrease) in Net Assets Available for Benefits
Net Assets Available for Benefits - Beginning of Years

Net Assets Available for Benefits - End of Years

See Accompanying Notes to Financial Statements.

Years ended

May 31,
2017 2016

$ 26,033,150 $ (17,431,492)
5,052,847 5,642,087
8,149 17,951
137,262 138,307

150 (146)

31,231,558 (11,633,293)
1.205°830

13077750 __-_ 120538
29,923,808 (12,839,123)
2,568,773 2,709,220

———107.601 ___113,861

32,600,182 (10,016,042)

32,657,650 31,584,214

648.564 818

33,306,214 __ 32,249,032
(706,032) (42,265,074)
—-238.498,683 __280,763.757
$.2372,792,651 $..238.498,683


353

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(13) Substantial Employers

During the years ended May 31, 2017, two employers made contributions to the Plan of $1,168,975 and
$332,251, respectively, representing 46% and 13%, respectively.

Employers affiliated with YRC, Worldwide Inc. (“YRC”), previously a major contributing employer,
accumulated delinquent contributions of approximately $468,936 for the months of March 2009 through
July 2009 of which approximately $376,943 has been collected as of May 31, 2017,

In August 2009, a majority of YRC employees represented by the International Brotherhood of
Teamsters agreed to a modified labor agreement. The modified agreement included an 18-month
cessation of union pension fund contributions, which will not require repayment. As a result, the 701
Pension Fund Board of Trustees adopted an amendment to the Plan whereby participants employed by
the YRC companies did not receive pension accruals effective September 1, 2009. YRC resumed
participation in the Plan on June 1, 2011 at 25% of the rate at which YRC was obligated to contribute
prior to the termination of its participation in the Plan in July 2009, The YRC participants will receive
reduced pension accruals commensurate with the reduction in the contribution rate.

Under an agreement with YRC, the delinquent contributions were to be remitted as YRC completed the
sale of certain of its assets. Effective January 31, 2015, in connection with YRC’s effort to refinance its
debt and avert bankruptcy, the Plan agreed to amend the "Contributions Deferral Agreement" with YRC
and convert the deferred contribution payments to unsecured debt.

Subsequent to the year ended May 31, 2017, the Plan agreed to a second amendment to the
"Contributions Deferral Agreement" which, among other things, extended the date by which payment of
all outstanding deferred pension payments and outstanding deferred interest must be made from
December 31, 2019 to December 31, 2022.

(14) Fair Value Measurements

Financial Accounting Standards Board ("FASB") Accounting Standards Codifications ("ASC") 820,
Fair Value Measurements and Disclosures, establishes a framework for measuring fair value. That
framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value, The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are
described as follows:

Level 1-Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets, that the Plan has the ability to access.

Level 2-Inputs to the valuation methodology include:
© quoted prices for similar assets or liabilities in active markets;
® quoted prices for identical or similar assets or liabilities in inactive markets;
« inputs other than quoted prices that are observable for the asset or liability; and
« inputs that are derived principally from or corroborated by observable market data by correlation
or other means,

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

17



343

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes.to Financial Statements

(7) Description of the Plan

The following summarized description is intended only to highlight some of the features of the Pension
Fund of the Welfare and Pension Fund Mid Jersey Trucking Industry Local No. 701 (the Plan"). In all
cases the actual text of the Plan governs all aspects of participation, eligibility, pension payments and, in.
general, any aspects of administration of the Plan. Accordingly, those interested should be sure to refer to

the actual text of the Plan,

General - The Plan is a amultiernployer defined benefit pension plan covering the Teamsters Local 701
members employed by contributing employers and Fund employees. Itis subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).

Employers' Contributions - The Plan is supported by the contributions made by participating employers
under the terms of certain collective bargaining agreements:and participation agreements,

Pension Benefits - The following are the pension benefits, with applicable eligibility, provided by the
Fund. The monthly accrued benefit amount is equal to the number of Pension Credits times various
multipliers, depending upon the group or class of participant.

Regular Retirement Benefit - Age 60:and at least 60 Pension Credits.

Early Retirement Benefit - Age 50 and at least 120 Pension Credits. Accrued benefit isreduced by 6/10
of 1% for each of the first 60 months and.1/3 of 1% for each of the next 60 months by which the early
retirement date precedes the attainment of age 60.

Service Retirement Benefit - For those hired on or after October 1, 1995 and prior to January 1, 2006 any
age with at least 240 Pension Credits. For those bired on or after January 1, 2006, any age with at least
300 Pension Credits,

Disability Retirement Benefit + At least. 120 Pension Credits with, total and permanent disability.
ae benefit is reduced for early retirement as if a participant attained age 53 (or current age if past
age 53).

Deferred Vested Benefit - 5 Years of Vesting Service. Accrued’ benefit payable-at age 60 or Early
Retirement Benefit payable at early retirement date, if eligible,

The Plan also provides for death benefits for both pre-retirement and post-retirement participants.

During the year ended: May 31, 2012, the Board of Trustees adopted an-amendment to the Plan to
eliminate the lump-sum distribution for benefits accrued under the Plan on or after April 1, 2012.



359

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

Notes to Financial Statements

(14) Fair Value Measurements (Continued)
Crescent Capital High Income Fund B, L.P. (Continued)

The Crescent Fund does not expect to make distributions of interest, dividends or capital gains unless
requested by a Limited Partner. Ifa Limited Partner elects to receive distributions in cash, such Limited
Partner must provide written distribution notice to the General Partner at least sixty days prior to the
desired distribution date; provided, however, the General Partner may, in its sole discretion, elect to
waive such prior written notice requirement. Net profit or net loss for a fiscal period is allocated among
the Limited Partners in proportion to their respective Fund percentage interest for such fiscal period. At
May 31, 2016, there were no unfunded commitments due from the Plan, The fair market value of the
Plan's investment in the Crescent Fund at May 31, 2017 was $23,496,772.

EnTrust Capital Special Opportunities Fund Ltd.

The EnTrust Capital Special Opportunities Fund Ltd. (the "Entrust Fund"), was incorporated in the
Cayman Islands on March 31, 2008, as an exempted company. The investment advisor to the Fund is
EnTrust Partners Offshore LP, a Delaware limited partnership. The Entrust Fund's investment objective
is to seek above-average rates of return and long term capital growth by investing opportunistically ina
select group of funds and investment vehicles. Following the expiration of the Lock-Up period,
shareholders shall have the right to redeem all of a portion of the applicable shares to the maximum
extent permitted by the terms relating to the Entrust Fund's investments in underlying investment
vehicles. At May 31, 2017, there was $-0- in unfunded commitments due from the Plan. The fair
market value of the Pian's investment in the Entrust Fund at May 31, 2017 was $16,375,717.

