<PAGE>
<PAGE> 1
--------------------------
PLAN INVESTMENT FUND, INC.
Annual Report
December 31, 1996
ADMINISTRATOR:
[LOGO]
<PAGE>
<PAGE> 2
PLAN INVESTMENT FUND, INC.
PRESIDENT'S LETTER
February 13, 1997
Fellow Investors:
On behalf of the Board of Trustees, I am pleased to submit the
1996 Annual Report for Plan Investment Fund, Inc. Despite
reduced profitability and cash flow at many of our Blue Cross
Blue Shield customers, the fund experienced excellent growth in
1996 including reaching a record high asset level of over $1
billion in April.
As discussed in detail in the accompanying reports from the
advisors, the bond market spent much of 1996 waiting for the
Federal Reserve to tighten monetary policy. This drove shortterm
rates up during the first half of 1996. During the last half of
1996, signs of moderating growth and low inflation encouraged
investors, and interest rates eased back to where they started
the year.
Average asset levels of Plan Investment Fund, a key measure of
the fund's success, totaled $835 million in 1996, $102 million
higher than in 1995. The Government/REPO Portfolio has a one
business day maturity policy that quickly allows it to reflect
changing interest rates. With the short end of the yield curve
negatively sloped for portions of 1996, this portfolio performed
very well and enjoyed a significant increase in both average
assets and investor usage. As indicated in the accompanying
table of comparative performance, the Government/REPO and Money
Market Portfolios produced competitive returns while maintaining
their high quality guidelines. The Short-Term Portfolio
continued its unbroken record of positive quarterly returns.
This past year was another very positive one for Plan Investment
Fund. The Plan Investment Fund Portfolios are dependable, high
quality investment vehicles that are operated in a cost effective
manner. We look forward to serving your investment needs in the
coming year.
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, 1996 Months Year Years Inception
------ ---- ----- -----
<S> <C> <C> <C> <C>
Government/REPO Portfolio 5.42% 5.42% - 5.63%
Donoghue Inst. Money Market Avg. 5.14% 5.15% - 5.33%
Repurchase Agreements 5.50% 5.49% - 5.70%
Money Market Portfolio 5.40% 5.38% 4.46% 6.03%
Donoghues Inst. Money Market Av 5.14% 5.15% 4.26% 5.83%
Repurchase Agreements 5.50% 5.49% 4.51% 6.02%
Short-Term Portfolio 5.96% 5.08% 4.64% 6.16%
6 Month Treasury Bill 5.42% 5.40% 4.59% 5.91%
1 - 3 Year Treasury Note 7.75% 4.97% 5.62% 7.21%
<FN>
* Inception dates
6/01/95-Government/REPO Portfolio;3/11/87-Money Market and Short-Term Portfolios
</TABLE>
- --------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
Closing Closing
Average Closing Average Average
Portfolio/Month Yield Price Maturity Quality
----- ----- ------ -------
<S> <C> <C> <C> <C>
Government/REPO
October 5.21% $1.00 1 Day A1+
November 5.34% $1.00 2 DayS A1+
December 5.33% $1.00 2 Days A1+
Money Market
October 5.26% $1.00 55 Days A1+
November 5.28% $1.00 58 Days A1+
December 5.26% $1.00 57 Days A1
Short-Term
October 5.37% $9.96 6.5 Mos. AAA
November 5.33% $9.96 8.0 Mos. AAA
December 5.29% $9.95 7.6 Mos. AAA
</TABLE>
<PAGE>
<PAGE> 4
REPORT FROM THE MONEY MARKET AND GOVERNMENT/REPO PORTFOLIO ADVISOR
In the past year, the twin issues of economic growth and inflation
dominated market movements and investor expectations. In a lesser way,
budget impasses, government shutdowns and a presidential election each
took their turns as market forces. However, accelerating business
activity and the belief that this would lead to higher inflation, were
the key issues on the minds of Federal Reserve policymakers and watchers
alike.
