Message from the CEO

The Trustees and Senior Management of the Fund have embraced the latest challenge, and you can count on us to keep your savings safe and secure.


Annual Highlights

Highlights Icon

The past fiscal year was a tough one for the markets and for your YMCA Retirement Fund but, despite the market volatility, more than 13,000 people received their monthly annuity payments, and no participant account balance lost a dollar of value. This is just what you should expect from your YMCA Retirement Fund, even though some observers say the investment climate has transitioned to a new normal of low returns, high volatility and slow economic growth and that this should be the expectation for some years to come.

The Fed in the U.S. and central banks all over the world have kept interest rates at all-time lows in an effort to stimulate economic growth. However, at the same time, the very low interest rates may likely be correlated to tamped-down investment returns.

The U.S. economy remains very unpredictable. The good news is that unemployment has dropped below 5% (as of this writing). Right now the U.S. is still struggling to sustain 2% annual growth, and it needs to achieve annual growth of 3% or better. This is required to support capital investment to fuel continued expansion as well as the creation of more jobs and a higher standard of living for a growing population.

Since it started in 1922, your YMCA Retirement Fund has persevered in the face of economic turmoil several times throughout its 94-year history. It has always emerged stronger, having adapted every time. The Trustees and Senior Management of the Fund have embraced the latest challenge, and you can count on us to keep your savings safe and secure.

Our Mission and Guiding Principles
Mission Graphic

The Fund’s primary focus is to protect participants’ account balances and provide retirees with an uninterrupted stream of annuity payments. 

Our three Guiding Principles summarize our ongoing efforts to deliver on our mission — to empower YMCA employees to achieve economic security, resulting in loyalty to the YMCA Movement:

  • Partner with participants to provide attractive benefits, resulting in a lifetime annuity as a reward for loyalty to the YMCA Movement 

  • Maximize the confidence and satisfaction of our Participants, Retirees and YMCAs as employers

  • Ensure an adequate funding level to perpetuate the safety and longevity of the plans

Investment Returns in the Short Term and Longer Term

Annualized Returns
(net of fees) 
(3.7%) 5.1% 5.4% 8.7% 4.5%

The Fund’s negative investment returns for the 1-year period are painful (believe me, I hate to lose in any period), but our returns over longer time periods have been positive. While it may be tempting to compare the Fund’s investment returns to headlines in the daily newspapers about the U.S. stock market, the Fund’s portfolio is well diversified with only 28% of its assets in U.S. equities.


In order to put our short- and long-term investment returns into the right context, it’s essential to understand the Fund’s structure. Our investment returns need to exceed 6% per year to consistently deliver more than the 3% interest credit and cover all investment and benefits management costs.

Many experts in the investment world believe that while investment returns for a diversified portfolio over the next 20 years may return to higher historical norms, in the short term it’s more realistic to expect that even achieving 6% will be no easy task.

With more than 100,000 people and over 800 YMCAs relying on us as the single-focus pension program for the YMCA Movement, taking the long view is essential. The Fund’s diversified portfolio of stocks, bonds and alternative assets (described in the Report from the CIO) is designed to provide a balance of growth and protection from risk over the long term. 

The Funding Level 

There are basically two types of pension plans:

  • Defined Contribution plans, where the level of annual contributions is defined and the final benefit is based on the value of the participant’s account

  • Defined Benefit plans, where the lifetime retirement benefits are defined based on years of service or other employment-related variables

The YMCA Retirement Plan is a hybrid, functioning like a Defined Contribution plan during the accumulation (saving) phase and as a Defined Benefit plan during the distribution (annuity) phase.

Assets and Liabilities Chart

As of June 30, 2016, our funding level (assets as a percent of liabilities) was 91%. You may recall the challenge associated with adopting new mortality tables last year, which was required by the Society of Actuaries. This added considerably to the Fund’s liabilities, and the approximately 4% decrease in funding that resulted from that change has yet to be offset. Naturally, we seek to restore full funding by growing the asset base as quickly as possible, but this must be done within the context of appropriate risk and in a low-growth market.

That means our funding level may very well remain under 100% for a period of time, making it difficult to grant higher interest credits. This is likely as tough to hear as it is for me to say, but this is the reality.

YMCA Relations and Customer Service

During the fiscal year July 2015 – June 2016, interest credited to Participants’ accounts averaged 4.5%. Compare this to a risk-free CD from your local bank, and you’ll see that even the Fund’s 3% annualized interest from July 1 – December 31, 2016 is significantly higher.

Engaging more YMCA staff in saving and planning for retirement is the driver of our efforts in YMCA Relations and Customer Service. Our ultimate goal is for Y staff to have a better understanding of their great retirement benefit.

Through group education sessions and individual counseling sessions offered by the Fund, our team was able to connect with more than 12,000 Y staff this year about their retirement plans. We were also gratified that many people stopped by our booth at the YMCA General Assembly in Kansas City in July.

The Operations Report from the Fund’s COOs explains in more detail our most recent efforts to support you with communications, education and enhanced mobile technology.

Support for Retirees

Annuities are paid to current retirees and issued to new retirees based on the book value of their accounts at retirement, not the market value (which was lower as of June 30, 2016). The Fund issues lifetime fixed annuities at a very favorable 7% interest rate. This is much higher than the market rate of 3-4% available from banks and insurance companies.

The YMCA Retirement Fund established the Retiree Emergency Assistance Program (REAP) in 2009 to provide one-time financial support to YMCA retirees who find themselves in a financial crisis without the resources they need to handle the situation. This program is supported by a generous gift from Peter E. Berger and proceeds from the annual Harold C. Smith Award Dinner. Grants are given for emergencies that fall into one of three categories: Medical, Shelter and Catastrophe.

In the last year, 46 grants totaling $69,125 were sent to Retirees in need.

CEO and AYR LiaisonRich Collato volunteers as the Fund’s Liaison to AYR, the Association of YMCA Retirees, providing quarterly reports to all YMCA Retirees. Our Chief Strategy Officer serves as a consultant to the AYR Board as it works to fulfill its strategic goals to Grow, Strengthen and Expand AYR.

The Retirement Savings Crisis

I’m very concerned about the savings crisis in our country. Only half of Americans have access to a pension plan, and more than three-quarters of them believe they won’t ever have enough savings to retire.

Unlike others in our country, YMCA Staff and Retirees can thank their employing YMCAs for viewing the retirement program as a critical employee benefit. When YMCA staff add their own voluntary savings via payroll deduction, we have the formula for success.

I urge you to start saving in a 403(b) Smart Account, and if you already are contributing to yours, try to save more. Our retirees say that, in their experience, the key is to start saving early and regularly from every paycheck, even if it’s only small amounts. This way you get the benefit of compound interest. You can always increase the amount you save in the future. Now is the time to save! 

Thank you for your continuing confidence in your YMCA Retirement Fund.

Preis Sidebar 

John M. Preis, President and CEO