<PAGE> 1
- --------------------------------------------------------------------------------
PLAN INVESTMENT FUND, INC.
Annual Report
December 31, 1999
ADMINISTRATOR:
--------------
BCS FINANCIAL SERVICES CORPORATION [LOGO]
BCS FINANCIAL SERVICES CORPORATION
676 N. St. Clair, Chicago, IL 60611
(312) 951-9841
<PAGE> 2
- --------------------------------------------------------------------------------
PLAN INVESTMENT FUND, INC.
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
February 9, 2000
Fellow Investors:
BCS Financial Services Corporation on behalf of the Board of Trustees, presents
the 1999 Annual Report for Plan Investment Fund. During 1999 the administrative
function for Plan Investment Fund was successfully migrated to BCS Financial
Services. This change was made without any disruption to the Participation
Certificate holders or the other service providers. This successful transition
was due, in no small part, to the efforts of the prior Administrator, Health
Plans Capital Services Corp. and BCS Financial Services Corporation. I am happy
to report also, that Plan Investment Fund experienced no problems related to the
Y2K issue.
The investment advisors discuss later in the Report the increase in short term
rates and the impact on the portfolios. Rates have gone up as a result of the
Federal Reserve's actions. This situation in conjunction with concerns about
investor actions approaching the end of the century prompted both managers to
shorten portfolio durations. In spite of these factors the returns on the Plan
Investment Fund portfolios remained very competitive while maintaining very high
credit quality.
During the past year average balances within Plan Investment Fund have been
below the levels of the prior two years. This decline we believe is the result
of reduced cash flows and decisions at some of the Blue organizations to
reallocate their investments.
There are presently 44 members of the Blue System that use Plan Investment Fund
and, we believe the wide usage of Plan Investment Fund demonstrates that these
portfolios provide a valuable investment alternative in many different
situations. We will continue to pursue ways to improve the value for investors
while maintaining the high quality and service that are the hallmark of Plan
Investment Fund.
Sincerely,
Edward J. Baran
President and Chief Executive Officer
<PAGE> 3
- --------------------------------------------------------------------------------
COMPARATIVE PERFORMANCE: ANNUALIZED TOTAL RETURN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended Three One Five Ten From
December 31, 1999 Months Year Years Years Inception*
- ----------------- ------ ---- ----- ----- ----------
<S> <C> <C> <C> <C> <C>
GOVERNMENT/REPO PORTFOLIO 5.44% 5.05% -- -- 5.46%
Donoghues Inst. Money Market Avg 5.23% 4.81% -- -- 5.18%
Repurchase Agreements 5.41% 5.05% -- -- 5.45%
MONEY MARKET PORTFOLIO 5.51% 5.02% 5.46% 5.27% 5.86%
Donoghues Inst. Money Market Avg 5.23% 4.81% 5.23% 5.06% 5.66%
Repurchase Agreements 5.41% 5.05% 5.49% 5.24% 5.80%
SHORT-TERM PORTFOLIO 4.18% 4.33% 5.60% 5.60% 5.97%
6 Month Treasury Note Index 5.15% 4.80% 5.38% 5.27% 5.74%
1 - 3 Year Treasury Note Index 2.43% 3.06% 6.51% 6.60% 6.82%
</TABLE>
* Inception dates:
- ------------------
6/01/95 - Government/REPO Portfolio; 3/11/87 - Money Market and Short-Term
Portfolios
- --------------------------------------------------------------------------------
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 5.18% $1.00 1 Day A1+
November 5.37% $1.00 1 Day A1+
December 5.21% $1.00 3 Days A1+
MONEY MARKET PORTFOLIO
October 5.21% $1.00 35 Days A1+
November 5.37% $1.00 38 Days A1+
December 5.36% $1.00 22 Days A1+
SHORT-TERM PORTFOLIO
October 5.12% $9.94 8.3 Months AA
November 5.33% $9.93 8.4 Months AA
December 5.45% $9.92 8.6 Months AA
</TABLE>
<PAGE> 4
- --------------------------------------------------------------------------------
REPORT FROM THE MONEY MARKET AND GOVERNMENT/REPO PORTFOLIO ADVISOR
- --------------------------------------------------------------------------------
A robust U.S. economy, coupled with recoveries abroad, put upward pressure on
interest rates in the U.S. markets during the past year. The surge in growth, as
exemplified by a thirty year low in U.S. unemployment and a 5.7% gain in third
quarter gross domestic product ("GDP"), led to increased focus on the massive
U.S. current account deficit, a weaker dollar and rising commodity prices.
