<PAGE>
<PAGE> 1
--------------------------
PLAN INVESTMENT FUND, INC.
Annual Report
December 31, 1995
ADMINISTRATOR:
[LOGO]
<PAGE>
<PAGE> 2
PLAN INVESTMENT FUND, INC.
PRESIDENT'S LETTER
February 9, 1996
On behalf of the Board of Trustees I am pleased to submit the
1995 Annual Report for Plan Investment Fund. This past year was
a welcome reprieve from the dismal bond market returns of 1994.
The Federal Reserve Board's shift to a more accommodative
monetary policy sparked a strong bond market rally throughout the
year.
With typical maturity ranges of one day (Government/REPO
Portfolio), 20 to 60 days (Money Market Portfolio) and 6 to 12
months (Short-Term Portfolio), the three portfolios that make up
Plan Investment Fund cover the full spectrum of the short-term
yield curve. Each of these portfolios is managed under
investment guidelines that stress high quality and preservation
of principal. Another key element of the management of these
portfolios is their low expense ratios. As indicated in the
accompanying table of comparative performance, these low expenses
helped all three portfolios produce competitive net investment
returns in 1995.
The total assets of Plan Investment Fund at the end of 1995 were
approximately $768 million, considerably higher than the $555
million balance at the end of 1994. This growth was to a large
extent due to a regulatory exemption granted to Plan Investment
Fund that allows Plans to classify the Government/REPO Portfolio
and the Money Market Portfolio as cash equivalents on their
annual blanks. Average asset levels, which we believe are a
better measure of the fund's success, also grew significantly.
Average assets increased over $50 million in 1995 to $733
million.
We were particularly pleased with the growth of the
Government/REPO Portfolio. This portfolio, which typically has
an average maturity of one business day, invests exclusively in
U.S. Treasury and government agency obligations and repurchase
agreements collateralized by these obligations. The portfolio
commenced operations on June 1, 1995 and by the end of the year
had grown to $119 million. We are encouraging all Plan
Investment Fund investors to add the Government/REPO Portfolio as
an investment option for their accounts.
This past year was a very positive one for Plan Investment Fund
and we are looking forward to yet another year of providing
investment services to the members of the Blue Cross and Blue
Shield system of independent Plans.
Sincerely,
/S/ PHIL
----
Philip A. Goss
President and Chief Executive Officer
<PAGE>
<PAGE> 3
- --------------------------------------------------------------------------
COMPARATIVE PERFORMANCE: ANNUALIZED TOTAL RETURN
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended Three One Five From
December 31, 1995 Months Year Years Inception
------ ---- ----- -----
<S> <C> <C> <C> <C>
PIF Government/REPO Portfolio 5.99% - - 5.99%
Donoghues Inst. Money Market Av 5.60% - - 5.65%
Repurchase Agreements 6.01% - - 6.05%
PIF Money Market Portfolio 5.85% 5.97% 4.62% 6.65%
Donoghues Inst. Money Market Av 5.60% 5.69% 4.42% 6.44%
Repurchase Agreements 6.01% 6.04% 4.60% 6.63%
PIF Short-Term Portfolio 6.31% 6.92% 5.21% 6.28%
6 Month Treasury Bill 5.72% 5.98% 4.75% 5.97%
1 - 3 Year Treasury Note 10.47% 11.00% 6.93% 8.14%
<FN>
* Inception dates
6/01/95 : Government/REPO Port 3/11/87 : Money Market Portfolio, Short
</TABLE>
- --------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
Closing Closing
Average Closing Average Average
Portfolio/Month Yield Price Maturity Quality
----- ----- ------ -------
<S> <C> <C> <C> <C>
Government/REPO Portfolio
October 5.75% $1.00 1 Day A1+
November 5.81% $1.00 1 Day A1+
December 5.75% $1.00 2 Days A1+
Money Market Portfolio
October 5.70% $1.00 44 Days A1+
November 5.65% $1.00 45 Days A1+
December 5.62% $1.00 34 Days A1+
Short-Term Portfolio
October 6.09% $ 9.98 9.2 Mos. AA+
November 6.01% $ 9.99 10.7 Mos. AA+
December 5.90% $10.00 9.4 Mos. AA+
</TABLE>
<PAGE>
<PAGE> 4
REPORT FROM THE MONEY MARKET AND GOVERNMENT/REPO PORTFOLIO
ADVISOR
The past year began with rising short-term interest rates and a
financial crisis in Mexico. It ended with falling short-term
interest rates and a financial crisis in Washington, DC. And
yet, in between these troubling opening and closing acts the
economy and the financial markets enjoyed remarkable success; an
economic soft landing engineered by Chairman Greenspan and the
Federal Reserve, even better than forecast news on inflation, a
steep recovery for bonds and a stock market that catapulted
through 5000 on the Dow. All this despite obstacles such as
Orange County's bankruptcy, two Federal government shut-downs and
a stalemate in the political debate over a balanced budget.
Fourth quarter economic activity showed signs of a sharp slowdown
to a pace of approximately 1-1/2%. Gross Domestic Product (GDP)
was hurt during the quarter by the prolonged strike at Boeing and
lower federal spending. Consumers, too, pulled in their reigns
as job insecurity and burgeoning debt levels dampened holiday
sales. The Federal Reserve took note of these signs, as well as
the very good news on inflation and lowered short-term interest
rates on December 19 to 5 1/2%. This marked their second easing
of monetary policy in 1995 and returned the Federal funds target
rate to the same level at which it began the year. The market
also looked forward to the Federal Open Market Committee meeting
in January 1996, with widespread sentiment that further easing
was in store. In fact, the slope of the yield curve has
indicated market anticipation of Fed easing for the past several
months. Long-term rates declined approximately 200 basis points
in 1995, bringing the 30-year Treasury bond yield down to 6%.
