DETROIT, MI (June 28, 2013) – The Evangelical Covenant Church finished 2012 with a $280,000 deficit, Treasurer and Director of Pension Dean Lundgren informed delegates during today’s business session of the 128th Annual Meeting.
The deficit amounted to 1.2 percent of the Mission and Ministry revenue of $23.3 million, Lundgren said.
Lundgren told delegates that expense management had been “excellent,” attributing the deficit to revenue shortfalls and “perhaps overly optimistic budget assumptions.” Local church giving was one percent below last year, but the budget had assumed a three percent increase.
Lundgren said he would address steps Covenant leaders have taken to bring revenue and expenses in line for the current and succeeding years when he presents the budget to the meeting on Saturday.
The Covenant Pension Plan continues to be in “very strong” shape, Lundgren said. The plan provides retirement benefits to almost 2,200 active and retired pastors, missionaries, and their surviving spouses.
As of May 31, the plan was 102 percent fully funded. “That is almost unheard of in today’s environment, where the typical corporate plan is in the 70s percentile and the state/municipal plan in the 60s percentile,” Lundgren said.
Retirement payments for 2012 totaled $7.3 million, with $90 million in retirement benefits paid over the last 20 years.
Lundgren said the plan experienced a strong investment performance for 2012 with invested assets up another $21.7 million (13.8 percent). That performance continued through the end of May this year. Invested assets were up $13.2 million (7.3 percent).
Bethany Benefit Service continued its trend of keeping premium increases below those of other medical plans, increasing only 4.5%, Lundgren said.
The plan covers more than 3,400 individuals, providing medical, dental, prescription drug, vision, life and long-term disability benefits. Those covered include pastors, missionaries, office staff, surviving spouses, and families.
The second half of 2013 will focus on preparing for the January 1, 2014, implementation of major components of health reform legislation – the Patient Protection and Affordable Care Act.
“PPACA will have very limited, if any, impact on our individuals receiving post 65 Medicare Supplementary Benefits through Bethany,” Lundgren said. “It does have potential implications, as yet undetermined, for our actively working participants.”
Lundgren said Bethany would communicate more information to churches about the legislation when it is available.
During 2012, National Covenant Properties disbursed nearly $40 million to fund projects involving 48 local Covenant churches. Total assets exceed $380 million, with loans currently totaling more than $268 million.
More than 260 Covenant congregations have invested a total of more than $40 million in Investment Demand Accounts since they were introduced in 2009. The accounts currently yield 1.5 percent.
During 2012, Covenant Trust Company distributed in excess of $7.2 million to Covenant causes at the local church, regional conference, and denominational levels. Assets currently under management exceed $550 million.