TD Ameritrade Trust Company Collective Investment Funds for Employee Benefit Plans Retire Funds. Financial Reports May 31, 2015

Transcription

1 TD Ameritrade Trust Company Collective Investment Funds for Employee Benefit Plans Financial Reports May 31, 2015

2 Contents Independent Auditor s Report 1-2 Financial Statements Statements of Financial Condition 3 Schedules of Investments 4-6 Statements of Operations 7 Statements of Changes in Participants Interest 8 Statements of Cash Flows 9-10 Financial Highlights 11 Notes to Financial Statements Other Financial Information (Unaudited) Summary Schedules of Monthly Values Retire Income Fund Summary Schedule of Investment Changes (Unaudited) 21 Retire2015 Fund Summary Schedule of Investment Changes (Unaudited) 22 Retire2025 Fund Summary Schedule of Investment Changes (Unaudited) 23 Retire2035 Fund Summary Schedule of Investment Changes (Unaudited) 24 Retire2045 Fund Summary Schedule of Investment Changes (Unaudited) 25 Retire2055 Fund Summary Schedule of Investment Changes (Unaudited) 26

3 Independent Auditor s Report To The Trust Committee TD Ameritrade Trust Company Collective Investment Funds for Employee Benefit Plans Denver, Colorado Report on the Financial Statements We have audited the accompanying financial statements of Retire Income Fund, Retire2015 Fund, Retire2025 Fund, Retire2035 Fund, Retire2045 Fund and Retire2055 Fund (six of the funds constituting the TD Ameritrade Trust Company Collective Investment Funds for Employee Benefit Plans), which comprise the statements of financial condition, including the schedules of investments, as of May 31, 2015, and the related statements of operations, changes in participants interest, cash flows and the financial highlights for the year 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 and financial highlights 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 and financial highlights that are free of material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements and financial highlights 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 of 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 auditor s 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 entity 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 entity 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. 1

4 Opinion In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Retire Income Fund, Retire2015 Fund, Retire2025 Fund, Retire2035 Fund, Retire2045 Fund and Retire2055 Fund as of May 31, 2015, and the results of their operations, their cash flows and their financial highlights for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Other Matter Our audits were conducted for the purpose of forming an opinion on the basic financial statements and financial highlights as a whole. The other financial information is presented for purposes of additional analysis and is not a required part of the financial statements. Such information has not been subjected to the auditing procedures applied in the audits of the financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Denver, Colorado September 25,

5 Statements of Financial Condition May 31, 2015 Retire Income Fund Retire2015 Fund Retire2025 Fund Retire2035 Fund Retire2045 Fund Retire2055 Fund Assets Investments at fair value (1) $ 6,283,459 $ 4,473,562 $ 17,233,425 $ 17,510,603 $ 8,958,363 $ 3,605,874 Cash and cash equivalents 16,656-59,326 49,350 42,464 28,006 Dividend receivable 1,998 1,219 4,292 3,813 1, Receivable for securities sold - 87, Total assets $ 6,302,113 $ 4,562,431 $ 17,297,043 $ 17,563,766 $ 9,002,596 $ 3,634,501 Liabilities and Participants' Interest Liabilities Trustee fees payable - Share Class I $ 521 $ 375 $ 1,461 $ 1,487 $ 763 $ 298 Trustee fees payable - Share Class II Sub-advisor fees payable - Share Class II Audit fees payable Payable for securities purchased 16,656-59,326 49,350 42,463 28,006 Payable to affiliate - 87, Total liabilities 17,609 88,262 61,707 51,821 43,743 28,510 Participants' Interest Participants' interest - Share Class I 6,132,294 4,397,270 17,119,241 17,478,377 8,815,183 3,525,403 Participants' interest - Share Class II 152,210 76, ,095 33, ,670 80,588 Total participants' interest 6,284,504 4,474,169 17,235,336 17,511,945 8,958,853 3,605,991 Total liabilities and participants' interest $ 6,302,113 $ 4,562,431 $ 17,297,043 $ 17,563,766 $ 9,002,596 $ 3,634,501 (1) Cost $ 6,104,239 $ 4,366,601 $ 16,572,488 $ 16,615,287 $ 8,433,213 $ 3,403,476 See Notes to Financial Statements. 3