With Federal funds at 5 3/4% for the most of the last two
quarters, one end of the curve had to move. The market's belief
was that short rates would decline. In the less than one year
area of the curve, in which the Money Market Portfolio and the
Government/REPO Portfolio operate, sentiment for easing was even
stronger. Here, the yield curve was actually inverted with three
and six-month yields below overnight rates by as much as fifty
basis points.
As the new year begins an agreement on a balanced budget is
crucial. Sentiment has propelled stock and bond prices to new
highs and anything less than an accord would probably trigger a
significant retracement. It is also likely that when the
President and Congress do agree, the Federal Reserve will
"reward" the two parties with another cut in the Federal funds
rate.
The bias towards lower short-term interest rates during the last
half of the year led to a gradual extension of the Money Market
Portfolio's maturities. The Portfolio's average weighted
maturity was lengthened from the 20-30 day range of a year ago to
a 40-day target. A high percentage of the Portfolio was
maintained in repurchase agreements and other 1-7 day investments
to provide liquidity. These very short maturities benefited the
portfolio's yield, as there was an inverted yield curve for much
of the period. For the year the Money Market Portfolio produced
a return of 5.97% versus a 5.69% average for the Institutions-
Only Funds in the IBC/Donoghue's Money Market Fund universe.
Portfolio credit quality was also emphasized during the year. All
the Portfolio's commercial paper investments were "First Tier"
securities, with ratings in the highest category, and all
repurchase agreements were collateralized by U.S. Government
securities.
The Government/REPO Portfolio was managed to produce a yield
comparable to one day repurchase agreements. As such,
investments were limited to overnight transactions and the
portfolio's average maturity was maintained at one day. Given
the frequently inverted slope of the yield curve, the portfolio's
performance was very competitive. Since its inception on June 1,
1995 the Government/REPO Portfolio produced an annualized total
return of 5.99% versus 5.65% for the Donoghue's Institutions-Only
universe.
Thomas H. Nevin, President and Chief Investment Officer
PNC Institutional Management Corporation
<PAGE>
<PAGE> 5
REPORT FROM THE SHORT-TERM PORTFOLIO ADVISOR
Following a historic year in 1994, during which we saw
unprecedented upheaval and losses in the bond market, no one
expected that 1995 would be another historic year. So much for
the consensus. The bond market rally that began in early 1995
and continues to this date resulted in interest rates dropping
over 200 basis points across most maturities and total returns
exceeding 30% in some sectors, rivaling equities for the best
performing asset class.
From a torrid pace in the second half of 1994, the economy slowed
substantially during the first half of 1995 as the Fed's tight
monetary policy kicked in with its usual lag. Like most market
participants, we entered 1995 on a cautious note, not
anticipating the power of the bond market rally that was to come.
With the economy showing signs of faltering and leading
indicators for inflation retreating, we became more constructive
on interest rates and started to extend the average maturity of
the portfolio. In response to the declining inflation and
economic trends, the Fed lowered short-term interest rates in
July and December in an effort to achieve the elusive "soft
landing" for the economy. This helped spur the bond market rally
on. As the rally became more entrenched, we took our cues from
the market and continued to extend portfolio maturity. The
portfolio's average maturity at the end of 1995 was almost 10
months as compared to a 4 month average at the start of the year.
Throughout 1995 we utilized our strong sector expertise to
maintain a well diversified, high quality portfolio that
minimized credit risk while achieving significant incremental
yield compared to a portfolio of similar maturity U.S.
Treasuries. Our successful sector strategies and maturity
management resulted in the portfolio's performance far exceeding
its benchmarks and rivaling returns of longer maturity indices.
This was accomplished while maintaining a conservative risk
profile aimed at preserving the portfolio's principal value.
As 1995 ended, stalled budget negotiations, dismal weather and
even more dismal holiday sales seemed to be telling us that 1996
would not be as friendly to the markets as the year just ended.
However, with the stock market reaching new highs nearly every
day in January and the Fed lowering interest rates once again,
prospects for a good year seem to be improving. Continuation of
favorable inflation trends, a balance budget accord and moderate
economic growth now appear to have a good chance of coming to
fruition. All this would be a wonderful environment for the
equity and bond markets. We would caution against expecting
performance like 1995 for 1996; however, we must acknowledge that
this caution once again reflects the consensus. We may be
writing to you again next year saying once again, "So much for
the consensus!"
[EDGAR REFERENCE - PERFORMANCE LINE CHART PIF SHORT-TERM PORTFOLIO
AND SIX MONTH TREASURY BILL]
<TABLE>
<CAPTION>
Annualized Total Return
-----------------------
1 Year 5 Years Inception
------ ------- ---------
<S> <C> <C> <C>
Short-Term Portfolio 6.92% 5.21% 6.28%
</TABLE>
Theresa A. Havell
Director, Fixed Income Group
Neuberger & Berman
<PAGE>
<PAGE> 6
Statement of Net Assets
GOVERNMENT/REPO PORTFOLIO
December 31, 1995
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 35.3%
- -------------------------------------------------------------------------------
Federal Home Loan Bank
Discount Note
5.70% (1/02/96) $42,000 $41,993,350
(Cost $41,993,350) ----------
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 65.1%
- -------------------------------------------------------------------------------
Aubrey G. Lanston & Co., Inc.
5.80% (1/02/96)
(Collateralized by $3,445,000 U.S.
