Annual Statement FOR THE YEAR ENDED 12/31/2016

Annual Statement OF THE FINANCIAL CONDITION OF THE FALMOUTH RETIREMENT BOARD TO THE PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION FOR THE YEAR ENDED 12/31/2016

Annual Statement for the Year Ended December 31, 2016 of the conditions and Affairs of the Falmouth Retirement Board Organized Under the Laws of the Commonwealth of Massachusetts to the Public Employee Retirement Administration Commission Date of Certificate 02/14/1941 Effective Date 07/01/1941 ADMINISTRATION OFFICE 80 Davis Straits, Suite 102 Street & Number Falmouth, MA 02540 City/Town, State and Zip Code (508) 457-0578 Telephone Number We, the undersigned, members of the Falmouth Retirement Board certify under penalties of perjury, that that we are the official board members of said retirement system, and that on the thirty-first date of December last, all of the herein-described assets were the absolute property of said retirement system, free and clear from any liens or claims thereon, except as stated, and the following statements, with the schedules and explanations therein contained, annexed, or referred to, are a full and correct exhibit of all of the assets, liabilities, income and disbursements, changes in fund balances, and the conditions and affairs of said retirement system on the said thirty-first date of December last, and for the year ended on that date, according to the best of our information, knowledge, and belief respectively Board Of Retirement Ex-Officio Member Jennifer P Petit (Name) Appointed Member (Signature) Term Expires Gary W Anderson (Name) Elected Member (Signature) Term Expires 10/30/2019 Russell R Ferreira (Chairman) (Name) Elected Member (Signature) Term Expires Vacant (Name) Member Appointed by Other Members (Signature) Term Expires 06/30/2018 Ellen K Philbin (Name) (Signature) Investment Managers Managers Listed on Next Page Investment Consultant Custodian Wainwright Investment Counsel, LLC State Street Bank One Boston Place, 41st Floor, Boston MA 02108 801 Pennsylvania Ave, Kansas City MO 64105 Page 1

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 ANNUAL STATEMENT BALANCE TESTS 1 ASSET BALANCE Assets Previous Year 117,181,73738 Income Current Year 22,229,40503 Disbursements Current Year 12,360,72986 Assets Current Year 127,050,41255 2 ASSET DIFFERENCE Assets Current Year 127,050,41255 Assets Previous Year 117,181,73738 Difference 9,868,67517 3 INCOME DIFFERENCE Income Current Year 22,229,40503 Disbursements Current Year 12,360,72986 Difference 9,868,67517 4 FUND CHANGE DIFFERENCE Total Fund Change Credits Current Year 26,464,12938 Total Fund Change Debits Current Year -16,595,45421 Difference 9,868,67517 Note: The difference as a result of tests 2, 3 and 4 should be the same Page 2

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 ASSETS & LIABILITIES 2016 2015 2014 1 1040 Cash 1,692,13561 2,052,62573 2,738,99663 2 1100 Short Term Investments 000 000 000 3 1180 Fixed Income Securities 000 000 000 4 1170 Equities 26,535,05632 21,496,78039 25,056,89924 5 1101 Pooled Short Term Funds 000 000 000 6 1172 Pooled Domestic Equity Funds 25,220,62760 21,932,03426 25,148,60789 7 1173 Pooled International Equity Funds 19,227,49214 17,119,77022 12,643,71021 8 1174 Pooled Global Equity Funds 000 000 000 9 1181 Pooled Domestic Fixed Income Funds 20,648,96967 19,877,13735 20,373,28906 10 1182 Pooled International Fixed Income Funds 2,789,78201 2,785,17496 1,392,23821 11 1183 Pooled Global Fixed Income Funds 000 000 000 12 1193 Pooled Alternative Investments 4,532,64000 6,069,37875 7,286,94175 13 1194 Pooled Real Estate Funds 11,195,73419 11,285,79303 9,930,33730 14 1195 Pooled Domestic Balanced Funds 000 000 000 15 1196 Pooled International Balanced Funds 000 000 000 16 1197 Hedge Funds 11,668,32742 11,185,17366 10,184,80942 17 1198 PRIT Cash 000 000 000 18 1199 PRIT Fund 000 000 000 19 1550 Interest Due and Accrued 000 000 000 20 1350 Prepaid Expenses 21 1398 Accounts Receivable (A) 22 1910 Land 000 3,648,31642 000 000 3,474,40000 000 000 3,340,50039 23 1920 Buildings 000 000 000 24 1929 Accumulated Depreciation Buildings 000 000 000 25 2020 Accounts Payable (A) (-108,66883) (-96,53097) (-101,09895) TOTAL 127,050,41255 117,181,73738 117,995,23115 FUNDS 1 3293 Annuity Savings Fund 30,204,78699 30,103,94419 29,827,72899 2 3294 Annuity Reserve Fund 11,185,78081 10,081,99888 9,210,99215 3 3295 Military Service Fund 10,27322 10,26296 10,25271 4 3296 Pension Fund 8,965,34305 8,637,51363 8,646,24848 5 3298 Expense Fund 000 000 000 6 3297 Pension Reserve Fund 76,684,22848 68,348,01772 70,300,00882 TOTAL ASSETS AT MARKET VALUE 127,050,41255 117,181,73738 117,995,23115 (A) Specific details for Accounts Receivable and Accounts Payable are to be disclosed on Schedule A Page 3 000