Higher prices, particularly in the energy sector, and tight labor markets caused
concerns of profit margin compression for U.S. corporations and negative
sentiment in the bond market.
Faced by strong economic reports, and despite reassuringly low levels of
inflation, the Federal Open Market Committee (FOMC) voted to increase short-term
interest rates three times in 1999, raising the federal funds target from 4.75%
in May to 5.50% in November. The third tightening, in November, effectively
reversed all of the easings instituted in the third and fourth quarters of 1998,
amid the global financial crisis.
As the year draws to a close, the Federal Reserve ("Fed") will continue to
monitor the strength of the economy and its remarkable pace of growth. With
expected year-over-year GDP growth of 4.3% for 1999, and with the tightness of
the labor market and pressure on wages, the Fed will have to remain vigilant to
prevent an end to the current nine-year record expansion in the U.S.
Although there was no change in monetary policy until mid-year, the money market
yield curve steepened, in anticipation, early in the year. The Money Market
Portfolio extended its average weighted maturity during this time to the mid-60
day range to take advantage of additional yield out the curve. In May, the Fed
adopted a bias towards tightening, further steepening the yield curve. On June
30, the Fed increased the federal funds rate 25 basis points. Coincident with
the increase in rates during the year, the Money Market Portfolio's assets
declined to the $300-350 million range for much of the year. At year-end,
government agency discount notes were purchased for anticipated liquidity needs,
due to the uncertainty about Y2K-related cash flows. The average weighted
maturity declined from the high 30's during the fourth quarter to 22 days at
year-end, as additional cash was held as a precaution. The Portfolio's total
return for the year was 5.02% versus 4.81% for the IBC's Total Institutions-Only
category. Assets at year-end rose to $426 million.
The Government/REPO Portfolio adhered to its policy of investing substantially
all its assets in overnight investments. The Portfolio's repurchase agreements
were collateralized by U.S. government obligations and the repo counterparties
were analyzed for their credit quality. Like the Money Market Portfolio,
government agencies were purchased for anticipated liquidity needs at year-end.
For 1999, the Government/REPO Portfolio produced a total return of 5.05% while
finishing the year with assets of $116.6 million.
Thomas H. Nevin
Managing Director
BlackRock Institutional Management Corporation
<PAGE> 5
- --------------------------------------------------------------------------------
REPORT FROM THE SHORT-TERM PORTFOLIO ADVISOR
- --------------------------------------------------------------------------------
The final quarter of 1999 ended with a surprising calm. Interest rates on very
short maturity issues fell to 2%, the Y2K bug never created the feared epidemic,
and the Federal Reserve ("Fed") tonic of keeping the markets liquid and
confident worked well.
However throughout the quarter we saw rates rise roughly a 1/2 to 3/4 of a
percent as the bond market completed a very tough year. True to our discipline
we kept the weighted average maturity of the portfolio in a defensive range,
considerably shorter than the benchmark.
We focused on preserving principal and took advantage of "turn" rates in high
quality corporate and Agency debt, as they were extremely attractive through mid
December. Careful security selection was rewarded as credit quality weakened in
some sectors and corporate downgrades exceeded upgrades by the ratings services.
We avoided the longer maturities, as it became clear that our economy continues
to be robust, consumer demand and confidence is strong, and there could be more
rate increases in the new year, as the Fed remains on inflation alert.
We have seen this pattern before. The easy monetary policy during 1993 was
focused on the weak banking and savings and loan sectors. The follow-up in
1994-95 was a series of seven increases doubling the Fed Funds rate from 3 to
6%. As you will recall in 1995 the Fed also capitulated later in the year as
funds were reduced to 5.5%, providing excellent returns to fixed income
investors. More recently we had the 1998 successful Fed action to head off an
international financial crisis. Three rate reductions provided financial system
liquidity and restored stability. The reversal in 1999 probably does not
complete the Fed's work of tightening monetary policy enough to subdue the
threat of inflation. Therefore, the market has discounted some additional
tightening to be accomplished sooner rather than later. Will there be an
attractive entry point for additional investments in fixed income in 2000? We
believe the answer is a resounding yes!
