# LCMS Convention Workbook_St. Louis Missouri_1983_S154 # Machine transcription, uncorrected — CHI Digital Archive (demonstration) 154 ADMINISTRATION AND PROGRAM IMPLEMENTATION were four operators trained, selected from the manual processing group to have the advantage of their experi- ence, and now there are 16. The final phases of the claims processing system will be in place by May 1983, at which time the needed number of trained operators will be in place, too. A few sentences certainly cannot describe all that has gone into accomplishing the progress made to this point. That progress has not been without its effect on the participants in the Concordia Health Plan—some good, and some not good. The understanding and patience of the members during the conversion process has been sincerely appreciated. —Annually the financial activities of the Concordia Health Plan are audited. The 1982 audit report is included as Exhibit A of this report. —The investment of the assets of the Concordia Health Plan is handled by Harris Trust and Savings Bank, Chicago, II]. Those assets represent the reserves required to cover certain benefits of the plan. The $12,234,193 available for investment at Dec. 31, 1982, as well as contributions received in the early months of a calendar quarter and not used for benefits by the end of the calendar quarter, are all invested in fixed income securi- ties. This is because of the nature of the fund—high turnover of investments and liquidity needs. During 1981 the return on the investments was 10.64%, and for 1982 was 30.5%. Concordia Disability and Survivor Plan The Concordia Disability and Survivor Plan has been designed to meet two major needs: to pay a monthly benefit when a member becomes totally disabled and to pay survivor benefits (lump-sum and/or monthly income) upon the death of amember before reaching retirement age. In addition, the plan pays a lump-sum benefit upon the death of a dependent. —More than 19,000 members are enrolled through 5,800 congregations, schools, and agencies in the United States and Canada. —The disability and survivor benefit payments were $2,929,198 for 1981 and $3,104,419 for 1982. Benefits Paid 1982 1981 Survivor Income ...... ..... $1,654,993 * $1,407,778 Number of Beneficiaries ..... 719 691 Lump Sum Death ........... S$ 445,793 * $ 511,055 *** Number of Beneficiaries ..... 92 110 Disability Income ........... $1,003,633 ** $1,010,365 *** Number of Beneficiaries ..... 508 540 * OnJan. 1, 1982, the monthly benefits for the dependents of deceased members were increased by 10". This increase was welcomed and appreciated. These benefit payments include those provided by the insurance carrier and those paid directly by the plan. ~* During 1982 these benefits were mainly paid from the Concordia Disability and Survivor Plan ($859,345) due to the realignment of the benefits of the plans effective Jan. 1, 1982. However. payments that commenced prior to that date under the Concordia Health Plan continued to be paid from the Concordia Health Plan during 1982:$144.288). The combined amount is shown under this plan to enable the total amount of the disability benefit payments to be reflected. and in one place. «** These payments were made from the Concordia Health Plan. With the realignment of benefits. effective Jan. 1, 1982. they are now paid from the Concordia Disability and Survivor Plan. —Annually an actuarial valuation of the plan is performed. There are two primary purposes for doing so. First, it indicates whether the current contribution rates will support the benefits to be paid. Second, the actuarial valuation indicates whether the assets on hand are sufficient to provide all of the future benefits for claims in pay status. These objectives have been met for the Concordia Disability and Survivor Plan. —The financial activities of the Concordia Disability and Survivor Plan are audited annually. Exhibit B of this report reflects the 1982 audited financial statements. —Harris Trust and Savings Bank, Chicago, IIl., invests the assets of the Concordia Disability and Survivor Plan. The guidelines adopted by the Board of Managers of the Worker Benefit Plans permit up to 40% of the assets to be invested in equity investments, with the remainder of the assets in fixed income securities. At Dec. 31, 1982, the assets invested were such that $3.1 million (62% of the fund) was in fixed income securities and $3.1 million (38% of the fund) was in equity investments. The fund earned a return of .36% for 1981, and 27.6% for 1982. Concordia Retirement Plan The purpose of the Concordia Retirement Plan is to provide a pension benefit at age 65. However, there are provisions fora pension to begin as early as age 55 or as late as age 70. In addition, upon the death of a retiree, a spouse may be eligible to receive a lump-sum benefit as well as a monthly income benefit. The plan also provides a lump-sum benefit payment upon the death of a dependent of a retiree. —The 19,000 members of the Concordia Disability and Survivor Plan are also enrolled in the Concordia Retire- ment Plan. —Benefits provided by the Concordia Retirement Plan during the past biennium were the following. Benefits Paid 1982 1981 Retirement Income .......... $3,908,875 * $3,189,778 Number of Beneficiaries ..... 2,857 2.673 Post-Retirement Death ...... $ 199,084 “* Number of Beneficiaries ..... 67 * OnJan. 1, 1982, an increase in the monthly retirement benefit was implemented of 1” for each year since the beneficiary's retirement date, with 10" being the maximum amount. This increase was much appreciated by the recipients. * Postretirement death benefits. before the realignment of benefits as of January 1982, were paid from the Concordia Health Plan and the Concordia Survivor Plan. The amount of the postretirement benefits cannot readily be identified separately from the amount of the preretirement benefits. Therefore those benefits are not shown here, but if reflected, the 1981 benefit amount would be lower than the 19&2 amount. —An actuarial valuation is done each year to determine if the plan is being adequately funded. This is done by comparing the present value of all benefits accumulated for the participants to the present value of the existing assets and the present value of future contribution payments to the plan. The actuarial valuation of the Concordia Retirement Plan indicates the plan is being properly funded. — —The 1982 Concordia Retirement Plan audited financial statements can be reviewed in Exhibit C of this report. —During 1982 the Board of Managers of the Worker Benefit Plans completed the implementation of the restated Investment Policy and Guidelines for the Concordia Retirement Plan. The restatement of the Investment Policy and Guidelines was the result of an extensive study of the Concordia Retirement Plan, which included utiliza- tion of computer simulation models of future results based on varying plan requirements and investment results. —Protection of the assets of the plan (safety of principal) is a high priority consideration in the investment strategy of the board. This consideration resulted in diversifying the investments among a group of managers, each witha responsibility for a segment of the asset strategy deve- loped by the board. ao The listing below shows the managers selected on the basis of their expertise and performance as to the role they have for the investment of the assets of the Concordia Retirement Plan. Manager Role ~ Fund Investment Advisers, Inc. Balanced Minneapolis, Minn. Fund 15™- Fiduciary Trust Company Balanced New York, N.Y. Fund 13" Funds Advisory, Inc. Fixed Income Houston, Tex. Specialist Fund 10": T. Rowe Price Assoc., Inc. Fixed Income Baltimore, Md. Specialist Fund 10%, Alliance Capital Mgmt. Corp. Equity Specialist Minneapolis, Minn. Fund 15". Morgan Guaranty Trust Co. Equity Opportunity New York, N.Y. Fund 20”: Morgan Guaranty Trust Co. Immunized Bond New York, N.Y. Fund a7 New England Mutual Life Guaranteed Investment Burlington, Mass. Contract a”