Portico trustees announce annuity increases for 2014
At their Nov. 1-3 meeting in Minneapolis, trustees of Portico Benefit Services approved an annuity increase for members who receive ELCA Participating Annuity payments. The trustees’ action is the second consecutive increase in two years and is the highest percentage increase since 2002. The interest-crediting rate for members with bridge accounts was also approved with an increase. A ministry of the ELCA, Portico provides retirement, health and related benefits and services.
The annuity increase is calculated based upon the Funded Ratio of the ELCA Participating Annuity Investment Fund as of Sept. 30, 2013. Changes to annuity payments and the interest-crediting rate will be effective January 2014. The trustees’ action included:
• Increase ELCA Participating Annuity payments to 3.0 percent
• Establish the ELCA Participating Annuity bridge account interest-crediting rate to 7.6 percent
• Retain the dividend-eligible annuity payments at their 2013 level, and a lump-sum cash dividend of 21.7 percent to be paid out in January 2014.
The Rev. Jeffrey Thiemann, president and CEO of Portico, said the annuity adjustment of 3 percent is nearly triple the amount from last year. “The improved state of the fund allowed us to increase member payments even more this year,” he said. “We know that our members appreciate having a healthy fund that allows both an increase in payments and gives them confidence in receiving income for life.”
The annuity increase is calculated from an approved formula that distributes one-third of the surplus in the fund to members, which is represented by any excess in the Funded Ratio above 1.000. The 1.091 Funded Ratio at Sept. 30, 2013, enables the 3 percent annuity increase for 2014. Annuity payments can be adjusted up or down every year, depending on investment performance and mortality gains and losses.