U.S. Real Estate Investment Fund, LLC

USS. Real Estate Investment Fund, LLC (U.S, REIF or the Fund)is a limited liability company organized
under the laws of the State of Delaware on July 31, 2006 pursuant to the Delaware Limited Liability
Company Act (the Act), The Fund commenced operations on January 1, 2007. The Fund's investment
objectives are to invest in a pool of real estate assets that are diversified by geography and property type,
with a focus on yield-driven investments and, to a lesser extent, on value-added investments. The
Manager of the Fund is Intercontinental Real Estate Corporation.

The Fund is an open-end, commingled real estate investment fund and is intended to have an indefinite
term. The Funds may be terminated by the Manager or by the written consent of the members
collectively owning not less than two-thirds of the outstanding interests.

The Fund is organized for the objective and purpose of enabling its operating subsidiaries, U.S. Real
Estate Investment REIT Fund, Inc, (U.S. REIT), Bay State REIT, LLC (Bay State REIT) and U.S. Real
Estate Investment Fund Non-REIT, LLC, to make investments in real estate assets; owning, managing,
supervising, and disposing of such investments through its subsidiaries; sharing the profits and losses
there from and engaging in such activities necessary, incidental, or ancillary thereto; and engaging in any
other lawful act or activity for which limited liability companies may be organized under the Act in
furtherance on the foregoing provided, however, that the Fund shall make all qualifying investments only
though one or more subsidiaries,

23
—

scan


335

PENSION FUND
OF THE WELFARE AND PENSION FUND

MID JERSEY TRUCKING INDUSTRY
LOCAL NO. 701
FINANCIAL STATEMENTS

FOR THE YEARS ENDED
MAY 31, 201 2016

Certified Public #
Accountants and Advisors, PC

“An anReECeTEE ts
Moots Suasbant isteraatiivel Lived

MOORE STEPHENS



346

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(2) Significant Accounting Policies and Information (Continued)

Actuarial Present Value of Accumulated Plan Benefits (Continued) - The actuarial present value of
accumulated plan benefits is determined by an independent actuary and is that amount that results from
applying actuarial assumptions to adjust the accumulated plan benelits to reflect the time value of money
(through discounts for interest) and the probability of payment (by means of decrements such as for
death, disability, withdrawal, or retirement) between the valuation date and the expected date of
payment. The computations of the actuarial present value of accumulated plan benefits were made as of
june I, 2016 and 2015, Had the valuations been performed as of May 31, there would be no material
ifferences.

Payment of Benefits - Benefit payments to participants are recorded upon distribution,

Funding Policy - Contributing employers are required to make contributions to the Plan on behalf of
each participant on the basis of a rate fixed by the applicable collective bargaining agreement or
participation agreement in effect, The contribution rates vary depending on the level of benefits
negotiated, Employee participants are not required to contribute to the Plan.

Income Taxes - The Internal Revenue Service has determined and informed the Plan by letter dated
Apri! 20, 2016, that the Plan and related trust are designed in accordance with applicable sections of the
Internal Revenue Code (IRC). The Plan's Trustees and legal counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of the IRC.

Accounting for Uncertainty in Income Taxes - In accordance with guidance issued by the Financial
Accounting Standards Board (FASB) on accounting for uncertainty in income taxes, management has
evaluated the Plan's tax position and concluded that the Plan has maintained its tax exempt status and has
taken no uncertain tax positions that require adjustment to the financial statements. Therefore, no
provision or liability for income taxes has been included in the financial statements. Management
believes that the Plan is no longer subject to income tax examinations by the U.S. federal, state, or local
tax authorities for fiscal years before 2014.

Withdrawal Liability - Withdrawal liability, which is based upon an employer's share of the Fund's
unfunded liability for vested benefits, is assessed as of the time of an employer's partial or complete
withdrawal from the Fund, as defined by the Multi-Employer Pension Plan Act of 1980. The ultimate
realization of withdrawal liability assessment generally is not reasonably estimable. The Fund recognizes
withdrawal liability assessments as revenue only when collection has occurred, except that under the
Fund's prior policy, an employer withdrawal liability was recognized in the year that it was accessed
since the Fund reasonably expected to collect all amounts due.

Reclassification - Certain items in the comparative financial statements have been reclassified to
conform to the current year's presentation,

Subsequent Events - Plan management has evaluated subsequent events through January 31, 2018, the
date the financial statements were available to be issued.

(3) Accumulated Plan Benefits

‘The actuarial present value of accumulated plan benefits is determined by an actuary and is that 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
decreases such as for death, disability, withdrawal or retirement) between the valuation date and the

expected date of payment.

10



345

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

Notes to Financial Statements

(2) Significant Accounting Policies and Information (Continued)

Basis of Accounting (Continued) - In July 2015, the FASB issued ASU 2015-12, Plan Accounting:
Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and
Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan
Investment Disclosures, (Part If) Measurement Date Practical Expedient, Part I eliminates the
requirements to measure the fair value of fully benefit-responsive investment contracts but will continue
to provide certain disclosures that help users understand the nature and risks of fully benefit-responsive
investment contracts. Upon adoption, contract value will be the only required measure for fully benefit-
responsive investment contracts. Part Il eliminates the requirements to disclose individual investments
that represent 5 percent or more of net assets available for benefits and the net appreciation or
depreciation in fair value of investments by general type. Part TI also simplifies the level of
disaggregation of investments that are measured using fair value. Plans will continue to disaggregate
investments that are measured using fair value by general type; however, plans are no longer required to
also disaggregate investments by nature, chatacteristics and risks. Further, the disclosure of information
about fair value measurements shall be provided by general type of plan asset. Part III provides a
practical expedient to permit plans to measure investments and investment-related accounts as ofa
month-end date that is closest to the plan's fiscal year-end, when the fiscal period does not coincide with
month-end, This ASU was effective for the Plan retrospectively for the year ending May 31, 2017 with
early adoption permitted. Plan management has adopted ASU 2015-12 and its application was applied
retrospectively.

Valuation of Investments - Investments are reported at fair value. Fair value is the price that would be
received to sell an asset or paid to transfer liability in an orderly transaction between market participants

at the measurement date.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) includes
the plan's gains and losses on investments bought and sold as well as held during the year.

Contributions Receivable - Contributions receivable were determined by a review of subsequent period
cash collections, therefore, an allowance for doubtful accounts is not considered necessary.

Use of Estimates - The preparation of financial statements in conformity with generally acce ted
accounting principles requires the plan administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

Property and Equipment - tf an expenditure exceeding $1,000 results in an asset having an estimated
useful life that extends beyond the year of acquisition, the expenditure is capitalized. Property and
equipment are stated at cost and is depreciated using the straight line method over the estimated useful
lives of the assets. Building and improvements are recorded at fair market value.