Josephine Mahaney
Senior Portfolio Manager
Neuberger Berman
<PAGE> 6
[PERFORMANCE GRAPH]
Annualized Total Return
-----------------------
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Inception
------ ------- -------- ---------
<S> <C> <C> <C> <C>
Short-Term Porfolio 4.33% 5.60% 5.60% 5.97%
</TABLE>
<PAGE> 7
GOVERNMENT/REPO PORTFOLIO
Statement of Net Assets
December 31, 1999
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- -------- ------------
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GOVERNMENT AGENCY OBLIGATIONS 92.3%
- ---------------------------------------------------------------------------------------------------------
Federal Home Loan Bank
Discount Notes
1.50% (01/03/00) $ 95,000 $ 94,992,083
------------
(Cost $94,992,083)
- ---------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 21.0%
- ---------------------------------------------------------------------------------------------------------
Merrill Lynch Government Securities, Inc.
3.20% (1/03/00)
To be repurchased at $15,004,000
(Collateralized by $16,230,000 Government
National Mortgage Association Bonds,
0.00% to 7.00%; due 08/16/29 to 12/16/29;
Market Value $15,452,031) 15,000 15,000,000
Morgan Stanley & Co., Inc.
2.50% (1/03/00)
To be repurchased at $6,601,375
(Collateralized by $6,785,000 U.S. Treasury
Notes, 4.88%; due 3/31/01; Market Value
$6,767,428) 6,600 6,600,000
------------
TOTAL REPURCHASE AGREEMENTS 21,600,000
------------
(Cost $21,600,000)
TOTAL INVESTMENTS IN SECURITIES 113.3% 116,592,083
(Cost $116,592,083*)
LIABILITIES IN EXCESS OF OTHER ASSETS (13.3)% (13,719,282)
----- ------------
NET ASSETS(Applicable to 102,872,801
PCs outstanding) 100.0% $102,872,801
===== ============
NET ASSET VALUE, offering and
redemption price per PC
($102,872,801/102,872,801 PCs) $ 1.00
============
* Aggregate cost for Federal tax purposes.
</TABLE>
See accompanying notes to financial statements.
<PAGE> 8
MONEY MARKET PORTFOLIO
Statement of Net Assets
December 31, 1999
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- -------- -------------
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GOVERNMENT AGENCY OBLIGATIONS 20.6%
- ---------------------------------------------------------------------------------------------------------
Federal Home Loan Bank
Discount Notes
1.50% (1/03/00) $ 87,705 $ 87,697,690
------------
(Cost $87,697,690)
- ---------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 3.5%
- ---------------------------------------------------------------------------------------------------------
NationsBank
5.00% (1/06/00) 15,000 14,999,960
----------
(Cost $14,999,960)
- ---------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 16.7%
- ---------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES 4.0%
Centric Capital Corp.
5.65% (2/29/00) 17,000 16,842,585
----------
ELECTRIC 3.5%
Allegheny Energy, Inc.
5.78% (3/10/00) 15,000 14,833,825
----------
MISCELLANEOUS MANUFACTURING 2.3%
Fortune Brands, Inc.
5.20% (2/11/00) 10,000 9,940,778
----------
PERSONAL CREDIT INSTITUTIONS 3.5%
Norwest Financial, Inc.
5.92% (3/09/00) 15,000 14,832,267
----------
SHORT-TERM BUSINESS CREDIT 3.4%
General Electric Capital Corp.
5.83% (4/11/00) 15,000 14,754,654
----------
TOTAL COMMERCIAL PAPER 71,204,109
----------
(Cost $71,204,109)
</TABLE>
<PAGE> 9
MONEY MARKET PORTFOLIO
Statement of Net Assets
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ----- -------------
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
VARIABLE RATE OBLIGATIONS 29.3%
- ---------------------------------------------------------------------------------------------------------------------
BANKS 15.3%
Bank One Corp.
6.115% (1/03/00) $ 15,000 $ 14,994,428
------------
Comerica Bank - Detroit
6.531% (1/25/00) 15,000 14,992,440
Key Bank, N.A.
6.031% (3/14/00) 15,000 14,996,006
SMM Trust Series 1999E
6.105% (1/05/00) 20,000 20,000,000
------------
64,982,874
------------
CHEMICALS & ALLIED PRODUCTS 3.5%
Dow Chemical Co.
6.021% (3/15/00) 15,000 14,998,875
------------
PETROLEUM REFINING 3.5%
Texaco Capital, Inc.
6.011% (2/03/00) 15,000 14,995,035
------------
SHORT-TERM BUSINESS CREDIT 3.5%
Caterpillar Financial Services Corp.
6.186% (1/18/00) 15,000 14,995,954
------------
TELECOMMUNICATIONS 3.5%
AT&T Corp.
