Fiscal 2009 Financial Reports Reflect Modest Surplus

Post a Comment » Written on June 25th, 2010     
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ST. PAUL, MN (June 25, 2010) – The Evangelical Covenant Church finished with a $99,000 surplus for 2009, Treasurer and Director of Pension Dean Lundgren informed delegates during today’s business session of the 125th Annual Meeting.

Lundgren (accompanying photo) also enthusiastically announced that members of the denomination have demonstrated considerable generosity by giving more than $12 million to Covenant World Relief (CWR) and the Paul Carlson Partnership (PCP) over the past five years. Click here for video coverage.

Covenanters have contributed $6.4 million to CWR – an average of $1.28 million per year. Already during 2010, Covenanters have donated more than $1.05 million toward Haiti relief. Additional funds have been used to assist in Chilean earthquake relief.

Lundgren added that the Paul Carlson Partnership has raised $4.7 million over the past five years – more than $950,000 per year – to address health, poverty and education issues in the Democratic Republic of Congo.

The general Mission and Ministry Budget finished with a surplus due to “significant expense cuts” that included across-the-board salary freezes last year for all Covenant Offices staff as well as modest increases in contributions.

Lundgren noted that during the “very challenging economic period” of 2008-2009, the Covenant had finished “slightly above breakeven.”

Rates for insurance through Bethany Benefit Services – which provides medical, life, and vision benefits – had annual compounded cost increases of less than five percent over the past eight years. “This is at a time when many group health plans have averaged double-digit annual rate increases,” Lundgren said.

Local Covenant churches have saved an aggregate of several million dollars per year in health benefit expenses due to the lower rate increases, Lundgren emphasized.

The Covenant Pension Plan remains in a “strong financial position,” Lundgren said. It covers 1,054 active pastors and missionaries, and has 382 retirees and 134 surviving spouses receiving monthly payments.

Payments to retirees in 2009 were $6.3 million, up from just over $1 million in 1988. Over the past 10 years, more than $49.4 million has been distributed in benefit payments.
The total value of pension benefits has increased $40 million over the last 12 years.

The plan was hit hard with the economic downturn in 2008, but rebounded. The market value increased $31.2 million (26.7 percent) in 2009. As of April 30, the plan was 93-percent funded (ratio of assets to liabilities), which compares extremely well to the 83 percent for the average corporate plan and 65 percent for average public pension plans.

The assets of National Covenant Properties (NCP), which provides loans to local churches for building programs, increased 10.3 percent to $325 million. More than 80 percent of Covenant churches with loans have them through NCP, and 30 percent of all Covenant churches have loans with NCP.

The total of outstanding loans is $238 million. During 2009, $21 million was distributed to fund 50 different church projects.

Assets managed by Covenant Trust Company (CTC) increased 9.8 percent to $399.6 million. CTC wrote $11.6 million of new business, 41.6 percent of which is designated for local Covenant churches, camps, and conferences.

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