As the year progressed, economic activity continued to rebound from last
year's very weak fourth quarter. The Federal Reserve's last easing of
monetary policy occurred in late January. Economic reports continued to
show a strong rebound peaking at mid-year with a Gross Domestic Product
growth rate of 4.5%. Strong employment reports, which showed solid new
job creation numbers, also contributed to a growing belief that the next
Fed move would tighten monetary policy. The July, August and September
FOMC meetings were thought to be particularly likely dates for such a
move. However, a funny thing happened each time a Fed move seemed
imminent. A series of weaker than expected economic reports and good
news on inflation would suddenly dash the market's expectations of
higher short-term interest rates. In early July, for example, a larger
than expected 700,000 increase in new jobs reported for June raised
expectations of a Fed tightening. However, by mid-month, moderate
comments by Alan Greenspan and a large dip in the purchasing manager's
survey quelled any move. In August, the situation repeated when reports
of higher auto and retail sales were offset by a decline in hourly wages
and a surge in inventories. A significant change that did occur last
year was a shift in the yield curve to a positive slope. For much of
the previous year, the yield curve was inverted based on expectations of
continued Fed easing.
The change in the slope of the yield curve affected the investment
management of the Money Market Portfolio during the year. The average
weighted maturity was gradually lengthened from approximately 35-40 days
in the first quarter to mid 50-day range at year-end. This extension
effort, at a time when yields were rising on longer-dated securities,
helped maintain the Portfolio's competitive position versus other money
market alternatives. The annualized total return for 1996 was 5.38%
versus 5.15% for the Donoghue Institutions-Only category. The Money
Market Portfolio also maintained its strict emphasis on credit quality,
investing only in "First Tier" securities. Repurchase agreements were
fully collateralized by U.S. Government obligations.
The Government/REPO Portfolio was managed to provide a daily yield
comparable to one-day repurchase agreements. Investments were limited
to overnight transactions and the Portfolio's average weighted maturity
was maintained at one day. The Portfolio's assets grew to $156 million
from $119 million a year ago. Yields on repurchase agreements again
provided competitive returns, helping the Government/REPO Portfolio
produce an annualized total return of 5.42% versus 5.15% for the
Donoghue Institutions-Only category.
Looking ahead, the course of monetary policy will be dictated by first
quarter reports on the economy and inflation. The economy appears to be
expanding at a 2.5-3.0% pace and inflation continues to hold around 3%.
In this climate, short-term interest rates could well remain at current
levels (5.25% federal funds) for some time. We also believe that the
Fed will wait until at least the second quarter before making any
changes to monetary policy based on business activity and wage
pressures.
Thomas H. Nevin, President and Chief Investment Officer
PNC Institutional Management Corporation
<PAGE>
<PAGE> 5
REPORT FROM THE SHORT-TERM PORTFOLIO ADVISOR
Following a strong 1995, the bond market commenced 1996 with a
continuation of that trend. Sentiment, however, shifted in February, as
investors focused on signs of strong economic growth, which, raising
inflation fears, caused interest rates to rise across the yield curve.
Between mid-February and the end of June, rates rose sharply. The shift
was most significant in the short and intermediate maturity securities
with the yield on one year bills rising by almost one full percent to
5.75% and five year notes rising by over 125 basis points to 6.5%, while
the thirty year bond rose by only 75 basis points to 6.90%. It was only
in the fourth quarter that signs of moderating growth and low inflation
encouraged investors, creating a more positive environment for the bond
market. For the year, returns were modest with the Lehman Brothers
Aggregate Index, a broad measure of bond market performance, returning
only 3.63%. Shorter duration indices did better with the six month
Treasury Bill, as measured by Salomon Brothers, returning 5.40%.
In this environment, we remained true to our disciplines. As interest
rates commenced their rise in February, we shortened duration and
continued to do so throughout the increase in rates. In the fourth
quarter as rates fell, we again extended duration. These changes served
to buffer the Short-Term Portfolio from the increase in rates while
giving it good participation in the fourth quarter rally. This strategy
change was also beneficial to results.