6.136% (1/13/00) 15,000 14,996,820
------------
TOTAL VARIABLE RATE OBLIGATIONS 124,969,558
------------
(Cost $124,969,558)
</TABLE>
<PAGE> 10
MONEY MARKET PORTFOLIO
Statement of Net Assets
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ------------ -----------
- -------------------------------------------------------------------------------------------------------------
<S> <C>
REPURCHASE AGREEMENTS 29.9%
- -------------------------------------------------------------------------------------------------------------
Greenwich Capital Markets
3.00% (1/03/00) To be repurchased at $15,003,750
(Collateralized by $23,052,489 Federal National
Mortgage Association STRIPS, due 9/01/23 to
5/01/29; Market Value $15,450,294)
15,000 $ 15,000,000
------------
Merrill Lynch Government Securities, Inc.
3.20% (1/03/00)
To be repurchased at $20,005,333
(Collateralized by $20,870,000 Government
National Mortgage Association Bonds,
5.84% to 6.08%; due 12/16/29;
Market Value $20,602,540)
20,000 20,000,000
------------
Morgan (J.P.) Securities, Inc.
4.50% (1/03/00) To be repurchased at $48,218,075 (Collateralized by
$50,180,000 Federal Home Loan Bank Discount Notes, due 3/08/00; Market
Value $49,646,235)
48,200 48,200,000
------------
Morgan Stanley & Co., Inc.
2.50% (1/03/00)
To be repurchased at $44,009,167
(Collateralized by $48,010,000 U.S.
Treasury Notes, 4.25%; due 11/15/03;
Market Value $44,952,285)
44,000 44,000,000
------------
TOTAL REPURCHASE AGREEMENTS 127,200,000
------------
(Cost $127,200,000)
</TABLE>
<PAGE> 11
MONEY MARKET PORTFOLIO
Statement of Net Assets
<TABLE>
<CAPTION>
PERCENTAGE
OF
NET ASSETS VALUE
----------- ------------
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES 100.0% 426,071,317
(Cost $426,071,317*)
LIABILITIES IN EXCESS OF OTHER ASSETS (0.0%) (51,678)
------- -------------
NET ASSETS (Applicable to 426,023,549
PCs outstanding) 100.0% $ 426,019,639
======= =============
NET ASSET VALUE, offering and
redemption price per PC
($426,019,639/426,023,549 PCs) $ 1.00
=============
* Aggregate cost for Federal tax purposes.
</TABLE>
See accompanying notes to financial statement
<PAGE> 12
SHORT-TERM PORTFOLIO
Statement of Net Assets
December 31, 1999
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- ------- ------------
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GOVERNMENT AGENCY OBLIGATIONS 3.9%
- -------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation
Gold Balloon
6.50% (7/31/00) $ 1,324 $ 1,300,756
-----------
(Cost $1,325,522)
- -------------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES 9.2%
- -------------------------------------------------------------------------------------------------------------
Case Equipment Loan Trust
5.285% (2/29/00) 2,226 2,199,234
Honda Auto Receivables Grantor Trust Series 1997A
5.85% (8/01/00) 265 262,202
Union Acceptance Corp.
5.44% (3/01/00) 558 557,106
------------
TOTAL ASSET BACKED SECURITIES 3,018,542
------------
(Cost $3,048,614)
- -------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 13.8%
- -------------------------------------------------------------------------------------------------------------
FINANCE 3.0%
Merrill Lynch & Co., Inc.
5.37% (2/16/00) 1,000 992,799
------------
FINANCIAL 4.9%
Enterprise Funding
6.28% (2/10/00) 1,623 1,611,675
------------
</TABLE>
<PAGE> 13
SHORT-TERM PORTFOLIO
Statement of Net Assets
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
FINANCIAL SERVICES 3.1%
Bell Atlantic Network Funding
5.80% (1/19/00) $ 1,035 $ 1,031,999
-----------
FOODS 2.8%
Hershey Foods Corp.
5.77% (1/31/00) 925 920,483
-----------
TOTAL COMMERCIAL PAPER 4,556,956
-----------
(Cost $4,557,364)
- --------------------------------------------------------------------------------------------------------------------------
FIXED RATE OBLIGATIONS 66.1%
- --------------------------------------------------------------------------------------------------------------------------
CHEMICALS 9.1%
E.I. Dupont de Nemours
4.998% (4/14/00) 3,000 2,988,750
-----------
COMPUTERS 6.1%
International Business Machines
6.375% (6/15/00) 2,000 2,002,500
-----------
CREDIT 5.9%
Associates Corp. North America
5.50% (2/15/02) 2,000 1,940,000
-----------
FINANCE 23.4%
Ford Motor Credit Co.