6 Schedules of Investments May 31, 2015 Fair Value as a % of Participants' Interest (1) Retire Income Fund Number of Shares Cost Fair Value Fair Value as a % of Participants' Interest (1) Retire2015 Fund Number of Shares Cost Fair Value Short term money market funds United States Federated Treasury Obligation Fund 2.6% 160,360 $ 160,360 $ 160, % 117,705 $ 117,705 $ 117,705 TDBank USA Institutional Money Market Deposit Account (2) 0.0% % Total short term money market funds 2.6% 160, , % 117, ,706 Collective investment funds United States Galliard Capital Management Stable Value Fund Q 16.0% 68, ,329 1,003, % 42, , ,148 Total collective investment funds 16.0% 983,329 1,003, % 601, ,148 Mutual funds United States stock LSV Conservative Value Equity Fund 2.9% 16, , , % 13, , ,363 Spartan Total Market Index Fund 6.0% 6, , , % 4, , ,047 T. Rowe Price Institutional Large Cap Growth 3.2% 6, , , % 5, , ,961 Total United States stock 12.1% 654, , % 550, ,371 International stock Dodge & Cox International Stock 5.4% 7, , , % 6, , ,637 Schroder International 5.2% 27, , , % 23, , ,107 Trilogy Emerging Markets Equity Fund 2.0% 15, , , % 14, , ,324 Wells Fargo Advantage Emerging Markets 2.1% 6, , , % 5, , ,874 Total international stock 14.7% 903, , % 790, ,942 United States bond Dodge & Cox Income Fund 7.5% 33, , , % 23, , ,588 Goldman Sachs Core Fixed-Income Institutional 7.4% 43, , , % 30, , ,523 Harbor High Yield Bond Institutional 4.7% 27, , , % 17, , ,328 Vanguard Inflation-Protected Securities 14.2% 83, , , % 58, , ,328 Total United States bond 33.8% 2,119,600 2,120, % 1,457,448 1,455,767 International bond Fidelity New Markets Income Fund 4.7% 19, , , % 10, , ,158 Legg Mason Global Opportunities Bond 9.5% 56, , , % 38, , ,880 Total international bond 14.2% 923, , % 594, ,038 United States real estate Vanguard REIT Index 6.6% 15, , , % 10, , ,590 Total United States real estate 6.6% 359, , % 253, ,590 Total mutual funds 81.4% 4,960,549 5,119, % 3,647,396 3,743,708 Total investments 100.0% $ 6,104,239 $ 6,283, % $ 4,366,601 $ 4,473,562 (1) Percentage of participants interest may not recompute as fair value and participants interest are rounded. (2) The percentage of participants' interest is less than 0.05% and therefore rounds to 0.0%. See Notes to Financial Statements. 4

7 Schedules of Investments - Continued May 31, 2015 Fair Value as a % of Participants' Interest (1) Retire2025 Fund Number of Shares Cost Fair Value Fair Value as a % of Participants' Interest (1) Retire2035 Fund Number of Shares Cost Fair Value Short term money market funds United States Federated Treasury Obligation Fund 2.6% 445,754 $ 445,754 $ 445, % 443,716 $ 443,716 $ 443,716 TDBank USA Institutional Money Market Deposit Account (2) 0.0% % Total short term money market funds 2.6% 445, , % 443, ,717 Collective investment funds United States Galliard Capital Management Stable Value Fund Q 7.7% 90,551 1,293,755 1,318, % 35, , ,166 Total collective investment funds 7.7% 1,293,755 1,318, % 501, ,166 Mutual funds United States stock LSV Conservative Value Equity Fund 4.8% 74, , , % 101,032 1,071,691 1,131,561 Spartan Total Market Index Fund 9.9% 27,573 1,427,022 1,707, % 37,362 1,914,778 2,313,461 T. Rowe Price Institutional Large Cap Growth 5.1% 29, , , % 40,403 1,008,924 1,196,342 Total United States stock 19.8% 2,967,446 3,426, % 3,995,393 4,641,364 International stock Dodge & Cox International Stock 9.0% 34,406 1,431,550 1,549, % 46,107 1,917,141 2,076,647 Schroder International 8.7% 127,318 1,474,548 1,502, % 170,080 1,979,872 2,006,948 Trilogy Emerging Markets Equity Fund 3.3% 70, , , % 72, , ,668 Wells Fargo Advantage Emerging Markets 3.4% 27, , , % 28, , ,048 Total international stock 24.4% 4,110,940 4,203, % 5,158,500 5,281,311 United States bond Dodge & Cox Income Fund 6.4% 79,285 1,077,064 1,096, % 63, , ,641 Goldman Sachs Core Fixed-Income Institutional 6.2% 101,060 1,051,795 1,070, % 82, , ,831 Harbor High Yield Bond Institutional 3.5% 56, , , % 55, , ,148 Vanguard Inflation-Protected Securities 12.0% 194,715 2,089,674 2,069, % 154,416 1,658,577 1,641,442 Total United States bond 28.1% 4,835,493 4,839, % 3,970,332 3,972,062 International bond Fidelity New Markets Income Fund 3.4% 38, , , % 37, , ,053 Legg Mason Global Opportunities Bond 7.6% 123,431 1,356,792 1,310, % 86, , ,346 Total international bond 11.0% 1,963,480 1,904, % 1,542,706 1,495,399 United States real estate Vanguard REIT Index 6.4% 41, ,619 1,094, % 44,298 1,003,025 1,164,584 Total United States real estate 6.4% 955,619 1,094, % 1,003,025 1,164,584 Total mutual funds 89.7% 14,832,978 15,468, % 15,669,956 16,554,720 Total investments 100.0% $ 16,572,488 $ 17,233, % $ 16,615,287 $ 17,510,603 (1) Percentage of participants interest may not recompute as fair value and participants interest are rounded. (2) The percentage of participants' interest is less than 0.05% and therefore rounds to 0.0%. See Notes to Financial Statements. 5

