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Hawkins reports positive trends for GuideStone insurance rates

DALLAS (BP)—Continued positive trends in insurance rates were reported to trustees of GuideStone Financial Resources of the Southern Baptist Convention (Annuity Board) during their Nov. 1-2 meeting in Dallas.

A $55.7 million budget for the coming year was adopted during the meeting.

President O.S. Hawkins told trustees that GuideStone’s “re-rate process for our medical plans is the best news we have given our participants in years. In fact, many of our Personal Plan participants will see no increase in their medical rates for 2005 and almost 40 percent will actually receive a reduction in their rates.”

The good news also extends to Personal Plan participants who have long-term disability coverage with GuideStone, Hawkins reported. “We are pleased to announce a 10 percent reduction in rates effective Jan. 1, 2005, for our Personal Plans Long Term Disability coverage. In an environment where so many costs are going up, this reduction in cost is indeed good news,” he said.

Hawkins, in his report to trustees, spoke on GuideStone’s theme for 2004 from Isaiah 54:2 which says, “Enlarge the place of your tent, and let them stretch out the curtains of your dwellings; do not spare; lengthen your cords, and strengthen your stakes.”

Utilizing an “ABC” acrostic, Hawkins said, “We have ‘lengthened our cords’ by having an Attitude of expansion; we have ‘strengthened our stakes’ by focusing on the Basics of our work; and we have ‘not spared’ as we have renewed our Commitment to go the extra mile in serving our participants.”

George Tous van Nijkerk, chairman of the trustees’ budget subcommittee, told the board that the proposed 2005 budget “is merely a tool for ministry. The staff and the trustee budget subcommittee have worked diligently to propose a budget that fully undergirds the ministries we provide with only a small increase over 2004.”

The $55.7 million unanimously approved by trustees is a 4.8 percent increase over 2004. 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. All receipts from Cooperative Program money are paid as financial assistance to needy retired ministers or denominational workers or their widows.

John Jones, GuideStone’s chief operating officer, reviewed the key financial indicators for the first nine months of 2004 and previewed GuideStone’s critical business projects for 2005.

As of the end of September, assets under management totaled $7.5 billion, Jones reported. He noted that GuideStone is showing substantial progress in managing expenses and is experiencing a notable increase in participants’ contributions to retirement plans.

In previewing the critical projects for 2005, Jones emphasized the name change implementation. “Following the first affirmative vote by the Southern Baptist Convention in June 2004, we are diligently working to introduce our new name, GuideStone Financial Resources,” Jones said. “We will continue this emphasis through June of next year when the second convention vote will occur.”

Jones also affirmed GuideStone’s continuing work to provide an even more competitive medical program. “We are encouraged by the responses of our participants to the revisions that have been made in the medical plans. The larger variety of plans with the increased utilization of network discounts has enabled us to pass on more competitive rates to our participants,” he reported.

Roddy Cummins, executive officer for investment services, noted that AB Funds Trust celebrated its third anniversary on Aug. 27 operating as a registered investment company.

“Three years marks an important milestone in terms of establishing an industry presence and a performance track record,” Cummins said. “We have reached this point with a performance record that any mutual fund company would be proud to own.” Lipper Inc., a nationally recognized Reuters company that compares the performance of mutual funds having similar investment objectives, reported that, as of Sept. 30, 11 of 13 retirement plan funds posted a three-year performance record above median in their respective peer universes.

Sam Stohner, GuideStone’s executive officer for organizational development and strategic planning, and Doug Day, executive officer for benefits services, presented a report to trustees on GuideStone’s life and health marketing emphasis. Stohner explained to trustees that although it is difficult to compete in several states, project teams are working to develop relationships with providers that will enable GuideStone to be more competitive in those areas.

“More of our participants are using network providers for their medical care and are saving money for themselves and for the medical plans,” Day told trustees. GuideStone medical plans will transition to a single network provider as of Jan. 1.

“We are projecting that the change to Blue Cross Blue Shield provider network will allow our participants to take advantage of provider fees that are discounted up to 40 percent or more,” Day said. A nationwide campaign by GuideStone is in progress to highlight the broad array of medical plans now available for Southern Baptist ministers and employees. As a part of this campaign, current medical plan participants who “Guide-a-Friend” to apply for medical coverage with GuideStone may receive a $100 credit on a 2005 medical plan billing statement — up to $1,200 for 12 referrals.

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 2005. 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 used also 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 permanent 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, with the latest increase of 5 percent given Jan. 1, 2001.

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.

Terry Wade, actuary for GuideStone, 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. Nineteen applications were declined for being outside relief guidelines. Twenty-eight individuals were added to the relief assistance roll during the quarter.

Other action by the relief committee included approving a $200 Christmas check for each relief 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. For more details on the Adopt An Annuitant ministry, call toll-free at 1-800-262-0511; visit the website at www.GuideStone.org and click on the Adopt An Annuitant link; or send an e-mail message to [email protected].

The next scheduled meeting of GuideStone trustees will be Feb. 28-Mar. 1, 2005, in Dallas.
Curtis D. Sharp is executive officer for denominational and public relations services for GuideStone Financial Resources. While a second vote of the Southern Baptist Convention in June of 2005 is required to officially change the name of the Annuity Board, the convention has authorized use of the new name during the interim period. The National Association of Security Dealers requires that the following statement be included whenever mutual funds are mentioned in an article: “You should consider the investment objectives, risks, charges and expenses of the AB Funds Trust carefully before investing. A prospectus with this and other information about the Funds may be obtained by calling 1-800-262-0511 or download one at www.GuideStone.org. It should be read carefully before investing. Past Performance is no guarantee of future results.”

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  • Curtis D. Sharp