wfn.org | Newsline: Brethren Benefit Trust makes changes to retiree annuity payments

[cobnews <cobnews@brethren.org>]

Newsline: Church of the Brethren News Service, News Director Cheryl Brumbau gh-Cayford, 800-323-8039 ext. 260, cobnews@brethren.org

BRETHREN BENEFIT TRUST MAKES CHANGES TO RETIREE ANNUITY PAYMENTS

(May 26, 2009) Elgin, IL -- In order to preserve the solvency and long-term  integrity of the Church of the Brethren Pension Plan's Retirement Benefits  Fund, which funds the monthly benefit payments for annuitants, the Brethre n Benefit Trust (BBT) Board in April took action that will reduce annuity p ayments for retirees.

The board met on the weekend of April 24-26 and wrestled with this difficul t issue that will affect the lives of the Pension Plan's annuitants.

According to an actuarial study conducted by Hewitt and Associates, as of D ec. 31, 2008, the Retirement Benefits Fund had enough assets to meet only 6 8 percent of its longterm obligations. In spite of investment returns that  have consistently outperformed market benchmarks, together with losses incu rred due to market decline beginning in the last part of 2007, the 2008 los ses in the stock and bond markets resulted in a 26 percent decline in the a sset value of the fund.

This is a $45 million shortfall and could seriously compromise the fund's a bility to meet benefit obligations in the future. If corrective action is n ot taken as soon as possible, there is a high probability that the Retireme nt Benefits Fund will not be able to recover.

"BBT's commitment as administrator of the Plan is to behave so that we can  meet our obligations to all of our members throughout their lifetimes," sai d president Nevin Dulabaum.

Effective July 1, all new annuities will be calculated using an interest as sumption rate of 5 percent, and a current division of "A" and "B" accounts  of active and inactive participants will be combined into one account. Effe ctive Aug. 1, all existing annuities will be recalculated using an interest  assumption rate of 5 percent.

Some annuitants may be surprised that the benefit amount can change, but ac cording to the Church of the Brethren Pension Plan legal document, the boar d has the provision to "readjust annuities or other benefits where such cha nges are deemed by the Benefit Trust to be necessary to protect and preserv e the actuarial and financial solvency of the Plan."

In addition, the funding of a special reserve account from the general asse ts of BBT (not the pension funds) will continue in an effort to bring the R etirement Benefits Fund to fully reserved status. The fund will be consider ed fully reserved when the value of its assets is at least 130 percent of t he estimated liabilities. A plan will be developed for providing additional  benefits to all participants when the funding status of the fund permits s uch benefits without jeopardizing its ability to meet its obligations.

The board is aware that a reduction in benefit amounts will create hardship  for some annuitants. To counteract this hardship, the board and staff are  implementing a simple grant program to provide relief to those annuitants w ho will suffer the most harm from a benefit reduction. The funding for thes e grants is not coming from the Pension Plan, but from BBT's operating rese rves, which are not normally used for this type of expense.

Details of the grant program and an application will be sent along with a l etter to annuitants informing them of their recalculated monthly benefit--p rior to the implementation of the new, reduced benefit. Eligibility criteri a for these grants are intentionally being kept simple.

BBT is prepared to respond to the many questions and concerns that are like ly to arise from these actions. Visit www.brethrenbenefittrust.org to learn  more about the decisions and developments as they unfold. Plan members are  also encouraged to contact BBT directly at 800-746-1505.

The Church of the Brethren is a Christian denomination committed to continu ing the work of Jesus peacefully and simply, and to living out its faith in  community. The denomination is based in the Anabaptist and Pietist faith t raditions and is one of the three Historic Peace Churches. It celebrated it s 300th anniversary in 2008. It counts some 125,000 members across the Unit ed States and Puerto Rico, and has missions and sister churches in Nigeria,  Brazil, the Dominican Republic, Haiti, and India.

(This release was provided by the communications staff of Brethren Benefit  Trust.)

># # #

>For more information contact:

>Cheryl Brumbaugh-Cayford
>Director of News Services
>Church of the Brethren
>1451 Dundee Ave., Elgin, IL 60120
>800-323-8039 ext. 260
>cobnews@brethren.org