In the recent meeting of the Board of Directors of the Church of God Benefits Board, the entity charged with managing the Ministers’ Retirement Plan, action was taken to grant a special year-end interest allocation to all participants in the Trustees’ Fund.
Because earnings in the Trustees’ Fund were better than anticipated in 2014, this one-time allocation of interest was approved by the board to be distributed at year end. Each participant with an investment in the Trustees’ Fund will receive a special interest allocation on a pro-rata basis. The allocation is expected to amount to a little over 1% of the participant’s investment in the Trustees’ Fund. For example, a participant with $1000 in the Trustees’ Fund will have approximately $11 in interest added to their account while a person with $100,000 in the Trustees’ Fund will receive approximately $1100. The pro rata amount that each person receives will be based solely on the amount that person has invested in the Trustees’ Fund – and will not take into consideration the balances in the equity investments.
In making this announcement of the special year-end interest allocation, Board Chairman Mark Walker also announced that the return on the Trustees’ Fund for 2015 will continue to be at four (4%) percent. In a time when fixed return rates remain at a historical low, the Board determined that it was extremely fortunate that the Ministers’ Retirement Plan can continue to pay at a rate that greatly exceeds the market rate. While the Board has projected the rate for the Trustees’ Fund to remain at four percent in 2015, it is possible that the rate could change based upon market conditions. If the economy recovers more quickly than anticipated, the rate could be increased. Conversely, if the economy were to falter, the Board could lower the rate during the year if such became necessary.
Since the retirement plan is a non-profit entity, all earnings, outside of an allowable reserve, must be passed on to participants. With earnings greater than expected in 2014, the one-time allocation became the fastest and most economical way to make those additional earnings available to participants.
Chairman Walker also announced that the board would be offering an incentive for new participants to join the plan in 2015. The new incentive provides for a matching contribution of up to $500 to any new participant who joins the plan in 2015 and makes up to $500 in contributions to the retirement plan in 2015. The plan will match dollar for dollar the contribution of new participants in 2015, up to $500 per participant.
While we do not anticipate that such will happen again, being able to pass on earnings to current participants and incentivize new participants to join the plan is an incredible opportunity to continue to grow the Ministers’ Retirement Plan that now manages some $335 million in assets.
Participants are reminded that they may invest in three other options besides the Trustees’ Fund. The other options are all based upon stock funds and fluctuate with the stock market. Your ability to withstand volatility should be taken into consideration before making any investment selection. Further, you should always remember that past performance is not a guarantee of future performance.