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GuideStone reports 2nd year of positive insurance trends

DALLAS (BP)–A second year of positive trends in insurance rates was reported to trustees of GuideStone Financial Resources of the Southern Baptist Convention, along with reports on positive performance of the investment funds, during their Nov. 7-8 meeting in Dallas.

President O.S. Hawkins told trustees that for the second year in a row GuideStone has good news for its medical plan participants.

“Last year we were able to give 40 percent of our personal plan participants a rate decrease. For 2006, 57 percent of our personal plan participants will receive a rate decrease,” Hawkins said. “In an environment where national medical costs are trending upwards at 10-13 percent per year, we have effectively stabilized rates while improving benefits for our participants.”

The transition to a single network provider, Highmark Blue Cross Blue Shield, has resulted in deeper discounts for medical services, resulting in lower claims. Many participants have chosen higher deductible plans which have contributed to GuideStone’s ability to stabilize rates. GuideStone’s pharmacy coalition agreement with Medco Health Solutions also has contributed to containing costs. While the national trend in pharmacy increases is running at approximately 12 percent, pharmacy costs for GuideStone’s plans have increased only by 6 percent.

In his report to trustees, Hawkins also reviewed GuideStone’s theme for 2005 from Matthew 5:41: “And whoever compels you to go one mile, go with him two.”

“We have stressed to our employees the importance of successfully completing the first mile by effectively serving our participants. We also encourage our staff to look for opportunities to go the second mile,” Hawkins said. He recounted how GuideStone had reached out to pastors, staff members and seminary faculty who were victims of the hurricanes that devastated the Gulf Coast earlier this year. More than 500 individual participants and 98 churches received additional assistance from GuideStone.

Greg Bibb of Kentucky, chairman of the trustees’ budget subcommittee, reviewed the proposed 2006 operating budget, which was unanimously adopted by trustees. Bill said the subcommittee and GuideStone staff “have carefully prepared a budget that undergirds our ministries and provides the resources to move ahead in developing future strategies that will help us fulfill our vision to enhance the financial security of our participants.”

GuideStone receives no Cooperative Program funds for operations from the Southern Baptist Convention, but pays all expenses from an advisory fee on its investment funds offered through GuideStone Funds. All receipts from Cooperative Program money are paid as financial assistance to needy retired ministers, denominational workers or their widows.

John R. Jones, GuideStone’s chief operating officer, told trustees that in addition to the good news regarding medical rates for 2006, the growth in medical plan participants also is showing positive results. “While in past years we have seen declining participation in our medical plans, we are experiencing significant increases in new participants since Jan. 1. This increase in participants gives testimony to the competitiveness of medical plans for our participants,” he said.

Jones also reported that assets under management for GuideStone Financial Resources totaled $8.4 billion as of the end of September, an 11.7 percent increase over last year.

Noting the success of GuideStone’s investment programs offered through GuideStone Funds, Jones said, “The past three quarters have been a great time for active management in the investment arena. The sub-advisers used by GuideStone Funds have taken advantage of this condition and have had significant positive results,” he said.

For the three years ending Sept. 30, 2005, 11 of the 13 investment funds provided by GuideStone Funds (in the GS4 share class) were in the top half of their peer universe (mutual funds with similar objectives according to total returns) according to Lipper, a nationally recognized organization that reports such rankings. For the most recent investment performance and fund ranking, visit www.GuideStone.org.

Jones also reviewed success related to the introduction of the Morningstar Retirement Manager software, an online guidance and advice tool that provides participants with detailed information related to their retirement plan investments.

“Since rolling out this new tool just over one month ago, 1,950 participants have already taken advantage of this innovative service. One-third of these participants have implemented investment strategies recommended by the tool. We believe many more of our participants will benefit from this easy-to-use product,” Jones said.

Trustees received a valuation report of the Fixed Benefit Fund. Based on the funded status of GuideStone Financial Resources’ Fixed Benefit Fund, surplus resources are not available to provide benefit increases for 2006. A trustee-approved policy calls for the review of the funded status of the Fixed Benefit Fund each fall to determine if sufficient margin has developed to enable GuideStone to provide a benefit increase for the coming year.

The Fixed Benefit Fund is a pool of money at GuideStone that is used to pay benefits to participants who have chosen to take a fixed annuity at retirement and to pay benefits to retirees under the board’s Plan A.

Although there was never a promise made to grant increases in fixed annuities or Plan A, GuideStone has been able to grant nine benefit increases in the last 20 years to Plan A participants and other fixed annuity participants. These increases have ranged from 5 percent to 25 percent.

The ability to grant these increases resulted from the unusually strong bull market of the late 1980s and 1990s when the return on stocks and bonds far exceeded the 8 percent earnings assumption used to evaluate the Fixed Benefit Fund. The Fixed Benefit Fund utilizes a diversified investment approach with both stocks and bonds in the portfolio. As the fund began to build a surplus, the surplus was dispersed to the annuitants of the fund in the form of benefit increases. Since the end of the bull market in 2000, most investment managers believe it is highly unlikely that a similar bull market will occur in the foreseeable future.

GuideStone actuary Terry Wade explained, “Our primary responsibility with respect to our Fixed Benefit Fund participants is preserving plan assets to meet the present and future benefit obligations under the plan. With that in mind, the financial position of the fund is strong.”

The trustees’ relief committee approved applications for five two-year monthly grants, two two-year expense grants and one one-time grant. Twenty-nine applications were declined for being outside relief guidelines. A total of 244 individuals were added to the financial assistance roll during the quarter.

The relief committee also approved a $200 Christmas check for each financial assistance recipient on the roll Dec. 1. Funds to provide the special Christmas check are made possible through GuideStone’s endowment program. Individuals and churches are invited to participate in the Adopt An Annuitant program, with details available toll-free at 1-800-262-0511; at www.GuideStone.org and click on the Adopt An Annuitant link; or via e-mail to [email protected].

Two staff promotions were announced to trustees, effective immediately: Patty A. Weiland will become a member of the executive staff of GuideStone Financial Resources and John Ambra will assume new responsibilities as director of development for financial assistance.

Weiland joined GuideStone in August 2000 with the responsibility to oversee all mutual fund products. She currently serves as director of mutual funds for GuideStone Financial Resources and oversees the operations for GuideStone Capital Management, the registered investment adviser to GuideStone Funds. Her scope of supervision includes overseeing client servicing and sales, investment operations and mutual fund compliance and governance.

Ambra joined the GuideStone staff in 1996 as a part of the endowment staff. He will work closely with Hawkins to assist Southern Baptists in understanding the needs of ministers and their spouses who have special needs in their retirement years.

The next scheduled meeting of GuideStone trustees will be Feb. 27-28 in Dallas.
Curtis D. Sharp is executive officer for denominational and public relations services for GuideStone Financial Resources.

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