Actuarial Present Value of Accumulated Plan Benefits - Accumulated plan benefits are those future
periodic payments that are attributable under the Plan's provisions to the services rendered by the
employees to the valuation date. Accumulated plan benefits include benefits expected to be paid to (a)
retired or terminated employees or their beneficiaries, (b) beneficiaries of employees who have died and
(c) present employees or their beneficiaries.

Benefits under the Plan are based on the employees’ total credited services. Benefits payable under all
circumstances- retirement, death, and disability are included to the extent they are deemed attributable to
employee service rendered to the valuation date.



378

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN #13-6043977
PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line di - Schedule of Assets (Acquired and Disposed of Within the Plan Year)

@) ) © @
Identity of Issue, Description of Investment,
Borrower, Including Maturity Date,
sor, or Rate of Interest, Collateral Cost of Proceeds of
Similar Party Par or Maturity Value Acquisitions Dispositions

Aetna Inc. 65,000 3.200% 06/15/26 $ (64,955) $ 65,045
CSMC Trust 70,000 Var Rt 12/15/49 (72,099) 72,450
Cenovus Energy Inc 45,000 5.400% 06/15/47 (44,952) 44,784
Express Scripts Holding Co 16,000 4.800% 07/15/46 (15,279) 15,548
Ford Credit Floorplan 50,000 Var Rt 08/15/19 (50,035) 50,041
Great Plains Energy Inc 20,000 3.900% 04/01/27 (19,924) 20,231
Harley-Davidson Motorcycle 42,165 1.300% 03/16/20 (42,231) 42,132
Keycorp 39,000 Var Rt 12/29/49 (39,000) 39,015
Lam Research Corp 15,000 3.900% 06/15/26 (15,213) 15,213
Microsoft Corp 80,000 1.550% 08/08/21 (79,977) 78,097
Microsoft Corp 34,000 2.875% 02/06/24 (33,752) 34,415
NTC Capital 30,000 Var Rt 01/15/27 (26,831) 27,465
TransCanada Trust 50,000 Var Rt 03/15/77 (50,000) 50,300
Viacom, Ine 13,000 3.450% 10/04/26 (12,933) 12,485
Woodside Finance, Ltd 30,000 3.700% 09/15/26 29,980) 29,107
World Omni Automobile 50,000 1.540% 10/15/18 50,145) 50,055

See Independent Auditors’ Report.

42



366

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN #13-6043977
PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

(a) (b) (c) @) ©
Identity of Issue, Description of Investment,
Borrower, pnaluding Maturity Date, c '
Lessor, or te of Interest, Collateral ‘urren
Similar Party Par or Maturity Value Cost Value
U.S. Government Securities (Continued):

Totals - Forwarded $ 4,465,382 $ 4,502,636
FNMA Pool #0995681! 31,133 6.000% 05/01/38 33,011 35,258
FNMA Pool #0AB9516 74,815 2.500% 05/01/28 76,206 76,153
ENMA Pool #0AD6942 113,116 5.000% 06/01/40 119,920 125,579
GNMA Pool #0741444 65,931 4.000% 11/15/40 70,011 10,027
Kentucky St Asset/Liability Co 37,590 3.165% 04/01/18 37,590 37,921
Met Transprtn Auth NY Revenue 45,000 6.687% 11/15/40 45,398 60,960
New Jersey St Turnpike Auth 50,000 7.102% 01/01/41 50,000 71,385
Resolution Fdg Corp Prin Strip 195,000 Var 01/15/30 108,560 135,133
Resolution Fdg Corp Prin Strip 347,000 Var 04/15/30 242,142 238,375
SBA Gtd Partn Ctfs 2013-20B 1 40,512 2.210% 02/01/33 40,601 40,015
SBA Gtd Partn Ctfs 2013-20C 1 24,239 2.220% 03/01/33 24,239 24,050
SBA Gtd Partn Ctfs 2013-20E 1 29,845 2.070% 05/01/33 27,430 29,182
SBA Gtd Partn Ctfs 2015-20E 1 35,386 2.770% 05/01/35 35,386 35,806
SBA Gtd Partn Ctfs 2016-20K 1 107,765 2.570% 11/01/36 107,765 108,182
SBA Gtd Partn Ctfs 2016-20L 1 73,498 2.810% 12/01/36 73,498 74,281
SBA Gtd Partn Ctfs 2017-20A 1 130,000 2.800% 01/01/37 130,000 131,073
SBA Gtd Partn Ctfs 2017-20B 1 45,000 2.820% 02/01/37 45,000 45,390
SBA Gtd Partn Ctfs 2017-20D 1 60,000 2.840% 04/01/37 60,000 60,533
US Treasury Bd Prin Strip. 128,000 0.000% 11/15/39 45,234 67,789
US Treasury Bd Prin Strip 478,000 0.000% 11/15/43 210,125 219,717
US Treasury Bond 240,000 3.000% 02/15/47 239,653 246,694
US Treasury Note 682,000 1.375% 02/15/20 679,906 681,679
US Treasury Note 364,000 1.500% 04/15/20 364,989 364,797
US Treasury Note 572,000 2.375% 05/15/27 $74,311 581,003
US Treasury Note 491,000 1.500% 05/15/20. 490,079 491,977
US Treasury Note 429,000 1.750% 05/31/22 428,598 429,017
U S Treasury Note 264,000 1.250% 05/31/19 263,794 263,836
US Treasury Note 362,000 2.000% 05/31/24 360,407 361,689
Utah St 100,000 4.554% 07/01/24 101.207 110,448
Total U.S. Government Securities - Forward $ 9,550,442 $ 9,720,585

See Independent Auditors! Report.



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN #13-6043977
PLAN NO, 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule:H, Line 4i- Schedule of Assets (Held at End of Year)

365

(a) _ Ab)
I sstie,
Borrower,
Lessor, or

U.S, Government Securities:
California St
Chicago IL
Commit to Pur FNMA Sf Mtg
Commit to Pur FNMA Sf Mtg
Commit to Pur FNMA Sf Mig
Commit to Pur FNMA Sf Mtg
Commit to Pur FNMA Sf Mig
Commit to Pur GNMA Sf Mtg
Commit to Pur GNMA II Jumbos
Federal Home Ln Mtg Corp
FHLMC Pool #G1-2250
FHLMC Pool #G1-2334
FHLMC ‘Pool #J0-4284
FHLMC Pool #G6-7700
FHLMC Pool #G6-0567
FHLMC Multiclass Mtg K026 A2
FNMA Pool #0A12432
FNMA Pool #0AL4060
FNMA Pool #0AL9546
FNMA Pool #0AS0774
FNMA Pool #0A80018
FNMA Pool #0AS6135
FNMA Pool #0AU1630
FNMA Pool #0A W8597
FNMA Pool #0A Y5003
FNMA Pool #0420862
FNMA Pool #0703712
FNMA Poo! #0739753
FNMA Pool #0BA2907.
FNMA Pool #0BC1158
FNMA Pool #0890200

Totals - Forward

See Independent Auditors! Report.

