Annual Reports

2018 Annual Report
Message from the CEO

 

 

Highlights AR2018

Nearly a century ago, even before Social Security came on the scene, the founders of the Fund had the remarkable vision to create a retirement program as a reward for YMCA workers who dedicate a career of service to the YMCA Movement.

Since that time, through wars, economic cycles and geo-political challenges, your Fund has remained steadfast in its commitment to the original vision. My colleagues and I, guided by a dedicated Board of Trustees, strive every day to be the best at what we do to support the people delivering YMCA programs and services in all corners of the USA.

Just like YMCAs, the Fund is a 501(c)(3) nonprofit organization. We hold ourselves to the highest standards as we take responsibility for both the investment management of $7 billion and benefits management for more than 120,000 people. At the same time we manage our expenses with great care. Please read the Report from the CFO for an explanation of our expense benchmarking.


“I am proud to say that your Fund is financially stronger than it has been in some time because Management and the Board continue to keep the long-term view in our sights.”


Investment Performance

In the fiscal year ended June 30, 2018, your Fund built on the recovery that began the prior year. Our net investment returns were consistently strong in absolute terms, and we also outperformed our benchmark in relative terms.

Looking back over longer time periods, the strong results for the year also improved our comparative performance. Please read the Report from the CIO for a more detailed commentary.

Investment Returns as of June 30, 2018 (Net of all Investment Costs)

Net of Costs

Impact of the Discount Rate on the Funding Level

In spite of our strong investment returns, we finished the fiscal year on June 30, 2018 at a funding level of 95% (assets as a percentage of liabilities).

While the funding level exceeded 100% during the course of the fiscal year, we reduced the rate used to discount our liabilities toward the end of the year. This bolstered the long-term sustainability of the Fund, but it also had the temporary effect of decreasing our funding level. Please read The Funding Level for an explanation of why this change was made and how it will strengthen the Fund for the long term.

The reduction of the discount rate was taken after a year of careful and thoughtful study and discussion among the Trustees, Management, and our independent Actuary (Conduent), in order to position your Retirement Fund for the long term.

Lowering our discount rate increased the value of our liabilities, thereby decreasing our funding level. Essentially, we accepted a short-term decrease of our funding level in order to strengthen the Fund for the long-term. When combined with other factors, the lower discount rate gave our Trustees the confidence to declare 5% annualized interest credits for the period of July to December 2018. This followed the previous six-month period, also at 5% annualized interest credits.

Assets and Liabilities

The reduction of the funding level below 100% had no impact on Participants or Retirees. Participants’ account balances did not go down and Retirees’ annuities were paid without interruption.

In fact, over the last ten years, during months when the funding level was below 100%, more than 6,100 people retired and still annuitized their accounts at the full value of their contributions and interest accumulated before they retired.

Our Mission and Guiding Principles

The Fund’s primary focus is to protect Participants’ account balances during their working careers and then provide an uninterrupted stream of annuity payments throughout their retirement years. 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:

Mission
  • 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

Our plans are structured to reward long-term YMCA employees. When they retire, the Fund annuitizes their account balances (savings for life) with an exceedingly beneficial annuity conversion rate and converts their account balances into monthly retirement payments (income for life). We mean it when we say that building loyalty to the YMCA Movement is the focal point of our mission at the YMCA Retirement Fund.

Committed to the Vision

Since its start in 1922, your Fund has been a steady, reliable retirement program. As the YMCA Movement has grown nationwide, so too has the Fund. It has allowed and encouraged YMCA staff to give their all to the communities they serve, knowing that they had strong support from the Fund throughout their YMCA careers in building and assuring their retirement future.

I am proud to say that your Fund is financially stronger than it has been in some time because Management and the Board continue to keep the long-term view in our sights. Ultimately, the core of our fiduciary responsibility to our Participants and Retirees is to ensure that your retirement program will be there to support you and your beneficiaries for your lifetimes. I am more confident than ever that we are fulfilling that responsibility.

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

Preis AR2018 

John M. Preis, President and CEO