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Board amends retirement plans to match new law’s provisions

DALLAS (BP)–Annuity Board trustees unanimously approved the Southern Baptist entity’s operating budget for 2002 during their Nov. 5-6 meeting in Dallas and authorized amendments to retirement plans to comply with provisions of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) signed into law earlier this year.

President O.S. Hawkins reported on the successful launch of AB Funds Trust, a family of no-load mutual funds sponsored by the Annuity Board. “The creation of AB Funds Trust and the expanded investment opportunities provides us with more resources to enhance the financial security of our participants,” Hawkins said. He reminded the trustees that with the launch of new products and services, “We are not at the finish line but rather the starting line of a new era for the Annuity Board.”

John Jones, chief operating officer, reported on third quarter Annuity Board operations. Jones praised the staff for the successful launch of new products and services, saying, “The spirit of cooperation and commitment of our staff ensured the success of this effort. Not only did we launch new products and services but we also successfully installed a state of the art business system that included new hardware and software … to more effectively compete in today’s marketplace.”

Board chairman George Tous van Nijkerk presided as trustees approved a 2002 budget of $50.4 million, a 2.4 percent increase over 2001. The Annuity Board receives no Cooperative Program funds for operations, but pays all expenses from an advisory fee on the investment funds available to participants.

All Cooperative Program money received by the board is paid as relief grants to needy retired ministers or denominational workers or their widows.

The trustees heard an update on EGTRRA that addressed expanded contribution opportunities for retirement plans and IRAs, increased ability for rollovers among various types of retirement plans and IRAs, and other provisions applicable to retirement plans and IRAs provided by the Annuity Board and its affiliates. The trustees approved amendments to the primary 403(b) retirement plans maintained by the Annuity Board to incorporate these legal changes when they become effective on Jan. 1, 2002.

Trustees received the valuation report of the Fixed Benefit Fund, which provides annuity payments to annuitants receiving Plan A benefits and certain fixed annuities. While recipients of commercial fixed annuities do not normally receive an increase in benefits, the Annuity Board has granted seven increases to annuitants since 1990. Three of these increases were 10 percent increases while four were 5 percent increases. The most recent increase was a 5 percent increase granted at the beginning of 2001. Each year the Fixed Benefit Fund is valued and if there is sufficient margin an increase is granted. The stock market’s low performance during the past 12 months has not provided sufficient margin to consider an increase for 2002.

The trustees’ relief committee, chaired by Frank Harmon, approved applications for 15 two-year monthly grants, one four-month grant, and 10 two-year expense grants. Eighteen applications were declined for being outside relief guidelines. Maximum supplemental assistance grants are $200 per month for single persons and $265 for couples. Twenty-two individuals were added to the Adopt An Annuitant roll during the third quarter and they receive an extra $75 each month.

Other action by the relief committee included approving a $200 Christmas check for each relief recipient on the roll Dec. 1.

The trustee insurance committee, chaired by John West, reported on enhancements to the board’s life and health products to be offered Jan. 1, 2002. Three options or levels of comprehensive medical plans will be offered as of Jan. 1. These plans will have varying levels of benefits and differing premium structures.

The next scheduled meeting of Annuity Board trustees will be Feb. 25-26 in Dallas.

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  • Curtis D. Sharp