(¢)
Description of Investment,
Tneluding Maturity Date,
Rate of Interest, Collateral
Par or Maturity Value

25,000: 7.600%
10,000 7.400%
190,000 2.500%
516,000. 3.000%
125,000 3.500%
$30,000 3.500%
250,000. 4.000%
40,000. 4.000%
60,000 3.500%
75,000 .900%
18,169 4.500%
733 5.000%
916 5.000%
89,543 3.500%
527,783 4.000%.
80,000. 2.510%
128,698 4.500%
44,253 3.000%
81,844 3.500%
41,291 3.000%
153,878 3.000%
92,652 4.000%
182,750 3.000%
51,876 3.00%
113,652 3.500%
200,525. 3.500%
3,085: 5.500%
6,377, 5.000%
79,814 4.000%
296,218 3.500%
24,099 6.500%

29

04/01/39
01/01/33
06/01/32
06/01/47
06/01/32
06/01/47
06/01/47
06/15/47
06/20/47
06/01/43
06/01/21
O9/01/21
02/01/22
08/01/46
06/01/43
11/25/22
05/01/41
09/01/43
11/01/46
10/01/43
07/01/43
11/01/45
07/01/43
08/01/29
03/01/45
07/01/45
02/01/18
12/01/18
11/01/45,
02/01/46
10/01/39

@)

Cost

$ 23,195
9,931
190,713
513,440
130,347
850,199
262,754
42.195
62,156
74,951
17,178
720
899
92,663
565,222
80,609
134,691
43,811
84,274
40,872
148,949
98,327
182,985
54,421
118,810
207,301
3.148
6,423
86,087

312,325

25.786
$ 4,465,382

&)

Current
Value

$ 37,696
10,210
191,951
518,843
130,860
857,324
264,143
42,329
62,597
74,996
18,845
768

967
92,995
559,708
81,382
140,212
44,725
85,038
41,736
155,535
98,540
184,736
53,559
117,459
207,243
3.109
6.540
84,871
306,142

27,577

$ 4,502,636


342

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Statements of Changes in Accumulated Plan Benefits

Years ended

May 31,
2016 2018

Actuarial Present Value of Accumulated Plan Benefits

at Begirining of Year $ 346,404,037 $ 352,760,326
Increase (Decrease) During the Year Attributable to: .
Benefits Accumulated, Net Experience Gain or Loss 1,725,619 274,872
Benefits Paid 31,584,214) 1,913,080)
Decrease in Discount Period 24.817,30 25,281,919

Total Actuarial Present Value of Accumulated

Plan Benefits at End of Year $34,362,749 $.346,404,037

See Accompanying Notes to Financial Statements.



356

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(14) Fair Value Measurements (Continued)

Fair Value of Investments that Calculate Net Asset Value - The following table summarizes
investments measured at fair value based on the net asset value (NAVs) per share as of May 31, 2017

and 2016: .
May 31,2017

Fair Unfunded Redemption Redemption
Value Commitment Frequency Notice Period

Common Collective Trusts:

EB Temp Inv Fd $ 3,837,117 NIA Daily NIA
EB DV Large Cap Growth Stock Index

Fund 6,008,560 N/A Daily NIA
Collective US Gov't Short-Term

Investment Fund 794,645 NIA Daily N/A
BB DV Non-SL Small Cap Stock

Index Fund 8,907,574 N/A Daily NIA
EB DV Non-SL Int'l Stock Index Fund 13,725,811 NIA Daily NIA

Partnerships/Joint Ventures;

Entrust Capital Special Opportunities Fund 16,375,717 NIA Quarterly 95 Days
Intercontinental Real Estate Corporation 12,806,598 N/A Quarterly 90 Days
Crescent Capital High Income Fund B-

Limited Partnership 23,496,772 N/A Daily NA

May 31,2016
Fair Unfunded Redemption Redemption
Value Commitment Frequency Notice Period
Common Collective Trusts:

EB Temp Inv Fd $ 3,431,943 NIA Daily N/A
Collective US Gov't Short-Term

Investment Fund 752,939 N/A Daily N/A
EB DV Non-SL Small Cap Stock

Index Fund 18,016,274 N/A Daily N/A
EB DV Non-SL Large Cap Growth

Stock Index Fund 10,577,299 NIA Daily N/A
EB DV Non-SL Int'l Stock Index Fund 11,764,582 N/A Daily N/A

Partnerships/Joint Ventures:
Entrust Capital Special Opportunities Fund 14,569,387 8,225,815 Quarterly 95 Days
Crescent Capital High Income Fund B-
Limited Partnership 21,303,393 N/A Quarterly 90 Days

The PIMCO All Asset All Authority Institutional Fund ("PIMCO") is a mutual fund that invests in
actively managed PIMCO. mutual funds in an effort to achieve broad asset diversification, including
global bonds and stocks, real estate, commodities, and exposure to PIMCO's value-added strategies
within each underlying fund. The Fund may also employ leverage and a net short exposure to the U.S,
equity market.

Financial Accounting Standards Board (FASB) ASU 2009-12 "Investments in Certain Entities that
Calculate Net Asset Value per Share (or Its Equivalent)" provides guidance on using the net asset value
per share provided by an investee to measure the fair value of certain alternative investments when the
fair value of the primary investment is not readily determinable. ASU 2009-12 requires disclosure, by
major category of investment, information regarding redemption restrictions, unfunded commitments to
the issuer of the investment, and the investment strategies of the issuer. The following describes the
required disclosures for the investments that are valued in this manner.

20



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701
EEN #13-6043977
PLAN NO. 001- PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End-of Year)

(a) (b) (¢ (d) 2)
Identity of Issue, Description of Investment,
foremeee, pislusing Maturity Date,
essor, OF ate of Interest, Collateral Current
Similar Party Par or Maturity Value Cost Value
Total U.S. Government Securities - Forwarded $9,550,442 $9,720,585
Tota) Corporate Bonds - Forwarded 31,509 6,464,846
Total Preferred Stock - Forwarded 925,066 947,687
Conimon Stock (Continued):

