LCMS Convention Workbook St. Louis, Missouri — 1981, Page 201

Transcription machine transcription, uncorrected

⤓ Download .txt · copy text

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