Farm Credit Foundations Defined Contribution / 401(k) Plan. Financial Statements December 31, 2014 and 2013

Transcription

1 Farm Credit Foundations Defined Contribution / 401(k) Plan Financial Statements December 31, 2014 and 2013

2 INDEPENDENT AUDITORS' REPORT Participants and Farm Credit Foundations Trust Committee Farm Credit Foundations Defined Contribution/401(k) Plan St. Paul, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of Farm Credit Foundations Defined Contribution/401(k) Plan (the Plan), which comprise the statements of net assets available for benefits as of December 31, 2014 and 2013, and the related statements of changes in net assets available for 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 preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Plan s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. An independent member of Nexia International

3 Participants and Farm Credit Foundations Trust Committee Farm Credit Foundations Defined Contribution/401(k) Plan Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2014 and 2013, and the changes in net assets available for benefits for the years then ended, in accordance with accounting principles generally accepted in the United States of America. CliftonLarsonAllen LLP Minneapolis, Minnesota August 11, 2015

4 Statements of Changes in Net Assets Available for Benefits Farm Credit Foundations Defined Contribution / 401(k) Plan Years Ended December 31, 2014 and 2013 Assets Investments at fair value $ 2,006,034,245 $ - Receivables: Notes from participants 22,684,079 - Employer contributions 86,697 95,628 Plan interest in Master Trust Investments at fair value - 1,851,842,740 Notes receivable from participants - 21,138,235 Total Plan interest in Master Trust - 1,872,980,975 Total assets 2,028,805,021 1,873,076,603 Liabilities Accrued expenses 207, ,933 Total liabilities 207, ,933 Net assets reflecting investments at fair value 2,028,597,573 1,872,963,670 Adjustment from fair value to contract value for interest in: Comingled trust fund (1,785,607) - Master Trust - (1,541,022) Net assets available for benefits $ 2,026,811,966 $ 1,871,422,648 See accompanying notes to the financial statements. 3

5 Statements of Changes in Net Assets Available for Benefits Farm Credit Foundations Defined Contribution / 401(k) Plan Years Ended December 31, 2014 and Net assets available for benefits, beginning of year $ 1,871,422,648 $ 1,534,943,573 Net investment income Net appreciation in fair value of investments 116,550,219 - Interest and dividends 21,264,932 - Master Trust income - 305,935,818 Interest on notes receivable to participants 743, ,373 Total net investment income 138,558, ,650,191 Contributions Participant 72,359,094 71,232,622 Employer 50,829,315 47,058,584 Total contributions 123,188, ,291,206 Deductions Benefits paid to participants 105,145,325 87,451,231 Administrative expenses 1,212,050 1,011,091 Total deductions 106,357,375 88,462,322 Net increase 155,389, ,479,075 Net assets available for benefits, end of year $ 2,026,811,966 $ 1,871,422,648 See accompanying notes to the financial statements. 4