Totals - Forwarded 10,784,370 12,406,014
Hendetson Land Development Co 181,965 1,043,769 1,175,745
Galaxy Entertainment Group Ltd 230,000 932,550 1,329,685
Fujitsu Ltd 184,408 984,205 1,347,061
Murata Manufacturing Co Ltd 8,527 1,065,879 1,183,609
Nippon Telegraph & Telephone C 29,422 1,101,721 1,412,235
Softbank Group Corp 19,589 957,892 1,594,789
Shimano Ine 3,382 551,531 526,024
Sony Corp 32,846 740,080 4,198,180
Suzuki Motor Corp . 27,710 992,936 1,306,756
Toyota Motor Corp 20,751 1,101,226 4,113,125
DNB Asa 75118 1,132,803 1,276,285
Marine Harvest Asa 35,615 636,702 625,833
Standard. Chartered Ple. 79,392 1,532,715 750,132.
Serco Group Pic 154,325 725,170 236,481
Lloyds Banking Group Ple 1,306,222 1,237,516 1,190,336
Carnival Plc 21,853 1,069,526 1,402,093
Rentokil Initial Ple 353,675 1,000,782 1,212,668
Roche Holding Ag 4,337 1,014,278 1,191,437
AT&T Ine 26,404. 961,809 1,017,346
Advance Auto Parts Inc 5,400 375,417 721,602
Alliance Data Systems Corp 3,000 798,896 723,390
Allstate Corp/The 6,199 247,367 535,222
Alphabet Inc-Cl A. 1,650 808,124 1,628,699
Arnerican Electric Power Co Inc 5,670 236,967 406,993
American Express Co 4,770 345,411 367,004
Ameriprise Financial Inc: 3,260 248,519 393,775
Amgen [ne 1,770 246,777 274,775
Amphenol Corp 13,500 253,022 1,007,200
Antero Resources Corp 9,380 242,185 192,947
‘Totals:- Forward $ 33,370,145 $ 39,747,341

See Independent Auditors' Report.



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EXN #13-6043977
PLAN NO. 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

374

(a) (b) (©) (d)
Identity of Issue, Description of Investment,
Borrower, Including Maturity Date,
Lessor, or Rate of Interest, Collateral
Similar Party Par or Maturity Value Cost
Total U.S, Government Securities - Forwarded $9,550,442
Total Corporate Bonds - Forwarded _- 6,331,509
Total Preferred Stock - Forwarded 925,066
Common Stock (Continued):
Totals - Forwarded 33,370,145
Apple Inc 12,000 372,916
Apple Inc 2,060 194,642
Bank of America Co 50,020 779,072
Berkshire Hathaway Inc 4,500 343,587
Berkshire Hathaway Inc 1,330 147,870
Booz Allen Hamilton Holding Co 7,550 278,223
CBS Corp 6,310 293,416
CVS Health Corp 10,000 809,687
Celgene Corp 3,450 402,038
Celgene Corp 7,900 923,235
Chevron Corp 7,355 652,718
Cisco Systems Inc 22,315 $61,432
Cognizant Technology Solutions 15,800 $82,186
Comeast Corp 14,140 379,836
ConocoPhillips 9,065 436,496
Cracker Barrel Old Country Sto 5,300 700,518
Cummins Inc 2,130 336,426
DTE Energy Co 4,310 310,104
Danaher Corp 3,570 288,831
Delta Air Lines Inc 9,780 416,908
Walt Disney Co/The 4,730 517,739
Discover Financial Services 7,506 299,392
Dollar Tree Inc 13,250 597,107
Dow Chemical Co/The 12,000 626,156
Eog Resources Inc 6,210 466,007
Ecolab Inc 7,300 418,251
Edison International 7,040 437,879
Energen Corp 5,450 320,331
Equity Lifestyle Properties In 4,140 250.042
Totals - Forward $ 46,513,190
See Independent Auditors’ Report.
38

©)

Current
Value

9,720,585

6,464,846
947,687

ee LOE

39,747,341

1,833,120
314,686
1,120,948
743,760
219,822
297,772
385,604
768,300
394,715
903,839
761,095
703,592
4,057,178
589,497
405,115
884,093
335,901
472,031
303,236
480,491
510,556
440,602
1,029,525
743,520
560,825
969,732
574,253
310,868
349,416

$ 58,211,433


362

SUPPLEMENTARY INE. TION

26



338

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,
information regarding Pension Fund of the Welfare and Pension Fund Mid-Jersey Trucking Industry
Local No, 701 net assets available for benefits as of May 31, 2017, and the changes therein for the year
then ended and its financial status as of May 31, 2016, and changes therein for the year then ended in
accordance with accounting principles generally accepted in the United States of America.

Report on Supplementary Information

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole.
The supplemental schedules of administrative expenses and investment expenses are presented for the
purpose of additional analysis and are not a required part of the financial statements. The supplemental
Schedule H, Line 4i - Schedule of Assets (Held at End of Year), Assets (Acquired and Disposed of
within the Plan Year) and Schedule H, Line 4j - Schedule of Reportable Transactions are presented for
the purpose of additional analysis and are not a required part of the financial statements but are
supplemental information required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, Such information is the
responsibility of the Plan's management and was derived from and relates directly to the underlying
accounting and other records used to prepare the financial statements. The information has been
subjected to the auditing procedures applied in the audits of the financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the financial statements or to the financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the information is fairly stated in all material respects in
relation to the financial statements as a whole.

Mec.

MSpc
Certified Public Accountants and Advisors,
A Professional Corporation

Cranford, New Jersey
January 31, 2018



379

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN .#13-6043977
PLAN NO. 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H; Line 4j - Schedule of Reportable Transactions

(a) (b) @ (d) @ f (a) me) a
Corrent
‘xpens Value of
Incurred Asset on.
entity of Purchase ‘Selling Lease with Cost of Transaction Net Gain
Party Involved Description of Asset Price Price Rental ‘transaction “Asset Date ‘or (Loss)
Pimeo AU.Asset Fund Inst $3,371,474 $12,006,000 NIA MA. $12,991,503 $12,000,000 $ (991,503)
* EB Temp tw Pd 15,805,961 16,180,493 NIA NYA — 16,180,493 16,180,493 -
' BB Temp tiv Fa 11,632,965 10,816,073 NIA: WA 10,816,073 10,816,073 te
‘ £B DV NSL Small Cap SIP 8,001,389 12,006,383 NA NIA 8,001,389 12,008,383 4,004,994
+ Collective US Govt $ 10,087,702 10,015,995 NA NYA 10,015,995 10,015,995 -
US Real Estate Investment
Fund LLC 12,104,696 - NA NIA’ 12,014,695 12,015,696 -

* Represents a party-in-interest

See Independent Auditors’ Report.

43



349

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(5) Property and Equipment

The following is a summary of property and equipment, at historical cost less accumulated depreciation,
at May 31st:

May 31
2017 2016

Building and Improvements $ 1,500,000 $ 1,500,000
Real Estate Equipment 25,878 25,878
Office Equipment 338,517 335,805
Subtotal 1,864,395 1,861,683
Less: Accumulated Depreciation (360,250) ___(359,846)

Total Property and Equipment - Net $1,504,145 $1,501,837

Depreciation expense was $6,480 and $8,407 for the years ended May 31, 2017 and 2016, respectively.

(6) Leases

Local 701 Pension Fund Realty Co., LLC, in which the Pension Fund is the sole member, was committed
to lease office space to the following tenants at May 31, 2017. All of the leases except for the lease with
Cal Scientific Inc. are subject to changes based on annual appraisals. The leases have been assigned to
the Local 701 Pension Fund Realty Co. LLC.