In a volatile market, we actively sought out sectors that offered
good value. We steadily increased our commitment to commercial paper to
25% of assets as they offered a good yield increment over Treasuries,
while cutting back to only 3% our commitment to bankers acceptances and
bank deposits, which narrowed to Treasuries reflecting increased
confidence in the banking sector. We also increased the US Agency
position by 9% to 19% as this sector offered the attractive combination
of high credit quality and reasonable yield improvement. The Mortgage
commitment fell from 12% to 3%. With declining sector spreads, we
allowed paydowns to reduce our exposure. We also reduced the exposure
in floating rate notes in order to purchase fixed rate issues which
offered better prospects in a falling rate environment. As the market
rallied, we increased the commitment to Treasuries which typically lead
rallies, and by year end they were over 25% of total investments.
We look forward to 1997 with some optimism. Interest rate levels seem
quite attractive in a climate of controlled inflation, reasonable real
interest rates and moderate economic growth that should be positive for
the bond market. Nonetheless, we remain vigilant. The modest returns of
the bond market in 1996 illustrate the danger of being lulled by
consensus thinking. Our style has served the Short-Term Portfolio well,
and we remain committed to managing fixed income in a prudent fashion
with controlled risk. We look forward to a rewarding and prosperous
year.
[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 5.08% 4.64% 6.16%
</TABLE>
Theodore P. Giuliano, General Partner
Neuberger & Berman
<PAGE>
<PAGE> 6
Statement of Net Assets
GOVERNMENT/REPO PORTFOLIO
December 31, 1996
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 89.5%
- -------------------------------------------------------------------------------
Federal Home Loan Bank
Discount Notes
5.25%- 6.50% (1/02/97) $140,000 $139,976,111
(Cost $139,976,111) ------------
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 10.9%
- -------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette
6.00% (1/02/97)
(Collateralized by $10,541,000 U.S.
Treasury Note, 5.625%; due 2/15/06;
market value $10,214,229) 10,000 10,000,000
Morgan Stanley & Co.
6.96% (1/02/97)
(Collateralized by $7,275,000 U.S.
Treasury Note, 5.125%; due 12/31/98;
market value $7,186,107) 7,000 7,000,000
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $17,000,000) 17,000,000
----------
TOTAL INVESTMENTS IN SECURITIES...........100.4% 156,976,111
(Cost $156,976,111*)
LIABILITIES IN EXCESS OF OTHER ASSETS (0.4%) (594,137)
---- --------
NET ASSETS (Applicable to 156,381,974
PCs outstanding) 100.0% $156,381,974
NET ASSET VALUE, offering and ===== ===========
redemption price per PC
($156,381,974 / 156,381,974 PCs) $1.00
====
<FN>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements
</TABLE>
<PAGE>
<PAGE> 7
Statement of Net Assets
MONEY MARKET PORTFOLIO
December 31, 1996
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- ------------------------------------------------------------------------------
BANKERS' ACCEPTANCE 1.9%
- ------------------------------------------------------------------------------
Citibank, N.A.
5.40% (2/03/97) $10,000 $ 9,950,500
(Cost $9,950,500)
- -------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 4.9%
- -------------------------------------------------------------------------------
Bank of America Illinois
5.48% (4/22/97) 13,000 13,000,000
Bank of New York
5.63% (3/03/97) 8,000 7,999,744
Fifth Third Bank
5.53% (2/24/97) 4,500 4,499,660
---------
TOTAL CERTIFICATES OF DEPOSIT 25,499,404
(Cost $25,499,404) ----------
-------------------------------------------------------------------------------
COMMERCIAL PAPER 74.4%
- -------------------------------------------------------------------------------
AGRICULTURAL SERVICES................... 2.5%
Golden Peanut Company
5.28% (3/20/97) 13,500 13,345,560
----------
BANKS................................... 16.1%
American General Finance Corp.
5.40% (1/23/97) 25,000 24,917,500
National City Corporation
5.34% (2/24/97) 25,000 24,799,750
NationsBank Corp.
5.36% (2/12/97) 20,000 19,874,933
Norwest Corporation
5.41% (3/25/97) 15,000 14,812,904
----------
84,405,087
----------
ELECTRIC SERVICES....................... 1.5%
Southern California Edison Co.
5.31% (4/15/97) 8,000 7,877,280
---------
</TABLE>
<PAGE>
<PAGE> 8
Statement of Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
FINANCE LESSORS......................... 5.6%
General Electric Capital Corp.
5.34% (4/28/97) $ 9,000 $ 8,843,805
Pitney Bowes Credit Corp.