6 Notes to Financial Statements Farm Credit Foundations Defined Contribution / 401(k) Plan December 31, 2014 and 2013 NOTE 1: DESCRIPTION OF THE PLAN The following description of the Farm Credit Foundations Defined Contribution / 401(k) Plan (the Plan) provides general information regarding the Plan. Refer to the Plan document for a complete description of Plan provisions. General The Plan is sponsored and maintained by AgriBank, FCB (AgriBank) and affiliated association and by former Ninth and Eleventh District Employers for the benefit of the eligible employees and affiliated associations, Northwest Farm Credit Services, ACA (Northwest, FCS), and other employers within the federal Farm Credit System. The Plan is intended to conform to and qualify under 401 and 501 of the Internal Revenue Code (IRC) of 1986, as amended. The Plan was most recently restated and amended effective October 1, The Farm Credit Foundations Plan Sponsor Committee approved amendments to the Plan document primarily to address the Internal Revenue Code requirements and conform provisions of the Plan with administrative practices. The participating employers are defined and declared to be instrumentalities of the United States in the charters issued to them by the Farm Credit Administration. For this reason, the Plan is intended to be a governmental plan as that term is defined in Code 414(d). For the same reason, the Plan is also intended to be a governmental plan as that term is defined in 3(32) of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. As such, the Plan is not subject to the provisions of Title I of ERISA. Plan Governance The Farm Credit Foundations Plan Sponsor and Trust Committees provide consideration and oversight of the benefit plans offered by participating employers of the AgriBank District, former Ninth and Eleventh District Employers, and Northwest, FCS as defined by the Farm Credit Foundations Administrative Agreement. As of December 31, 2014, there were 44 participating employers across 29 states with over 8,400 active employees, which Farm Credit Foundations served. The governance committees are either elected or appointed representatives (senior leadership and/or Board of Director members) from the participating organizations. The Plan Sponsor Committee is responsible for decisions regarding benefits at the direction of the participating employers. The Trust Committee is responsible for fiduciary and plan administrative functions. Eligibility Regular full-time and certain part-time employees are eligible to participate and may begin making employee contributions as soon as administratively possible following their date of hire. The following are not eligible to participate in the Plan: temporary employees, part-time employees without benefits, leased employees, non-resident aliens, employees of entities acquired by foreclosure, other individuals who for any period are classified as an independent contractor, employees covered by a collective bargaining agreement (unless the terms of the bargaining agreement otherwise provides), interns, externs, and cooperative students. Contributions The provisions of the Plan are summarized below: Any eligible employee that is not participating in the AgriBank District Retirement Plan, the Eleventh Farm Credit District Employees Retirement Plan, the Ninth Farm Credit District Pension Plan, or the Northwest Farm Credit Services Retirement Plan receives additional employer contributions each pay period. For qualified employees, contributions are made at a rate of 3% of compensation. Participants may contribute up to 75% of the eligible earnings on a pre-tax basis and up to 75% of eligible earnings on a post-tax basis (Roth 401(k) contributions). Total participant contributions may not exceed 75% of eligible earnings. Employer matching contributions are equal to 100% of total participant contributions, up to 6% of eligible earnings for participants not accruing benefits in their employer s closed defined benefit plan. For employees hired prior to January 1, 2007, and who participate in their employer s closed defined benefit retirement plan the employer matching contributions are equal to 100% of employee contributions up to 2% of eligible pay; plus 50% of the next 4% of eligible pay (maximum 4% total employer match). All participants who fail to make a deferral election will be automatically enrolled in the Plan. The automatic deferral starts at 3% of pre-tax earnings for participants with a plan entry date prior to January 1, The 5

7 automatic deferral starts at 6% of pre-tax earnings for participants with a plan entry date after January 1, Automatically enrolled participant contributions increase annually by 1% of pre-tax earnings until their contribution reaches 15% of pre-tax earnings. Participants may change the deferral percentage at any time. Grandfathered provisions for certain employee groups: For qualified employees of Farm Credit Services of America, ACA (FCS of America) an employer in the AgriBank District, who began participation prior to January 1, 1991, contributions are up to a maximum of 13% of earnings. All employees of Northwest, FCS, FCS of America, and former Eleventh District employers hired prior to January 1, 2007, who do not participate in their employer s closed defined benefit plan, receive an additional 3% integrated contribution of salary that exceeds the Social Security taxable wage base for the year. o The integrated additional contribution is credited to participants 401(k) accounts beginning with the pay period that their benefits eligible wages exceed the social security wage base. Certain employers in the former Eleventh District (those who have Internal Revenue Service (IRS) private letter rulings) are allowed to make paid-leave contributions to participant accounts. In general, paid-leave contributions are made in an amount equal to the dollar value of paid-leave accrued at December 31 in excess of the paid-leave that can be carried forward under the employers paid-leave policy. All participant and employer contributions are subject to limits set forth by the IRC. Participants may also contribute amounts representing eligible rollover distributions from other qualified plans. Participants in the Plan may direct employee and employer contributions in 1% increments to any of the Plan s investment options. The Plan s investments in each option are maintained under the direction of the participants. Participant Accounts Each participant s account is credited with the participant s contribution, related employer contributions, and Plan allocations of earnings or losses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the vested portion of the participant s account. Participant accounts are valued on a daily basis. Vesting The vesting provisions of the Plan are as follows: Participants are immediately vested in participant contributions, paid-leave contributions, and investment income earned thereon. Participants vest 100% in employer matching contributions and employer contributions after four years of service. Participants with less than four years of service vest in the employer contributions at a rate of 25% for each full year of service. Participants are immediately vested upon death, disability, or retirement. Notes Receivable from Participants The Plan allows participants to borrow a portion of their account balance subject to limitations set forth by the Plan and the IRC. Notes are secured by the balance in the participants accounts and generally bear interest at the prime rate. Repayment of notes receivable from participants, including monthly interest charges, is made semi-monthly in the form of payroll withholding. Notes are generally made for a term of five years or less, except for notes for a principal residence, which may be made for a term of up to 25 years. Payment of Benefits The participant s account value will be distributed to the participant upon termination. The Plan participant or a beneficiary may elect distribution under one, or any combination, of the following methods: by payment in a lump sum or by payment in monthly installments over a fixed reasonable period of time, not exceeding the life expectancy of the participant. All distributions will be paid in the form of a check drawn on the Trust. In the case of death, distributions will be made to the designated beneficiary. The Plan allows for in-service withdrawals upon financial hardship, as defined in the Plan, or upon attainment of age 59 1/2. The Plan also allows for in-service withdrawals of post-tax, rollover, or deductible employee contributions and certain matching contributions, as defined in the Plan. 6

