LCMS Convention Workbook St. Louis, Missouri — 1983, Page 155

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ADMINISTRATION AND PROGRAM IMPLEMENTATION 155

John Hancock Mutual Life

Guaranteed Investment
Boston, Mass. 5”

Contract 5”

In addition to the above, the board utilized the services
of Canada Permanent Trust Company of Toronto, Ont.,
for the investment of the assets for Canadian workers.

The above distribution of managers and assets pro-
vides for a split in the portfolio so that 50% of the assets
are in fixed income securities and the other 50% are equity
investments. Since the balanced managers have discre-
tion in allocation between fixed and equity, there is the
potential, when market conditions dictate, for a high of
65% in equities and a low of 35%. During 1981 the board,
capturing the high interest rates available, entered into
the two Guaranteed Investment Contracts with the insur-
ance companies indicated with a rate of return of 17.3%
for six years.

During the past biennium the board also established a
Master Custodian relationship with The Northern Trust
Company, Chicago, Ill. This arrangement became neces-
sary with the diversification of managers as the new
money managers were not the prior traditional banks
with trust arrangements. Since all assets of the Concordia
Retirement Plan are now in one location, it is possible to
secure consolidated reports and performance analysis
reports on a more timely basis than was previously the
case.

At Dec. 31, 1982, the assets invested for the Concordia
Retirement Plan were $242,769,280 at market value, with
approximately $88 million in equity investments (36%)
and approximately $154 million in fixed income invest-
ments (64%). The return for 1981 was 3.3%. Even with the
establishment of the various accounts with the new
money managers in 1982, which necessitated large trans-
fers of assets between the managers, the fund earned a
return of 25.02% during 1982.

The Board utilized the services of Meidinger Asset
Planning Services, Chicago, IIl., as a consultant in the
search for the new money managers employed and uses
their services to provide additional investment counsel on
an on-going basis.

Pension Plan for Pastors and Teachers

Preceding the Concordia Retirement Plan and the Con-
cordia Disability and Survivor Plan was the Pension Plan for
Pastors and Teachers. It provides retirement benefits, dis-
ability benefits, and benefits for surviving dependents of a
deceased member.

—When the Concordia Plans were established, new enroll-
ments in the Pension Plan for Pastors and Teachers
ceased. However, more than 4,400 members have moneys
on deposit with the Pension Plan for Pastors and
Teachers, and they willin the future receive benefits from
this plan along with benefits from their participation in
the Concordia Plans.

—Presently 3,500 individuals are receiving benefits as
retired members, disabled members, or surviving depend-
ents of a deceased member. The benefits paid during 1981
totaled $5,092,057, and for 1982 $5,283,039. In July 1981
beneficiaries under the Pension Plan for Pastors and
Teachers—who were not also beneficiaries under the
Concordia Retirement Plan—received a 10% increase in
their benefit. Those who also received Concordia Retire-
ment Plan benefits received a 6% increase in their
“Pension Plan” benefit, in addition to their increase in
their Concordia Retirement Plan benefit. There also were
special—minimum benefit level—cases which were
handled separately to give consideration to how the
change impacted their minimum benefit.

—The financial activities of the Pension Plan for Pastors
and Teachers are audited, and the 1982 audit report is
included as Exhibit D of this report.

—The investment of the assets of the Pension Plan for
Pastors and Teachers, which was previously the respons-
ibility of the Board of Trustees of the Synod, was trans-
ferred to the Board of Managers with the action taken at
the 1981 synodical convention in response to the recom-

mendations of Task Force II. Following the previously
established policies and procedures the investment of the
assets of the Pension Plan for Pastors and Teachers is
still handled internally and are under the direction of the
Treasurer’s office of the Synod. Canadian investments
are also still handled by Canada Permanent Trust
Company of Toronto.

Given that the nature of the Pension Plan for Pastors and
Teachers is such that there are really two funds within
one plan: one for active workers—the Reserve Fund, and
one for retured workers—the Annuity Fund, the board
decided to split the investment of these funds early in
1982. The Annuity Fund, with assets of approximately
$39 million at Dec. 31, 1982, was invested totally in fixed
income investments with the implementation of a Dedi-
cated Bond Portfolio matching the cash flow needs of the
fund. This approach was taken because of the high yields
available in the early part of 1982. The Dedicated Bond
Portfolio has a return of 13.5%, which is secured in place
for the duration of the fund—the ex pected payment period
of the fund. The Reserve Fund, with assets of approxi-
mately $61.8 million at Dec. 31, 1982, was invested with
$28.8 million in equity investments (47) and $33 million
(53%) in fixed income securities. When the total plan is
considered, approximately 28": is in equity investments
and 72% is in fixed income securities. Earnings added to
active members’ account balances were 9.3099" in 1981
and 12.6092% in 1982.

Supplemental Benefits Plan

This plan makes available to eligible retirees additional
retirement benefits and to eligible dependents additional
survivor benefits if their total monthly income benefit is below
the ‘minimum benefit” designated in the Pension Plan for
Pastors and Teachers. Also, a lump-sum death benefit is
provided.

Approximately 3,200 individuals are receiving such assist-
ance. The total benefits paid during 1981 were $1,287,274, and
for 1982 $1,423,970. As the number of individuals receiving
benefits from the Pension Plan for Pastors and Teachers
decreases, this will reduce the amount of these benefits and
eventually they will be completely eliminated during the next
century.

Support Benefits Program

The purpose of this program is to provide financial aid to
eligible disabled workers, retired workers, and dependents of
deceased members. The amount of assistance is determined in
accordance with plan guidelines and reports submitted by
social workers, from Lutheran social ministry agencies, who
have visited the applicants.

Financial assistance for about 67 individuals is provided.
The annual payments for 1981 totaled $66,514, and for 1982
$67,100.

Accident Insurance Programs

Travel Accidental Death and Dismemberment Insurance
Program—it is available for designated members of staffs,
commissions, boards, and committees of the Synod and its
controlled organizations. Approximately 1,900 individuals
have this $25,000 coverage.

Travel Accidental Death and Dismemberment Insurance
Program for Foreign Missionaries—is a program for foreign
missionaries and their dependents, and covers about 150
individuals. The coverage provided a foreign missionary is
$10,000, and for dependents is $5,000 for a spouse and $1,000
for each child.

All Cause Accidental Death and Dismemberment Insurance
Program—approximately 5,400 individuals have elected to
participate in this program, with insurance amounts ranging
from $20,000 to $150,000. Effective Nov. 1, 1982, and continuing
throughout the next three years, the insurance coverage was
increased by 20% over the amount selected. Additional benefits
also were added. This increased protection was possible with-
out any corresponding increase in cost.

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