5.55% (3/17/97) 21,000 20,757,188
----------
29,600,993
INDUSTRIAL INORGANIC CHEMICALS.......... 1.9% ----------
Air Products & Chemicals Inc.
5.425% (4/03/97) 10,000 9,861,361
---------
MISCELLANEOUS BUSINESS CREDIT........... 2.8%
Deere (John) Capital Corp.
5.40% (3/26/97) 15,000 14,811,000
----------
MOTOR VEHICLES.......................... 3.4%
Daimler-Benz North America Corp.
5.35% (2/03/97) 18,000 17,911,725
----------
PERSONAL CREDIT INSTITUTIONS............ 8.5%
Dean Witter, Discover and Co.
5.42% (1/17/97) 20,000 19,951,822
Ford Motor Credit Corp.
5.28% (2/27/97) 25,000 24,791,000
Household Finance Corporation
5.27% (4/17/97) 20,000 19,689,655
----------
64,432,477
SECURITY BROKERS & DEALERS.............. 12.7%
Goldman Sachs Group L.P.
5.45% (3/31/97) 25,000 24,663,160
Merrill Lynch & Co.
5.44%-5.60% (2/12/97-2/18/97) 22,000 21,845,467
----------
46,508,627
SERVICES - EQUIPMENT RENT & LEASE....... 2.8%
International Lease and Finance Corp.
5.40% (3/07/97) 15,000 14,853,750
----------
</TABLE>
<PAGE>
<PAGE> 9
Statement of Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
SERVICES - AMUSEMENT.................... 4.0%
Walt Disney Company
5.40% (3/24/97) $21,342 $21,079,493
SHORT-TERM BUSINESS CREDIT.............. 12.6%
American Express Credit Corp.
5.27% (5/19/97) 10,000 9,797,983
C.I.T. Group Holdings, Inc.
5.38% (1/14/97) 20,000 19,961,144
Paccar Financial Corp.
5.60% (1/27/97) 3,650 3,635,238
Transamerica Finance Corp.
5.28%-5.32% (4/15/97-4/23/97) 29,000 28,539,494
Xerox Credit Corp.
5.47% (3/17/97) 4,000 3,954,417
----------
65,888,276
----------
TOTAL COMMERCIAL PAPER 390,575,629
(Cost $390,575,629) ----------- -----------
- -------------------------------------------------------------------------------
VARIABLE RATE OBLIGATION 4.7%
- -------------------------------------------------------------------------------
SECURITY BROKERS & DEALERS....................
Bear Stearns Companies Inc.
5.47% (2/07/97) 25,000 25,000,000
(Cost $25,000,000) ----------
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 14.5%
- -------------------------------------------------------------------------------
Aubrey G. Lanston & Co. Inc.
6.00% (1/02/97)
(Collateralized by $21,951,000 U.S.
Treasury Note, 8.25%; due 5/15/05;
market value $23,465,619) 23,000 23,000,000
Donaldson, Lufkin & Jenrette
6.00% (1/02/97)
(Collateralized by $21,080,000; U.S.
Treasury Note, 5.825%; due 2/15/06;
market value $20,426,520) 20,000 20,000,000
</TABLE>
<PAGE>
<PAGE> 10
Statement of Net Assets
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
Morgan Stanley & Co.
6.96% (1/02/97)
(Collateralized by $32,885,000 U.S.