8 Forfeited Accounts Nonvested employer contributions are forfeited by terminating participants. Forfeited accounts are held in an account at New York Life until used to either pay Plan administrative expenses or to reduce employer contributions. Forfeited accounts were $628,152 and $140,189 at December 31, 2014 and 2013, respectively. Forfeited accounts were used to offset administrative expenses of $264,224 and $690,011 during 2014 and 2013, respectively. Forfeited accounts were not used to reduce employer contributions during 2014 and Plan Administration The Plan provides that an employee of a participating employer who has satisfied the Plan's eligibility requirements, will have rights to benefits under the Plan. Farm Credit Foundations serves as Plan Administrator. The Farm Credit Foundations Trust Committee has primary responsibility for administration and interpretation of the Plan and investment of the Plan assets. The Farm Credit Foundations Trust Committee is the trustee for the Plan assets and was the trustee for the Plan assets invested in Master Trust. The trustee supervises and administers all investments and related activities, including such functions as purchases, sales, reinvestment, and collection of investment income. Certain income and expense items of the investments in the Master Trust are recorded at the Master Trust level. These include investment expenses, interest income, and dividends. As of December 31, 2013, Wells Fargo Bank, N.A. (Wells Fargo) was the custodian for the Plan assets and New York Life Trust Company was, and continues to be, the third-party administrator for the Plan. Effective January 1, 2014, New York Life Trust Company replaced Wells Fargo as custodian for the Plan assets. Additionally, the Plan assets were removed from the Master Trust effective January 1, 2014 and the assets related to this Plan were invested in a standalone trust. Subsequent to December 31, 2014, New York Life s retirement division was purchased by John Hancock Retirement Plan Services. There has been no impact to the Plan as a result of this event. Plan Termination Although there has been no expression of intent to do so, the Plan Sponsor Committee has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the plan provisions. Upon either full or partial termination of the Plan, or, if applicable, upon complete discontinuance of profit sharing plan contributions to the Plan, an affected participant s right to his/her account balance is 100% vested, irrespective of the vested percentage which otherwise would apply. Any approved change will be added to the Plan in writing and communicated to participants at such time and in such manner as the Plan Administrator deems necessary. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accompanying financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Accordingly, income is recorded in the year earned and expenses are recorded in the year incurred. Investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Statements of Net Assets Available for Benefits present the fair value of the investment contracts as well as the adjustment of the fully benefit responsive investment contracts from fair value to contract value. The Statements of Changes in Net Assets Available for Benefits are prepared on a contract value basis. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and changes therein, as well as disclosures of contingent assets and liabilities. Actual results could differ from those estimates. 7

