# LCMS Convention Proceedings_St. Louis Missouri_1947_S622
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

622 FINANCIAL MATTERS

ments will have to be 7% of the gross salary. Under either rate
the cost of the proposed plan will vary in accordance with the
following factors:

1. Turnover among employees.

2. Average retirement age of present employees. Present em-
ployees may retire at any time after attaining the age of 65. If all
should elect to retire as soon as they attained this age, the cost
would be considerably greater than if they averaged to retire
_ at 70, for example.

3. Rate of salary increase. Since pensions are based on salary,
an increase in salary creates an increase in pension.

There are more predictable factors (such as death rates and
rates of interest yields on investments) which will affect the cost
of this pension plan, but until actual experience has developed in
connection with the three factors listed, it will be impossible to
state just what the future level of the annual contribution rate
should be.

As far as the cost is concerned, we are told that it will be,
as stated before, 6% of gross salary, provided the initial pay~
ment of $150,000 is immediately set up. The payroll of Synod
(not including Concordia Publishing House) covering the present
number of employees that come under consideration and the
present salaries would be about $177,000 per year, 6% of which
would mean an annual payment of $10,620. If the lay employees
had been immediately admitted to Synod’s Pension Plan, it would
have cost Synod 4% during each of the elapsed 10 years. At
4% on the present salary basis, the annual payment by Synod
would have been $7,080, or $70,800 for the 10-year period. Thus,
by paying the full 6%, or $3,540 more per year than would have
been paid, Synod is picking up the backlog among its lay em-
ployees and guaranteeing them a resonable pension.

It is also to be considered that the present Pension Plan of
Synod’s professional employees is now costing Synod over $28,000
a year for office overhead, candidate premiums, and pension death
benefits, and that practically none of these expenses would occur
in the lay pension plan. There would be no elaborate records
to be kept, as there would be only one fund and not 5,000, more
or less, as is now the case with Synod’s existing plan for pro-~
fessional employees. The benefits for the lay workers would hardly
be comparable to those for professional employees because there
would be no death benefits, no survivorship benefits for widows
and orphans, and no disposable reserves,

. ACTION
This report was received by the convention.