8 Schedules of Investments - Continued May 31, 2015 Fair Value as a % of Participants' Interest (1) Retire2045 Fund Number of Shares Cost Fair Value Fair Value as a % of Participants' Interest (1) Retire2055 Fund Number of Shares Cost Fair Value Short term money market funds United States Federated Treasury Obligation Fund 2.5% 223,406 $ 223,406 $ 223, % 89,308 $ 89,309 $ 89,308 TDBank USA Institutional Money Market Deposit Account (2) 0.0% % Total short term money market funds 2.5% 223, , % 89,310 89,309 Collective investment funds United States Galliard Capital Management Stable Value Fund Q 1.4% 8, , , % 1,570 22,451 22,860 Total collective investment funds 1.4% 119, , % 22,451 22,860 Mutual funds United States stock LSV Conservative Value Equity Fund 7.5% 59, , , % 25, , ,619 Spartan Total Market Index Fund 15.1% 21,788 1,118,905 1,349, % 9, , ,396 T. Rowe Price Institutional Large Cap Growth 7.8% 23, , , % 10, , ,337 Total United States stock 30.4% 2,342,362 2,716, % 1,027,663 1,174,352 International stock Dodge & Cox International Stock 13.7% 27,189 1,128,441 1,224, % 11, , ,314 Schroder International 13.1% 99,791 1,157,495 1,177, % 43, , ,203 Trilogy Emerging Markets Equity Fund 3.5% 38, , , % 16, , ,221 Wells Fargo Advantage Emerging Markets 3.5% 14, , , % 6, , ,355 Total international stock 33.8% 2,948,691 3,034, % 1,273,061 1,305,093 United States bond Dodge & Cox Income Fund 3.9% 25, , , % 7, , ,088 Goldman Sachs Core Fixed-Income Institutional 3.8% 31, , , % 9, , ,253 Harbor High Yield Bond Institutional 3.2% 27, , , % 10, , ,171 Vanguard Inflation-Protected Securities 7.0% 59, , , % 17, , ,046 Total United States bond 17.9% 1,603,908 1,603, % 517, ,558 International bond Fidelity New Markets Income Fund 3.3% 18, , , % 7, , ,223 Legg Mason Global Opportunities Bond 4.0% 33, , , % 10, , ,550 Total international bond 7.3% 669, , % 231, ,773 United States real estate Vanguard REIT Index 6.8% 23, , , % 10, , ,929 Total United States real estate 6.8% 525, , % 241, ,929 Total mutual funds 96.2% 8,090,560 8,613, % 3,291,715 3,493,705 Total investments 100.1% $ 8,433,213 $ 8,958, % $ 3,403,476 $ 3,605,874 (1) Percentage of participants interest may not recompute as fair value and participants interest are rounded. (2) The percentage of participants' interest is less than 0.05% and therefore rounds to 0.0%. See Notes to Financial Statements. 6

9 Statements of Operations Year Ended May 31, 2015 Retire Income Fund Retire2015 Fund Retire2025 Fund Retire2035 Fund Retire2045 Fund Retire2055 Fund Investment income: Dividends $ 204,764 $ 136,724 $ 571,531 $ 685,916 $ 370,533 $ 144,654 Total investment income 204, , , , , ,654 Expenses: Sub-advisor fees - Share Class II Audit fees 2,374 1,321 5,351 5,845 2,899 1,129 Trustee fees - Share Class I 6,210 3,991 15,564 16,969 8,579 3,276 Trustee fees - Share Class III Total expenses 9,039 5,497 21,601 23,003 11,886 4,718 Net investment income 195, , , , , ,936 Realized and unrealized loss on investments: Net realized gain on investments sold 39,535 34,320 89,664 96,960 57,750 30,388 Net change in unrealized appreciation on investments (122,020) (79,057) (246,650) (223,277) (88,754) (34,216) Net loss on investments (82,485) (44,737) (156,986) (126,317) (31,004) (3,828) Net increase in participants' interest resulting from operations $ 113,240 $ 86,490 $ 392,944 $ 536,596 $ 327,643 $ 136,108 See Notes to Financial Statements. 7