9 Fair Value Measurements The accounting guidance describes three levels of inputs that may be used to measure fair value. Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the Plan has the ability to access at the measurement date. Level 2: Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly. Level 2 inputs include the following: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active so that they are traded less frequently than exchange-traded instruments, the prices are not current, or principal market information is not released publicly, inputs other than quoted prices that are observable for the asset or liability, and inputs derived principally from or corroborated by observable market data by correlation or other means. Level 3: Unobservable inputs are supported by little or no market activity and are significant to the fair value of the assets or liabilities. These unobservable inputs reflect the Plan s own assumptions about assumptions that market participants would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. In addition, assets measured at NAV per share which the Plan does not have the ability to redeem at NAV per share at the measurement date. 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. There have been no changes in the valuation methodologies used at December 31, 2014 and Investment Valuation and Income Recognition The Plan s investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Money market funds, mutual funds, and comingled trust funds are valued at the NAV of shares held by the Plan at year end. Corporate bonds and government securities are valued using pricing models maximizing the use of observable inputs for similar securities. Common stocks are valued at the closing price on the active market on which the individual securities are traded. The investment insurance contract is valued based on a discounted cash flow model. The fair value of the Plan s interest in the Master Trust is based on the beginning of year value of the Plan s interest in the trust plus actual contributions and allocated investment income or losses less actual distributions and allocated administrative expenses. Purchases and sales of investments are recorded on a trade date basis. Interest income is accrued based on the terms of the underlying instrument and dividend income is recorded on the ex-dividend date. Net investment income includes the Plan s gains and losses on investments purchased and sold as well as held during the year. Notes Receivable from Participants Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are reclassified as distributions based upon the terms of the Plan document. Benefits and Expenses Benefit payments to participants are recorded upon distribution. Administrative and other eligible expenses of the Plan are paid from the Plan assets to the extent of forfeited employer contributions. Expenses in excess of forfeitures are either paid from Plan assets or directly by the employers. Administrative and other expenses of the Plan consist of legal, auditing, recordkeeping, and custodial fees. 8

10 Recently Issued or Adopted Accounting Pronouncements We have assessed the potential impact of accounting standards that have been issued, but are not yet effective, and have determined that no such standards are expected to have a material impact to our consolidated financial statements. NOTE 3: INCOME TAX STATUS The IRS has determined and informed the Farm Credit Foundations Plan Sponsor and Trust Committees by a letter dated May 12, 2014, that the Plan and related trust are designed in accordance with applicable sections of the IRC. Although the Plan has been amended since receiving the determination letter, the Plan administrator and the Plan's tax counsel believe that the Plan is designed, and is currently being operated, in compliance with the applicable requirements of the IRC and, therefore, believe that the Plan is qualified, and the related trust is tax-exempt. Accounting principles generally accepted in the United States of America require the Trust Committee to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to NOTE 4: INVESTMENTS Significant Investments The following table identifies the individual investments that represent five percent or more of the Plan s net assets available for benefits at December 31, 2014: Description Fair Market Value Dodge and Cox Stock Fund $ 239,137,442 New York Life Anchor IV Fund 318,858,409 PIMCO Total Return Fund 105,845,885 SSgA S&P 500 Index Fund 164,126,402 Vanguard Primecap Fund 201,965,747 Vanguard Wellington Fund 238,904,592 Appreciation of Investments Net appreciation in the fair value of Plan investments for the year ended December 31, 2014 is as follows: Common stocks $ 14,186,710 Mutual funds 102,363,509 Total net appreciation $ 116,550,219 Interest in Master Trust At December 31, 2013 the Plan s investments were in a master trust which held the investment assets of the Plan, AgriBank District Retirement Plan, the Eleventh Farm Credit District Employees Retirement Plan, Northwest Farm Credit Services Retirement Plan, and the Ninth Farm Credit District Pension Plan. Each plan s share of the Master Trust was determined by the use of accumulation units, with each unit representing an undivided interest in the Master Trust. The plans were credited with units purchased and charged with units to be paid or forfeited at the monthly accumulation unit value. Net assets, net investment income, gains and losses, and administrative expenses were allocated to the participating plans based upon the weighted average units held during the period. The Plan s interest in the Master Trust was approximately 62% at December 31, The Plan s investment in the Master Trust was greater than 5% of net assets available for benefits at December 31,

