LCMS Convention Workbook St. Louis, Missouri — 1981, Page 204

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204 ADMINISTRATION

NOTES TO FINANCIAL ST

NOTE C--ACTUARIAL PRESENT VALUE OF ACCUMULATED PLAN BENEFITS--CONT'D

The accumulated plan benefit information as determined by Tillinghast,
Nelson & Warren, Inc., as of December 31, 1980 is as follows:

Actuarial present value of accumulated
plan benefits
Vested benefits
Members currently receiving
Payments
Other members

$20,851,749
53,284,772
7,136,521
4,789,754
$78,926,275

Nonvested benefits

Significant assumptions underlying the actuarial computations are:

Assumed rate of return 8%, including a reduction to
on investments reflect anticipated adminis-
trative expenses associated
with providing benefits.
Retirement Rates by employee type, based
upon a study of Concordia
Retirement Plan experience.
Social Security Benefits Social Security primary insurance
amounts are estimated by apply-
ing ratios to projected final
earnings. These ratios are
developed using the Social
Security Law as amended through
1977, with wage base increases
of 5% per year compounded after
1981 and 4% per year compounded
increases in the Consumer Price

Index.

Mortality 1971 Group Annuity Mortality
Table, projected hy Scale 1
to 1985.

Actuarial assumptions used in the above calculation of accunulated plan
benefits are not the same actuarial assumptions used in the valuation of
the Plan for purposes of funding or determination of contrihution rates.
Funding determinations and ntribution rates are ter ed based on
benefits expected to be paid in the future, whereas accumu benefits
are only those expected future denefits associated with meni s' service
to date. Since the plan bases benefits on salaries of the five most
recent years prior to retirement, future salaries are projected for
purposes of funding the plan. If projected satary increases were taken
into consideration, the actuarial present value of accumatated plan
Denefits would be $144,881,796. However, for determination of
accumulated benefits as of the valuation date for financial reporting
purposes, future salary increases are not consitered,

NOTES TO FINANCIAL STATEMENTS--CONT'

NOTE D--INVESTMENTS

The market value of investments that represent 5% ($7,894,042) or more of
the Plan's net assets as of December 31, 1980 are as follows:

Units of Fair
Participation Value
Commingled Funds of Morgan
Guaranty Trust Company:
Money Market Investments~-Liquidity 10,168 $10,168,000
Special Situation Investments--

Convertibles 78 ,626 11,910,940
Special Situation Investment s-—

Equities 13,177 8,135,385
Technology and Machinery Sector 93,406 13,352,121
Natural Resources and

Processing Sector 190,338 11,993,053
Fixed income direct placement s--

Mortgage~-Real Property 235,030 16,798,508
Fixed income direct placements--

Corporate Medium Term 140,817 12,638 ,684

NOTE E--INCOME TAX STATUS

The Internal Revenue Service has ruled (January 11, 1979) that the Plan
qualifies under Section 401 (a) of the Internal Revenue Code (IRC) and
is, therefore, not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Board of Managers of the Worker Benefit

Plans is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.

NOTE F--ACCOUNTING CHANGES

In 1980, the Plan changed its method of accounting and reporting to
comply with the provisions of Statement of Financial Accounting Standards
No. 35 issued by the Financial Accounting Standards Board. Adoption of
this statement required additional disclosures relating principally to
accumulated plan benefit information and changing the method of
accounting for investments from amortized cost to market. Previously
reported information pertaining to 1979 has Deen restated to present that
information on a comparable basis.

The effect of the change in accounting for investments reduced net assets
available for benefits as previously reported at January 1, 1979 by
$3,793,022, and increased net assets available for benefits by $8,216,346
and $1,542,105 at December 31, 1980 and 1979, respectively.

10 Broadway
St. Louis, Missour: 63102

Ernst & Whinney

314/231-7700

Board of Managers

Concordia Plans

Lutheran Church - Missouri Synod
St. Louis, Missouri

We have examined the balance sheets of the Concordia Survivor Plan of The
Lutheran Church - Missouri Synod as of December 31, 1980 and 1979, and
the related statements of revenues, expenses, and fund balance and
statements of changes in financial position for the years then ended.
Our examinations were made in accordance with generally accepted auditing
standards and, accordingly, included such tests of the accounting records
and such other auditing procedures as we considered necessary in the
circumstances.

In out opinion, the financial statements referred to above present fairly
the financial position of the Concordia Survivor Plan of The Lutheran
Church - Missouri Synod at December 31, 1980 and 1979, and its results of
operations, changes in fund balance, and changes in financial position
for the years then ended, in conformity with generally accepted
accounting principles applied on a consistent basis.

St. Louis, Missouri
February 24, 1981

BALANCE SHEETS

CONCORDIA SURVIVOR PLAN

December 31
1980 1979
ASSETS
Cash:
Demand deposits S$ 10,865 $§ 40,799
Investment account 38,969 14,489
29,834 55,288
Funds on deposit with insurance
company--Nore B 6,628,290 5,566,497
Contributions receivable 922,519 816,598
Investments--at amortized cost
(approximate market value--$15,715,150
in 1980; $13,641,829 in 1979):
Bonds, notes, and debentures 10,425,256 6,359,212
Common stocks 6,075,925 7,575,701
16,501,181 13,934,913
Accrued interest and dividends 210,279 106,332
Prepaid expenses and other assets 324,355 2,548
Equipment (less allowance for
depreciation of $6,254 in 1980 and
$5,638 in 1979) 4,093 4,296
Data processing software 26,703 9,937
$26,667,254 $20,496 499