LCMS Convention Workbook St. Louis, Missouri — 1983, Page 159

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ADMINISTRATION AND PROGRAM IMPLEMENTATION 159

Year ended December 31, 1981

Short-term investments s $ 2,876,000
Bonds, notes and debentures (774,005) 6,322,151
Common stocks (777,495) 8,193,379

$Q1, 551,500) $17,391,53C

EXHIBIT B

NOTES TO FINANCIAL STATEMENTS--Continued Page 6

CONCORDIA DISABILITY AND SURVIVOR PLAN

NOTE D--AMOUNT DUE FROM INSURANCE COMPANIES

The amount due from insurance companies is an experience balance which,
under the terms of the policies, is due from the insurance companies and
represents the insurance companies’ estimate, based on the latest infora-
ation available, of the difference between premiums paid by the Plan and
the sum of claims paid, claims provided for, and the insurance companies’
retention for 1982.

NOTE E--FUNDS ON DEPOSIT WITH INSURANCE COMPANY

The Plan has agreed to leave experience balances from years prior to 1981
on deposit with an insurance company as a claim stabilization reserve.
These funds earn interest and, subject to final adjustment, are available
for withdrawal at the request of the Plan on the yearly anniversary date
of the policy (January 1). The insurance company has estimated the mar-
ket value of these funds to be $6,016,000 at December 31, 1982 and
$6,918,000 at December 31, 1981.

NOTE F--ACTUARLAL VALUATIONS

An actuarial valuation of the Plan was performed by Tillinghast, Nelson &
Warren, Inc. as of January 1, 1982. The primary purposes of this
valuation are to determine the progress of the funding to date and to
determine the adequacy of the contribution structure for the costs that
will be incurred during the following year.

The actuary has reported that the liabilities of the Plan as of January
1, 1982 are adequately funded and all future benefit payments will be
provided for by past and future recommended contributions. As of January
1, 1982, as reported by the actuary, the market value of current Plan
assets exceeds actuarially accrued liabilities by approximately
$2,655,000.

EXHIBIT EB

NOTES TO FINANCIAL STATEMENTS--Continued Page 7

CONCORDIA DISABILITY AND SURVIVOR PLAN

NOTE F-~ACTUARIAL VALUATIONS-~Cont inued
Significant assumptions underlying the actuarial computations are:

Assumed rate of return on investments 6% per year,

compounded annually.

Mortality:
Active workers and
beneficiaries

1971 Group Annuity
Mortality Table, pro-
jected by Scale D to
1985.

Disabled lives 1965 Railroad Retirement
Board Totally Disabled
Annuitancts Mortality
Table,

Disablement Rates based upon a study
of Concordia Retirement
Plan experience.

NOTE G--INCOME TAX STATUS

The Internal Revenue Service has ruled (July 26, 1977) that the plan
qualifies under Sections 511 through 515 of the Internal Revenue Code
(IRC) and is, therefore, not subject to tax under present income tax law.
Once qualified, the Plan {s required to operate in conformity with the
IRC to maintain its qualification. As further discussed in Note H, the
Plan has been amended and a ruling from the IRS as to continued qualifi-
cation is in the process of being requested. It is management's opinion
that the Plan will continue to qualify under the Internal Revenue Code.

NCTE H--PLAN AMENDMENTS AND TRANSFER OF ASSETS

Under Plan amendments effective January 1, 1982, pre-retirement lump-sun
death and disability benefits incurred after 1981 are paid by the Concor-
dia Disability and Survivor Plan (CDSP). Prior to these amendnents, the
lump-sum death and temporary disability benefits were provided by the
Concordia Health Pian and long-term disability benefits were provided by
the Concordia Retirement Plan. Also effective January 1, 1982, post-
retirement death benefits which previously had been provided by the

CDSP are provided by the Concordia Retirement Plan.

EXHIBIT B

NOTES TO FINANCIAL STATEMENTS--Cont inued Page 6

CONCORDIA DISABILITY AND SURVIVOR PLAN

NOTE H--PLAN AMENDMENTS AND TRANSFER OF ASSETS-~Continued

As a result of these amendments, the present value of the future benefits
assumed by the Concordia Retirement Plan, as determined by the Plans's
consulting actuaries ($21,264,653), was transferred from the CDSP to the
Concordia Retirement Plan. As of December 31, 1982, $7,470,669 is pay-
able to the Concordia Retirement Plan which represents che unpaid balance
of this transfer plus accrued interest.

NOTE I--ACCOUNTING CHANGES

In 1982, the Plan changed its method of accounting and reporting to
comply with the provisions of the audit and accounting guide entitled,
Audits of Employee Benefit Plans, issued by the American Institute of
Certified Public Accountants. Adoption of this guide required certain
reporting changes and changing the method of accounting for investments
from amortized cost to market. Previously reported information
pertaining to 198] has been restated to present the information on a
comparable basis.

The effect of the change in accounting for investments reduced net assets
as previously reported at January 1, 1981 by $786,031 and increased
(decreased) the change in net assets by $1,841,966 and $(288,864) for the
years ended December 31, 1982 and 1981, respectively.

EXHIBIT C
Page 1

Ernst & Whinney 10 Broadway

St. Louis, Missouri 63102

314/231-7700

Board of Managers

Concordia Plans

Lutheran Church - Missouri Synod
St. Louis, Missouri

We have examined the statements of net assets available for henefits of
the Concordia Retirement Plan of the Lutheran Church ~ Missouri Synod as
of December 31, 1982 and 1981, and the related statements of changes in
net assets available for benefits for the years then ended. Our
exaninations 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 our opinion, the financial statements referred to above present fairly
the net assets available for benefits of the Concordia Retirement Plan of
the Lutheran Church - Missouri Synod at December 31, 1982 and 1981, and
the changes in net assets available for benefits for the years then
ended, in conformity with generallly accepted accounting principles

applied on a consistent basis.
Grate v Whevraeg

St. Louis, Missouri
March 8, 1983