11 The following table presents the fair values of investments for the Master Trust as of December 31, 2013: Money market $ 83,579,422 Corporate bonds 460,050 Government securities 71,175 Common stocks 809,736,638 Mutual funds 1,436,632,750 Commingled trust funds 463,457,703 Cayman Islands exempted company 4,549,417 Investment insurance contracts 86,952,339 Long/short equity limited partnership 77,845,517 Pending investment trades 21,634,587 Net investments held by Master Trust 2,984,919,598 Notes receivable from participants 21,138,235 Total Master Trust $ 3,006,057,833 The following table presents the Master Trust investment income for the year ended December 31, 2013: Money market $ 2,027,258 Corporate bonds 72,110 Government securities 11,156 Common stocks 216,080,053 Mutual funds 199,618,059 Commingled trust funds 10,316,484 Cayman Islands exempted company 3,151,419 Investment insurance contracts 5,177,535 Long/short equity limited partnership 12,320,597 Securities lending cash collateral 44,228 Total net appreciation 448,818,899 Interest and dividends 19,320,480 Less: investment management expenses 15,698 Total net investment income $ 468,123,681 NOTE 5: RISKS AND UNCERTAINTIES The Plan provides for investment in a variety of investment funds. In general, investments are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the values of the investments will occur in the near term and that such changes could materially affect participants account balances and the amounts reported in the Statements of Net Assets Available for Benefits. NOTE 6: RELATED PARTY Farm Credit Foundations paid certain expenses on behalf of the Plan and was reimbursed by the participating employers for those expenses. 10

12 NOTE 7: FAIR VALUE OF FINANCIAL INSTRUMENTS The Plan uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. For additional information on how the Plan measures fair value, refer to Note 2. The following table presents the fair value hierarchy for the balances of assets of the plan measured at fair value on a recurring basis as of December 31, 2014: Level 1 Level 2 Level 3 Total Money market $ 17,518,092 $ - $ - $ 17,518,092 Corporate bonds - 2,566,121-2,566,121 Government securities - 75,672-75,672 Common stocks: Information technology 91,475, ,475,163 Industrials 57,018, ,018,577 Financial 89,497, ,497,235 Health care 65,099, ,099,892 Consumer 51,157, ,157,796 Energy 31,126, ,126,588 Other 66,764, ,764,608 Material 16,186, ,186,096 Telecomunications 21,151, ,151,294 Utilities 6,164, ,164,680 Total common stocks 495,641, ,641,929 Mutual funds: Fixed income funds 149,710, ,710,422 Domestic funds 826,950, ,950,592 International funds 93,166, ,166,890 Other 20,382, ,382,467 Total mutual funds 1,090,210, ,090,210,371 Commingled trust fund, stable value fund - 320,644, ,644,017 Investment insurance contract ,378,043 79,378,043 Total investments at fair value $ 1,603,370,392 $ 323,285,810 $ 79,378,043 $ 2,006,034,245 11

13 The following table presents the fair value hierarchy for the balances of the assets of the Master Trust measured at fair value on a recurring basis as of December 31, 2013: Level 1 Level 2 Level 3 Total Money market $ 83,579,422 $ - $ - $ 83,579,422 Corporate bonds - 460, ,050 Government securities - 71,175-71,175 Common stocks: Information technology 129,264, ,264,190 Industrials 104,592, ,592,872 Financial 120,391, ,391,270 Health care 82,862, ,862,380 Consumer 158,311, ,311,452 Energy 59,946, ,946,300 Other 72,328, ,328,309 Material 45,243, ,243,227 Telecomunications 19,640, ,640,288 Utilities 17,156, ,156,350 Total common stocks 809,736, ,736,638 Mutual funds: Fixed income funds 310,836, ,836,391 Domestic funds 830,936, ,936,584 International funds 276,059, ,059,984 Other 18,799, ,799,791 Total mutual funds 1,436,632, ,436,632,750 Commingled trust funds: Stable value funds - 322,587, ,587,202 Index collective funds - 89,643,055-89,643,055 Real estate funds - 51,227,446-51,227,446 Total commingled trust funds - 463,457, ,457,703 Cayman Islands exempted company - - 4,549,417 4,549,417 Investment insurance contract - 7,235,880 79,716,459 86,952,339 Long/short equity limited partnership ,845,517 77,845,517 Pending investment trades 21,634, ,634,587 Total investments at fair value $ 2,351,583,397 $ 471,224,808 $ 162,111,393 $ 2,984,919,598 There were no transfers into or out of Level 1 or Level 2 during the Plan years ended December 31, 2014 or The following table presents changes in the Plan assets measured at fair value using Level 3 inputs on a recurring basis for the year ended December 31, 2014: Investment insurance contract Beginning Balance, January 1, 2014 $ - Transfer in from Master Trust 79,716,459 Actual return on Plan assets, interest income 3,846,561 Purchases 247,222 Sales (4,432,199) Ending Balance, December 31, 2014 $ 79,378,043 12