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 Balance Dec 31 Prior year Receipts Interfund Transfers Disbursements Balance Dec31 Current Year Annuity Savings Fund 30,103,94419 3,161,13964-2,665,90734-394,38950 30,204,78699 Annuity Reserve Fund 10,081,99888 319,02536 2,665,88335-1,881,12678 11,185,78081 Pension Fund 8,637,51363 7,905,35268 1,568,84100-9,146,36426 8,965,34305 Military Service Fund 10,26296 1026 000 000 10,27322 Expense Fund 000 938,84932 000-938,84932 000 Pension Reserve Fund 68,348,01772 9,905,02777-1,568,81701 000 76,684,22848 Total All Funds 117,181,73738 22,229,40503-0 - -12,360,72986 127,050,41255 List below all transfers: Xfer from Xfer from Xfer from Annuity Savings Fund Control Acct Annuity Savings Fund Control Acct Pension Reserve Fund Control Acct to Annuity Reserve Fund in the amt of to Pension Reserve Fund Control Acct to Pension Fund Control Account in the amt of in the amt of 2,665,88335 on acct of 2016 Retirements Xfer from to in the amt of on acct of Xfer from to in the amt of on acct of Xfer from to in the amt of on acct of 2399 on acct of Interest Not Owed 1,568,84100 on acct of Appropriation Transfer per PERAC Page 4

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 RECEIPTS 1 Annuity Savings Fund: 2016 2015 2014 (a) 4891 Members' Deductions 2,850,20618 2,708,92311 2,709,19226 (b) 4892 Transfers from Other Systems 227,55392 98,14835 245,95801 (c) 4893 Member Make Up Payments and Redeposits 42,66446 58,80782 48,02712 (d) 4900 Member Payments from Rollovers 9,39405 33,08273 11,16221 (e) Investment Income Credited to Members' Accounts 31,32103 46,66200 45,99999 Subtotal 3,161,13964 2,945,62401 3,060,33959 2 Annuity Reserve Fund: (a) 4750 Recovery of Annuity from Reinstatement 000 000 000 (b) Investment Income Credited to Annuity Reserve Fund 319,02536 285,79000 270,97939 Subtotal 319,02536 285,79000 270,97939 3 Pension Fund: (a) 4898 3(8)(c) Reimbursements from Other Systems 494,89486 166,05981 217,90666 (b) 4899 Received from Commonwealth for COLA & Survivor Bft 114,25782 42,11414 79,23574 (c) 4894 Pension Fund Appropriation 7,296,20000 6,948,80000 6,617,94300 (d) 4840 Workers Compensation Settlement 000 000 11,00000 (e) 4751 Recovery of Pension from Reinstatement 000 000 000 (f) 4841 Recovery of 91A Overearnings 000 000 000 Subtotal 7,905,35268 7,156,97395 6,926,08540 4 Military Service Fund: (a) 4890 Contributions Received from Municipality 000 000 000 (b) Investment Income Credited 1026 1025 1024 Subtotal 1026 1025 1024 5 Expense Fund: (a) 4896 Expense Fund Appropriation 000 000 000 (b) Investment Income Credited to Expense Fund 938,84932 962,38189 945,00593 Subtotal 938,84932 962,38189 945,00593 6 Pension Reserve Fund: (a) 4897 Federal Grant Reimbursement 5,72500 4,20624 4,66400 (b) 4895 Pension Reserve Appropriation 000 000 000 (c) 4822 Interest Not Refunded 97913 5,94041 5,60798 (d) 4825 Miscellaneous Income 279 000 000 (e) Excess Investment Income 9,898,32085-498,65930 6,536,60771 Subtotal 9,905,02777-488,51265 6,546,87969 TOTAL RECEIPTS 22,229,40503 10,862,26745 17,749,30024 Page 5