Treasury Note, 5.875%; due 7/31/97;
market value $33,772,269) $33,100 $ 33,100,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $76,100,000) 76,100,000
----------
TOTAL INVESTMENTS IN SECURITIES......... 100.4% 527,125,533
(Cost $527,125,533*)
LIABILITIES IN EXCESS OF OTHER ASSETS... (0.4%) ( 2,253,668)
---- -----------
NET ASSETS (Applicable to 524,873,780
PCs outstanding) 100.0% $524,871,865
===== ===========
NET ASSET VALUE, offering and
redemption price per PC
($524,871,865 / 524,873,780 PCs) $1.00
====
<FN>
* Aggregate cost for Federal tax purposes.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 11
Statement of Net Assets
SHORT-TERM PORTFOLIO
December 31, 1996
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 27.2%
- -------------------------------------------------------------------------------
U.S. Treasury Bills
5.276%-5.50% (6/12/97-9/18/97) $ 5,080 $ 4,941,798
U.S. Treasury Notes
5.375%-6.875% (3/31/97-11/15/99) 14,095 14,097,775
----------
TOTAL U.S. TREASURY OBLIGATIONS 19,039,573
(Cost $19,047,289) ----------
- -------------------------------------------------------------------------------
GOVERNMENT AGENCY OBLIGATIONS 23.7%
- -------------------------------------------------------------------------------
Federal Home Loan Bank
Discount Note
5.25% (2/20/97) 5,000 4,961,688
---------
Federal Home Loan Mortgage Corporation
Notes
5.20%-7.555% (1/07/97-5/02/97) 5,710 5,629,607
Mortgage Pass-Throughs
6.00% (11/22/97) 2,122 2,096,606
Collateralized Mortgage Obligations
6.0375% (1/31/97) 1,297 1,298,096
---------
9,024,309
Federal National Mortgage Association
Discount Note
5.25% (1/30/97) 2,630 2,618,312
---------
TOTAL GOVERNMENT AGENCY OBLIGATIONS 16,604,309
(Cost $16,621,366) ----------
- -------------------------------------------------------------------------------
CERTIFICATE OF DEPOSIT 2.9%
- -------------------------------------------------------------------------------
Morgan (J.P.) & Co., Inc.
5.73% (8/12/97) 2,000 1,998,243
(Cost $1,999,766)
</TABLE>
<PAGE>
<PAGE> 12
Statement of Net Assets
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
ASSET BACKED SECURITIES 9.3%
- -------------------------------------------------------------------------------
Capita Equipment Receivables Trust 1996
5.60% (10/15/97) $ 1,390 $ 1,390,291
Caterpillar Financial Asset Trust 1995-A
6.10% (3/30/97) 488 489,092
Ford Motor Credit Trust 95-A
5.90% (5/15/00) 461 460,702
Ford Motor Grantor Trust 1995-A
4.30% (7/15/98) 1,118 1,115,155
Premier Auto Trust 95-2A5
7.15% (2/04/99) 3,000 3,026,250
---------
TOTAL ASSET BACKED SECURITIES 6,481,490
(Cost $6,485,478)
- -------------------------------------------------------------------------------
COMMERCIAL PAPER 23.6%
- -------------------------------------------------------------------------------
BUSINESS SERVICES....................... 1.4%
Asset Securitization Co-op Corp.
5.45% (1/07/97) 1,000 999,092
CHEMICALS............................... 4.2%
Dupont (E.I.) DeNemours & Co.
5.25% (5/05/97) 3,000 2,945,312
FINANCE LESSORS......................... 3.6%
General Electric Capital Corp.
5.39% (2/03/97) 2,500 2,487,442
FINANCIAL SERVICES...................... 2.1%
AT&T Corp.
5.55% (1/10/97) 1,485 1,482,940
FIRE CASUALTY INSURANCE................. 3.6%
USAA Capital Corp.
5.27% (4/08/97) 2,520 2,483,848
PHARMACEUTICAL.......................... 2.6%
Abbott Laboratories
5.65% (1/09/97) 1,790 1,787,752
PRINTING & PUBLISHING................... 2.8%
Gannett Co., Inc.
5.60% (1/6/97) 2,000 1,998,444
SECURITY BROKERS & DEALERS.............. 3.3%
Goldman Sachs, & Co.
5.27% (6/05/97) 2,355 2,301,220
TOTAL COMMERCIAL PAPER 16,486,050
(Cost $16,487,408)
</TABLE>
<PAGE>
<PAGE> 13
Statement of Net Assets
SHORT-TERM PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -----
<S> <C> <C>
- -------------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 4.3%
- -------------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS............
Toyota Motor Credit
5.39% (1/07/97) $ 3,000 $ 2,998,620
(Cost $3,000,000)
- -------------------------------------------------------------------------------
FIXED RATE OBLIGATIONS 8.9%
- -------------------------------------------------------------------------------
SECURITIES BROKERS & DEALERS............
Dean Witter, Discover and Co.