14 The following table presents changes in the Master Trust assets measured at fair value using Level 3 inputs on a recurring basis for the year ended December 31, 2013: Cayman Islands exempted company Investment insurance contract Long/short equity limited partnership Total Beginning Balance, January 1, 2013 $ 23,032,585 $ 76,674,749 $ 65,524,920 $ 165,232,254 Actual return on Plan assets: Still held at the reporting date 3,151,419 4,412,615 12,320,597 19,884,631 Sold during the period - 626, ,135 Purchases - 43,484-43,484 Sales (21,634,587) (2,040,524) - (23,675,111) Transfers out of Level Ending Balance, December 31, 2013 $ 4,549,417 $ 79,716,459 $ 77,845,517 $ 162,111,393 As discussed in Note 1, effective January 1, 2014, the Plan assets were removed from the Master Trust and the assets related to this Plan were invested in a stand-alone trust. The following table sets forth additional disclosures of the Master Trust for the fair value measurement of investments in certain entities that calculate NAV per share (or its equivalent) as of December 31: Redemption Redemption Investment Type Fair Value Frequency Notice Period 2014 Commingled trust fund, stable value fund $ 320,644,017 Daily Daily 2013 Commingled trust fund Stable value fund $ 322,587,202 Daily Daily Index collective fund 89,643,055 Daily Daily Real estate fund 51,227,446 Quarterly 45 days Total commingled trust fund 463,457,703 Long/short equity limited partnership 77,845,517 Semi-annually 95 days Cayman Islands exempted company 4,549,417 Quarterly 100 Days There were no investments that calculate NAV per share in the Master Trust with unfunded commitments as of December 31, 2014 and Events that may restrict the ability to transact with funds that calculate NAV per share were not considered probable as of December 31, 2013, except for restrictions on investment redemptions instituted during the 2013 plan year by the Cayman Islands exempted company. The plan held an insurance investment contract at December 31, 2014 and 2013 measured at fair value using Level 3 inputs on a recurring basis. The insurance investment contract fair value was calculated using a discounted cash flow model and did not use NAV. 13

15 The following table presents the quantitative information used in the discounted cash flow model to calculate fair value on a recurring basis for the insurance investment contract for the years ended December 31: 2014 Range Fair Value Unobservable Input (Weighted Average) of Asset Interest rates by investment year 3.90%-8.90% (5.40%) $ 79,378,043 Transfer rates by investment year (a) 5.00%-32.20% (11.00%) Assumed amortization period 5 years 2013 Interest rates by investment year 3.75%-8.52% (5.42%) $ 79,716,459 Transfer rates by investment year (a) 5.00%-29.98% (10.28%) Assumed amortization period 5 years (a) Represents sales and maturities The Plan has various processes and controls in place to ensure fair value is reasonably estimated. The Farm Credit Foundations Trust Committee has primary responsibility for assessing fair value. During the financial statement preparation a reasonableness assessment is performed. Additionally, a third party investment manager monitors the investment risk, valuation, and advises the Farm Credit Foundations Trust Committee regarding investment decisions. Valuation approaches are reviewed on an ongoing basis and revised as necessary based on changing market conditions to ensure values represent a reasonable exit price. Objectives The stable value fund is designed for investors seeking stable returns and competitive rates over the long-term. The investment objective of the index collective fund is to match the return of the Barclays Capital Aggregate Bond Index. The real estate fund owns and seeks improved real estate projects, such as office, retail, residential, and industrial investments with stabilized occupancies that produce a relatively high level of current income combined with moderate appreciation potential. The long/short equity limited partnership generally implements non-traditional or alternative investment strategies. The Cayman Islands exempted company investment objective is to generate superior, long-term return with less risk than equity markets. NOTE 8: SUBSEQUENT EVENTS The Plan has evaluated subsequent events through August 11, 2015, the date the financial statements were available to be issued. Subsequent to December 31, 2014, New York Life s retirement division was purchased by John Hancock Retirement Plan Services. There have been no material subsequent events that would require recognition in these financial statements or disclosure in the Notes to Financial Statements, except for the acquisition of New York Life s retirement division by John Hancock Retirement Plan Services as described in Note 1. 14