10 Statements of Changes in Participants' Interest Year Ended May 31, 2015 Retire Income Fund Retire2015 Fund Retire2025 Fund Units Amount Units Amount Units Amount Participants' interest at beginning of period 488,863 $ 6,660, ,395 $ 3,702,761 1,076,996 $ 15,007,906 Increase in participants' interest resulting from operations: Net investment income 195, , ,930 Net realized gain on investments sold 39,535 34,320 89,664 Net change in unrealized appreciation on investments (122,020) (79,057) (246,650) Net increase in participants' interest resulting from operations 113,240 86, ,944 Increase (decrease) in participants' interest resulting from participating unit transactions: Issuance of units - Share Class I 44, , ,804 1,527, ,879 3,618,829 Issuance of units - Share Class II ,189 30,078 1,538 21,419 Redemption of units - Share Class I (79,897) (1,093,320) (62,450) (872,016) (99,228) (1,408,501) Redemption of units - Share Class II (142) (1,921) (57) (781) (28,518) (397,261) Net increase (decrease) in participants' interest resulting from participating unit transactions (35,888) (489,538) 49, , ,671 1,834,486 Participants' interest at end of period 452,975 $ 6,284, ,881 $ 4,474,169 1,206,667 $ 17,235,336 Retire2035 Fund Retire2045 Fund Retire2055 Fund Units Amount Units Amount Units Amount Participants' interest at beginning of period 1,194,949 $ 16,394, ,155 $ 8,131, ,134 $ 3,171,885 Increase in participants' interest resulting from operations: Net investment income 662, , ,936 Net realized gain on investments sold 96,960 57,750 30,388 Net change in unrealized appreciation on investments (223,277) (88,754) (34,216) Net increase in participants' interest resulting from operations 536, , ,108 Increase in participants' interest resulting from participating unit transactions: Issuance of units - Share Class I 169,148 2,357, ,522 1,433,713 60, ,446 Issuance of units - Share Class II 1,816 25,007 2,486 33,874 3,218 43,381 Redemption of units - Share Class I (121,004) (1,682,410) (69,336) (955,897) (36,509) (505,478) Redemption of units - Share Class II (8,910) (119,407) (864) (12,078) (5,652) (76,351) Net increase in participants' interest resulting from participating unit transactions 41, ,369 37, ,612 21, ,998 Participants' interest at end of period 1,235,999 $ 17,511, ,963 $ 8,958, ,512 $ 3,605,991 See Notes to Financial Statements. 8

11 Statements of Cash Flows Year Ended May 31, 2015 Retire Income Fund Retire2015 Fund Retire2025 Fund Cash Flows from Operating Activities Net increase in participants' interest resulting from operations: $ 113,240 $ 86,490 $ 392,944 Adjustments to reconcile net increase in participants' interest resulting from operations to net cash provided by (used in) operating activities: Purchases of investments (1,704,347) (2,255,209) (6,032,320) Proceeds from sales of investments 1,997,534 1,439,029 3,646,924 Net realized gain on investments sold (39,535) (34,320) (89,664) Net change in unrealized appreciation on investments 122,020 79, ,650 Changes in assets and liabilities: Dividend receivable 1, ,356 Receivable for securities sold 86 (87,650) - Audit fees payable (474) (361) (526) Trustee fees payable - Share Class I (25) Trustee fees payable - Share Class II 1 2 (31) Sub-advisor fees payable - Share Class II - 5 (61) Payable for securities purchased 16,656-59,326 Payable to affiliate (86) 87,650 - Net cash provided by (used in) operating activities 506,194 (684,918) (1,775,160) Cash Flows from Financing Activities Issuance of units - Share Class I 604,887 1,527,637 3,618,829 Issuance of units - Share Class II ,078 21,419 Redemptions of units - Share Class I (1,093,320) (872,016) (1,408,501) Redemptions of units - Share Class II (1,921) (781) (397,261) Net cash provided by (used in) financing activities (489,538) 684,918 1,834,486 Net increase in cash and cash equivalents 16,656-59,326 Cash and cash equivalents: Beginning of period End of period $ 16,656 $ - $ 59,326 See Notes to Financial Statements. 9

12 Statements of Cash Flows - Continued Year Ended May 31, 2015 Retire2035 Fund Retire2045 Fund Retire2055 Fund Cash Flows from Operating Activities Net increase in participants' interest resulting from operations: $ 536,596 $ 327,643 $ 136,108 Adjustments to reconcile net increase in participants' interest resulting from operations to net cash used in operating activities: Purchases of investments (4,690,604) (2,437,068) (1,172,260) Proceeds from sales of investments 3,445,944 1,578, ,577 Net realized gain on investments sold (96,960) (57,750) (30,388) Net change in unrealized appreciation on investments 223,277 88,754 34,216 Changes in assets and liabilities: Dividend receivable 1, Receivable for securities sold - - 2,548 Audit fees payable (181) (386) (394) Trustee fees payable - Share Class I Trustee fees payable - Share Class II (8) 2 (3) Sub-advisor fees payable - Share Class II (16) 5 (5) Payable for securities purchased 49,350 42,463 28,006 Payable to affiliate - - (2,548) Net cash used in operating activities (531,019) (457,148) (269,992) Cash Flows from Financing Activities Issuance of units - Share Class I 2,357,179 1,433, ,446 Issuance of units - Share Class II 25,007 33,874 43,381 Redemptions of units - Share Class I (1,682,410) (955,897) (505,478) Redemptions of units - Share Class II (119,407) (12,078) (76,351) Net cash provided by financing activities 580, , ,998 Net increase in cash and cash equivalents 49,350 42,464 28,006 Cash and cash equivalents: Beginning of period End of period $ 49,350 $ 42,464 $ 28,006 See Notes to Financial Statements. 10