Treasury Note, 5.875%; due 8/15/98;
market value $3,572,534) 3,500 3,500,000
Daiwa Securities America, Inc.
5.50% (1/02/96)
(Collateralized by $5,095,000 U.S.
Treasury Note, 4.25%; due 5/15/96;
market value $5,103,661) 5,000 5,000,000
Donaldson, Lufkin & Jenrette Securities Corp.
5.85% (1/02/96)
(Collateralized by $27,452,000 U.S.
Treasury Bill, 5.182%; due 8/22/96;
market value $26,570,790) 26,032 26,032,000
Goldman Sachs & Co., Inc.
5.65% (1/02/96)
(Collateralized by $5,170,000 Federal Home Loan
Bank Discount Note, 5.86%; due 1/22/96;
market value $5,150,147) 5,000 5,000,000
Lehman Government Securities Inc.
5.60% (1/02/96)
(Collateralized by $4,885,000 U.S.
Treasury Note, 6.125%; due 09/30/00;
market value $5,104,972) 5,000 5,000,000
Morgan Stanley & Co.
5.96% (1/02/96)
(Collateralized by $15,668,000 U.S.
Treasury Bond, 11.25%; due 2/15/15;
market value $25,644,448) 25,000 25,000,000
Nikko Securities Co., International
5.875% (1/02/96)
(Collateralized by $2,993,000 U.S.
Treasury Note, 5.75%; due 9/30/97;
market value $3,063,335) 3,000 3,000,000
</TABLE>
<PAGE>
<PAGE> 7
Statement of Net Assets
GOVERNMENT/REPO PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
Swiss Bank Corp.
5.75% (1/02/96)
(Collateralized by $3,120,000 U.S.
Treasury Bond, 11.25%; due 2/15/15;
market value $5,119,265) $5,000 $ 5,000,000
----------
TOTAL REPURCHASE AGREEMENTS 77,532,000
(Cost $77,532,000) ----------
TOTAL INVESTMENTS IN SECURITIES...... 100.4% 119,525,350
(Cost $119,525,350*)
LIABILITIES IN EXCESS OF OTHER ASSETS. (0.4%) ( 445,752)
------ -----------
NET ASSETS (Applicable to 119,079,598
PCs outstanding) 100.0% $119,079,598
====== ===========
NET ASSET VALUE, offering and
redemption price per PC
($119,079,598 / 119,079,598 PCs) $1.00
<FN>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 8
Statement of Net Assets
MONEY MARKET PORTFOLIO
December 31, 1995
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 4.3%
- -------------------------------------------------------------------------------
Student Loan Marketing Association
Variable Rate Note
5.20% (1/02/96) $25,000 $25,000,000
(Cost $25,000,000) ----------
- ------------------------------------------------------------------------------
BANKERS' ACCEPTANCES 3.1%
- ------------------------------------------------------------------------------
Bank of New York
5.58% (3/08/96) 10,000 9,896,150
Citibank, N.A.
5.70% (3/07/96) 7,600 7,520,580
Republic National Bank, New York
5.53% (3/11/96) 1,000 989,247
----------
TOTAL BANKERS' ACCEPTANCES 18,405,977
(Cost $18,405,977) ----------
- -------------------------------------------------------------------------------
COMMERCIAL PAPER 43.4%
- -------------------------------------------------------------------------------
AGRICULTURAL SERVICES........... 1.7%
Golden Peanut Co.
5.62%-5.66% (2/13/96-3/18/96) 10,150 10,045,086
----------
BANKS............................ 1.7%
National City Corp.
5.67% (2/15/96) 10,000 9,929,125
----------
BOOKS PUBLISHING & PRINTING...... 1.7%
McGraw-Hill, Inc.
5.50% (4/22/96) 10,000 9,828,889
----------
CHEMICALS AND ALLIED PRODUCTS.... 2.3%
Bayer Corp.
5.85% (1/02/96) 13,600 13,597,790
----------
FINANCE LESSORS.................. 2.4%
General Electric Capital Corp.
5.59% (2/28/96) 14,000 13,873,914
----------
INDUSTRIAL INORGANIC CHEMICAL.... 0.3%
Air Products & Chemicals Inc.
5.90% (1/16/96) 2,000 1,995,083
----------
</TABLE>
<PAGE>
<PAGE> 9
Statement of Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
MISCELLANEOUS BUSINESS CREDIT...... 4.1%
Deere (John) Capital Corp.
5.65% (2/09/96) $15,000 $14,908,188
National Rural Utilities Cooperative
Finance Corp.
5.60% (3/15/96) 9,300 9,192,947
----------
24,101,135
----------
MOTOR VEHICLES..................... 2.7%
Daimler-Benz North America Corp.
5.58% (3/15/96) 15,800 15,618,774
----------
MOTORS & GENERATORS................ 0.8%
Emerson Electric Co
5.85% (1/03/96) 5,000 4,998,375
----------
NATURAL GAS DISTRIBUTION........... 1.5%
Michigan Consolidated Gas Co.
5.66% (2/26/96) 8,600 8,524,282
----------
PERSONAL CREDIT INSTITUTIONS....... 1.7%
Associates Corp. of North America
5.69% (2/28/96) 10,000 9,908,328
----------
PETROLEUM REFINING................. 4.3%
Koch Industries, Inc.
5.95% (1/02/96) 25,000 24,995,868
----------
PHARMACEUTICAL PREPARATIONS........ 2.9%
Sandoz Corp.
5.70% (2/26/96) 15,000 14,867,000
Warner Lambert Co.