6.00% (3/01/98) 2,000 2,000,640
BANKS...................................
FFC National Bank Delaware
6.05% (11/04/98) 2,000 1,998,440
SERVICES - EQUIPMENT LEASING............
International Lease Finance Corp.
5.37% (2/02/98) 2,250 2,238,818
---------
TOTAL FIXED RATE OBLIGATIONS 6,237,898
(Cost $6,257,203) ---------
TOTAL INVESTMENTS IN SECURITIES......... 99.9% 69,846,183
(Cost $69,898,510*)
OTHER ASSETS IN EXCESS OF LIABILITIES... 0.1% 93,965
----- ----------
NET ASSETS (Applicable to 7,031,704
PCs outstanding) 100.0% $69,940,148
====== ==========
NET ASSET VALUE, offering and redemption
price per PC ($69,940,148 / 7,031,704 PCs) $9.95
=====
<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, 1996
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
--------------- ------------ ----------
<S> <C> <C> <C>
INTEREST INCOME $5,685,574 $36,081,207 $4,062,884
EXPENSES
Investment advisory fee 211,113 1,064,867 191,620
Administration fee 52,778 329,368 35,404
Custodian 21,021 70,260 11,537
Transfer agent 3,323 33,240 1,859
Audit 4,780 29,787 3,213
Insurance 4,731 29,411 3,179
Legal 2,535 15,760 1,703
Trustee expenses 1,886 11,811 1,275
Professional services 571 8,547 383
Printing 786 4,886 529
Service Agent 0 0 100,000
Miscellaneous 137 1,162 128
SEC registration fee 0 0 ( 9,209)
Fees waived (197,869) (63,495) ( 128,611)
--------- --------- -------
Total expenses 105,792 1,535,604 213,010
--------- --------- -------
NET INVESTMENT INCOME 5,579,782 34,545,603 3,849,874
NET REALIZED LOSS ON SECURITIES SOLD 0 (1,915) (114,232)
UNREALIZED DEPRECIATION OF SECURITIES 0 0 (323,685)
--------- ---------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $5,579,782 $34,543,688 $3,411,957
========= ========== =========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 15
Statements of Changes in Net Assets
Government/REPO PORTFOLIO
<TABLE>
<CAPTION>
Year Ended Period Ended
December 31, 1996 December 31, 1995*
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 5,579,782 $ 1,708,753
Net realized gain (loss) on securities sold 0 0
--------- ---------
Net increase in net assets
resulting from operations 5,579,782 1,708,753
--------- ---------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.053
and $.034 per PC (5,579,782) (1,708,753)
--------- ---------
CAPITAL TRANSACTIONS:
Proceeds from sale of 1,417,722,752
and 314,747,906 PCs 1,417,722,752 314,747,906
Value of 1,568,583 and 815,927 PCs
issued in reinvestment of dividends 1,568,583 815,927
Cost of 1,381,988,959 and 196,484,235
PCs repurchased (1,381,988,959) (196,484,235)
------------- -----------
Increase (decrease) in net assets derived
from capital transactions 37,302,376 119,079,598
---------- -----------
Total increase (decrease) in net assets 37,302,376 119,079,598
NET ASSETS:
Beginning of period 119,079,598 0
----------- -----------
End of period $156,381,974 $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, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 34,545,603 $ 35,136,896
Net realized gain (loss) on securities sold (1,915) 0
---------- ----------
Net increase in net assets
resulting from operations 34,543,688 35,136,896
---------- ----------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.052
and $.058 per PC (34,545,603) (35,136,896)
---------- ----------
CAPITAL TRANSACTIONS:
Proceeds from sale of 6,250,634,449
and 6,644,511,740 PCs 6,250,634,449 6,644,511,740
Value of 18,322,446 and 17,729,871 PCs
issued in reinvestment of dividends 18,322,446 17,729,871
Cost of 6,329,059,211 and 6,528,632,149
PCs repurchased (6,329,059,211) (6,528,632,149)
------------- -------------
Increase (decrease) in net assets derived
from capital transactions (60,102,316) 133,609,462
---------- -----------
Total increase (decrease) in net assets (60,104,231) 133,609,462
NET ASSETS:
Beginning of period 584,976,096 451,366,634
----------- -----------
End of period $524,871,865 $584,976,096
=========== ===========
<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, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,849,874 $ 5,957,302
Net realized gain (loss) on securities sold (114,232) 35,953
Unrealized appreciation (depreciation)
of securities (323,685) 700,727
Net increase in net assets --------- ---------