13 Financial Highlights Year Ended May 31, 2015 Retire Income Fund Retire2015 Fund Retire2025 Fund Retire2035 Fund Retire2045 Fund Retire2055 Fund Share Class I Share Class I Share Class I Share Class I Share Class I Share Class I Selected per unit data Unit value beginning of period $ $ $ $ $ $ Income from investment operations (b) : Net investment income (a) Net loss on investments (0.17) (0.18) (0.15) (0.09) (0.07) (0.01) Total from investment operations Unit value end of period $ $ $ $ $ $ Total return (b) 1.83% 1.95% 2.44% 3.28% 3.65% 4.11% Ratios and supplemental data Participants' interest, end of period $ 6,132,294 $ 4,397,270 $ 17,119,241 $ 17,478,377 $ 8,815,183 $ 3,525,403 Ratio of net investment income to average participants' interest 3.08% 3.25% 3.50% 3.90% 4.12% 4.15% Ratio of expenses to average participants' interest 0.14% 0.13% 0.13% 0.13% 0.13% 0.13% Retire Income Fund Retire2015 Fund Retire2025 Fund Retire2035 Fund Retire2045 Fund Retire2055 Fund Share Class II Share Class II Share Class II Share Class II Share Class II Share Class II Selected per unit data Unit value beginning of period $ $ $ $ $ Income from investment operations (b) : Net investment income (a) Net gain (loss) on investments (0.18) (0.16) (0.07) (0.01) Total from investment operations Unit value end of period $ $ $ $ $ $ Total return (b) 1.57% 1.77% 2.24% 2.94% 3.50% 3.91% Ratios and supplemental data Participants' interest, end of period $ 152,210 $ 76,899 $ 116,095 $ 33,568 $ 143,670 $ 80,588 Ratio of net investment income to average participants' interest 2.90% 2.92% 2.16% 1.92% 3.93% 3.96% Ratio of expenses to average participants' interest 0.34% 0.33% 0.33% 0.33% 0.33% 0.33% (a) Net investment income per unit was calculated using the average shares method. (b) Due to timing of participant unit transactions, the per unit amounts and total return presented may not agree with the aggregate gains and losses as presented on the statements of operations. These financial highlights are calculated based on a unit holder's account that is outstanding for the entire period and may not be indicative of the future performance of the Funds. See Notes to Financial Statements. 11

14 Notes to Financial Statements Note 1. Organization The (the Funds) are collective investment funds established under the Declaration of Trust establishing the TD Ameritrade Trust Company Collective Investment Funds for Employee Benefit Plans (Declaration of Trust) to provide for the collective investment and reinvestment of assets of qualified employer sponsored retirement plans. TD Ameritrade Trust Company (TDATC, referred to herein as the Trustee) serves as the trustee, custodian, transfer agent, and record-keeper for the Funds. Rogerscasey (referred to herein as the Sub-Advisor) provides investment sub-advisory services for the Funds. Each fund offers two share classes, Share Class I and Share Class II, which differ by their allocation of class specific expenses. The following describes the individual Funds, as set forth in the Declaration of Trust: Retire Income Fund: This fund may be appropriate for investors who have retired or have begun withdrawing portions of their investment in the fund s target year, The Retire Income Fund primarily invests in a combination of U.S. and non-u.s. stocks and bonds, REITs, and cash equivalents through mutual funds, commingled funds, exchange-traded funds, individual securities, and money market vehicles. Under normal circumstances, this fund s strategic asset class targets include: Target Rebalancing Range Fixed income 59% +/- 15% U.S. equity 15% +/- 6% International equity 13% +/- 4% REITs 10% +/- 3% Cash equivalents 3% Retire2015 Fund: This fund may be appropriate for investors who will retire or will begin withdrawing portions of their investment in the fund s target year, The Retire2015 Fund primarily invests in a combination of U.S. and non-u.s. stocks and bonds, REITs, and cash equivalents through mutual funds, commingled funds, exchange-traded funds, individual securities, and money market vehicles. Under normal circumstances, this fund s strategic asset class targets include: Target Rebalancing Range Fixed income 48% +/- 15% U.S. equity 21% +/- 8% International equity 20% +/- 6% REITs 8% +/- 3% Cash equivalents 3% 12

15 Notes to Financial Statements Note 1. Organization (Continued) Retire2025 Fund: This fund may be appropriate for investors who will retire or will begin withdrawing portions of their investment in the fund s target year, The Retire2025 Fund primarily invests in a combination of U.S. and non-u.s. stocks and bonds, REITs, and cash equivalents through mutual funds, commingled funds, exchange-traded funds, individual securities, and money market vehicles. Under normal circumstances, this fund s strategic asset class targets include: Target Rebalancing Range Fixed income 36% +/-13% U.S. equity 27% +/- 9% International equity 27% +/- 8% REITs 7% +/- 3% Cash equivalents 3% Retire2035 Fund: This fund may be appropriate for investors who will retire or will begin withdrawing portions of their investment in the fund s target year, The Retire2035 Fund primarily invests in a combination of U.S. and non-u.s. stocks and bonds, REITs, and cash equivalents through mutual funds, commingled funds, exchange-traded funds, individual securities, and money market vehicles. Under normal circumstances, this fund s strategic asset class targets include: Target Rebalancing Range Fixed income 27% +/-12% U.S. equity 34% +/- 9% International equity 29% +/- 8% REITs 7% +/- 3% Cash equivalents 3% Retire2045 Fund: This fund may be appropriate for investors who will retire or will begin withdrawing portions of their investment in the fund s target year, The Retire2045 Fund primarily invests in a combination of U.S. and non-u.s. stocks and bonds, REITs, and cash equivalents through mutual funds, commingled funds, exchange-traded funds, individual securities, and money market vehicles. Under normal circumstances, this fund s strategic asset class targets include: Target Rebalancing Range Fixed income 18% +/-8% U.S. equity 41% +/- 10% International equity 32% +/- 9% REITs 6% +/- 2% Cash equivalents 3% 13

