YMCARETIREMENTFUND

2019

ANNUAL REPORTDedicated To The Promise

Annual Highlights JUNE 30 SUMMARY FINANCIAL DATA (dollar amounts in thousands)

2019 2018 2017 2016 INVESTMENT PERFORMANCE (NET OF FEES)

Total Fund return 5.31% 9.26% 13.28% (3.68%) Composite benchmark 5.73% 8.45% 11.63% (1.41%)

RESERVE ANALYSIS Assets available for benefits $ 7,127,684 $ 7,051,928 $ 6,553,309 $ 5,883,869 Required actuarial reserves 7,559,712 7,417,411 6,752,402 6,488,693 Reserve (deficit) $ (432,028) $ (365,483) $ (199,093) $ (604,824) Assets as a % of required reserves 94% 95% 97% 91%

RECEIPTS Contributions from Ys and participants $ 295,408 $ 279,076 $ 267,391 $ 257,360 Interest and dividends 32,589 26,462 29,575 39,672

Total $ 327,997 $ 305,538 $ 296,966 $ 297,032

DISBURSEMENTS Benefit and lump-sum distributions* $ 557,899 $ 358,136 $ 342,985 $ 346,088 Investment and administrative expenses 48,614 47,834 45,481 44,074

Total 606,513 405,970 388,466 390,162 NET DISBURSEMENTS $ (278,516) $ (100,432) $ (91,500) $ (93,130)

JUNE 30 SUMMARY OF PARTICIPANT STATISTICS Retirement Plan participants* 91,127 94,727 91,925 89,116 Savings Plan participants 46,061 43,865 41,119 37,611 Retirees and beneficiaries 14,793 14,341 13,845 13,386

Total participants** 118,624 120,763 116,227 111,780 Average annual salary of active participants $ 31,926 $ 31,101 $ 30,721 $ 30,004 Average annual retirement benefit $ 18,924 $ 18,482 $ 18,265 $ 17,908 Average age of active participants 44 44 43 43 Participating YMCAs 777 791 802 814

*During fiscal year 2019, the Retirement Plan was amended for a 3-month period to allow participants who terminated YMCA employ-ment prior to April 30, 2019 with account balances of one hundred thousand dollars or less, to withdraw their account balance as a lump-sum. This temporary window resulted in an increase in disbursements and a decrease in the number of participants.

**Some participants are enrolled in both plans.

The complete audited financial statements including footnotes and the auditor’s opinion, as well as the actuary’s valuation, are on the Fund’s website at www.yretirement.org. If you would like to receive a hard copy of either report, please email us at info@ymcaret.org.

Message from the Chairman As chairman of the YMCA Retirement Fund’s Board of Trustees, it is my privilege to present the Fiscal Year 2019 Annual Report. This marks my last year on the Fund’s Board, so it is an especially poignant time for me. As I look back on my opportunity to serve the YMCA Retirement Fund as a trustee since 2004, this is unquestionably the culmination of my work with the YMCA Movement. What a blessing it has been!

I joined the Fund’s Board at a key point in its history: 2004 was the year the Fund’s Church Plan status was clarified through legislation passed by the U.S. House and Senate and then signed into law by President George W. Bush.

Since that year, the Fund has grown from 75,000 to over 115,000 participants, with assets under management nearly doubling, from $3.7 billion to $7.1 billion.

Strengthening Communities More than 25 years ago I joined the Board of the YMCA of Metropolitan Atlanta, and I was privileged to witness first-hand how the work of YMCA staff, working hand-in-hand with volunteers, can transform a community. In support of that community-building across the country, the YMCA Retirement Fund was conceived almost 100 years ago with the same promise that we make today: We will provide YMCA staff with a safe and secure way to save, resulting in lifetime income upon retirement.

The trustees of the Fund spend countless hours fulfilling their fiduciary duties as they oversee the YMCA Retirement Fund. This year, we were pleased to welcome a new member to our Board, Christine Marcks.

A Momentous Year Fiscal Year 2019 was a momentous year for the Fund: We said goodbye to our dear friend and CEO of 19 years, John Preis, and welcomed Scott Dolfi as John’s successor. It’s amazing to consider that Scott is only the sixth CEO of the Fund since it was established in 1922.

John retired after a stellar 37-year career as a leader in the YMCA Movement. We will always be grateful to John, not only for his management skills, financial acumen, and strategic vision but also for his heart, which always put the YMCA mission and its people first.

Scott is a highly experienced and effective general manager in the sectors of insurance, pensions and annuities. In addition to his wealth of experience and technical skills, Scott is passionate about helping YMCA staff achieve financial wellness as they dedicate their lives to empowering youth, improving family health, and strengthening communities. We are excited to begin our work alongside Scott.

The Fund’s Promise As the Fund approaches its centennial, my colleagues on the Board and staff of the Fund remain dedicated to empowering YMCA staff to achieve financial security, now and in their future.