resulting from operations 3,411,957 6,693,982
--------- ---------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.542
and $.599 per PC (3,849,874) (5,957,302)
--------- ---------
CAPITAL TRANSACTIONS:
Proceeds from sale of 3,710,897
and 2,359,181 PCs 37,000,000 23,445,783
Value of 259,814 and 411,083 PCs
issued in reinvestment of dividends 2,587,864 4,098,549
Cost of 3,330,380 and 6,773,259
PCs repurchased (33,132,139) (67,598,372)
---------- ----------
Increase (decrease) in net assets derived
from capital transactions 6,455,725 (40,054,040)
--------- ----------
Total increase (decrease) in net assets 6,017,808 (39,317,360)
NET ASSETS:
Beginning of period 63,922,340 103,239,700
---------- -----------
End of period $69,940,148 $63,922,340
========== ==========
<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>
Year 6/1/95(1)
Ended Through
12/31/96 12/31/95
<S> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00
---- ----
Income From Investment Operations:
Net Investment Income .053 .034
Net Realized Gain (Loss) on Investments 0 0
---- ----
Total From Investment Operations .053 .034
---- ----
Less Distributions:
Dividends to PC holders from
Net Investment Income (.053) (.034)
Distributions to PC holders from
Net Capital Gains 0 0
---- ----
Total Distributions (.053) (.034)
---- ----
Net Asset Value, End of Period $1.00 $1.00
==== ====
Total Return 5.42% 5.99% (3)
Ratios/Supplemental Data:
Net Assets, End of Period (000) $156,382 $119,080
Ratio of Expenses to Average
Net Assets(2) .10% .10% (3)
Ratio of Net Investment Income
to Average Net Assets 5.29% 5.78% (3)
- ------------------------------
<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 .29% and .30%
for the fiscal periods ended December 31, 1996 and December 31, 1995,
respectively.
(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
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- -------- -------- --------
<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 .052 .058 .041 .030 .037
Net Realized Gain (Loss)
on Investments 0 0 0 0 0
---- ---- ---- ---- ----
Total From Investment Operations .052 .058 .041 .030 .037
---- ---- ---- ---- ----
Less Distributions:
Dividends to PC holders from
Net Investment Income (.052) (.058) (.041) (.030) (.037)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 0
---- ---- ---- ---- ----
Total Distributions (.052) (.058) (.041) (.030) (.037)
---- ---- ---- ---- ----
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
==== ==== ==== ==== ====
Total Return 5.38% 5.97% 4.21% 3.07% 3.73%
Ratios/Supplemental Data:
Net Assets, End
of Period (000) $524,872 $584,976 $451,367 $474,838 $390,581
Ratio of Expenses to Average
Net Assets(1) .23% .24% .26% .24% .23%
Ratio of Net Investment Income
to Average Net Assets 5.24% 5.82% 4.15% 3.02% 3.68%
- ------------------------------
<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 .24%, .25%
and .24% for the fiscal periods ended December 31, 1996, 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
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.00 $ 9.93 $10.03 $10.05 $10.09
Income From Investment
Operations:
Net Investment Income .542 .599 .440 .377 .443
Net Realized and Unrealized
Gain (Loss) on Investments (.050) .070 (.100) (.009) (.034)
---- ---- ---- ---- ----
Total From Investment Operations .492 .669 .340 .368 .409
---- ---- ---- ---- ----
Less Distributions:
Dividends to PC holders from
Net Investment Income (.542) (.599) (.440) (.377) (.443)
Net Capital Gains 0 0 0 (.011) (.006)
---- ---- ---- ---- ----
Total Distributions (.542) (.599) (.440) (.388) (.449)
---- ---- ---- ---- ----
Net Asset Value, End of Period $ 9.95 $ 10.00 $ 9.93 $10.03 $10.05
==== ===== ==== ===== =====
Total Return 5.08% 6.92% 3.46% 3.72% 4.13%
Ratios/Supplemental Data:
Net Assets, End
of Period (000) $69,940 $63,922 $103,240 $186,808 $195,579
Ratio of Expenses to Average
Net Assets(1) .30% .30% .30% .30% .30%
Ratio of Net Investment Income
to Average Net Assets 5.43% 6.00% 4.29% 3.74% 4.29%
Portfolio Turnover Rate(2) 119.0% 64.8% 47.6% 34.1% 37.6%
- ------------------------------
<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 .48%, .43%, .37%, .32% and .37% respectively, for the fiscal
periods ended December 31, 1996, 1995, 1994, 1993 and 1992.
