# LCMS Convention Workbook_St. Louis Missouri_1981_S203 # Machine transcription, uncorrected — CHI Digital Archive (demonstration) ADMINISTRATION 201 other large employers, had the opportunity to express their feelings about the benefit programs. Their reactions were subsequently assessed by the board in preparation for the actuarial review. The group generally had a positive response to the benefit programs. Realizing that benefits need to be analyzed in light of the corresponding cost, the following items were changes suggested for consideration: 1. Permit enrollment on first of calendar month following employment date rather than first of calendar quarter 2. Earlier vesting of retirement benefits 3. Full survivor benefits for dependents of ministers of religion not in Social Security 4. Ad hoc adjustments of retirement benefits during periods of high inflation 5. Encouragement for employer to pay total cost of Health Plan coverage 6. Minimum benefit from the Survivor Plan when Social Security benefits exceed Plan benefit percentages 7. Total retirement benefits, including Social Security, targeted at 85% of final net compensation These items have been considered by the board and the actuary in the review of the Concordia Retirement Plan and Concordia Survivor Plan. Review of Retirement Plan and Survivor Plan— 15 Year Study The Board of Managers felt that even with the numerous benefit improvements that have been made in these programs over the past 15 years of operation, they should again be reviewed in a comprehensive way so that objectives could be established for future benefit improvements and also for the funding of these benefits. This type of study and review demonstrates the continued concern of the board to make sure that the workers of The Lutheran Church—Missouri Synod have an adequate program of protection within an affordable level of cost. At the writing of this report, the Board of Managers and the Board of Directors of the Synod have approved, in concept, various changes in the Concordia Plans that are to become effective Jan. 1, 1982. Although final approval by the Board of Managers and the Board of Directors is still required, some of the changes being considered are outlined below. 1. Realignment of plan structure PLAN STRUCTURE PRESENT PROPOSED Health Plan Health Plan Health Care Benefits Health Care Benefits Preretirement Lump-Sum Death Benefits Short-Term Disability Benefits Dependent’s Lump-Sum Death Benefits Retirement Plan Retirement Plan Retirement Income Benefits Postretirement Survivor Income Postretirement Lump-Sum Death Benefits Dependent’s Lump-Sum Death Benefits (Postretirement) Retirement Income Benefits Long-Term Disability Benefits Survivor Plan Disability and Survivor Plan Preretirement Survivor Income Preretirement Lump-Sum Death Benefits Dependent’s Lump-Sum Death Benefits (Preretirement) Short-Term Disability Benefits Long-Term Disability Benefits Preretirement Survivor Income Postretirement Survivor Income Postretirement Lump Sum Death Benefits If adopted, the proposed structure will assist in the communication of plan information and, hopefully, should result in better understanding, on the part of both workers and employers, of the benefits provided. 2. Survivor benefits on a basis without reduction for Social Security for ministers of religion who were not in Social Security. 3. Retirement benefits targeted to be 85% of net compensa- tion at retirement when worker has 35 years of plan participation and has had average compensation. 4. Partial vesting after 5 years of service, with full vesting at 10 years of service. Provision for minimum monthly surviving dependent benefit. . Benefit adjustment for those retired workers and sur- viving dependents receiving benefits on Jan. 1, 1982. . Eligibility on first of month following employment. qi 1 Investment Analysis Following an extensive study of the Concordia Retirement Plan, which included utilizing computer simulation models of future results based on varying plan requirements and invest- ment results, the Board of Managers restated its Investment Policy and Guidelines. Based on these factors, an asset strategy was developed which, in effect, separates the investment of funds into three categories, each with a different money manager. Specific investment guidelines and performance standards were established for each of these three segments. Protection of the assets of the Plan (safety of principal) is a high-priority consideration in the investment strategy adopted by the Board of Managers. The Board of Managers utilizes the services of Merrill Lynch to provide quarterly investment performance reports. In addition, the board utilizes the services of Meidinger and Associates to provide additional investment counsel and analysis of reports made by the money managers in their semiannual investment meetings with the board. Performance evaluation is done on a time-weighted and internal rate of return basis (taking into consideration changes in market value as well as earnings). This permits comparison of the job done by the professional money managers utilized by the board with other fund managers for funds with similar investment guidelines and fund characteristics. Including changes in market value creates performance numbers which may differ from current interest rates or money-market returns, but which may, on the other hand, compare favorably to what the “market” did in a particular year and to what other managers were able to do under similar investment conditions. Reviewing the reports received from consultants mentioned above, the board does compare performance and the probability of achieving the investment goals established for each pro- fessional manager. Reports indicate the performance of the managers of investments for Concordia Retirement Plan compare favorably with other such managers and funds. Data-Processing System Work continues on the development of an On-Line Data Base Management Information System which will greatly assistin processing data relative to an employer’s and worker's participation in the various benefit programs. In addition to developing an on-line subsystem for member- ship information—which should be operational by mid-1981— work is also progressing on the establishment of an on-line health-claim-payment subsystem. Hopefully the claim function can be operational early in 1982. Worker Benefit Programs The various benefit programs which are available to all full-time workers of the Synod through their enrolled and participating employers are summarized below, and changes that occurred in each program during the past biennium are outlined. Concordia Retirement Plan Normal retirement benefits are available at age 65. Workers can retire as early as age 55 and draw monthly benefits. In addition to retirement benefits, this program provides long- term disability benefits after a disability has lasted at least one year. Prior to the cost/benefit analysis done by the actuary for anticipated benefit changes, the board established funding objectives for the Plan to assure consistent handling in future analyses and reviews. Such objectives will also allow the board and the actuary to assess the level of funding required in the