5.40% (5/20/96) 2,000 1,958,000
----------
16,825,000
----------
SECURITY BROKERS & DEALERS......... 1.4%
Dun & Bradstreet Corp.
6.10% (1/10/96) 8,000 7,987,800
----------
SERVICES - EQUIPMENT RENTING & LEASING.. 3.9%
International Lease and Finance Corp.
5.36%-5.95% (1/26/96-6/04/96) 23,175 22,795,054
----------
SHORT-TERM BUSINESS CREDIT ......... 6.6%
American Express Credit Corp.
5.55%-5.64% (3/11/96-3/29/96) 25,000 24,698,461
Asset Securitization Cooperative Corp.
5.70% (2/20/96) 2,125 2,108,177
Corporate Asset Funding, Inc.
5.57% (3/12/96) 7,100 7,022,005
Transamerica Finance Corp.
5.55% (2/15/96) 5,000 4,965,313
----------
38,793,956
----------
</TABLE>
<PAGE>
<PAGE> 10
Statement of Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
TELEPHONE COMMUNICATIONS...... 3.4%
AT & T Corp.
5.44%-5.63% (2/20/96-5/30/96) $20,000 $ 19,695,139
-----------
TOTAL COMMERCIAL PAPER 253,513,598
(Cost $253,513,598) -----------
- -------------------------------------------------------------------------------
FIXED RATE OBLIGATIONS 0.8%
- -------------------------------------------------------------------------------
Merrill Lynch & Co.
6.05% (8/19/96) 5,000 5,000,000
(Cost $5,000,000) -----------
- -------------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 23.3%
- -------------------------------------------------------------------------------
BANKS.......................... 7.7%
First Union National Bank
of North Carolina
5.50% (1/02/96) 25,000 25,000,000
Huntington National Bank of Ohio
5.69% (1/02/96) 20,000 19,999,782
-----------
44,999,782
-----------
SECURITY BROKERS & DEALERS...... 15.6%
Bear Stearns & Co. Inc.
5.925% (2/16/96) 31,000 31,000,000
Goldman Sachs Group, L.P.
6.0625% (2/06/96) 25,000 25,000,000
Merrill Lynch & Co. Inc.
5.68%-5.74% (1/02/96) 25,000 24,999,289
Morgan Stanley Group Inc.
6.0296% (1/03/96) 10,000 10,000,000
-----------
90,999,289
-----------
TOTAL VARIABLE RATE OBLIGATIONS 135,999,071
(Cost $135,999,071) -----------
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 25.7%
- -------------------------------------------------------------------------------
Aubrey G. Lanston & Co., Inc.
5.80% (1/02/96)
(Collateralized by $29,530,000 U.S.
Treasury Note, 5.875%; due 08/15/98;
market value $30,623,200) 30,000 30,000,000
Donaldson, Lufkin & Jenrette Securities Corp.
5.85% (1/02/96)
(Collateralized by $32,013,000 U.S.
Treasury Bill, 5.21%; due 11/14/96;
market value $30,620,434) 30,000 30,000,000
</TABLE>
<PAGE>
<PAGE> 11
Statement of Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
Lehman Government Securities Inc.
5.85% (1/02/96)
(Collateralized by $14,415,000 U.S.
Treasury Note, 6.375%; due 1/15/99
and $11,190,000 U.S. Treasury Bond,
8.750%; due 8/15/20; market value
$30,625,839) $30,000 $ 30,000,000
Morgan Stanley & Co., Inc.
5.96% (1/02/96)
(Collateralized by $30,545,000 U.S.
Treasury Note, 4.00%; due 1/31/96;
market value $31,017,969) 30,400 30,400,000
Nikko Securities Co., International
5.875% (1/02/96)
(Collateralized by $29,930,000 U.S.
Treasury Note, 5.75%; due 09/30/97;
market value $30,621,383) 30,000 30,000,000
-----------
TOTAL REPURCHASE AGREEMENTS 150,400,000
(Cost $150,400,000) -----------
TOTAL INVESTMENTS IN SECURITIES... 100.6% 588,318,646
(Cost $588,318,646*)
LIABILITIES IN EXCESS OF OTHER ASSETS. (0.6%) ( 3,342,550)
------ ------------
NET ASSETS (Applicable to 584,976,096
PCs outstanding) 100.0% $584,976,096
====== ===========
NET ASSET VALUE, offering and
redemption price per PC
($584,976,096 / 584,976,096 PCs) $1.00
=====
<FN>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 12
Statement of Net Assets
SHORT-TERM PORTFOLIO
December 31, 1995
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 10.8%
- -------------------------------------------------------------------------------
U.S. Treasury Notes
5.50%-7.50% (1/31/97-11/15/98) $6,820 $ 6,925,038
(Cost $6,823,688) ----------
- -------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 35.5%
- -------------------------------------------------------------------------------
Federal Farm Credit Bank
Discount Note
5.45% (1/16/96) 25 24,943
----------
Federal Home Loan Mortgage Corporation
Note
7.555% (2/10/97) 1,000 1,023,120
Mortgage Pass-Throughs
6.00%-6.50% (10/21/97-12/01/00) 8,617 8,674,018
Collateralized Mortgage Obligations
6.35%-6.50% (1/15/96-2/15/96) 1,496 1,495,878
----------
11,193,016
----------
Federal National Mortgage Association
Note
7.50% (2/12/97) 7,000 7,016,380
Discount Note
5.65% (1/09/96) 75 74,906
----------
7,091,286
----------
Student Loan Marketing Association
Variable Rate Note
6.08% (7/01/96) 4,000 4,014,000
----------
U.S. Department of Veterans Affairs
Vendee Mortgage Trust 1992-2
6.50% (11/27/98) 329 328,055
----------
TOTAL GOVERNMENT AGENCY OBLIGATIONS
Cost $22,540,216) 22,651,300
----------
- -------------------------------------------------------------------------------
ASSET BACKED SECURITIES 5.9%
- -------------------------------------------------------------------------------
Caterpillar Financial Asset Trust 1995-A
6.10% (9/07/96) 1,600 1,606,000
Ford Motor Credit Trust 95-A
5.90% (3/31/97) 832 834,873
General Motors Acceptance Corp.