6.85% (8/15/00) 3,000 3,006,974
General Motors Acceptance Corp.
6.45% (8/27/01) 2,000 1,982,500
International Lease Finance Corp.
6.63% (6/01/00) 740 739,820
6.21% (2/01/01) 1,000 991,250
Prudential Funding Corp.
5.96% (4/27/00) 1,000 997,500
-----------
7,718,044
-----------
</TABLE>
<PAGE> 14
SHORT-TERM PORTFOLIO
Statement of Net Assets
<TABLE>
<CAPTION>
PERCENTAGE
OF PAR
NET ASSETS (000) VALUE
---------- --------- -----------
<S> <C> <C> <C>
FINANCIAL SERVICES 15.6%
Citicorp
6.70% (4/30/01) $ 1,170 $ 1,167,075
General Electric Capital Corp.
6.33% (9/17/01) 2,000 1,982,500
Morgan Stanley, Dean Witter, Discover & Co.
5.89% (3/20/00) 2,000 1,997,075
-----------
5,146,650
-----------
RETAIL MERCHANDISING
Wal-Mart Stores, Inc. 6.0%
6.15% (8/10/01) 2,000 1,982,500
TOTAL FIXED RATE OBLIGATIONS 21,778,444
-----------
(Cost $21,961,930)
- --------------------------------------------------------------------------------------------------------------------------
VARIABLE RATE OBLIGATIONS 6.1%
- --------------------------------------------------------------------------------------------------------------------------
FINANCE
Goldman Sachs Group
6.25% (1/24/00) 2,000 1,999,381
-----------
(Cost $1,999,871)
TOTAL INVESTMENTS IN SECURITIES 99.1% 32,654,079
(Cost $32,893,301*)
OTHER ASSETS IN EXCESS OF LIABILITIES 0.9% 287,106
------ ------------
NET ASSETS (Applicable to 3,321,151
PCs outstanding) 100.0% $ 32,941,185
===== ============
NET ASSET VALUE, offering and
redemption price per PC
($32,941,185/3,321,151PCs) $ 9.92
=============
</TABLE>
* 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 $0; excess of tax cost over value $239,222.
See accompanying notes to financial statements.
<PAGE> 15
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
--------------- ------------ ------------
<S> <C> <C> <C>
ASSETS
Investments in securities at value $116,592,083 $426,071,317 $ 32,654,079
Accrued interest receivable 1,792 1,926,484 477,828
Cash 1,439 22,642 6,939
Other assets 1,330 4,122 587
------------ ------------ ------------
Total Assets 116,596,644 428,024,565 33,139,433
LIABILITIES
Payable for fund subscriptions cancelled 13,000,000 -- --
Dividends payable 701,299 1,876,468 182,805
Accrued expenses payable 22,544 128,458 15,443
------------ ------------ ------------
Total Liabilities 13,723,843 2,004,926 198,248
------------ ------------ ------------
NET ASSETS $102,872,801 $426,019,639 $ 32,941,185
============ ============ ============
NET ASSET VALUE PER
PARTICIPATION CERTIFICATE $ 1.00 $ 1.00 $ 9.92
============ ============ ============
</TABLE>
(Participation Certificates outstanding,
Government/REPO Portfolio 102,872,801,
Money Market Portfolio 426,023,549,
Short-Term Portfolio 3,321,151)
See accompanying notes to financial statements.