(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, 1996 the Short-Term
Portfolio had capital loss carry-forwards amounting to $871,994 and $114,232
that expire in 2002 and 2003, respectively. 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 the 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 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, 1996 and the maturity shown is the date of the
next interest readjustment.
<PAGE>
<PAGE> 22
Management Estimates - The preparation of financial statements in accordance
with generally accepted accounting principals requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
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 1996 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 $92,413 of such fees for the
period ended December 31, 1996. PIMC voluntarily waived $30,556 of service
agent fees and CSC voluntarily waived $5,642 of administrator fees payable by
the Short-Term Portfolio during this period. In addition, PIMC voluntarily
waived $47,621 and $172,944 of advisory fees and CSC voluntarily waived $15,874
and $24,925 of administrator fees payable by the Money Market Portfolio and
Government/REPO Portfolio, respectively, during this period.
D. At December 31, 1996, net assets consisted of:
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
------------ ----------- ----------
<C> <C> <C>
Capital paid in................. $156,381,974 $524,873,780 $70,978,701
Accumulated realized gain (loss)
on security transactions...... - (1,915) (986,226)
Net unrealized appreciation of
investments................... - - ( 52,327)
----------- ----------- ----------
$156,381,974 $524,871,865 $69,940,148
=========== =========== ==========
</TABLE>
E. Short-Term Portfolio purchases and sales of investment securities, other than
short-term investments, were $43,573,371 and $64,619,848, respectively, and
purchases and sales of U.S. Government securities were $35,304,728 and
$42,551,320 respectively, for the period ended December 31, 1996.
<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, 1996 and the related
statements of operations for the year then ended, the statements of changes
in net assets for each of the two years or periods then ended, and the
financial highlights for each of the five years or periods 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, 1996. 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, 1996, the results of their
operations for the year ended, the changes in their net assets for each of the
two years or periods then ended, and the financial highlights for each of the
five years or periods then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
January 31, 1997
<PAGE>
<PAGE> 24
- -----------------------------------------------------------
PLAN INVESTMENT FUND, INC.
676 N. St. Clair
Chicago, Illionois 60611
(312) 440-6372
Trustees
--------
Albert F. Antonini David M. Murdoch
President and Executive Vice President
Chief Executive Officer Blue Cross and Blue Shield
Blue Cross and Blue Shield Association
of Central new York
Ronald F. King
Philip A. Goss President and
President and Chief Executive Officer
Chief Executive Officer Blue Cross and Blue Shield
Plan Investment Fund, Inc. of Oklahoma
Health Plans Capital
Services Corp. Donald P. Sacco
President and
Gene Holcomb Chief Operating Officer
President Blue Cross and Blue Shield
Blue Cross and Blue Shield of Oregon
of Tennessee
Thomas J. Ward
Steven L. Hooker President and
Chief Financial Officer and Chief Executive Officer
Treasurer Blue Cross of Northeastern
The Benchmark Group Pennsylvania
William M. Lowry Sherman M. Wolff
President and Senior Vice President, Finance
Chief Executive Office and Sales
Himark, Inc. Blue Cross and Blue Shield
of Illinois
INVESTMENT ADVISORS
-------------------
GOVERNMENT/REPO PORTFOLIO SHORT-TERM PORTFOLIO
and MONEY MARKET PORTFOLIO --------------------
- -------------------------- Neuberger & Berman
PNC Institutional Management Corporation New York, New York
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
12/96 17,974 17,566
</TABLE>
Past Performance is Not
Predictive of Future Performance