16 Notes to Financial Statements Note 2. Summary of Significant Accounting Policies The following is a summary of the significant accounting policies followed by the Funds in the preparation of the accompanying financial statements. Principles of accounting: The accompanying financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP), as established by the Financial Accounting Standards Board (FASB), to ensure consistent reporting of financial condition, results of operations and cash flows. The Funds each meet the definition of an investment company and therefore follow the investment company guidance in FASB Accounting Standards Codification (ASC) 946. Use of estimates: The preparation of financial statements in conformity with GAAP requires the Funds Trustee to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported results of operations and cash flows during the reporting period. Estimates include determination of fair value of investments. Actual results could differ from those estimates. Cash and cash equivalents: The Funds consider all highly liquid instruments with original maturities of three months or less at the acquisition date to be cash equivalents. Cash balances of the Funds and other affiliated entities are combined into a deposit account provided by an affiliate of the Trustee. The balance of the deposit account is in excess of federally insured limits; however, management of the Funds does not believe the Funds are exposed to any significant credit risk. Investment valuation: The Funds record investments 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. The Funds utilize valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities recorded at fair value are categorized within the fair value hierarchy based upon the level of judgment associated with the inputs used to measure their value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below: Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access at the measurement date. The Funds do not adjust the quoted price for these investments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price. Level 2. Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement. Level 3. Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. 14

17 Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Funds assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and takes into consideration factors specific to the investment. A description of the valuation techniques applied to the Funds major categories of assets measured at fair value on a recurring basis follows: Short term money market funds - Short term investments are valued at cost, which approximates fair value. Mutual funds - Mutual funds are valued at their daily net asset value. Short term money market funds and mutual funds are measured at fair value on a recurring basis using Level 1 inputs based on quoted prices for identical assets in active markets as of the measurement date. The inputs or methodology used for valuing investments are not necessarily an indication of the risks associated with investing in those investments. The Funds assess the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Funds accounting policies regarding the recognition of transfers between levels of the fair value hierarchy. For the year ended May 31, 2015, there were no transfers between levels. The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. Collective investment funds - As a practical expedient, the valuation of investments in other funds is generally equal to the reported net asset value (NAV) of the investment fund, without adjustment, as the reported net asset value represents fair value based on observable data such as ongoing redemption or subscription activity. The Trustee may adjust the valuation obtained from the investment fund if it is aware of information indicating that a value reported does not accurately reflect the value of the investment fund. In determining fair value the Trustee may consider various factors, including the financial statements of the investment fund as well as any other relevant valuation information to determine if any adjustments should be made to the NAV reported by the investment fund. The fair value of the Funds investments in the investment funds generally represents the amount the Funds would expect to receive if they were to liquidate their investments in the funds. However, certain funds may provide the manager of the fund with the ability to suspend or postpone redemptions (a gate), or a (lock-in period) upon initial subscription, within which the Funds may not redeem in a timely manner. If there is an imposition of a gate, if a lock-in period in excess of 3 months is remaining at the fair value measurement date, or if the Funds may not redeem its holding in the fund within 3 months or less, the Trustee's ability to validate or verify the NAV through redeeming may be impaired. The Funds adopted ASU , Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) - a Consensus of Emerging Issues Task Force, during the year ended May 31, 2015 and therefore the inputs used in the valuation of the collective investment funds are no longer required to be categorized within the fair value hierarchy. 15

18 Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Investment transactions and dividends: Investment transactions are recorded on the trade date. Realized gains and losses on investment transactions are determined on the average lot cost method and are included as net realized gain or loss on investments sold in the accompanying statements of operations. The difference between the cost and the fair value of open investments is reflected as unrealized appreciation (depreciation) on investments, and any change in that amount from the prior period is reflected in the accompanying statements of operations. Dividend income is recognized on the ex-dividend date. Allocation of income and expenses: Income, audit fee expenses, and the gains/losses of each fund are allocated on a pro-rata basis to each class of shares, except for trustee, sub-advisor, and if applicable, qualified custodian fees, which are unique to each class of shares. Federal income taxes: Each of the Funds qualify as a "group trust" and the Funds as established under the trust, are exempt from taxation. Accordingly, the financial results of the Funds contain no provision for income taxes. The FASB provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing more-likely-than-not to be sustained when challenged or when examined by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense and liability in the current year. As of May 31, 2015 and for the year then ended, management has determined that there are no material uncertain tax positions. The Funds file income tax returns in U.S. federal jurisdiction. The current and prior three tax years generally remain subject to examination by U.S. federal tax authorities. Participant transactions: The unit values of the Funds are determined at the close of each business day that the New York Stock Exchange is open for business. Units may be issued and redeemed on any business day at the daily unit value. All earnings, gains, and losses of the Funds are reflected in the computation of the daily unit value and are realized by the participants upon redemption from the Funds. Net investment income and net realized gains are reinvested, and thus, there are no distributions of net investment income or net realized gains to participants. Subsequent events: The Trustee, as manager of the Funds, has evaluated the period after the financial statement date through September 25, 2015, the date the financial statements were available to be issued, and has determined that there are no subsequent events that require recognition or disclosure. Recently adopted accounting pronouncements: In May 2015, the FASB issued ASU , Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) a Consensus of Emerging Issues Task Force (ASU ). ASU removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU is effective for fiscal years beginning after December 15, Early adoption is permitted. The Funds have elected to early adopt this guidance. 16