<PAGE> 16
Statements of Operations
December 31, 1999
<TABLE>
<CAPTION>
GOVERNMENT/REPO MONEY MARKET SHORT-TERM
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------- -------------
<S> <C> <C> <C>
INTEREST INCOME $ 9,238,624 $ 21,398,838 $ 3,313,381
--------------- ------------- -------------
EXPENSES
Investment advisory fee 360,279 745,887 173,881
Administration fee 90,887 207,209 31,220
Custodian 29,732 46,442 11,580
Legal 22,493 26,835 5,802
Audit 13,126 24,001 3,150
Professional services 10,945 4,794 --
Insurance 8,780 23,169 3,260
Transfer agent 9,536 11,657 1,200
Trustee expenses 2,955 7,199 600
Printing 4,590 4,103 1,325
Service agent -- -- 100,001
Miscellaneous 412 464 4,366
Fees waived (371,980) (987) (149,068)
------------ ------------ ------------
Net Expenses 181,755 1,100,773 187,317
------------ ------------ ------------
NET INVESTMENT INCOME 9,056,869 20,298,065 3,126,064
NET REALIZED LOSS ON SECURITIES SOLD -- (3,910) (32,174)
UNREALIZED DEPRECIATION OF SECURITIES -- -- (404,457)
------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 9,056,869 $ 20,294,155 $ 2,689,433
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 17
GOVERNMENT/REPO PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 9,056,869 $ 13,829,240
Net realized gain (loss) on securities sold -- --
--------------- ---------------
Net increase in net assets
resulting from operations 9,056,869 13,829,240
--------------- ---------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.049
and $.054 per PC (9,056,869) (13,829,240)
--------------- ---------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 2,921,614,052
and 3,258,023,585 PCs 2,921,614,052 3,258,023,585
Value of 2,740,565 and 6,014,183 PCs
issued in reinvestment of dividends 2,740,565 6,014,183
Cost of 2,946,168,096 and 3,338,589,426
PCs repurchased (2,946,168,096) (3,338,589,426)
--------------- ---------------
Increase (decrease) in net assets derived
from capital transactions (21,813,479) (74,551,658)
--------------- ---------------
Total increase (decrease) in net assets (21,813,479) (74,551,658)
NET ASSETS:
Beginning of period 124,686,280 199,237,938
--------------- ---------------
End of period $ 102,872,801 $ 124,686,280
=============== ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 18
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 20,298,065 $ 23,473,526
Net realized gain (loss) on securities sold (3,910) 77
--------------- ---------------
Net increase in net assets
resulting from operations 20,294,155 23,473,603
--------------- ---------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.049
and $.053 per PC (20,298,065) (23,473,526)
Net capital gains -- (77)
--------------- ---------------
Total distributions (20,298,065) (23,473,603)
--------------- ---------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 3,577,865,628
and 3,708,891,424 PCs 3,577,865,628 3,708,891,424
Value of 15,097,502 and 18,036,609 PCs
issued in reinvestment of dividends 15,097,502 18,036,609
Cost of 3,655,063,876 and 3,653,428,968
PCs repurchased (3,655,063,876) (3,653,428,968)
--------------- ---------------
Increase (decrease) in net assets derived
from capital transactions (62,100,746) 73,499,065
--------------- ---------------
Total increase (decrease) in net assets (62,104,656) 73,499,065
NET ASSETS:
Beginning of period 488,124,295 414,625,230
--------------- ---------------
End of period $ 426,019,639 $ 488,124,295
=============== ===============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 19
SHORT-TERM PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,126,064 $ 2,623,231
Net realized gain (loss) on securities sold (32,174) 17,715
Unrealized appreciation (depreciation)
of securities (404,457) 101,501
------------ ------------
Net increase in net assets
resulting from operations 2,689,433 2,742,447
------------ ------------
DIVIDENDS TO PARTICIPATION
CERTIFICATE HOLDERS:
From net investment income $.502
and $.540 per PC (3,126,064) (2,623,231)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from sale of 6,644,257
and 3,125,109 PCs 66,300,020 31,194,097
Value of 180,621 and 185,408 PCs
issued in reinvestment of dividends 1,799,213 1,850,667
Cost of 8,372,866 and 3,096,706
PCs repurchased (83,388,894) (30,901,428)
------------ ------------
Increase (decrease) in net assets derived
from capital transactions (15,289,661) 2,143,336
------------ ------------
Total increase (decrease) in net assets (15,726,292) 2,262,552
NET ASSETS:
Beginning of period 48,667,477 46,404,925
------------ ------------
End of period $ 32,941,185 $ 48,667,477
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 20
GOVERNMENT/REPO PORTFOLIO
FINANCIAL HIGHLIGHTS
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Year Year Year 6/1/95(1)
Ended Ended Ended Ended Through
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
------------ ------------ ------------ ------------ ------------
<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 0.049 0.054 0.054 0.053 0.034
Net Realized Gain (Loss) on Investments 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Total From Investment Operations 0.049 0.054 0.054 0.053 0.034
------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends to PC holders from
Net Investment Income (0.049) (0.054) (0.054) (0.053) (0.034)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Total Distributions (0.049) (0.054) (0.054) (0.053) (0.034)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ ============
Total Return 5.05% 5.48% 5.57% 5.42% 5.99%(3)
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 102,873 $ 124,686 $ 199,238 $ 156,382 $ 119,080
Ratio of Expenses to Average
Net Assets(2) 0.10% 0.10% 0.10% 0.10% 0.10%(3)
Ratio of Net Investment Income
to Average Net Assets 4.98% 5.36% 5.44% 5.29% 5.78%(3)
</TABLE>
- -----------------------------------------
(1) Commencement of operations
(2) Without the waiver of a portion of advisory and administration fees (see
Note C), the ratio of expenses to average daily net assets would have been
.30%,.28%, .29%, .29% and .30% for the fiscal periods ended December 31,
1999, 1998, 1997, 1996 and 1995, respectively.
