Annuity Board posts record in benefits paid during 1998

DALLAS (BP)--A 10 percent permanent increase in benefits on Jan. 1, 1998, for most annuitants, and 2,906 newly established benefits, resulted in a record for total benefits paid last year by the Annuity Board of the Southern Baptist Convention, trustees were informed during their March 1-2 meeting in Dallas.

President O. S. Hawkins said, "… we have closed the 81st year of the Annuity Board operations with thanksgiving for significant accomplishments."

A strong fourth quarter in financial markets pushed total assets to $7.09 billion. Earnings for the year for most of the 13 investment funds were at historically comparable levels. A 25 percent increase, from $400 a month to $500 a month, for those fully covered in the Church Annuity Plan Protection Section Disability Benefit was approved.

Trustees received a report from staff that no rate increase would be necessary on July 1 for participants under the Personal Security Program (PSP) in the Comprehensive Medical Plan, the Catastrophic Medical Plan and the Medicare Supplement. The Annuity Board reviews PSP rates on a quarterly basis. Rates for managed care products and products under the Employer Security Program, meanwhile, are reviewed annually and, if necessary, adjusted at the beginning of the calendar year.

Board treasurer Jeffrey P. Billinger reported total assets were $7.09 billion at Dec. 31, 1998, compared to $6.35 billion at Dec. 31, 1997. The net income for 1998 was $825 million, the highest annual net income ever reported by the board. This compared to $735 million net income for 1997.

Benefit payments and withdrawals in 1998 totaled $389 million, up 18.9 percent over 1997. Applications were processed for 2,906 people. At year’s end, there were 30,290 benefit recipients.

The Church Annuity Plan had 43,143 people from 21,794 churches in active billing status Dec. 31, and another 37,420 institutional and agency employees had active retirement accounts. Participant contributions of $281,683,044 represented a 7.5 percent increase over the year 1997.

Agreements were made with a new administrator for underwriting and claims payment in the board's medical plans. Contracts were negotiated with new preferred provider organizations and a new prescription drug provider. Activity in the various insurance programs included: Life and accident claims paid in 1998 totaled $8,744,485; disability insurance claims paid totaled $2,918,834; and indemnity medical and dental claims paid totaled $74,385,318. In addition, prescription drug claims of $22,293,341 were paid by Annuity Board plans.

A total of $4,384,631 was distributed through the board's relief program to needy retired ministers and their widowed spouses. This amount is more than $1 million over 1997 benefit totals. The amount received from the Southern Baptist Convention Cooperative Program and special designations totaled $1,261,803. The entire Cooperative Program allocation for the Annuity Board and special designations is spent in relief ministry without any expense applied. The board's Retired Ministers' Support fund supplements the convention allocation. A significant number of people on relief receive no regular retirement annuity because their churches never enrolled them in the Church Annuity Plan.

Hawkins reminded trustees the Southern Baptist Convention has designated the fourth Sunday in June as Adopt An Annuitant Sunday. He requested that trustees make a special effort to promote this special day in their churches and associations.

At year’s end, 710 people were receiving supplemental assistance grants, and 2,691 received the $75 Adopt An Annuitant benefit. The increased monthly payments of $75 (from $50) for Adopt An Annuitant recipients began Jan. 1, 1998. The increase in this benefit was the first since the program was implemented in 1981.

The trustees’ relief committee considered 195 relief requests. They approved 120 two-year monthly grants, three three-month monthly grants, one one-time grant and 29 two-year expense grants. Forty-three were declined for being outside guidelines. Six individuals were added to the Adopt An Annuitant roll.

Trustees approved two resolutions recognizing exceptional service of one current trustee and one former trustee. Virgil V. Ayres of Louisiana, chairman of the trustee insurance committee, was recognized for leadership he provided during a strategic time of transition for the board's insurance programs. A second resolution was approved for former trustee Bob R. Howard of Missouri, who died Feb. 19. Howard was recognized for selfless service as a trustee and as a member of the board's endowment council.

Richard M. Hart Jr., executive officer for systems & technology services, provided an update to trustees concerning the board's efforts in preparing for the year 2000. Hart reported that all hardware has been upgraded and is fully compliant. He also indicated all software except one application has been certified as Y2K-compliant. The remaining application is expected to be fully compliant before the end of the second quarter.

Trustees elected William Thomas Hopkins as managing director of organizational development and vice president of the corporation. Hopkins will replace D. Hugh Williams who will retire in April. All other executive officers were re-elected. The Annuity Board bylaws require annual election of both general (trustee) officers and executive officers.

Trustees accepted the recommendation of their general officers nominating committee and re-elected Timothy E. Head of South Carolina to a one-year term as chairman and S. Glenn Weekley of Tennessee to a one-year term as vice chairman.

At the Monday evening dinner meeting, five trustees were honored for their years of service to the board: T. Jack Colvin Jr., Mississippi, 1991-99; Joseph A. Mack, South Carolina, 1991-99; E. Joe May, Arizona, 1992-99; R. Roy Rogers, Kansas-Nebraska, 1991-99; and Christene Y. Walker, a local member, 1991-99.

The trustees’ next scheduled meeting will be Aug.2-3 in Baltimore.

Sharp is executive officer, denominational and public relations services, for the Annuity Board.