Grantor Trust Series 1992D
5.55% (2/29/96) 816 816,510
Midlantic Grantor Trust Series 1992-1
4.30% (1/31/96) 531 529,474
----------
TOTAL ASSET BACKED SECURITIES 3,786,857
(Cost $3,772,189) ----------
</TABLE>
<PAGE>
<PAGE> 13
Statement of Net Assets
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
CERTIFICATE OF DEPOSIT 7.9%
- -------------------------------------------------------------------------------
FCC Bank
6.35% (4/24/96) $5,000 $ 5,017,500
(Cost $4,998,393) ----------
- -------------------------------------------------------------------------------
FIXED RATE OBLIGATIONS 22.2%
- -------------------------------------------------------------------------------
Dean Witter, Discover and Companies
6.00% (3/01/98) 2,000 2,017,500
Smith Barney Holdings, Inc.
7.40% (11/17/96) 4,000 4,062,000
Trust Company Bank of Georgia
6.50% (3/21/96) 5,000 5,017,500
Xerox Credit Corp.
6.25% (1/15/96) 3,115 3,115,343
----------
TOTAL FIXED RATE OBLIGATIONS 14,212,343
(Cost $14,155,965) ----------
- -------------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 16.5%
- -------------------------------------------------------------------------------
Dean Witter, Discover and Companies
6.0596% (1/16/96) 3,600 3,586,464
Ford Motor Credit Corp.
5.51%-6.1562% (1/02/96-2/05/96) 4,000 3,998,260
Toyota Motor Credit Corp.
5.33% (1/02/96) 3,000 2,983,860
----------
TOTAL VARIABLE RATE OBLIGATIONS 10,568,584
(Cost $10,599,813) ----------
TOTAL INVESTMENTS IN SECURITIES....... 98.8% 63,161,622
(Cost $62,890,264*)
OTHER ASSETS IN EXCESS OF LIABILITIES. 1.2% 760,718
------ ----------
NET ASSETS (Applicable to 6,391,373
PCs outstanding) 100.0% $63,922,340
====== ==========
NET ASSET VALUE, offering and redemption
price per PC ($63,922,340 / 6,391,373 PCs) $10.00
======
<FN>
* Aggregate cost for Federal tax purposes.
The Aggregate gross unrealized appreciation
or depreciation for all securities is as
follows: excess of value over tax cost
$313,832; excess of tax cost over value
$42,474.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 14
Statements of Operations
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio* Portfolio Portfolio
--------------- ------------ ----------
<C> <C> <C>
INTEREST INCOME $1,738,297 $36,606,286 $6,255,073
--------- ---------- ---------
EXPENSES
Investment advisory fee 59,087 999,983 244,217
Administration fee 14,772 302,146 49,629
Custodian 9,715 70,436 12,412
Transfer Agent 135 36,500 1,500
Insurance 1,509 31,116 5,158
Audit 1,541 30,582 5,029
Legal 374 15,738 2,727
Trustee Expenses 507 10,303 1,704
Professional Services 142 7,886 477
Printing 284 5,780 986
Service Agent 0 0 100,000
Miscellaneous 41 821 135
Fees waived (58,563) (41,901) (126,203)
--------- ---------- ---------
Total expenses 29,544 1,469,390 297,771
--------- ---------- ---------
NET INVESTMENT INCOME 1,708,753 35,136,896 5,957,302
NET REALIZED GAIN ON
SECURITIES SOLD 0 0 35,953
UNREALIZED APPRECIATION
OF SECURITIES 0 0 700,727
--------- ---------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,708,753 $35,136,896 $6,693,982
========= ========== =========
<FN>
*From June 1, 1995 commencement of operations.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 15
Statements of Changes in Net Assets
Government/REPO PORTFOLIO
<TABLE>
<CAPTION>
Period Ended
December 31, 1995*
------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,708,753
Net increase in net assets
resulting from operations 1,708,753
-----------
DIVIDENDS TO PARTICIPATION CERTIFICATE HOLDERS:
From net investment income
$.034 per PC (1,708,753)
-----------
CAPITAL TRANSACTIONS:
Proceeds from sale of 314,747,906 PCs 314,747,906
Value of 815,927 PCs
issued in reinvestment of dividends 815,927
Cost of 196,484,235 PCs repurchased (196,484,235)
-----------
Increase in net assets derived
from capital transactions 119,079,598
-----------
Total increase in net assets 119,079,598
NET ASSETS:
Beginning of period 0
-----------
End of period $119,079,598
===========
<FN>
*From June 1, 1995 commencement of operations.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 16
Statements of Changes in Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 35,136,896 $ 21,875,541
Net realized gain (loss)
on securities sold 0 0
Net increase in net assets ----------- -----------
resulting from operations 35,136,896 21,875,541
----------- -----------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income
$.058 and $.041 per PC (35,136,896) (21,875,541)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from sale of 6,644,511,740
and 6,086,561,540 PCs 6,644,511,740 6,086,561,540
Value of 17,729,871 and 11,028,155
PCs issued in reinvestment
of dividends 17,729,871 11,028,155
Cost of 6,528,632,149 and
6,121,061,465 PCs repurchased (6,528,632,149) (6,121,061,465)
-------------- --------------
Increase (decrease) in net assets
derived from capital transactions 133,609,462 (23,471,770)
----------- -----------
Total increase (decrease) in
net assets 133,609,462 (23,471,770)
NET ASSETS:
Beginning of period 451,366,634 474,838,404
----------- -----------
End of period $584,976,096 $451,366,634
=========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 17
Statements of Changes in Net Assets