(3) Annualized
See accompanying notes to financial statements.
<PAGE> 21
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
------------ ------------ ------------ ------------ ------------
<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 0.049 0.053 0.054 0.052 0.058
Net Realized Gain (Loss) on Investments 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Total From Investment Operations 0.049 0.053 0.054 0.052 0.058
------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends to PC holders from
Net Investment Income (0.049) (0.053) (0.054) (0.052) (0.058)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Total Distributions (0.049) (0.053) (0.054) (0.052) (0.058)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============ ============
Total Return 5.02% 5.42% 5.51% 5.38% 5.97%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 426,020 $ 488,124 $ 414,625 $ 524,872 $ 584,976
Ratio of Expenses to Average
Net Assets(1) 0.27% 0.26% 0.25% 0.23% 0.24%
Ratio of Net Investment Income
to Average Net Assets 4.90% 5.28% 5.38% 5.24% 5.82%
</TABLE>
- -------------------------------------------
(1) Without the waiver of a portion of advisory and administration fees (see
Note C), the ratios of expenses to average daily net assets would have
been .24% and .25% for the fiscal periods ended December 31, 1996 and
1995, respectively.
See accompanying notes to financial statements.
<PAGE> 22
SHORT-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
For a Participation Certificate (PC) Outstanding Throughout the Period
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 9.97 $ 9.95 $ 10.00 $ 9.93
----------- ----------- ----------- ----------- -----------
Income From Investment Operations:
Net Investment Income 0.502 0.540 0.547 0.542 0.599
Net Realized and Unrealized
Gain (Loss) on Investments (0.080) 0.030 0.020 (0.050) 0.070
----------- ----------- ----------- ----------- -----------
Total From Investment Operations 0.422 0.570 0.567 0.492 0.669
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends to PC holders from
Net Investment Income (0.502) (0.540) (0.547) (0.542) (0.599)
Distributions to PC holders from
Net Capital Gains 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Total Distributions (0.502) (0.540) (0.547) (0.542) (0.599)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 9.92 $ 10.00 $ 9.97 $ 9.95 $ 10.00
=========== =========== =========== =========== ===========
Total Return 4.33% 5.86% 5.85% 5.08% 6.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 32,941 $ 48,667 $ 46,405 $ 69,940 $ 63,922
Ratio of Expenses to Average
Net Assets(1) 0.30% 0.30% 0.30% 0.30% 0.30%
Ratio of Net Investment Income
to Average Net Assets 5.01% 5.42% 5.47% 5.43% 6.00%
Portfolio Turnover Rate(2) 106.6% 10.2% 79.2% 119.0% 64.8%
</TABLE>
- -------------------------------------------
(1) Without the waiver of a portion of advisory, service agent and
administration fees (see Note C), the ratios of expenses to average daily
net assets would have been .54%, .59%, .57%, .48% and .43% for the fiscal
periods December 31, 1999, 1998, 1997, 1996 and 1995.
(2) Excludes security purchases with a maturity of less than one year.
See accompanying notes to financial statements.
<PAGE> 23
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 Portfolios
intend, subject to the use of offsetting capital loss carry-forwards, to
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,
1999, the Short-Term Portfolio had capital loss carry-forwards amounting to
$854,279, $114,232, $40,211 and $32,174 that expire in 2002, 2004, 2005 and
2007 respectively. These loss carry-forwards are available to offset
possible future capital gains of the Short-Term Portfolio. At December 31,
1999, the Money Market Portfolio had a capital loss carry-forward amounting
to $3,910 that expires in 2007. This loss carry-forward is available to
offset possible future capital gains of the Money Market 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. All repurchase agreements were entered
into on December 31, 1999.
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, 1999 and the maturity shown is the
date of the next interest readjustment.
Management Estimates - The preparation of financial statements in
accordance with generally accepted accounting principles 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.