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 DISBURSEMENTS 1 Annuity Savings Fund: 2016 2015 2014 (a) 5757 Refunds to Members 143,09955 314,23080 345,87283 (b) 5756 Transfers to Other Systems 251,28995 141,57710 127,34662 2 Annuity Reserve Fund: Subtotal 394,38950 455,80790 473,21945 (a) 5750 Annuities Paid 1,881,12678 1,628,36463 1,516,68103 (b) 5759 Option B Refunds 000 000 000 3 Pension Fund: Subtotal 1,881,12678 1,628,36463 1,516,68103 (a) 5751 Pensions Paid 8,890,86504 8,356,21314 7,940,83303 Regular Pension Payments 7,040,42092 6,475,05001 6,059,33002 Survivorship Payments 309,39447 303,18141 333,18867 Ordinary Disability Payments 67,10496 74,27831 72,79032 Accidental Disability Payments 1,301,45237 1,336,22165 1,312,89430 Accidental Death Payments 123,55704 121,75704 127,56638 Section 101 Benefits 48,93528 45,72472 35,06334 (b) 5755 3(8)(c) Reimbursements To Other Systems 255,49922 272,99366 223,98743 (c) 5752 COLAs Paid 000 000 000 (d) 5753 Chapter 389 Beneficiary Increase Paid 000 000 000 4 Military Service Fund: Subtotal 9,146,36426 8,629,20680 8,164,82046 (a) 4890 Return to Municipality for Members who Withdrew Funds 000 000 000 Subtotal 000 000 000 5 Expense Fund: (a) 5118 Board Member Stipend 3,00000 2,87500 2,25000 (b) 5119 Salaries 160,81547 153,31496 152,17320 (c) 5304 Management Fees 479,10443 502,37891 503,36355 (d) 5305 Custodial Fees 64,76925 62,09769 56,66930 (e) 5307 Investment Consultant Fees 100,00000 100,00000 100,00000 (f) 5308 Legal Expenses 15,44145 22,65439 16,29077 (g) 5309 Medical Expenses 59731 6629 17462 (h) 5310 Fiduciary Insurance 6,04700 5,86900 5,71400 (i) 5311 Service Contracts 35,57441 34,28772 28,43165 (j) 5312 Rent Expense (k) 5315 Professional Services (l) 5316 Actuarial Services (k) 5317 Accounting Services (n) 5320 Education And Training 38,87400 000 000 8,00000 3,05000 38,18100 000 000 8,00000 2,79000 37,95000 000 000 8,00000 2,27000 (o) 5589 Administrative Expenses 20,69575 14,37138 17,43829 (p) 5599 Furniture and Equipment (q) 5719 Travel 1,13796 1,74229 13,41962 2,07593 13,32109 95946 (r) 5829 Depreciation Expense: Building 000 000 000 Subtotal 938,84932 962,38189 945,00593 TOTAL DISBURSEMENTS 12,360,72986 11,675,76122 11,099,72687 Page 6

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 INVESTMENT INCOME Investment Income received from: 2016 2015 2014 (a) Cash (from Schedule 1) 1,58831 1,84051 3,59014 (b) Short Term Investments (from Schedule 2) 000 000 000 (c) Fixed Income Securities (from Schedules 3A and 3C) 000 000 000 (d) Equities (from Schedules 4A and 4C) 512,43748 318,71275 330,45841 (e) Pooled Funds (from Schedule 5) 1,278,90730 1,062,30137 1,237,83937 (f) Commission Recapture 000 000 000 4821 TOTAL INVESTMENT INCOME 1,792,93309 1,382,85463 1,571,88792 Plus: 4884 Realized Gains (Profits) 1,203,15611 3,868,05844 2,903,30648 4886 Unrealized Gains (Increase in Market Value) 17,764,85460 11,220,60564 12,838,73172 1550 Interest Due & Accrued on Fixed Income Securities at End Of Current Year 000 000 000 Less: 4823 Paid Accrued Interest on Fixed Income Securities 000 000 000 4885 Realized Losses 988,49311 619,18225 1,120,86299 4887 Unrealized Losses (Decrease in Market Value) 8,584,92387 15,056,15162 8,394,20418 1550 Interest Due and Accrued on Fixed Income Securities Prior Year 000 000 25569 NET INVESTMENT INCOME 11,187,52682 796,18484 7,798,60326 Income required: Annuity Savings Fund (from Supplementary Schedule) 31,32103 46,66200 45,99999 Annuity Reserve Fund 319,02536 285,79000 270,97939 Expense Fund 938,84932 962,38189 945,00593 Military Service Fund 1026 1025 1024 TOTAL INCOME REQUIRED 1,289,20597 1,294,84414 1,261,99555 Net Investment Income 11,187,52682 796,18484 7,798,60326 Less Income Required 1,289,20597 1,294,84414 1,261,99555 EXCESS INCOME TO PENSION RESERVE FUND 9,898,32085-498,65930 6,536,60771 Page 7