19 Notes to Financial Statements Note 3. Investments As of May 31, 2015, investments in collective investment funds valued using the practical expedient are as follows: % of TD Ameritrade Collective Participants' Investment Redemptions Investment Fund Investment Fund Fair Value Interest Objective Permitted Retire Income Fund Galliard Capital Management Stable Value Fund Q $ 1,003, % Fixed Income Daily* Retire 2015 Fund Galliard Capital Management Stable Value Fund Q 612, % Fixed Income Daily* Retire 2025 Fund Galliard Capital Management Stable Value Fund Q 1,318, % Fixed Income Daily* Retire 2035 Fund Galliard Capital Management Stable Value Fund Q 512, % Fixed Income Daily* Retire 2045 Fund Galliard Capital Management Stable Value Fund Q 121, % Fixed Income Daily* Retire 2055 Fund Galliard Capital Management Stable Value Fund Q 22, % Fixed Income Daily* * The general partner or sponsor of the respective investment fund reserves the right to require a 12- month notice for withdrawal of assets from the investment fund by the Trustee. Requests for redemptions by the Funds participants are not subject to this restriction. There are no current plans to make significant redemptions from the investments in the investment fund as of May 31, Information about each investment funds portfolio as of the date of these financial statements is not available to the Funds. Note 4. Related-Party Transactions For liquidity and administrative purposes, the Funds seek to maintain approximately 3 percent of their assets in cash or cash equivalent. The cash component for the Funds could have been composed of a bank depository account provided by an affiliate of the Trustee or a short-term money market fund. The short-term money market fund alternative provided is the Federated Treasury Obligation Fund, which is not an affiliate of the Trustee. In the event the audit fee impacts the Funds unit values as determined on a daily basis, by an amount greater than $0.005 per unit, the Trustee will assume such excess audit fees. In addition, if the audit fees caused the Funds total expenses, including the expenses of the underlying assets, to exceed 2 percent of average participants interest annually, the Trustee will assume such excess audit fees. For the year ended May 31, 2015, the Trustee did not assume any fees. As of May 31, 2015, the Retire2015 Fund had a payable to affiliate relating to over-night advances of cash of $87,650 from the Trustee which is included on the statements of financial condition. The Trustee owns 5 Class I shares and 5 Class II shares in each fund as of May 31,

20 Notes to Financial Statements Note 5. Fees The Trustee charges the Funds a fee equal to 0.10 percent for Share Class I and 0.30 percent for Share Class II per annum of assets held by external participants applicable to each respective share class. This fee accrues on a daily basis and is paid monthly in arrears. Of this fee, 0.20 percent is paid to the Sub- Advisor for sub-advisory services provided to the Funds for Share Class II, which is presented on the statements of operations. Note 6. Risks and Indemnifications In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Funds maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. The Funds expect the risk of future obligation under these indemnifications to be remote. The managers of underlying collective investment funds in which the Funds may invest, may utilize derivative instruments with off-balance-sheet risk. The Funds exposure to risk is limited to the amount of their investment in the underlying collective investment funds. 18

21 Other Financial Information (Unaudited)

22 Summary Schedules of Monthly Values (Unaudited) Year Ended May 31, 2015 Retire Income Fund Retire2015 Fund Retire2025 Fund Share Class I Share Class I Share Class I Units Outstanding Unit Value Units Outstanding Unit Value Units Outstanding Unit Value May 31, ,575 $ ,960 $ ,041,796 $ June 30, , , ,054, July 31, , , ,060, August 31, , , ,063, September 30, , , ,061, October 31, , , ,077, November 30, , , ,107, December 31, , , ,115, January 31, , , ,118, February 28, , , ,155, March 31, , , ,148, April 30, , , ,163, May 31, , , ,198, Retire Income Fund Retire2015 Fund Retire2025 Fund Share Class II Share Class II Share Class II Units Outstanding Unit Value Units Outstanding Unit Value Units Outstanding Unit Value May 31, ,288 $ ,435 $ ,200 $ June 30, , , , July 31, , , , August 31, , , , September 30, , , , October 31, , , , November 30, , , , December 31, , , , January 31, , , , February 28, , , , March 31, , , , April 30, , , , May 31, , , ,