<PAGE> 24
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 - BlackRock
Institutional Management Corporation ("BIMC"), an indirect majority owned
subsidiary of PNC Bank National Association, serves as the Portfolios'
investment advisor and service agent. As compensation for its services the
Portfolios pay BIMC a fee, computed daily and paid monthly based upon an
annualized percentage of the average daily net assets, 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 ("NB"), a Delaware Limited
Liability Corporation, serves as the Portfolio's investment advisor. As
compensation for its services, the Portfolio pays NB a fee, computed daily
and paid monthly based upon an annualized percentage of the average daily
net assets, 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 Corporation ("CSC") served as the Fund's
administrator until March 31, 1999. Effective April 1, 1999, BCS Financial
Services Corporation ("BCS") serves as the Fund's administrator with
respect to the Fund's overall operations and relations with holders of PCs.
As compensation for its services each Portfolio pays BCS 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.
PFPC Trust Company ("PFPC Trust"), an affiliate of PNC Bank National
Association, 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, BIMC serves as the Short-Term Portfolio
service agent. PFPC Trust, BIMC and PFPC receive fees from the Fund for
serving in these capacities.
BIMC and NB have agreed contractually to reduce their advisory fees
otherwise payable to them in 1999 to the extent necessary to reduce the
ordinary operating expenses of the 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, NB waived $95,864
of such fees payable by the Short-Term Portfolio for the period ended
December 31, 1999. BIMC voluntarily waived $45,389 of service agent fees
and CSC and BCS voluntarily waived $1,845 and $5,970, respectively, of
administrator fees payable by the Short-Term Portfolio during this period.
In addition, BIMC voluntarily waived $740 and $304,057 of advisory fees and
CSC voluntarily waived $227 and $15,003 of administrator fees payable by
the Money Market Portfolio and Government/REPO Portfolio, respectively,
during this period. BCS voluntarily waived $20 and $52,920 of administrator
fees payable by the Money Market Portfolio and Government/REPO Portfolio,
respectively, during this period.
D. At December 31, 1999, net assets consisted of:
<TABLE>
<CAPTION>
Government/REPO Money Market Short-Term
Portfolio Portfolio Portfolio
--------------- ------------- -------------
<S> <C> <C> <C>
Capital paid in ................... $ 102,872,801 $ 426,023,549 $ 34,221,303
Accumulated realized loss on
security transactions ........... -- (3,910) (1,040,896)
Net unrealized depreciation of
investments ..................... -- -- (239,222)
------------- ------------- -------------
$ 102,872,801 $ 426,019,639 $ 32,941,185
============= ============= =============
</TABLE>
E. Short-Term Portfolio purchases and sales of investment securities, other
than short-term investments, were $30,454,602 and $30,974,930,
respectively, and purchases and sales of U.S. Government securities were
$12,440,774 and $22,431,014 respectively, for the period ended December 31,
1999.
<PAGE> 25
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participation Certificate Holders and
Trustees of Plan Investment Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Government/REPO Portfolio, the
Money Market Portfolio and the Short-Term Portfolio (constituting the Plan
Investment Fund, Inc., hereafter referred to as the "Fund") at December 31,
1999, the results of each of their operations for the year then ended, the
changes in each of their net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1999 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, PA
February 4, 2000
<PAGE> 26
- --------------------------------------------------------------------------------
PLAN INVESTMENT FUND, INC.
676 N. St. Clair
Chicago, Illinois 60611
(312) 951-9841
TRUSTEES
--------
EDWARD J. BARAN MARK A. ORLOFF
President and Vice President and
Chief Executive Officer Deputy General Counsel
Plan Investment Fund, Inc. Blue Cross and Blue Shield
BCS Financial Corporation Association
HOWARD F. BEACHAM III JED H. PITCHER
President and Chairman of the Board and
Chief Operating Officer Chief Executive Officer
Blue Cross and Blue Shield Regence Blue Cross and Blue Shield
of Central New York, Inc. of Utah
PHILLIP A. GOSS JOSEPH REICHARD
Vice President Vice President, Treasury Services &
Corporate Development Assistant Treasurer
Blue Cross and Blue Shield Highmark, Inc.
of Illinois
M. EDWARD SELLERS RONALD F. KING
President and President and
Chief Executive Officer Chief Financial Officer
Blue Cross and Blue Shield Blue Cross and Blue Shield
of South Carolina of Oklahoma
JAMES M. MEAD
President and
Chief Executive Officer
Capital Blue Cross
INVESTMENT ADVISORS
-------------------
GOVERNMENT/REPO PORTFOLIO SHORT TERM PORTFOLIO
AND MONEY MARKET PORTFOLIO --------------------
- -------------------------- Neuberger Berman
BlackRock Institutional Management Corporation New York, New York
Wilmington, Delaware
