wfn.org | ELCA Pension Plan to Offer More Choice

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ELCA NEWS SERVICE

November 28, 2000

ELCA PENSION PLAN TO OFFER MORE CHOICE
00-292-SS*

     MINNEAPOLIS (ELCA) -- At its Nov. 3-5 meeting here, ELCA Board of
Pensions trustees adopted a new pension strategy that will offer more
choice and flexibility for plan members. The strategy, approved by the
ELCA Church Council at its Nov. 10-13 meeting, will be implemented in
2003.
     At its previous meeting the board of trustees set the strategy in
motion by removing the required annuitization for members retiring at
age 70-1/2, retroactive to Aug. 1, 2000.
     The new strategy will consolidate regular and optional pension
plans into one investment program, though they will retain their
separate account status and withdrawal features. In addition, the
strategy will offer more investment choices, add more flexible
retirement options and include an education program to help members
understand their choices and become more financially literate. The first
phase of the education program will begin in 2001.
     As part of this move, the Board of Pensions must seek an outside
record-keeping partner that will allow for daily valuation, Internet
account access and an advanced voice response system, said John G.
Kapanke, president.
     "This is consistent with our vision to focus on the relationship
side of our service to plan members and congregations. We recognize
outside companies are more efficient and better equipped to perform
record-keeping functions in today's fast-paced marketplace," Kapanke
said. "Our strengths are in our advocacy role as the ELCA's lifetime
provider of pension, health and other benefits and related services."
     Trustee Jon B. Christianson, Arden Hills, Minn., asked why the
plan couldn't be
implemented sooner than 2003.
     A conversion for the typical company would likely take six to nine
months, but the ELCA program is not the typical corporate plan, said
Robert J. Procaccini, vice president for information systems.
     The ELCA program serves a complex mix of multiple congregations,
agencies, and rostered and lay staff members who have various
predecessor church plan histories, he said. The extra time is needed to
prepare the Board of Pensions' systems properly for the conversion to a
new outside record-keeper, Procaccini said.
     Trustees rescinded a move made at their August 2000 meeting to add
two new U.S.-only investment funds to the regular pension plan in 2001
so that board resources can be used to develop the pension changes
further (including the U.S.-only funds) in 2003.
     "We will communicate details of our upcoming pension changes as
they develop and well in advance of any required action by plan
members," Kapanke said.
     The board also adopted a 2001 budget of $50.6 million, which is in
line with 1999 reported projections and up from $43 million in 2000. The
increase is necessary because of medical management fees, pension
record-keeping changes and other investments in relationship technology,
said Michael L. Troutman, vice president for finance and investments.
This also includes an increase in investment management fees resulting
from rapid growth in ELCA pension fund assets.
     In approving the 2001 budget, the board of trustees also expressed
support for the budget projections for 2002 ($54.2 million) and 2003
($57 million). The 2001 and 2002 budgets include funding for the
proposed employment of a full-time staff person in the ELCA Division for
Ministry to direct a health and wellness project, Kapanke said.
     Staff updated trustees on health plan changes under consideration
for 2002, which include possible expansion of managed care and greater
member choice between Aetna U.S. Healthcare and Blue Cross and Blue
Shield of Minnesota. Trustees are expected to vote on a final
recommendation at their meeting Feb. 3-4.
     Carol A. Mashuga, pension benefits manager, explained a
return-to-work pilot project for plan members on disability. "The Board
is trying to manage, not just administer, disability cases," Mashuga
said, adding that the board plans to offer return-to-work support for
those who may benefit from such assistance. The plan involves
psychiatric and functional skills assessment as well as vocational
assessment. The board will work with synod bishops and the ELCA Division
for Ministry to assist plan members who want to return to active
pastoral roles, Mashuga said.
     [*Sonia C. Solomonson is managing editor of The Lutheran
magazine.]

For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html