Tenant Term_of Lease Rental per Month

Kevin J, Dembinski, DMD. 10/01/14-09/30/19 $1,850 plus 11.4% of utilities and real
estate tax increases.

Teamsters Local 701 10/01/14-09/30/19 $2,797 plus 17.2% of utilities and real
estate tax increases.

Cal Scientific Inc. 06/01/16-05/31/18 $788.13 plus 5% of utilities and real
estate tax increases.

Bakery Drivers & Salesmen Local 10/01/14-09/30/19 $19.50 per sq ft plus 8.05% of utilities
194 and Industry Pension Fund and real estate tax increases.

Tomahawk Cutting & Coring, LLC 04/01/17-03/31/19 $703.63 plus 4.1% of utilities and real
estate tax increases.

Teamsters Local 418 Pension Fund 10/01/14-09/30/19 $19.50 :per sq ft plus .97% of utilities and
real estate tax increases,

13



351

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

Notes to Financial Statements

(8) Transactions with Related Parties (Continued)

Payroll costs are initially paid’ from the Local 701 Welfare Insurance Plan.and the expenses are then
allocated among the Funds based on an allocation method determined to fairly distribute the expenses.
Other common administrative expenses are initially paid fromthe Local 701 Welfare Insurance Plan and
the Local 701 Pension Fund and then also allocated among the Funds based-on en allocation method
developed to equitably distribute the expenses. Each Fund is charged for its allocated share of the fair
market rent plus utilities for the office facilities occupied by the Funds. Monthly payments are made by
the Funds to satisfy the amounts due to the other Funds.

Monthly payments are made by the Funds to satisfy the amounts due to other Funds. At May 31, 2017
and 2016, the balances due to-and (from) the Funds were:

May 31,
2017 2016
Teamsters Local 701 Welfare Insurance Plan $ (16,591) $ (14,185)
Teamsters Local 701 Defined Contribution Fund 1,066 (4,965)
Teamsters Local 418 Pension Fund 2,474 2,035
Bakery Drivers Local 194 Pension Fund 322 332
Totals Beeeob 12,729) $16,803)

The Local 701 Pension Fund Realty Co., LLC leases office space to the Teamsters Local 701, Rentis
charged to the Funds by the Local 701 Pension Fund Realty Co., LLC, a'New Jersey limited liability
company in which the Pension Fund is the sole member.

(9) Local 701 Pension Fund Realty Co, LEC

Property located al 2003 U.S. Route 130, North Brunswick, New Jersey, (the "Premises") and owned by
the Plan, has been conveyed to the Local 701 Pension Fund Realty Co., LLC (the "Company").

The Company was formed on February 7, 2001 under the New Jersey Limited Liability Company Act
and has one member, the Plan. Since it has a single member, the Company is. taxed as a disregarded
entity, so that all items of income, gain, loss, deduction, and credit realized by the Company is reported
by the member (the Plan) as if it realized directly all such:items. The assets, liabilities, meome, and
expenses of the Company for the years ended May 31, 2017 and.2016 are included in these financial
statements.

(10) Withdrawal Liability

The employer companies who are under agreement with thé Union are subject to the Multi-Employer
Pension Plan Act of 1980, The Act, among other items, imposes a liability on employers that withdraw
froma pension plan for the amount of their pro-rata share of the pension plan's unfunded obligation for
vested benefits. Under the law, an employer has withdrawn completely if it has permanently ceased
operations under the Fund or has permanently ceased to have an obligation to contribute to the Fund.
There may also be a partial withdrawal, As of May 31, 2016, the date of the most recent valuation, the
Plan's unfunded obligations for vested benefits for withdrawal liability purposes was $93,891,707.

15



337

se
Certified Public 25. Co
Accountants and Advisors. B.C.
mma
‘Avs ioc ris ascocians set

MOORE STEPHENS

suerte gO rm Nae ire 2 WAP SEAN FMS

INDEPENDENT AUDITORS’ REPORT

To the Board of Trustees of
Pension Fund of the Welfare and Pension Fund
Mid-Jersey Trucking Industry Local No. 701
North Brunswick, New Jersey.

Report on the Financial Statements

We have audited the accompanying financial statements of Pension Fund of the Welfare and Pension
Fund Mid-Jersey Trucking Industry Local No. 701, which comprise the statements of'net assets available
for benefits as‘of May 31, 2017 and 2016, the related statements of changes in net assets available for
benefits for the years then ended, the statements-of accumulated plan benefits as of May 31, 2016 and
2015, the related statements of changes in accumulated plan benefits for the years then ended, and the
related notes to the financial statements,

Management's Responsibility for the Financial Statements

Management is responsible for the prepatation 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 froni 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 Plan's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Plan's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as. well-as evaluating the overall presentation of the financial
statements,

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

wwwunspe-epa:com
340 North Avenue, Cranford, NJ 07016-2496 “Teh 908 272-7000. Tax 9082727101
546 5th Avenue, New York, NY 10036-5000 Tel 242 82-124 Vax 212 87.8846
Member af ihe American lastituce of Cerisiied Pibli, Accountants Center tor Public Company Aust Fires andi Private Compaines Practice Section geen



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EEN #13-6043977
PLAN NO. 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i- Schedule of Assets (Held at End of Year)

372

(@) (b) «) @

Identity of Issue, Description of Investment,

Borrower, Including Maturity Date,

Lessor, or Rate of Interest, Collateral

Similar Party Par or. Maturity Vas Cost
Total U.S. Government Securities - Forwarded $9,550,442
Total Corporate Bonds - Forwarded. 6,331,509
Preferred Stock (Continued):
Totals - Forwarded 155,732
First Maryland Capital 11 65,000 Var 02/01/27 $7,556
General Electric Co 114,000 ‘Var. 12/29/49 117,508
JPMorgan Chase & Co 98,000 Var 12/29/49 102,441
JPMorgan Chase & Co 83,000 Var 12/29/49 86,906
JPMorgan Chase & Co 33,000 Var 12/29/49 33,990
JPMorgan Chase & Co 15,000 Var 10/29/49 15,257
Keycorp Capital T 27,000 Var. 07/01/28 24,598
M&T Bank Corp 25,000 Var 12/29/49 25,281
Northern Trust Corp 16,000 Var 12/29/49 16,050
State Street Corp 70,000. Var 06/01/77 61,536
SunTrust Capital 1 37,000 Var 05/19/27 31,703
Wachovia Capital Trust I 146,000 Var 01/15/27 134,334
Wells Fargo. & Co 23,000 Var 03/29/49 24,010
Wells Fargo & Co 37,000 Var 12/29/49 38.164
Total Preferred Stock - Forward 923,066
Common Stock:

Pandora A/S 8,176 1,015,959
Orsted A/S 28,949 1,098,766
Continental Ag 4,999 1,065,858
Rheinmetall Ag 14,394 866,910
MTU Aero Engines Ag 4,601 546,476
Mediaset Espana Comunicacion S 91,686 1,103,057
Ferrovial Sa 55,733 1,114,885
Red Electrica Corp Sa. 28,281 433,584
Christian Dior Se 2476 370,161
Cie De Saint-Gobain 13,925 675,592
Groupe Eurotunnel Se 111,162 1,285,754
Koninklijke Kpn Nv $3,389 182,251
ASML Holding Nv 8.441 1,025,117
Totals - Forward $ 10,784,370

See bidependent Auditors’ Report.

