SAN FRANCISCO (BP)–GuideStone Financial Resources President O.S. Hawkins updated trustees during their July 27-28 meeting on GuideStone’s efforts to maintain the right perspective during a challenging economic environment.
“During the last quarter we have recouped some of the losses we experienced over the last 18 months,” Hawkins said. “Since March, GuideStone’s invested assets have increased to $8.3 billion, an increase of approximately 30 percent. This underscores the message we have stressed during these tumultuous times — it is important to ‘stay the course’ to be invested in the market so that when it recovers, you are invested to take advantage of the upward movement. Those who exited the equity markets during the trough of the downturn realized actual losses. Those who ‘stayed the course’ only realized paper losses and have, in fact, recouped 30 percent or more of their portfolios.”
Trustees also received reports on GuideStone’s operations, and heard an update on GuideStone’s plans to offer specific financial advice to its participants.
Hawkins told trustees that during very challenging times, GuideStone has continued to provide high levels of service to its participants.
“The past 18 months have been one of the most challenging periods in the history of GuideStone,” Hawkins said. “Yet, we have continually sought to help our participants have the right perspective as we have maintained our focus on enhancing their financial security.
“In response to the faltering economy, we have reduced our employee headcount by 10 percent, implemented both a hiring freeze and a salary freeze, and reduced the 2009 budget by over 15.2 percent of the 2008 budget. In the midst of all these measures to aggressively manage costs, we have been able to maintain our high levels of customer service.”
John R. Jones, chief operating officer, reported on GuideStone’s operations and updated trustees on special initiatives designed to improve participants’ services.
“The recent upward movement in the financial markets has been a welcome respite from the volatility we have experienced in the past year and a half,” Jones said.
For the first six months of this year, nine of 11 GuideStone Select Funds performed better than their respective benchmarks, Jones said.
“Additionally, GuideStone Funds ranked 45 out of 212 mutual fund families in the most recent Fund Family Fiduciary Rankings prepared by fi360,” Jones said. This report ranks mutual fund families based upon the percentage of their individual funds that pass fi360’s due diligence screens. These screens include the fund’s track record, assets, management tenure, style consistency, expense ratio, risk adjusted performance and performance relative to their peer group among other criteria.
Jones also provided updates on improved services related to enhanced use of technology.
“We have recently restructured our website to facilitate navigation for our participants,” Jones said. “Quarterly and annual participant statements have been enhanced to provide more information related to how a participant is doing in preparing for retirement. Through electronic delivery of these statements, even greater security is now provided for our participants’ privacy.”
Jones also touted GuideStone’s recent recognition by Plan Sponsor magazine as one of the top 10 recordkeepers in the 403(b) industry.
“This acknowledgment … confirms that GuideStone is large enough to be ranked with the largest financial institutions in the country,” Jones said.
As a part of GuideStone’s strategic long-range plan, Property and Casualty insurance products are now available to churches and ministry organizations. Jones shared the progress of this effort with trustees.
“We are grateful for the opportunity to make available risk management products to churches and ministry organizations that will provide affordable insurance coverage as well as comprehensive educational materials,” Jones said. “We are now licensed in 37 states and have applied for licenses in the remainder of the 50 states.
“In the rollout of our property and casualty products, we have used a crawl, walk, run, approach. As of the middle of July we have already written coverage for 66 churches or ministry organizations in 11 states.”
Hawkins also updated trustees on GuideStone’s medical plans.
“Over the past few years, GuideStone’s health plan participants have benefited from our commitment to continue to provide affordable and flexible healthcare products while maintaining our ministry focus,” Hawkins said. “Since 2003, health plan premiums nationwide have increased by an average of 52 percent.”
Even after taking into account out-of-pocket medical expenses, the average GuideStone participant’s total costs (premium plus out-of-pocket) decreased between 2004 and 2009. Average total costs were as high as $773 per month in 2004. Estimates show that average total costs for 2009 will be $728 per month, a decrease of 6 percent.
During the past six years, the national medical trend has continued to outpace inflation and healthcare expenses. Additionally, healthcare medical coverage has generally become more expensive for employers and individuals. Industry analysts expect claim costs to continue with double-digit increases in 2010 for health care plans utilizing preferred provider organizations (PPO) such as GuideStone’s.
Although GuideStone’s rate action for 2010 will not be determined until late summer or early fall, churches that have budget deadlines before the new rates are released would be prudent to assume rate increases of at least 17 percent or higher due to nationwide medical inflation, GuideStone says. Churches or individuals who wish to minimize the impact of these increases on their 2010 budgets should consider GuideStone’s full range of health plans including higher deductible plan options that can save money on monthly rates, GuideStone says.
For example, a 40-year-old pastor living in the Dallas area who has family coverage in the Health Choice 500 plan would receive a premium increase of $135 per month for 2010. However, if this pastor would move to the Health Choice 1000 plan, his premium would actually decrease by $36 per month, GuideStone says. The savings in premiums virtually offsets the increased individual deductible from $500 to $1,000. Moving to the Health Choice 2000 plan, would reduce his premium by $183 per month. The savings in premium reductions more than makes up for the change in the individual deductible from $500 per year to $2,000 per year, according to GuideStone.
Hawkins reported to trustees on the possible impact of the national healthcare initiative that is now being considered by Congress.
“Through recent conversations with key members of the larger denominational benefits boards, there is a consensus that if the proposed government sponsored universal health program is implemented, it will virtually eliminate the ability of denominations to provide viable medical plans for ministers and employees of churches and ministry organizations,” Hawkins said. “GuideStone, along with other church benefits organizations, is continually monitoring the efforts of the administration and Congress in producing legislation that would provide a government sponsored medical program.”
Patty A. Weiland, executive officer for financial services and solutions, overviewed a new online tool that will enable GuideStone to provide financial advice to participants.
“This new service will help us to answer the most often asked questions that come from participants,” Weiland said. Those questions include, “‘How should my retirement account be invested? How much should I be saving for retirement? Am I on track to meet my financial goals? Do I need to make adjustments to future goals?'”
Financial advice will consist of fund-specific investment advice related to GuideStone’s proprietary investment funds that are available to participants in GuideStone’s retirement plans. In addition to the investment fund advice, a retirement income gap analysis will also be available to assist participants in knowing how much more they may need to save in order to reach their retirement income goal. This tool is scheduled to be available at no cost to participants by mid-September.
“Throughout its 91-year history GuideStone has remained faithful to its beginnings,” Hawkins said. “Nothing we do is more significant than providing financial assistance to retired pastors or their widows who have great needs.”
Through the Mission:Dignity emphasis in June, a new record was set for requests of bulletin inserts to promote the program. In previous years, the most churches requesting inserts were 600. This year more than 1,100 churches requested more than 170,000 inserts. Since Mission:Dignity Sunday, June 28, more than 500 new donors have contributed to the program. Interested churches or individuals can learn more about Mission:Dignity by logging on to www.MissionDignitySBC.org.
In closing remarks, Hawkins reminded trustees, “Every decision we make as trustees and staff must be considered in terms of our vision statement which says, ‘We exist to honor the Lord by being a lifelong partner with our participants in enhancing their financial security.’
“In that statement we find our motivation — to honor the Lord. We find our message — to be a lifelong partner. And we have our mandate — to enhance the financial security of our participants.”
Curtis D. Sharp is the executive officer for denominational and public relations services at GuideStone Financial Resources of the Southern Baptist Convention.