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 5,957,302 $ 6,618,510
Net realized gain (loss)
on securities sold 35,953 (907,947)
Unrealized appreciation (depreciation)
of securities 700,727 (701,778)
Net increase in net assets ----------- -----------
resulting from operations 6,693,982 5,008,785
----------- -----------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income
$.599 and $.440 per PC (5,957,302) (6,618,510)
----------- ----------
CAPITAL TRANSACTIONS:
Proceeds from sale of 2,359,181
and 9,713,036 PCs 23,445,783 96,971,954
Value of 411,083 and 491,088 PCs
issued in reinvestment of dividends 4,098,549 4,901,395
Cost of 6,773,259 and 18,429,870
PCs repurchased (67,598,372) (183,832,374)
----------- -----------
Increase (decrease) in net assets
derived from capital transactions (40,054,040) (81,959,025)
----------- -----------
Total increase (decrease) in net assets (39,317,360) (83,568,750)
NET ASSETS:
Beginning of period 103,239,700 186,808,450
----------- -----------
End of period $ 63,922,340 $103,239,700
=========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 18
FINANCIAL HIGHLIGHTS
GOVERNMENT/REPO PORTFOLIO
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
6/1/95(1)
through
12/31/95
--------
<S> <C>
Net Asset Value, Beginning of Period $1.00
----
Income From Investment Operations:
- ---------------------------------
Net Investment Income .034
Net Realized Gain (Loss) on Investments 0
----
Total From Investment Operations .034
----
Less Distributions:
- ------------------
Dividends to PC holders from
Net Investment Income (.034)
Distributions to PC holders from
Net Capital Gains 0
----
Total Distributions (.034)
----
Net Asset Value, End of Period $1.00
====
Total Return(1) (3) 5.99%
Ratios/Supplemental Data:
- ------------------------
Net Assets, End of Period (000) $119,080
Ratio of Expenses to Average
Net Assets(2) (3) .10%
Ratio of Net Investment Income
to Average Net Assets(3) 5.78%
- --------------------------
<FN>
(1) From June 1, 1995 commencement of operations
(2) Without the waiver of advisory and administration fees (see Note C),
the ratio of expenses to average daily net assets would have been .30%.
(3) Annualized
</TABLE>
<PAGE>
<PAGE> 19
FINANCIAL HIGHLIGHTS
MONEY MARKET PORTFOLIO
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
---- ---- ---- ---- ----
Income From Investment Operations:
- ---------------------------------
Net Investment Income .058 .041 .030 .037 .060
Net Realized Gain (Loss)
on Investments 0 0 0 0 0
---- ---- ---- ---- ----
Total From Investment Operations .058 .041 .030 .037 .060
---- ---- ---- ---- ----
Less Distributions:
- ------------------
Dividends to PC holders from
Net Investment Income (.058) (.041) (.030) (.037) (.060)
Distributions to PC holders
from Net Capital Gains 0 0 0 0 0
---- ---- ---- ---- ----
Total Distributions (.058) (.041) (.030) (.037) (.060)
---- ---- ---- ---- ----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
==== ==== ==== ==== ====
Total Return 5.97% 4.21% 3.07% 3.73% 6.16%
Ratios/Supplemental Data:
- ------------------------
Net Assets, End
of Period (000) $584,976 $451,367 $474,838 $390,581 $642,583
Ratio of Expenses to
Average Net Assets(1) .24% .26% .24% .23% .25%
Ratio of Net Investment
Income to Average Net Assets 5.82% 4.15% 3.02% 3.68% 5.97%
- -------------------------------
<FN>
(1) Without the waiver of advisory and administration fees (see note C), the
ratios of expenses to average daily net assets would have been .25% and
.24% for the fiscal periods ended December 31, 1995 and December 31, 1992,
respectively.
</TABLE>
<PAGE>
<PAGE> 20
FINANCIAL HIGHLIGHTS
SHORT-TERM PORTFOLIO
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 9.93 $10.03 $10.05 $10.09 $9.96
----- ----- ----- ----- ----
Income From Investment Operations:
- ---------------------------------
Net Investment Income .599 .440 .377 .443 .637
Net Realized and Unrealized
Gain (Loss) on Investments .070 (.100) (.009) (.034) .130
----- ----- ----- ----- -----
Total From Investment Operations .669 .340 .368 .409 .767
----- ----- ----- ----- -----
Less Distributions:
- ------------------
Dividends to PC holders from
Net Investment Income (.599) (.440) (.377) (.443) (.637)
Distributions to PC holders
from Net Capital Gains 0 0 (.011) (.006) 0
----- ----- ----- ----- -----
Total Distributions (.599) (.440) (.388) (.449) (.637)
----- ----- ----- ----- -----
Net Asset Value, End of Period $10.00 $ 9.93 $10.03 $10.05 $10.09
===== ===== ===== ===== =====
Total Return 6.92% 3.46% 3.72% 4.13% 7.95%
Ratios/Supplemental Data:
- ------------------------
Net Assets, End
of Period (000) $63,922 $103,240 $186,808 $195,579 $94,050
Ratio of Expenses to
Average Net Assets(1) .30% .30% .30% .30% .30%
Ratio of Net Investment
Income to Average Net Assets 6.00% 4.29% 3.74% 4.29% 6.22%
Portfolio Turnover Rate(2) 64.8% 47.6% 34.1% 37.6% 63.8%
- ------------------------------
<FN>
(1) Without the waiver of advisory, service agent and administration fees (see
note C), the ratios of expenses to average daily net assets would have been
.43%, .37%, .32%, .37% and .56% respectively, for the fiscal periods ended
December 31, 1995, 1994, 1993, 1992 and 1991.