William A. Holby, Chairman

William A. Holby Chairman of the Board

YMCA Retirement Fund 1 2019 Annual Rerport

Message from the CEO It is an honor to have joined the YMCA family.

Becoming part of the worldwide, mission-driven YMCA Movement is very important to me. It’s an opportunity to take what I’ve learned in the pension and insurance worlds and apply these concepts to help support the people who wake up every day to strengthen their communities.

The YMCA Retirement Fund’s mission is to empower YMCA employees to achieve financial security, resulting in loyalty to the YMCA Movement. When you are secure financially, it’s easier to focus on helping other people strive to reach their wellness goals, helping kids learn and have fun, and building stronger, healthier communities.

Looking Back and Looking Forward

Having started at the Fund one week shy of the fiscal year ended June 30, 2019, I am pleased to present the work of the Fund’s staff and Board. The results accounted for in this report occurred under the strong leadership of John Preis, a true YMCA legend. His 19 years at the Fund were amazing, and he has been an invaluable resource for me as I took on my new role.

The Annual Highlights page presents key measures of the Fund’s work in both investment management and benefits administration. The Report of the CIO provides a concise commentary on our investment strategy and performance.

I am grateful for the trust bestowed upon me by the Board. It is inspirational to witness their dedication, service and passion for the YMCA Movement. I am thankful and honored to carry on the responsibility of and commitment to serving YMCAs and their employees.

Taking the Long-Term View

Shortly after starting at the Fund, I had the opportunity to meet hundreds of YMCA people in July 2019 at the General Assembly in Anaheim. Their passion for YMCA work and their trust in the YMCA Re-tirement Fund were the first and second things they communicated to me.

As the new CEO, I realize that the staff and Board of the Fund have worked hard to earn this trust. The responsibility to ensure that the Fund is stronger than ever for the long term is something I think about every single day.

Dedicated to the Promise As a pension fund we make a promise to our participants: that we will provide a safe and secure way to save now, so they may look forward to lifetime income in the future when they retire. We’ve done this for nearly 100 years and plan to keep doing so as we ap-proach our second century of service to YMCA people.

Scott Dolfi, President and CEO

Scott Dolfi President and CEO

About Scott Scott Dolfi became the Fund’s sixth president and CEO in late June 2019. Prior to joining the Fund, he worked for Guardian Life Insurance Company of America as chief operating officer. Before that, he worked for General Electric for 18 years. During this time, he spent eight years in London as the CEO of GE Life, a pension and annuity company.

Scott holds an MS in industrial and management engineering from Rens-selaer Polytechnic Institute and a BS in engineering and management from Clarkson University.

YMCA Retirement Fund 2 2019 Annual Rerport

Report from the CIO

Performance – A Multi-Year Perspective

The Fund experienced its third consecutive year of positive performance in the fiscal year ended June 30, 2019 (FY 19), and finished with $7.1 billion in investment assets. FY 19 was distinguished by three quarters of strong performance, broken up by a December quarter that featured an extreme, risk-off bear market, as can be seen in Table 1. Altogether, over these four quarters, the Fund gained 5.3% (shown net of all manager fees and internal investment costs, as are all returns below).

Our Fund is focused on the long term, so one-year returns are just part of the results picture for a retirement plan like ours. Even returns over 3 years (9.2% annualized return), 5 years (5.4%) and 7 years (7.7%), as shown in Table 2, represent only short- and intermediate-time periods for measuring results.

When we consider the results over 10 years (8.9%) or 20 years (5.6%), the outcomes have a greater bearing on the retirement benefits we can sustainably provide. These two periods represent a stunning contrast in returns, primarily because the 10-year period began with markets close to a historic low level during the Great Financial Crisis, whereas the 20-year period began with markets near a tech-boom high.

Management and Trustees use a variety of benchmarks over multiple time periods to measure and monitor the Fund’s performance. As of June 30, 2019, the Fund outperformed each of its benchmarks over the last 3, 5, 7 and 10 years. However, the Fund underperformed each of the benchmarks in FY 19 – only the second time this has occurred in the last 10 years. While we pay close attention to short-termresults and make course corrections along the way, our ability to take a long-term perspective is one ofthe Fund’s key investment advantages.

Macroeconomic and Market Environment

We remain cautious on the macro environment, as many seemingly incompatible indicators have begun to co-exist: growing geopolitical tensions in nearly all parts of the globe and yet rising financial markets; strong economic growth and yet modest inflation; expanding national deficits and yet low interest rates; and sinking corporate confidence and yet record consumer confidence. These inconsistencies create the likelihood of considerable volatility ahead in investment markets.

Table 2

Period Through 6/30/19

YMCA Retirement

Fund

Performance vs.