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 MEMBERSHIP FOR CURRENT YEAR ACTIVE MEMBERS Group 1 Group 2 & 4 TOTAL Active Membership, Dec 31st, Previous Year 447 124 571 Inactive Membership, Dec 31st, Previous Year 114 8 122 Enrolled During Current Year 59 5 64 Transfers Between Groups 0 0 0 Reinstatements of Disabled Members 0 0 0 SUBTOTAL 59 5 64 Deduct: Death 0 0 0 Withdrawals 24 1 25 Retirements 21 4 25 SUBTOTAL 45 5 50 Active Membership, Dec 31st, Current Year 458 123 581 Inactive Membership, Dec 31st, Current Year 117 9 126 RETIRED MEMBERS, BENEFICIARIES & SURVIVORS Retired, Beneficiary and Survivor Membership, Dec 31st, Previous Year 263 114 377 Retirements During the Year Superannuation 21 4 25 Ordinary Disability 0 0 0 Accidental Disability 0 0 0 Termination Retirement Allowance 0 0 0 Beneficiary of Deceased Retiree 0 0 0 Survivor Benefits from Active Membership 0 0 0 SUBTOTAL 21 4 25 Deduct: Deaths of Retired Members 11 2 13 Termination of Survivor Benefits 1 0 1 Reinstatements of Disabled Pensions 0 0 0 SUBTOTAL 12 2 14 Retired Membership, Dec 31st, Current Year Superannuation 237 73 310 Ordinary Disability 0 2 2 Accidental Disability 12 29 41 Termination 0 0 0 Beneficiaries from Accidental Deaths 2 3 5 Beneficiaries from Section 100 0 0 0 Beneficiaries from Section 101 1 4 5 Beneficiaries under Option C 10 4 14 Option (D) Survivor Allowance 10 1 11 Section 12B Survivor Allowance 0 0 0 Total Retired, Beneficiary and Survivor Membership, Dec 31st, Current Year 272 116 388 TOTAL MEMBERSHIP Active, Inactive, Retired, Beneficiary and Survivor, Dec 31st, Current Year 847 248 1,095 Page 8

Annual Statement of the Falmouth Retirement Board for the Year Ended December 31, 2016 Schedule A: Detail of Accounts Receivable and Accounts Payable Accounts Receivable Amount Original Date 4751 Recovery of Pension from Reinstatement 000 4840 Workers Compensation Settlements 000 4841 Recovery of 91A Overearnings 000 4891 Members Deductions 000 4892 Transfers From Other Systems 000 4893 Member Make Up Payments and Redeposits 000 4900 Member Payments from Rollovers 000 4898 3(8)(c) Reimbursements from Other Systems 000 4899 Received from Commonwealth for COLA and Survivor Benefits 000 4884 Realized Gain on Sale of Investments 000 4894 Pension Fund Appropriation (Current Fiscal Year) 3,648,10000 12/31/2016 4894 Pension Fund Appropriation (Previous Fiscal Year) 000 4890 Contributions Received from Municipality on Account of Military Service 000 4897 Federal Grant Reimbursement 000 4895 Pension Reserve Appropriation 000 Investments Sold But Funds Not Received (list individually) Estate of Thomas Garland 21642 12/31/2016 000 000 000 TOTAL RECEIVABLES 3,648,31642 Accounts Payable 5316 Actuarial Services 000 5317 Accounting Services -8,00000 12/31/2016 5320 Education and Training 000 5757 Refunds to Members 000 5756 Transfers to Other Systems 000 5750 Annuities Paid 000 5759 Option B Refund 000 5751 Pensions Paid 000 5755 3(8)(c) Reimbursements to Other Systems 000 5752 COLAs Paid 000 5753 Chapter 389 Beneficiary Increase Paid 000 4885 Realized Loss on Sale of Investments 000 4890 Return to Municipality for Members Who Withdrew Their Funds 000 5118 Board Members' Stipend 000 5119 Salaries 000 5304 Management Fees -60,74107 12/31/2016 5305 Custodial Fees -10,94127 12/31/2016 5307 Investment Consultant Fees -25,00000 12/31/2016 5308 Legal Expenses -95625 12/31/2016 5309 Medical Expenses 000 5310 Fiduciary Insurance 000 5311 Service Contracts -49949 12/31/2016 5312 Rent Expense 5315 Professional Services Expense 000 000 5589 Administrative Expenses -1,37456 12/31/2016 5599 Furniture and Equipment -1,13796 12/31/2016 5719 Travel 000 Investments Purchased But Not Paid For (list individually) overpayment of member deductions -1823 12/31/2016 000 000 000 TOTAL PAYABLES -108,66883 Page 9