(2) Excludes security purchases with a maturity of less than one year.
</TABLE>
<PAGE>
<PAGE> 21
Notes to Financial Statements
A. Plan Investment Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a diversified open-end regulated investment
company. The Fund consists of three separate portfolios, the Government/REPO
Portfolio, the Money Market Portfolio and the Short-Term Portfolio (the
"Portfolio(s)"). The Fund is authorized to issue five billion Participation
certificates ("PCs"), par value $.001 per PC. The Fund presently offers three
classes of PCs as follows: the Government/REPO Portfolio - one billion PCs
authorized, the Money Market Portfolio - two billion PCs authorized and the
Short-Term Portfolio - one billion PCs authorized.
B. Significant accounting policies relating to the Fund are as follows:
Security Valuation - Government/REPO Portfolio and Money Market Portfolio:
Securities are valued under the amortized cost method, which approximates
current market value. Under this method, securities are valued at cost when
purchased and thereafter a constant proportionate amortization of any discount
or premium is recorded until maturity or sale of the security.
Security Valuation - Short-Term Portfolio: Securities for which market
quotations are readily available (other than debt securities with remaining
maturities of 60 days or less) are valued at the most recent quoted bid price
provided by investment dealers. Debt securities with remaining maturities of
60 days or less are valued on an amortized cost basis (unless the Board
determines that such basis does not represent fair value at that time).
Securities Transactions and Investment Income - Securities transactions are
recorded on the trade date. Realized gains and losses on investments sold are
recorded on the identified cost basis. Interest income is recorded on the
accrual basis.
Dividends to Participation Certificate Holders - Dividends of net investment
income of the Portfolios are declared daily and paid monthly. Dividends
payable are recorded on the dividend record date. The Short-Term Portfolio
will, subject to the use of offsetting capital loss carry-forwards, distribute
net realized short- and long-term capital gains, if any, once each year.
Federal Income Taxes - No provision is made for federal taxes as it is each
Portfolio's intention to continue to qualify as a regulated investment company
and to make the requisite distributions to Participation Certificate Holders
which will be sufficient to relieve each Portfolio from all, or substantially
all, federal income and excise taxes. At December 31, 1995, the Short-Term
Portfolio had capital loss carry-forwards amounting to $871,994 that expire
in 2002. These loss carry-forwards are available to offset possible future
capital gains of the Short-Term Portfolio.
Repurchase Agreements - Each Portfolio may agree to purchase money market
instruments from financial institutions such as banks and broker-dealers
subject to the seller's agreement to repurchase them at an agreed upon date
and price ("repurchase agreements"). Collateral for repurchase agreements may
have longer maturities than the maximum permissible remaining maturity of
portfolio investments. The seller under a repurchase agreement is required on
a daily basis to maintain the value of the securities subject to the agreement
at not less than the repurchase price. The agreement is conditioned upon the
collateral being deposited under the Federal Reserve book entry system or held
in a separate account by the Fund's custodian or an authorized securities
depository.
Estimated Maturities - The maturity of collateralized mortgage obligations and
other asset backed securities may vary due to prepayments of principal. The
maturity dates for these securities are estimates based on historic prepayment
factors.
Variable Rate Obligations - For variable rate obligations, the interest rate
presented is as of December 31, 1995 and the maturity shown is the date of the
next interest readjustment.
Management Estimates - The preparation of financial statements requires the use
of management estimates.
<PAGE>
<PAGE> 22
C. The Fund has entered into agreements for advisory, administrative, service
agent, custodian and transfer agent services as follows:
Government/REPO Portfolio and Money Market Portfolio - PNC Institutional
Management Corporation ("PIMC"), an indirectly wholly owned subsidiary of PNC
Bank, National Association ("PNC Bank"), serves as the Portfolios' investment
advisor and service agent. As compensation for its services the Portfolios pay
PIMC a fee, computed daily and paid monthly, at the following rate: .20% of
the first $250 million, .15% of the next $250 million, .12% of the next $250
million, .10% of the next $250 million, and .08% of amounts in excess of $1
billion.
Short-Term Portfolio - Neuberger & Berman ("N&B"), a New York limited
partnership, serves as the Portfolio's investment advisor. As compensation for
its services, the Portfolio pays N&B a fee, computed daily and paid monthly, at
the following rate: .30% of the first $50 million, .20% of the next $50
million, .15% of the next $150 million, and .10% of amounts in excess of $250
million.
Health Plans Capital Services Corp. ("CSC") serves as the Fund's administrator
and acts generally in a supervisory capacity with respect to the Fund's
overall operations and relations with holders of PCs. As compensation for its
services each Portfolio pays CSC a fee, computed daily and payable monthly at
an annual rate not to exceed .05% of the average daily net assets of each of
the Fund's Portfolios.
