LCMS Convention Workbook St. Louis, Missouri — 1983, Page 163

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ADMINISTRATION AND PROGRAM IMPLEMENTATION 163

A member becomes fully vested after a combined total of ten years member-
ship in the Pian or the Concordia Retirement Plan. Net investment earn-
ings of the Plan, as defined, are allocated to the Pension Reserve
Account and the Annuity Account based upon che balance in such accounts
as of the beginning of the year.

Any donations to the Plan and the accumulated employer's contributions of
members who withdraw prior to full vesting are accumulated in the Con-
tingent Reserve Account. Under the provision of the Plan, this account
may be used for general contingencies and providing increased benefits.

During 1982, the Board of Managers authorized the establishment of a
“dedicated portfolio” of fixed income securities for the Annuities
Account. This portfolio earns a rate of return that is sufficient to
provide for the estimated liabilities for future annuities as determined
by the Plan's consulting actuaries. In addition, the portfolio may be
reoptimized periodically in order to obtain a more favorable rate of
return or to obtain the cash flow necessary to provide for future annuity
payments.

EXHIBIT D
Page 5
NOTES TO FINANCIAL STATEMENTS--Continued

PENSION PLAN FOR PASTORS AND TEACHERS
THE LUTHERAN CHURCH - MISSOURI SYNOD

December 31, 1982 and 1981

NOTE Be~DESCRIPTION OF THE PLAN~-Continued

In addition to basic benefits paid under the Plan, The Lutheran Church -
Missouri Synod has made certain supplementary payments to provide minimum
pension amounts to all retirees. Effective July 1, 1981, the Plan's
Board of Managers increased the minimum pension benefit and authorized
the balance of the Contingent Reserve Account to be transferred to The
Lutheran Church - Missouri Synod to partially fund these increases. The
cost of the additional payments was estimated to be $42,500 a month, and
a total of $765,000 has been recorded as a transfer to The Lutheran
Church - Missouri Synod to cover the cost through December 31, 1982.
After the utilization of the Contingent Reserve Account, benefits paid in
excess of that provided under the provisions of the Plan will be funded
by The Lutheran Church - Missouri Synod.

NOTE C--INVESTMENTS
Net investment earnings were as follows:

Year Ended December 31

1982 198)
Interest income $ 7,539,082 $5,104,093
Dividend income 2,104,991 2,676,764

Net realized and unrealized
gains (losses) in fair value
of investments 8,370,549

18,014,622

(5,825,367)
1,955,490

Less administrative expenses (241,365) (297 ,307)

AMOUNT TO BE ALLOCATED $17,773,257 $1,658,183

Allocated to:

Peneion Reserve Account $10,716,219 $1,042,019
Annuities Account 7,057,038 616,164

$17,773,257 $1,658,183

EXHIBIT D

Page 6
NOTES TO FINANCIAL STATEMENTS—~Continued

PENSION PLAN FOR PASTORS AND TEACHERS
THE LUTHERAN CHURCH - MISSOURI SYNOD

December 31, 1982 and 1981

NOTE C--INVESTMENTS—-Continued

During 1982 and 1981 the Plan'a investments (including investments
bought, sold, as well as held during the year) appreciated (depreciated)
in fair value, as determined by quoted market prices, by $8,370,549 and
$(5,825,367) as follows:

Net Appreciation Fair Value

(Depreciation) in at End
Fair Value During Year of Year
Year ended December 31, 1982
Short-term investments $ $15,861,318
Bonds, notes, and debentures 6,117,071 52,486,735
Equity securities 2,253,478 28,801,843
$8,370,549 $97,149, 896

Year ended Deceuber 31, 1981

Shorce-term investments $12,515,016
Bonds, notes, and debentures (356,991) 36,167,031
Equity securities (5,468,376) 41,494,332

$ (5,825 ,367) $90,176,379

No individual investments exceeded 5% of total Plan assets in either
year.

NOTE D--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 cost to market. Previously reported information pertaining to 1981
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, 198! by $7,905,096 and increased
(decreased) the change in net assets by $16,522,370 and $(7,185,058) for
the years ended December 31, 1982 and 1981, respectively.

4-09

Report of Board of Directors, Council
of Presidents, Council of Administrators
on Planning Process (Res. 12-07A)

Report of Executive Coordinating Committee

In Resolution 12-07A the Synod in its 1981 convention
authorized an Executive Coordinating Committee to assist the
Synod’s Board of Directors, Council of Presidents, and Council
of Administrators in carrying out the planning process recom-
mended in the report of the Executive Planning Committee on
pages 357—363 of the 1981 convention workbook. The follow-
ing is a report of that subcommittee.

Membership

Appointed to the Executive Coordinating Committee were
three District Presidents—Wilbert E. Griesse (Mid-South),
Glenn O’Shoney (Texas), Richard L. Schlect (Michigan); three
lay members of the Synod’s Board of Directors—David H.
Goertz, George H. Mohr, Harold Olsen; and five executives
from the Synod’s Council of Administrators—Paul Devantier
(Communications), Walter Rosin (Professional Education),
John Schuelke (Administration), Edward Westcott (Missions),
Victor Constien (Parish Services). The President of the Synod,
Ralph A. Bohlmann, is also a committee member. Richard
Schlecht was elected chairman; George Mohr, vice-chairman;
and Victor Constien, secretary. Richard L. Engdahl, director,
Department of Stewardship and Financial Support, serves as
an advisory member.

Flow Chart

Early in its work the ECC confirmed the value of the
planning process proposed in 1981 for developing and keeping
current a master plan for the Synod. Some minor revisions
were made in the flow chart which indicated how the Synod’s
master plan evolves. As the process continues to be refined, the
flow chart will be changed to reflect those refinements.

Annual Budget Preparation Schedule

The following schedule adopted by prior convention action
guided the activities of national and District leaders in the
preparation ofan annual budget to help implement the master
plans. Although it was not possible to meet all dates on this
schedule, the ECC believes that meeting this schedule is still a
worthwhile goal.

Budget Preparation Schedule

By Nov. 30—Each requesting unit submits to the Board of
Directors through the Council of Administrators a proposed