Composite Benchmark

1 Year 5.3% -0.4%

3 Years 9.2% +0.7%

5 Years 5.4% +0.1%

7 Years 7.7% +0.4%

10 Years 8.9% +0.6%

Table 1

Total Returns for Quarter Ending:

Global Stocks (ACWI)

U.S. Stocks (Russell

3000)

YMCA Retirement

Fund

Sept. 30, 2018 4.3% 7.1% 3.1%

Dec. 31, 2018 -12.8% -14.3% -6.0%

March 31, 2019 12.2% 14.0% 5.6%

June 30, 2019 3.6% 4.1% 3.0%

Total Returns for Fiscal Year 2019: 5.7% 9.0% 5.3%

Hunter S. Reisner Chief Investment Officer

YMCA Retirement Fund 3 2019 Annual Rerport

During FY 19, equity markets often reacted positively to the expectations of sustained growth propelled by lower interest rates. However, at some times such as during the December quarter, fear was the pre-vailing emotion — fear of the impact that escalating U.S.-China tensions could have on global growth and asset prices. During these times, faced with elevated uncertainty and dampened investor sentiment, central banks adopted a more dovish tone. As a result, interest rates globally remained quite low, with $13 trillion in debt having negative yields. Easy monetary policy may continue as long as the global growth outlook remains low and slow.

In the U.S., at the start of FY 19, most investors expected the Federal Reserve Bank to continue hiking rates. However, in December, the Fed signaled no further rate hikes and, in early 2019, hinted at rate cuts. Soon after, for the first time since 2007, the U.S. yield curve (measuring the difference between the three-month and ten-year treasury yields) inverted. Such a phenomenon has historically been a recession indicator, leading many to believe the Fed would or should cut short-term rates and remain accommoda-tive for the foreseeable future in an attempt to forestall a downturn in growth in an economy whose ex-pansion is now at record length.

Long-Term Investment Approach

The Fund manages an investment portfolio to meet our current and future obligations over the long term, including paying benefits in a timely fashion, generating 6–7+% long-term annualized returns, and minimizing the likelihood of a substantial, sustained drawdown of our assets. We will continue to accomplish this by doing the following:

Allocating approximately 75% of our Fund tohigh-expected-return asset classes, including pub-lic stocks and private equity investments in buy-outs, real estate, certain natural resources, andventure-stage and growth-stage companies

Allocating approximately 25% of our Fund to acombination of U.S. government securities andcertain diversifying strategies that are not highlycorrelated to public stocks and that we expect willproduce attractive (or at least acceptable) long-term returns while as a whole retaining value orappreciating during periods of equity market dis-tress

Diversifying by geography, asset class, sector, currency, and many other risk factors

Outlook

Fund Management focuses on (a) setting a well-thought-out asset allocation (see Chart 1) that balances the collection of risks we accept, as well as (b) carefully selecting and sizing a range of strategies and managers that we believe can achieve our investment objectives.

We are committed to the Fund’s mission and aim to achieve attractive returns that, over the long run, will enable us to provide our participants with sound benefits that empower them to achieve economic security after a career of service to the YMCA. We are confident that the combination of the Fund’s skilled staff and Trustees, well-considered investment strategy, and capable investment managers will enable the Fund to deliver strong performance over the long term.

Chart 1

YMCA Retirement Fund 4 2019 Annual Rerport

Board of Trustees Back Row, left to right: Angela Brock-Kyle, W. Kelvin Walker, D. Scott Luttrell,Stephen A. Ives, William D. Rueckert,Mark Baumgartner, David M. Martin,Barbara A. Bettin.

Front Row, left to right: Jurij Z. Kushner, Denise L. Day, Joseph R. Weist, William A. Holby, Eric K. Mann, Christine C. Marcks, Robert T. Lutts, Sandra J. Morander.

Senior LeadershipBack Row, left to right: Lisa Worthy, Vincent M. De Sio, Elizabeth Delgado, Elliott C. Buchholz, Maureen Haley, John Quiñones, Vanessa A. Boulous.

Front Row, left to right: Hunter S. Reisner, Elizabeth A. Kurilla, James G. Kirschner, John M. Preis, Suleyman Gokcan, Kerri R. Hayes, Marcela Deitrich.

Retiree Liaison Reid S. Thebault serves as the YMCA Retirement Fund’s Retiree Liaison. Appointed by the Board to a three-year term in 2018, his role is to provide a direct line of communication between the Fund’s trustees and retirees. A trustee of the Fund from 2002 – 2013, Mr. Thebault’s YMCA career spanned 45 years, culminating in his role as CEO of the YMCA of Metropolitan Detroit.

Independent Consultants Actuary: Buck Auditor: KPMG LLP Compensation: Willis Towers Watson Insurance: Willis Investment Advisor: Cambridge Associates Legal Counsel: Patterson Belknap Webb & Tyler LLP

Reid S. Thebault

Annual Report Produced by the YMCA Retirement Fund800-RET-YMCA (738 - 9622) • info@ymcaret.org • www.yretirement.org

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Photo Credits: Michael Benabib Photography, Bachrach Photography, Michael Levy Photography