23 Summary Schedules of Monthly Values (Unaudited) - Continued Year Ended May 31, 2015 Retire2035 Fund Retire2045 Fund Retire2055 Fund Share Class I Share Class I Share Class I Units Outstanding Unit Value Units Outstanding Unit Value Units Outstanding Unit Value May 31, ,185,458 $ ,442 $ ,868 $ June 30, ,180, , , July 31, ,196, , , August 31, ,199, , , September 30, ,231, , , October 31, ,232, , , November 30, ,236, , , December 31, ,241, , , January 31, ,230, , , February 28, ,218, , , March 31, ,226, , , April 30, ,232, , , May 31, ,233, , , Retire2035 Fund Retire2045 Fund Retire2055 Fund Share Class II Share Class II Share Class II Units Outstanding Unit Value Units Outstanding Unit Value Units Outstanding Unit Value May 31, ,491 $ ,713 $ ,266 $ June 30, , , , July 31, , , , August 31, , , , September 30, , , , October 31, , , , November 30, , , , December 31, , , , January 31, , , , February 28, , , , March 31, , , , April 30, , , , May 31, , , ,

24 Retire Income Fund Summary Schedule of Investment Changes (Unaudited) Year Ended May 31, 2015 Purchases (in shares) Cost of Investments Purchases Dodge & Cox Income Fund 4,318 $ 59,860 Dodge & Cox International Stock ,985 Federated Treasury Obligation Fund 20,336 20,336 Fidelity New Markets Income Fund 2,992 47,610 Galliard Capital Management Stable Value Fund Q 7, ,591 Goldman Sachs Core Fixed-Income Institutional 5,388 57,152 Harbor High Yield Bond Institutional 4,612 48,888 Legg Mason Global Opportunities Bond 7,991 89,091 LSV Conservative Value Equity Fund 3,342 38,209 PIMCO Real Return 4,929 56,875 Schroder International 4,407 50,018 Spartan Total Market Index Fund ,790 T. Rowe Price Institutional Large Cap Growth 1,049 28,859 Vanguard REIT Index 1,902 49,425 Wells Fargo Advantage Emerging Markets ,377 Trilogy Emerging Markets Equity Fund 1,869 15,970 Vanguard Inflation-Protected Securities 88, ,308 Redemptions (in shares) Realized Gain (Loss) Redemptions Dodge & Cox Income Fund 5,896 $ 2,219 Dodge & Cox International Stock 1,256 4,004 Federated Treasury Obligation Fund 42,334 - Fidelity New Markets Income Fund 3, Galliard Capital Management Stable Value Fund Q 12,870 2,376 Goldman Sachs Core Fixed-Income Institutional 7,733 1,774 Harbor High Yield Bond Institutional 4,648 (524) Legg Mason Global Opportunities Bond 9,677 2,992 LSV Conservative Value Equity Fund 2,346 2,826 PIMCO Real Return 88,856 4,211 Schroder International 4, Spartan Total Market Index Fund 964 7,025 T. Rowe Price Institutional Large Cap Growth 1,015 3,420 Vanguard REIT Index 2,414 8,197 Trilogy Emerging Markets Equity Fund 2, Vanguard Inflation-Protected Securities 4,436 (148) Wells Fargo Advantage Emerging Markets 1,136 $ (177) 39,535 21

25 Retire2015 Fund Summary Schedule of Investment Changes (Unaudited) Year Ended May 31, 2015 Purchases (in shares) Cost of Investments Purchases Dodge & Cox Income Fund 8,841 $ 122,504 Dodge & Cox International Stock 2, ,725 Federated Treasury Obligation Fund 48,068 48,068 Fidelity New Markets Income Fund 4,080 65,366 Galliard Capital Management Stable Value Fund Q 15, ,131 Goldman Sachs Core Fixed-Income Institutional 11, ,866 Harbor High Yield Bond Institutional 7,084 75,729 Legg Mason Global Opportunities Bond 15, ,804 LSV Conservative Value Equity Fund 5,738 66,978 PIMCO Real Return 11, ,416 Schroder International 9, ,587 Spartan Total Market Index Fund 1,671 98,064 T. Rowe Price Institutional Large Cap Growth 2,081 58,656 Vanguard REIT Index 3,843 97,902 Wells Fargo Advantage Emerging Markets 2,188 48,067 Trilogy Emerging Markets Equity Fund 5,461 46,970 Vanguard Inflation-Protected Securities 62, ,377 Redemptions (in shares) Realized Gain (Loss) Redemptions Dodge & Cox Income Fund 4,583 $ 1,344 Dodge & Cox International Stock 1,175 4,697 Federated Treasury Obligation Fund 31,937 - Fidelity New Markets Income Fund 1, Galliard Capital Management Stable Value Fund Q 8,691 1,578 Goldman Sachs Core Fixed-Income Institutional 6,012 1,142 Harbor High Yield Bond Institutional 3,300 (301) Legg Mason Global Opportunities Bond 7,507 1,675 LSV Conservative Value Equity Fund 2,309 2,802 PIMCO Real Return 57,204 2,167 Schroder International 4,470 1,248 Spartan Total Market Index Fund 901 6,673 T. Rowe Price Institutional Large Cap Growth 959 3,448 Vanguard REIT Index 1,944 5,855 Trilogy Emerging Markets Equity Fund 2,845 1,050 Vanguard Inflation-Protected Securities 3,436 (219) Wells Fargo Advantage Emerging Markets 1,152 $ ,320 22