NOTES TO FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS (CONTINUED) Retirement Plan for Employees of Georgia Ports Authority (Continued) Fair Value Measurements (Continued): Global opportunities hedge funds. This type includes one investment in a limited partnership that hold a majority of the funds' sovereign, quasi-sovereign and corporate debt located within emerging market countries, including distressed, high yield and defaulted debt, while hedging against global market and credit risks with derivative instruments including futures, foreign currency contracts and credit default swaps. The fair values of the investments in this type have been determined using the NAV (or its equivalent) per share of the investments. This investment has a seven-year term from the initial close on June 1, 2012, with one one-year extension. Capital will begin returning to investors at the end of the investment period, five years from the initial close. The Plan also holds investments in immediate participation guarantee (IPG) contracts in the amount of $10,494 and $10,049 as of June 30, 2021 and 2020, respectively, consisting of both an annuity allocation amount (a minimum balance required by contract to provide for annuity benefits guaranteed by the insurance company) and an unallocated amount (the amount in excess of the annuity allocation). The Plan’s investment in IPG contracts is valued as described in Note 1 in accordance with GASB Statement No. 31, and is excluding from reporting in the fair value hierarchy. Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At June 30, 2021 and 2020, the Plan was not exposed to custodial credit risk with respect to its investments. Custodial credit risk for deposits is the risk that in the event of a bank failure, the Plan may not be able to recover its deposits. At June 30, 2021 and 2020, the Plan was not exposed to custodial credit risk with respect to its deposits. Rate of Return: For the years ended June 30, 2021 and 2020, the annual money-weighted rate of return on pension plan investments, net of pension investment expense, was 21.70% and 9.10%, respectively. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Interest Rate Risk: Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. At June 30, 2021 and 2020, the Plan had $399,988 and $325,170, respectively, invested in the following types of investments as categorized by credit risk and interest rate risk: Equities - $281,767 and $217,727, Fixed Income - $105,542 and $95,210, Alternative Funds - $2,185 and $2,184, and Immediate Participation (IPG) Contracts - $10,494 and $10,049. Each investment category does not have a credit quality rating or a weighted average maturity. investments in non-U.S. 29
