wfn.org | Newsline: Agency reports progress in changing pension assumption rate

[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

AGENCY REPORTS PROGRESS IN CHANGING PENSION ASSUMPTION RATE

(July 22, 2009) Elgin, IL -- Brethren Benefit Trust (BBT) has reported on i ts work to lower the annuity assumption rate for the Church of the Brethren  Pension Plan. The Pension Plan has provided retirement benefits to ministe rs and lay employees of the Church of the Brethren and its agencies since 1 943.

The decision to lower the rate came in late April, in response to losses in curred because of the economic recession. The BBT Board approved the change  of all past and future annuity assumption rates to 5 percent, a significan t decrease from rates that have been in the range of 6 to 8 percent in rece nt years.

As of Dec. 31, 2008, the Retirement Benefits Fund held by BBT had enough as sets to meet only 68 percent of its current obligations. The decision to re duce the assumption rate has been made in an effort to return the Retiremen t Benefits Fund to fully funded status. Returning the fund to fully funded  status "is our first priority," BBT has stated.

Monthly pension payments at the new rate will begin Sept. 1. An estimated 1 ,450 people will be affected. The group includes retired pastors, former di strict and denominational staff, and others who are receiving annuities.

"Based on our preliminary calculations, the reduction (in monthly payments)  will be in the 15 to 20 percent range for most annuitants, but there are a  number of variables that could have your individual rate falling above or  below that range," Dulabaum wrote in a letter to all annuitants.

The organization has worked diligently to make this conversion accurately,  Dulabaum said. However, converting the rate for members who retired several  decades ago, when calculations were made by an earlier computer system or  by hand, has required much more work and a longer process than expected, he  said.

BBT has employed three temporary staff to serve as a data compilation team.  The team has had to pull paper files and worksheets dating back decades, a nd then input that information into a new computer database. The team also  is researching and cross referencing other records and information to ensur e that the figures used are accurate.

Hewitt Associates, a national employee benefits consultant, has been retain ed to compute the new monthly payments based on the 5 percent annuity assum ption rate. Once that work is complete, BBT will send letters informing eve ry annuitant of the amount of his or her new monthly benefit.

Retirees who experience great financial hardship because of the reduction w ill be able to apply for a new grant program. BBT has appropriated non-Pens ion Plan assets from its operating reserves to provide special assistance,  up to the amount of the benefit reduction. The BBT Board will review and ev aluate the grant program each year.

"We know that this process is difficult and that this change is a disappoin tment to you and to all of our Brethren Pension Plan annuitants," Dulabaum  wrote in his letter. "We have also received support for making an extremely  tough decision. Our first responsibility is to ensure that the Plan can co ver its payments for decades to come."

He also noted that "the 5 percent rate to which we are moving is still on t he high end of annuity assumption rates being offered today. While this new s provides little consolation, it does help to put into context just how se vere of a loss in equities we have gone through over the past 20 months....  This current downturn continues to present problems to all pension plans n ationwide, whether church-based or secular."

For more information go to http://www.brethrenbenefittrust.org where BBT is  offering an online link with answers to the most frequently asked question s about changes in the Pension Plan.

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.

># # #

>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