36.

)

Current
Value

9,720,585
6.464.846

162,619

60,450
120,304
101,704

86,374

35,083

16,144

24,503

25,628

16,080

65,100

34,040
136,510

23,886

39,265

947,687

715,471
1,265,006
1,113,032
1,382,775

649,832
1,232,571
1,256,882

635,245

707,759

779,410
1,310,643

182,089
1,115,299

$ 12,406,014



360

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(14) Fair Value Measurements (Continued)

U.S. Real Estate Investment Fund, LLC (Continued)

The Fund entered into several joint ventures with Intercontinental Build Real Estate Investment Fund
LLC. Investment in joint ventures is presented using the equity method-at fair value of the Fund's
ownership interest of the underlying entities. The fair market value of the Plan's investment in
Intercontinental Real Estate Investment Fund at May 31, 2107 was $12,806,598.

Transfers Between Levels

The availability of observable ‘market data is monitored to assess the appropriate classification of
financial instruments within the fair value hierarchy. Changes in economic conditions or model-based
valuation techniques may require the transfer of Financial instruments from one fair value level to
another, In such instances, the transfer is reported at the beginning of the reporting period. For the year
ended May 31, 2017, there were no transfers in or out of levels 1, 2 or 3.

(15) Party-In-Interest Transactions

The Plan investments in common collective trusts are managed by an iffiliate of Bank of New York
Mellon ("BNY"), the Plan's custodian, . In addition, the Plan's investments in the EB Temporary
Investment Fund ("EB Temp"), EB DV Non-SL Small Cap Stock Index Fund ("SIF-1"), the EB DV
Non-SL Large Cap Stock Index Fund ("SIP-2"), the EB DV Non-SL International Stock Index Fund
(“SIF-3"), and the Collective U.S, Government STIF ("STIF").are sponsored and managed by BNY, As
such, transactions in those common collective trust funds, EB Temp, SIF-1, SIF-2, SIF-3, and STIF

qualify as party-in-interest transactions.
(16) Retirement Plans

The Plan contributes to one multi¢mployer defined benefit pension plan under the terms of a
participation agreement that covers its employees, Therisks of participating in multiemployer plans are
different from single-employer plans in the following aspects:

a. Assets contributed to the multiemployer plan by one company may be used to provide benefits to
employees of other participating companies.

b. Ifa participating company stops contributing to the plan, the unfunded obligation of the plan may
be borne by the remaining participating companies.

c. If the Fund stops participating in the multiemployer plan, and continues in business, the Fund
could be required to pay an amount, referred to as withdrawal liability, based on the unfunded
Status of the plan. The Fund has no intention of stopping its participation in the multiemployer
plan.

24



PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO, 701

Index to Financial Statements

336

Independent Auditors' Report
Financial Statements:
Statements of Net Assets Available for Benefits as of May 31, 2017 and 2016

Statements of Changes in Net Assets Available for Benefits for the years ended
May 31,2017 and 2016

Statements of Accumulated Plan Benefits as of May 31,2016 and 2015

Statements of Changes in Accumulated Plan Benefits for the years ended
May 31, 2016 and 2015

Notes to Financial Statements
Supplementary Information:
Schedule of Administrative Expenses
Schedule of Investment Expenses
» Schedule H, Line 4i - Schedule of Asseis (Held-at End of Year)

Schedule H, Line 4i - Schedule of Assets (Acquired and Disposed of Within the
Plan Year)

Schedule H, Line 4j - Schedule of Reportable Transactions

7-25

27
28
29-41

42
43



368

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701
EIN #13-6043977
PLAN NO. 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

(a) (b) © @ €)
Identity of Issue, Description of Investment,
Borrower, Including Maturity Date,
Lessor, or Rate of Interest, Collateral Current
Similar Party < Par or Maturity Value Cost Value
Total U.S. Government Securities - Forwarded $9,550,442 9,720,585
Corporate Bonds: (Continued):

Totals - Forwarded 1,267,165 1,292,366
Caterpillar Financial Services 55,000 54,878 55,327
Caterpillar Financial Services 40,000 39,416 39,138
Celanese Us Holdings LLC 40,000 45,520 45,064
Cenovus Energy Inc 23,000 26,408 25,710
Chase Issuance Trust A4 A4 100,000 99,967 100,313
Citigroup Ine 35,000 35,641 36,266
Columbia Pipeline Group Inc 15,000 15,015 17,951
Comcast Corp 24,000 20,431 21,542
Commonwealth Edison Co 20,000 19,926 21,500
Conagra Brands Inc 40,000 40,430 40,562
Consolidated Edison Co of New 20,000 20,039 19,893
Consolidated Edison Inc 20,000 19,988 19,819
DTE Energy Co 110,000 106,848 105,153
John Deere Capital Corp 25,000 25,000 25,048
Delphi Automotive Ple 10,000 9,945 9,822
Deutsche Telekom International 20,000 33,105 31,758
Dell International LLC / 144A 25,000 24,993 26,345
Discover Card Execution A2 A2 325,000 324,848 329,345
Discover Financial Services 60,000 60,642 65,201
Dominion Energy Inc 26,000 26,503 26,966
Duke Energy Corp 35,000 32,230 32,947
Duke Energy Progress LLC 10,000 10,204 10,506
Erae USA Finance LLC 144A 10,000 9,967 9,755
Erac USA Finance LLC 144A 40,000 39,926 38,863
Kinder Morgan Inc/De 16,000. 18,953 19,741
Kinder Morgan Inc/De 13,000 15,668 16,715
Enterprise Products Operating 44,000 43,064 44,000
Express Scripts Holding Co 40,000 40,899 42,046
FedEx Corp 21,000 20,947 21,037
Fifth Third Bancorp 120,000 119,831 120,722
Ford Credit Auto Owne 1 A 144A 100,000 100,000 100,987
Ford Credit Auto Owne 2 A 144A 190,000 187,388 189,225
Ford Credit Auto Owner Tr C A3 5,000 4.999 4,970
Totals - Forward $ 2,960,784 $ 3,006,603

See Independent Auditors’ Report.