PNC Bank acts as custodian of the Fund's assets and PFPC Inc. ("PFPC"), an
affiliate of PNC Bank, acts as the Fund's transfer agent and dividend
disbursing agent. In addition, PIMC serves as the Short-Term Portfolio service
agent. PNC Bank, PIMC and PFPC receive fees from the Fund for serving in these
capacities.
PIMC and N&B have agreed contractually to reduce their advisory fees otherwise
payable to them in 1995 by the Money Market Portfolio and the Short-Term
Portfolio, respectively, to the extent necessary to reduce the ordinary
operating expenses of both Portfolios individually so that they do not exceed
0.30 of one percent (0.30%) of each Portfolio's average net assets for the
year. Under these contractual agreements, N&B waived $107,922 of such fees for
the period ended December 31, 1995. PIMC voluntarily waived $11,270 of service
agent fees and CSC voluntarily waived $7,011 of administrator fees payable by
the Short-Term Portfolio during this period. In addition, PIMC voluntarily
waived $31,425 and $54,651 of advisory fees and CSC voluntarily waived $10,476
and $3,912 of administrator fees payable by the Money Market Portfolio and
Government/REPO Portfolio, respectively, during this period.
D. At December 31, 1995, net assets consisted of:
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
------------ ----------- ----------
<C> <C> <C>
Capital paid in................. $119,079,598 $584,976,096 $64,522,976
Accumulated realized gain (loss)
on security transactions...... - - (871,994)
Net unrealized appreciation of
investments................... - - 271,358
----------- ----------- ----------
$119,079,598 $584,976,096 $63,922,340
=========== =========== ==========
</TABLE>
E. Short-Term Portfolio purchases and sales of investment securities, other
than short-term investments, were $70,674,862 and $38,057,773 respectively, and
purchases and sales of U.S. Government securities were $42,352,577 and
$22,829,444 respectively, for the period ended December 31, 1995.
<PAGE>
<PAGE> 23
Report of Independent Accountants
To the Participation Certificate Holders and
Trustees of Plan Investment Fund, Inc.
We have audited the accompanying statements of net assets of the Money Market
Portfolio, Short-Term Portfolio and Government/REPO Portfolio of Plan
Investment Fund, Inc. (the "Fund") as of December 31, 1995, and the related
statements of operations for the year or period then ended, the statements of
changes in net assets for each of the two years or period then ended, and the
financial highlights for each of the five years or period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included physical inspection and
confirmation of investments held by the custodian and others as of December 31,
1995. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Plan
Investment Fund, Inc. as of December 31, 1995, the results of their operations
for the year or period then ended, the changes in their net assets for each of
the two years or period then ended, and the financial highlights for each of
the five years or period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
January 26, 1996
<PAGE>
<PAGE> 24
- -----------------------------------------------------------
PLAN INVESTMENT FUND, INC.
676 N. St. Clair
Chicago, Illionois 60611
(312) 440-6372
Trustees
--------
Albert F. Antonini Ralph S. Rhoades
President and Vice Chairman and
Chief Executive Officer Chief Executive Officer
Blue Cross and Blue Shield Blue Cross and Blue Shield
of Central new York of Oklahoma
Philip A. Goss Donald P. Sacco
President and President
Chief Executive Officer Pierce County Medical
Plan Investment Fund, Inc.
Health Plans Capital Thomas J. Ward
Services Corp. President and
Chief Executive Officer
Steven L. Hooker Blue Cross of Northeastern
Senior Vice President, Finance Pennsylvania
Blue Cross and Blue Shield
of Oregon Sherman M. Wolff
Senior Vice President, Finance
William M. Lowry and Sales
President and Blue Cross and Blue Shield
Chief Executive Officer of Illinois
Blue Cross of Western
Pennsylvania
David M. Murdoch
Executive Vice President
Blue Cross and Blue Shield
Association
INVESTMENT ADVISORS
-------------------
GOVERNMENT/REPO PORTFOLIO SHORT-TERM PORTFOLIO
and MONEY MARKET PORTFOLIO --------------------
- -------------------------- Neuberger & Berman
PNC Institutional Management New York, New York
Corporation
Wilmington, Delaware
<PAGE>
<PAGE> 25
EDGAR Appendix
This appendix describes components of the printed version of this report
that do not translate into a format acceptable to the EDGAR system.
The cover of the printed version of this report includes a logo of the
administrator of Plan Investment Fund, Inc., Health Plans Capital Services
Corp. The logo includes the full legal name and address of the
administrator and abbreviated initials of the administrator, "CSC",
enclosed in a box beneath a line bar.
A header featuring the Plan Investment Fund, Inc. logo appears at the top
of pages 6, 8, 10, 12, 14, 16, 18 and 20. The logo includes the abbreviated
initials of Plan Investment Fund, Inc., "PIF", enclosed in a box beneath a
line bar.
A performance line chart which depicts the growth of a $10,000 investment
in the Short-Term Portfolio and the six month U.S. Treasury Bill since the
portfolio's inception, March 11, 1987, appears in the lower left quarter of
page 5 of the report. The following table depicts the substance of the
chart and provides the following plots.
Growth of $10,000 Investment
Since March 11, 1987 Inception
<TABLE>
<CAPTION>
Short-Term Six Month U.S.
Portfolio Treasury Bill
---------- --------------
<S> <C> <C>
3/87 $10,000 $10,000
12/87 10,413 10,501
12/88 11,158 11,238
12/89 12,209 12,224
12/90 13,271 13,216
12/91 14,326 14,035
12/92 14,909 14,597
12/93 15,463 15,071
12/94 15,999 15,727
12/95 17,106 16,667
</TABLE>
Past Performance is Not
Predictive of Future Performance
