Pension Plan Participants Profit

This press release was sent to Church of the Brethren retirement centers, colleges, the seminary, districts, General Board, Association of Brethren Caregivers, COBYS Family Services, Children's Aid Society, Agenda, Newsline, and Messenger.

“BBT investments profited from the best first quarter for the stock market since 1987,” said Darryl Deardorff, chief financial officer of Brethren Benefit Trust. For pension plan participants, the common stock fund gained 45.3 percent for the 12 months preceding March 31 and the balanced fund increased 32.8 percent. Foundation clients saw a 46.8 percent increase in the common stock fund and a 32.8 percent increase in the balanced fund for the same period.

An exuberant member of the pension plan announced that if common stock returns continued at the same rate for 30 more years, he would have about $37 million dollars in his pension account at retirement. No one checked his calculations, but Donald Fecher, director of the Pension Plan, cautioned, “The recent stock market performance has been exceptional, but it is not a promise of future high returns. The stock market, over time, can more realistically be expected to average in the neighborhood of 10 percent a year. There is, however, a lesson to be learned. Stock market returns of 30 and 40 percent are an essential part of a pattern that justifies patience and holding firm when market returns are under 5 percent (as they were in 1994) or when they show a loss (as they did in 1991).

Participants in the Pension Plan have discovered that the earlier their funds are invested, the better they perform. From 1986 to 1998, the average monthly benefit for members who paid into the plan for 30 years or more, almost tripled ($821 per month in 1986 to $2,291 a month in 1998). Fecher said, “When dollars are fewer, the effects of time can act like Miracle Gro on hard-earned pension dollars. We especially urge congregations employing our younger pastors to help them to get an early start with a Church of the Brethren pension account.”

See the latest returns under Investment Program on the BBT web site at www.brethren.org.

For more information: Contact Marilyn Nelson, Director of Interpretation, at 1-800-746-1505.