32



PENSION FUND. OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

EIN #13-6043977

PLAN NO. 001 - PLAN YEAR ENDED MAY 31, 2017

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

377

(a) {b) (c)
Identity of Issue, Description of Investment,
Borrower, Including Maturity Dat
Lessor, or Rate of Interest, Collateral
Similar Par Par or Maturity Value

Total U.S. Government Securities - Forwarded

Total Corporate Bonds - Forwarded
Total Preferred Stock - Forwarded

Common Stock (Continued):
Totals - Forwarded

Samsung Electronics Co Ltd 1,622
Allergan Ple 3,100
Medtronic Pie $,700
Chubb Ltd 5,700
Chubb Ltd 5,140
Lyondellbasell Industries Nv 2,205
Samsung Electronics Co Ltd 71

Total Common Stock

Common Collective Trusts;

*EB Temp Inv Fd 1,869,438
*EB Temp Inv Fd 1,967,679
*EB Dv Nsl Intl Sif 67,017
*EB Dv Nsl Small Cap Sif 36,122
*EB Dv Nsl Leg Sif 21,166
*Collective Us Gov't Stif 20 794,645

Total Common Collective Trusts

Registered Investment Companies:
Pimco All Asset Fund Institutional 2,774,150

Partnership/Joint Ventures:
Entrust Capital Spec Opp Fund Ltd. 16,394,854
Crescent Capital High Income 23,496,772
U S Real Estate Investment 11,868
Total Partnerships/Joint Ventures
Total Investments

* Represents a party-in-interest

See Independent Auditors' Report.

Al

Var 12/31/40
Var 12/31/49

Var
Var
Var

Var
Var
Var

Var 12/31/49

N/A

N/A
N/A
NIA

N/A

N/A
N/A
NWA

{ay

Cost

$__ 9,550,442
6,331,509

925,066

72,502,729

801,997
730,986
478,221
305,418
613,799
168,317

63,983

___75,665.450

1,869,438
1,967,679
12,248,609
5,578,026
2,679,725

794.645

25,138,122

33,738,493

13,727,626
22,755,894
12,104,696

48.588.216
$.129,937,208

(e)
‘urrent
Yalue
$_9,720,585
6,464,846
947,687

93,764,446

1,610,646
693,625
480,396
816,183
735,997
177,547

onsen 0,502

98,349,342

1,869,438
1,967,679
13,725,811
8,907,574
6,008,560
794.645

33,273,707

32,984,646

16,375,717
23,496,772

12,806,598
52,679,087

$234,419,900

vation


363

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Schedules of Administrative Expenses

Administrative Expenses:
Salaries and Payroll Taxes
Fringe Benefits
Conferences and Meetings
Depreciation.

Insurance

Real Estate Taxes

Maintenance Expenses and Fees
Utilities

Office Supplies and Expenses
Postage

Telephone

Computer Expenses and Supplies
Legal Fees

Accounting Fees

Actuarial Fees

Other Administrative

Total Administrative Expenses

See Independent Auditors’ Report.

27

Years ended
May 31,

2017 2016
$ 172,108 $ 172,368
70,763 70,257
6,963 17,416
6,480 8,407
130,202 140,002
33,233 32,164
16,119 11,324
15,902 15,722
2,931 3,386
4,534 5,288
1,829 1,969
19,105 16,920
73,586 75,631
26,844 28,891
50,000 45,000

17,965 20,073

$__.048,564 $664,818



347

PENSION FUND OF THE WELFARE AND PENSION FUND
MID JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(3) Accumulated Plan Benefits (Continued)
The significant actuarial assumptions and methods used in the latest valuation.of June 1, 2016 were:

Mortality Rates - The RP2000 mortality table set forward three years projected with scale AA on a fully
generational basis for healthy participants and the RP2000 disabled mortality table for disabled

participants for the current year,

Retirement Rates - For those eligible to retire, the retirement rates are as follows:

Age Rate
40-44 5%
45-49 15%
50-59 50%
60-61 45%

62 50%
63-69 75%
70+ 100%

Disability Rates - Sample rates are as follows:

Age Rate

25 0.05%
30 0.05%
35 0.06%
40 0.09%
45 0.18%
50 0.40%
55 0.85%
60 1.74%

Termination Rates - The termination rates are assumed to follow the published T-6 table. Sample rates
are as follows:

20 7.94%
30 7AO%
40 6.11%
50 3.62%
60+ 0.13%

Administrative Expenses - $600,000, payable at the beginning of the year.

New Entrants - No new entrants or rehired employees are assumed in the future.
Maximum Benefits - It is assumed that the maximum benefit limitation under the
Internal Revenue Code will not increase in the future.

Interest Rate - 7.5%

i



350

PENSION FUND OF THE WELFARE AND PENSION FUND
MID. JERSEY TRUCKING INDUSTRY LOCAL NO. 701

Notes to Financial Statements

(6) Leases (Continued)

The Local 701 Pension Fund Realty Co., LLC leases to the above listed tenants and are accounted for as
noneancelable operating leases with terms of one to five years. The following is a schedule by years of
future minimum rentals under the leases at May 31, 201 i

Year end

May.31
2018 $97,026
2019 97,026
2020 32,342
Total $226,394

(7) Risks and Uncertainties

Concentrations of Credit Risks - Financial instruments which potentially subject the Plan to
concentrations of credit risk are cash-and‘employers' contributions receivable arising from its normal
business activities, The Plan routinely:assesses the financial strength of its employers based upon factors
surrounding the industry and its geographic locations. A substantial portion of the Plan's income is
derived from the employers of the industry which is in turn dependent tipon the stability and
envitonment of the local economy. A downturn in the industry would affect employer contributions.
‘The Plan places its cash with high credit quality financial institutions. The amount on deposit in any one
institution that exceeds federally insured limits is subject to credit risk.

Investment Risks - The Plan invests in various investment secutities. Investment securities are exposed
to various risks such as interest rate, market and credit risks. Due to the level of risk associated with
certain investinent securities, it is at least reasonably possible that changes in the values of investment
securities will occur in the nearterm-and those changes could materially affect the amounts reported in
the statements of net assets available for benefits.

Inherent Risks-The actuarial present value of accumulated plan benefits is reported based on certain
assumptions pertaining to-interest rates, and participant demographics, all of which are subject to change,
Due to uncertainties inherent in the estimations and assumptions: process, it is at least reasonably
possible that changes in these estimates and assumptions in the near term would be material to the
financial statements.

(8) Transactions with Related Parties

Allocation of Cotnmon Expenses - The Plan currently shares common facilities and personnel with two

other related: Funds of the Highway and Local Motor Freight Drivers, Dockmen and Helpers Local

Union No. 701 (Teamsters Local 701), Teamsters Local 418 Pension Fund, and Bakery Drivers Local

194 Pension Fund (collectively, the "Funds”). Accordingly, certain. common expenses are allocated

among the Funds, These expenses include; payroll and:related fringe benefits, rent andvutilities, office

and computer supplies and maintenance as. well as other costs for-goods and services. shared by the
Ss.

14