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Annuity Board announces changes in Investment Funds

DALLAS (BP)–Several key changes in the Annuity Board’s retirement funds structure, due to the recent expansion of the agency’s mission statement, will ultimately pave the way for improved services and products, according to O.S. Hawkins, Annuity Board president and chief executive officer.

The changes will take effect on April 1.

“The 2000 Southern Baptist Convention in Orlando enhanced the Annuity Board’s mission statement allowing us to offer expanded products and services greatly benefiting our participants,” Hawkins said. “These fund changes effective April 1 are in anticipation of our move to a registered mutual fund environment later this year.”

“The Annuity Board is committed to serving our participants across all the seasons of life. The expanded mission statement and the resultant move into a registered mutual fund environment will allow us to better serve every participant by offering new investment vehicles along with our 403(b) retirement plans,” he added.

Four of the changes will alter the investment objectives or components of the funds. Other changes are simply name changes only.

The Market Index Plus Fund will be transformed into the Equity Index Fund. The Market Index Plus Fund has been an actively managed, broad market equity fund. On a day-to-day basis, fund managers have selected stocks in an effort to exceed the performance of the Standard and Poor’s 500 Index. On April 1, the Equity Index Fund will replace the Market Index Plus Fund and provide a passively managed, broad market equity fund designed to mirror the S&P 500 Index.

The new Equity Index Fund will be more like a true index fund as it will buy and hold companies found in the S&P 500 Index, rather than buy and sell on a daily basis. Like the Market Index Plus Fund and all the other Annuity Board investment funds, the new Equity Index Fund will continue to be screened to eliminate stocks that are publicly perceived to be involved in alcohol, tobacco, pornography, gambling or abortion services.

To avoid potential confusion with the new Equity Index Fund, the Equity Income Fund will be renamed the Value Equity Fund.

Another change of investment objective will be the conversion of the Enhanced Cash Fund to the Money Market Fund. Presently, like the other 12 funds, the Enhanced Cash Fund strikes a daily NAV (net asset value) to determine the value of a participant’s holdings in units. The NAV fluctuates by small amounts on a daily basis. The new Money Market Fund will be managed toward the goal of maintaining a daily value of one dollar. To enact this change on the close of business on March 30, 2001, the Enhanced Cash Fund will strike its final NAV. The value of each participant’s holdings will be calculated and converted to Money Market shares based on a $1 per share value. On April 1, participants will maintain the value of their investment in the Enhanced Cash Fund, but the number of their shares will increase.

The other two changes involving fund objectives relate to the Emerging Markets Fund and the International Equity Fund. The Emerging Markets Fund will be discontinued. This fund has not been available to participants for individual investment, but has been a component in the Annuity Board’s blended funds. Effective April 1, the International Equity Fund will begin investing to a lesser extent in common stock of foreign companies located in emerging markets. Rather than having two international equity funds — one for emerging foreign markets and one for more established foreign markets — there will be just one fund that combines the two types of foreign markets.

The final changes are name changes only. As the Annuity Board prepares to move into a registered mutual funds environment, name changes will be made for three bond funds. They are:

— Short-Term Bond Fund becomes Low-Duration Bond Fund

— Intermediate-Term Bond Fund becomes Medium-Duration Bond Fund

— Long-Term Bond Fund becomes Extended-Duration Bond Fund

These fund changes will be effective April 1 and will be reflected on participants’ second quarter statements mailed in July.

For questions or further clarification, participants may contact the Annuity Board at 1.800.262.0511 between 7 a.m. and 6 p.m. weekdays, Central Time.

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  • Curtis D. Sharp