CHICAGO, IL (March 17, 2011) – The Covenant Pension Plan has made “a truly remarkable recovery” since the market plunge that hit bottom March 9 in 2009, says Dean Lundgren, director of pensions and vice president of finance for the Evangelical Covenant Church.
“The plan is in very solid financial shape for paying benefits today as well as in the future,” Lundgren adds. Over the past 24 months ending February 28, invested assets appreciated by $68 million (66 percent).
The Covenant Pension Plan provides retirement benefits to Covenant pastors, missionaries and their surviving spouses. Of the 2,006 active and inactive plan participants, 382 retirees and 134 surviving spouses are receiving benefit payments. In 2010, a total of $6.7 million was paid in retirement benefits. During the last 10 years, retirees and surviving spouses collectively received $74.7 million in benefit payments.
The plan is 101 percent funded, which means market value assets are in excess of actuarial liabilities, Lundgren explains. “This compares very favorably to the average corporate plan at 89 percent and state and local pension plans, many of which are less than 70 percent funded.
“It’s not the numbers that are important, but rather, it is that the plan is in a solid position to provide retirement benefits to current and future retirees and their surviving spouses,” Lundgren adds.
He credits a difficult decision made in February 2009 by the Covenant Board of Pensions and the Benefits Investment Committee to “stay the course” and not change asset allocation or investment managers. “We had confidence that despite the adverse markets, we made sound decisions for both the short and long term.”