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 2019, this one-time allocation of interest was approved by the board to be distributed on December 20, 2019. 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 over 1.60% of the participant’s investment in the Trustees’ Fund. For example, a participant with $1,000 in the Trustees’ Fund will have approximately $16.00 in interest added to their account while a person with $100,000 in the Trustees’ Fund will receive approximately $1,600. 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.
With the additional interest of 1.60%, the effective rate for the Trustees’ Fund in 2019 will exceed 5.60%.
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 2020 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 2020, it is possible that the rate could change based upon market conditions.
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 2019, 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 still offer the incentive bonus for new participants who join the plan in 2020. For any new participant who joins in 2020, the plan will match dollar-for-dollar the contributions made in 2020, up to $500 per participant.
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.