2017 President’s Report

As each year passes, the richness of God’s blessings on PCA Retirement & Benefits fills my heart with thanksgiving. There is no question we have experienced the growth pains of very challenging periods in our history, but by and large, we have witnessed the goodness of the Lord in significant ways. Here are a few highlights of the past 5 years of God’s work in this ministry of the Presbyterian Church in America.

• We began a significant effort responding to a 2011 church-wide survey of teaching elders. This survey provided significant understanding into the needs of these ministry servants.
• RBI published the PCA Call Package Guidelines in 2012 which the General Assembly “exhorted Presbyteries and member churches to implement for their use.”   This free resource has been updated every year since its original publication.
• RBI implemented Investment Refresh in 2014, a Target Retirement Fund reinvestment option. This program resulted in 94% of retirement plan participants selecting an age appropriate fund designed to achieve consistent risk adjusted returns over the long term.
• In further response to the 2011 survey, RBI significantly expanded participant advisory services by providing free financial planning assistance to all PCA church employees who participate in the PCA Retirement Plan. Through sequential hires in 2010, 2015, and 2017, we are fully staffed with leadership, financial planners, and support staff.
• RBI continues to offer free financial planning seminars to PCA church employees throughout the United States. In addition, we offer free consultative services to church sessions, finance committees and pulpit committees in the PCA.
• Responding to the needs of our teaching elder families, in 2016 RBI created a new ministry of care and counseling support called ServantCare ministries for participating presbyteries. This program offers convenient and confidential on-line counseling services to PCA pastors and their wives at reduced rates.
• The 2017 overall expense ratio for the PCA Retirement Plan is at a near record low point. (A very good thing!) Presently at 0.92%, this expense ratio is the lowest experienced by the plan in 17 years.
• Finally, the PCA Retirement Plan exceeded $600 million in assets under management (AUM) during the first several weeks of 2018. This compares to AUM of $368 million 5 years ago.

We are so thankful to God for guiding and growing RBI’s ministry of service so profoundly over the past 5 years. In an effort to put these changes in perspective, I decided to reread the 2012 RBI Annual Report. My response to reading these words were, “Thank you God for what you are doing through us!” Below are some key quotes from this report.
“Since its beginning, RBI has been significantly involved in the material needs of our ministry partners. This means we have always been concerned about the retirement readiness of our PCA employees and their need to protect their spouses and family members with health, life and long term disability insurance.”
“Concern for these material needs frequently involves us in decisions between husbands (teaching elders) and wives as they make very difficult, life altering choices. Financial hardship in a pastor’s marriage often leads to long term consequences for retirees and their widows.”
“God has given us the privilege of walking with these families through periods of deep grief and financial insecurity.”
“And finally, there is the financial disaster that typically proceeds from moral failure. One of my saddest moments here at RBI was receiving a phone call from a cherished friend and pastor’s wife as she described the crushing blow of her husband’s sin which resulted in their divorce.”
“Here’s the big point. If you are ministry minded, it is impossible to go about the work of a “transaction” business while ignoring the relational needs of those you serve. I believe the gospel compels RBI to enter into the hurt and despair of those we serve and to apply ministries of healing and care if we are able. If we see a need, God has given us the privilege of taking action out of love for our brothers and their families.”
So, we stand on the promise of the gospel message; that Jesus is growing his kingdom and fulfilling his promise of reconciliation and restoration through our work. The success of our work is not about us, but about the promise and evidence of the gospel’s work in our midst. We are tremendously grateful and filled with joy to serve you in this way!
Turning to the financial markets, 2017 was a year to remember! Stocks in the U.S., as measured by the S&P 500 were up 21.8% for the year. Since 1928, stocks have risen by more than 20% for 35% of this time period. Given the infrequency of this result, it’s important for long term investors to be “present” or fully invested when these opportunities arise. Every Target Date Fund in the PCA Retirement Plan has exposure to stocks and thus this excellent result accrued (in various degrees) to almost all participants in the plan. This good result was bolstered by strong corporate earnings, deregulation, expectations for corporate tax reductions, and share buybacks.
Bonds or fixed income investments had a relatively flat year as these markets reflected the Fed’s tightening bias (the plan to incrementally raise interest rates) and very moderate inflation expectations. Most high quality U.S. Bond indexes provided returns that roughly equaled the average coupon (the stated interest rate at time of issue) that ranged between 3.0% and 3.5%.
Given the recent (early 2018) volatility of the stock markets, it would seem to most an indication of problems ahead. But it depends what you mean by “ahead.”   Over the short run, I would argue that the U.S. economy is in a good place. Inflation is low, our economy is still in the expansion mode, interest rates are moderate, lower corporate tax rates will boost economic growth, and unemployment has reached historic lows. Apart from the Bitcoin hoopla there doesn’t seem to be any particular event that will be the catalyst to drive us into the next recession.
However, the primary concern at this point in the economic cycle is that the Fed might step on the monetary policy brakes too hard and significantly slow down the hard won growth we’ve experienced during this recovery.   This is the reason the markets seem fixated on employment and inflation expectations at this time. This is only logical in my view and may translate into a more choppy experience for investors in various world markets. So, keep your seat belts buckled and please don’t attempt to market time. The smart choice is to remain invested and keep your eyes on long term results.
Thank you for your support of PCA Retirement & Benefits. Through your participation in the Retirement Plan, Group Insurance products and Ministerial Relief, we are able to sustain programs that encourage and support our churches and employees.