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Annuity Board assets near $7 billion; trustees hear reports and take action

SAN ANTONIO, Texas (BP) Trustees of the Annuity Board of the Southern Baptist Convention met in San Antonio, Texas, Aug. 3-4 and received a series of record-setting financial and statistical reports from the agency’s president, O. S. Hawkins.
In his report for the second quarter of 1998, Hawkins said total assets of the board stood at a new record high $6.969 billion on June 30. Net income of $626.2 million in the period January-June was the highest in history for the first half of a year.
Trustees also discussed a change in administrative services for the board’s comprehensive medical, group dental and long-term disability plans. The Annuity Board, with offices in Dallas, provides retirement, relief and insurance ministries to Southern Baptist churches, institutions, ministers, missionaries and other employees.
Jeffrey P. Billinger, treasurer and executive officer for financial and corporate services, reported that the board operated well within the approved budget: Total contributions of $146.8 million to participant accounts in the first six months was a 4.8 percent increase over the first half of 1997, while benefit payments and withdrawals were $167.2 million, a 4.2 percent increase over the first half of 1997. There were 482 participants who had benefits established in the second quarter. A total of 28,514 were receiving annuity benefits and another 1,355 were receiving installment benefits at June 30.
Insurance premium income was virtually flat compared to 1997, while claims grew 3.3 percent compared to the 1997 record. The imbalance had been expected by trend analysis and resulted from a rise in medical costs, especially prescription drugs. Billinger said the program is meeting all claims needs. The next rate study will be done in the last quarter to set medical rates for Jan. 1, 1999.
It was announced that the Annuity Board will move its administrative services only (ASO) contract from Prudential Insurance Company to Kirke-Van Orsdel (KVI) in a three-step process to be completed at the end of 1998. The West Des Moines, Iowa, firm took over medical underwriting responsibilities on July 1, and will begin processing claims for the medical and dental plans on Sept. 1, 1998. The transfer of remaining administrative duties will occur on Jan. 1, 1999.
Hawkins said, “While this is a change administratively, we believe it will be accomplished with a minimum of inconvenience to our participants and will result in more efficient service. Prudential has worked with the Annuity Board since 1990, and now, by mutual agreement, the two parties have agreed to go our separate ways.”
Kirke-Van Orsdel, a division of Seabury & Smith, Inc., is one of America’s largest administrators of health-care benefits. The firm serves thousands of corporations and more than 300 association plans similar to the Annuity Board programs. The participant base of the combined plans exceeds 7 million persons, with some 400,000 claims a month.
Each participant in an Annuity Board plan will receive information in a special mailing this month, said Douglas D. Day, managing director of Insurance Services. Day said every participant in the indemnity medical plans will receive temporary identification cards and claim forms with directions for filing claims. Permanent identification cards and updated benefit booklets will be issued at a later date. Participants in managed care plans (HMO and POS) are not affected at this time.
The Cooperative Program of the Southern Baptist Convention has provided $658 thousand for the Annuity Board relief ministry this year, an 18 percent increase over the first six months of 1997. These funds, all of which go for relief payments, were supplemented by $203,000 from the Annuity Board’s Retired Ministers’ Support Fund. In addition, the board’s Adopt An Annuitant ministry paid out $1.2 million in $75 per month supplements to annuitants whose regular benefits are small.
Richard M. Hart Jr., executive officer for Systems and Technology Services, briefed trustees on the Annuity Board’s progress in preparation for the year 2000, a special project to determine that Annuity Board software systems are compliant with Year 2000 requirements.
The relief committee of the trustees considered 87 relief requests. They approved 33 two-year monthly grants, one one-year monthly grant, 19 two-year expense grants and one one-time grant. Four applications were returned for additional information. Twenty-eight requests were declined for being outside guidelines. Relief benefits are $200 per month for individuals and $265 per month for couples. One hundred recipients added to the Adopt An Annuitant roll in the first six months were approved, and two new Adopt An Annuitant gifts were approved.
The next meeting of Annuity Board trustees will be Nov. 2-3, 1998, in Dallas.

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  • Thomas E. Miller Jr.