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‘Remarkable’ quarter cited by Annuity Board president

MANALAPAN, Fla. (BP)–“The second quarter can be characterized as remarkable,” said Paul W. Powell, president of the Annuity Board of the Southern Baptist Convention, in his report to trustees at their summer meeting Aug. 4-5 in Manalapan, Fla.
Powell introduced a series of executive officer reports that listed accomplishments of the agency, including earnings of nearly half a billion dollars for the first six months of the year.
Preliminary reports for July indicate earnings of $250 million for the month, far exceeding the previous record for a single month, Powell said. Earnings in September 1996, the previous high, were $164 million. Total assets at the end of July are expected to be $6.35 billion.
The president noted Southern Baptists are responding in record numbers to special financial needs of annuitants and retired ministers and their widows without annuities, setting new records in relief and Adopt An Annuitant benefits.
Treasurer William C. Lee reported total assets on June 30, 1997, stood at $6.106 billion, the first reporting period in which assets exceeded $6 billion.
J. Ray Taylor, chairman of the presidential search committee, reported the committee is progressing in its work, but gave no indication when it would be ready to present a candidate for election.
“Our prayer is that we will find God’s man in God’s time,” Taylor said. The charge to the committee gave no deadline for a recommendation. Taylor said he has received approximately 22 resumes.
Powell, who will be 65 in December 1998, and chief operating officer W. Gordon Hobgood Jr., who turns 65 this August, asked the trustees in February 1996 to begin the search for a new chief executive officer. A committee was appointed in November 1996. The Annuity Board has no mandatory retirement age, but both the top executives expressed a desire to retire after their 65th birthdays.
Trustees were told the board operated within its approved budget in the first six months, while paying record benefits and generating record earnings from investments. Benefits and withdrawals totaled $160 million. While this total was 4 percent lower than 1996, there was a major withdrawal in 1996 when a Baptist hospital was sold, making its employees ineligible to participate in Annuity Board plans. When that withdrawal is discounted from the comparison, payments to participants were 10 percent higher than in 1996.
Payments for benefits and withdrawals in 1997 have exceeded the $142 million in contributions to participant accounts by $18 million, but contributions were up 8.4 percent over 1996. Total assets also were bolstered by earnings of $462 million, compared to $291 million earnings for the same six months in 1996. Powell, investment executive officer John R. Jones and treasurer Lee all noted with satisfaction the performance of the funds available to participants in Annuity Board retirement plans.
A new benefit payment option was introduced in the first quarter. Participants may now apply for an “installment option” that provides a monthly benefit without locking a participant’s accumulations into an annuity benefit. In the second quarter, 400 participants elected the new benefit option in lieu of a fixed period or life annuity benefit. Use of the installment option gives participants more flexibility than fixed period benefits, does not require renewal and reduces administrative costs.
Actuarial reports on funds from which retirement benefits are paid indicated all are either fully funded or in a surplus condition. Another analysis of assets underlying the fixed-benefit obligations of the board will be made in October. If a surplus is found that is sufficient to grant a meaningful increase, management will make a recommendation to trustees in November. If trustees approve an increase, it will be effective the next Jan. 1 for the formula benefit plan, often referred to as “old Plan A,” and for purchased annuities of five years or longer.
Insurance assets of $115 million at June 30 declined 2.5 percent from Dec. 31, 1996. The reduction was attributed to premiums of $62.8 million in the six months, compared to $64 million in the same period of 1996. Claims also rose $1.9 million from a year ago. There were 200,000 medical claims in the first six months, and 92 percent were processed within 15 days of receipt.
The relief committee of the board considered 106 relief requests. They approved 56 two-year monthly grants, 22 two-year expense grants, one one-time grant and declined 24 requests that were outside guidelines. Three applications were returned for additional information. Relief benefits are funded from Southern Baptist Convention Cooperative Program allocations and supplemented by Annuity Board resources developed by its endowment department. Relief expenditures for the second quarter were $361,120.
The relief committee also approved 636 recipients added to the Adopt An Annuitant roll during the first and second quarters of 1997. Adopt An Annuitant benefits in the second quarter totaled $379,500, and 2,659 individuals or couples were receiving an extra $50 each month from the program funded by direct gifts.
The next scheduled meeting of Annuity Board trustees will be Nov. 3-4 in Dallas.

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  • Thomas E. Miller Jr.