wfn.org | ABCUSA: MMBB'S BOARD APPROVES BENEFIT CHANGES

[RICH.SCHRAMM@ecunet.org]

AMERICAN BAPTIST NEWS SERVICE 
Office of Communication  
American Baptist Churches USA 
P.O. Box 851, Valley Forge, PA 19482-0851 
Phone: (610)768-2077 / Fax: (610)768-2320 
Web: www.abc-usa.org
Richard W. Schramm, Director 
 E-mail: richard.schramm@abc-usa.org

MMBB'S BOARD OF MANAGERS APPROVES BENEFIT 
PLAN CHANGES
 The Board of Managers of The Ministers and 
Missionaries Benefit Board (MMBB), during is meeting Nov. 
8, 2001, approved eight benefit plan changes and took 
action to preserve and increase MMBB's endowment for 
the benefit of future generations.
 Three plan changes are related to the Economic 
Growth and Tax Relief Reconciliation Act of 2001 
(EGTRRA).  EGTRRA, which was signed into law last June, 
constitutes the most comprehensive reform of qualified 
plans and other retirement arrangements since the 1980s.   
 Specific provisions of EGTRRA that will have a 
positive effect on MMBB members include: (1) the 
maximum annual contribution that can be made to 
retirement accounts will be increased significantly; (2) 
rollover provisions are broadened, permitting MMBB to 
accept members' 401(k) and governmental 457 plan 
accounts, as well as traditional IRAs; (3) members 50 
years of age or older can make catch-up elective deferrals 
(member voluntary salary reduction contributions) to TAS 
(The Annuity Supplement); and (4) a model Section 457 
plan (a form of non-qualified deferred compensation) can 
be made available to "non-steeple" church-related 
institutions, such as retirement and nursing homes, and 
colleges and universities.
 To make it possible for MMBB members to benefit 
from the new provisions the board approved plan changes 
related to items two, three and four above.   No action 
was required for item one.
 In an action unrelated to EGTRRA the board 
approved the establishment of a Tax-Deferred Annuity 
Plan (TDA).  The TDA plan allows certain employers to 
establish a free-standing plan that does not offer benefits 
provided under the Retirement/Death Benefit Plans, such 
as group term life insurance, disability benefits and 
children's allowances.  All contributions would be employer 
provided on a tax-deferred basis.  The TDA plan will be 
the third 403(b) plan to be administered by MMBB; the 
other two are the Retirement Plan and TAS.  
 The board approved a life-time cap of $50,000 on 
Retirement Plan distributions prior to retirement.  Although 
members are able to take partial distributions prior to 
retirement on up to 40% of the member-directed portion 
of their Retirement Plan account, the total dollar limit for 
distributions after Dec. 31, 2001, is $50,000.  There are 
two exceptions where the dollar cap can be exceeded: (1) 
if a distribution occurs within 12 months of the member's 
annuity state date or (2) if the amount requested is for a 
need that meets the IRS hardship test and criteria.
 Two additional amendments to the Retirement 
Plan and TAS affect required minimum distributions and 
the availability of loans to members after age 70+.  (1) 
Required minimum distributions in 2001 were based on 
new and simplified IRS rules, which resulted, in most 
cases, in smaller distributions to members and 
beneficiaries.  Without the amendment, minimum 
distributions could not have been based on the new rules 
until 2002.  (2) Effective January 1, 2002, payments on 
new plan loans can be extended beyond age 70+, or new 
loans can be taken out after that age. 
 The board also approved a resolution to reduce 
the draw on the Permanent Fund (endowment) by 
charging an administrative fee of up to an annualized 50 
basis points (0.5%) against the board's assets, except the 
Permanent Fund.  Over the years MMBB has used income 
from the endowment for two major purposes: (1) to 
provide noncontractual benefits, like emergency 
assistance, tuition for children of deceased and disabled 
members, medical subsidies and grants to retired 
members with low income, and (2) for administrative 
expenses, such as day-to-day operations, rent, utilities, 
publications, member service and contracted services.  
 Because of ever-increasing administrative and 
operational costs and the need for investment in 
technology infrastructure to undergird member service, 
MMBB can no longer solely rely on income from its 
endowment to meet noncontractual and administrative 
requirements.  The board's action will result not only in 
the preservation of principle but in the increase of 
endowment resources with which to support MMBB's 
ministry for years to come.

W010302A.TXT

 -0-