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LCC benefits and pension services building for the future

January 11, 2018 17 Comments

WINNIPEG – After serving Lutheran Church–Canada’s (LCC) church workers since 1989, LCC Worker Benefit Plans became an independent corporation, LCC Worker Benefit Services Inc., on January 1, 2018. Adopting the new name and revising its internal governance does not change any group health benefits or the pensions for the 891 active and retired pastors, deacons and other church employees enrolled in the plan. Neither does it fundamentally change its relationship with employers: congregations, institutions, and organizations.

“LCC’s Board of Directors began looking into establishing an independent delivery organization for worker benefits with us in 2015” explained WBS Board of Directors chairman Rev. Dr. Dieter Kays. “With its approval we renewed the benefit plans’ mandate for the future thereby allowing LCC’s BOD to concentrate on mission and ministry matters rather than the operational details of health benefit and pension plans.” Kays noted that the change is unrelated to LCC’s restructuring.

The transformation is designed to provide a more responsive and agile management. Under the new corporation WBS has its own Board of Directors elected by LCC’s Board to which it is accountable. The WBS board will have the responsibility for making all operational decisions regarding group benefits and pensions. To assist in the decision-making the WBS board will include more members with experience and expertise in benefit and pension plans.

Dr. Kays explained that since a new entity has been created, employers will need to sign new agreements outlining current policies, procedures, expectations, and accountabilities involving the new  WBS. “We have a great relationship with our employers and these agreements help both WBS and employers recommit to what’s already in place.”

To familiarize congregations and other employers with the renewed direction and agreements WBS will conduct presentations across Canada. At the events congregational leaders and key decision makers will have the opportunity to understand the rationale behind the changes and explore the agreements.

“We’re looking forward to a renewed mandate that will allow us to continue ‘Caring for those who serve’” said Dr. Kays.

17 Comments »

  • Rev. Lee Barnai, LC-C emeritus said:

    An explanation of the excerpt (last sentence of third paragraph) “To assist in the decision-making the WBS board will include more members with experience and expertise in benefit and pension plans.”, would be helpful.
    Will these “members” be paid members or volunteers?
    Will they be confessing Christians?

  • canluth (author) said:

    Thanks for the question Pastor Barnai. Governance of group benefit and pension plans has become increasingly challenging over the years due to increased regulatory oversight and a fast changing and complex investment environment. Consider the events of the global economic crisis of 2008-2009 and how the dramatic decline in interest rates and the stock market placed the vast majority of defined benefit plans in Canada in a solvency deficit. To navigate through these types of challenges, directors of worker benefit plans must have relevant expertise and experience to protect the interests of the benefits plans and the members that are served. WBS will be seeking to find those types of individuals to serve as directors.
    While we hope and expect that a majority of directors of WBS will continue to be members of LCC, we will have the flexibility, as necessary, to attract individuals with the necessary expertise who are not members of our Church body. When we do this we will seek to ensure that the individuals not only have the expertise but will also respect and have comfort with the theological position of our Church. While currently all the members of the WBS board are serving as volunteers, consideration is being given by LCC Board of Directors to compensating board members of WBS for their time in order to assist with recruiting suitable board members. No decision has been made at this time.
    Dieter Kays, Chair, Worker Benefit Services

  • Lee Barnai said:

    Thank you for the response.
    Navigating the rough seas of the investment world has indeed become more challenging, even for seasoned professionals.
    While the need for directors with the necessary financial savvy and sound judgement as well as theological sensitivity is important, it certainly will also be necessary to weigh the costs of their recruitment/service against healthy investment returns. In other words a balance between possible management costs/fees and the achievement of return goals.
    May God bless the formation and operation of WBS Inc.
    Lee Barnai

  • Rev. Robert Clifford said:

    Dr. Kays:
    As an “engaged stakeholder” I have read the report of the Worker Benefit Plans from the 2017 Convention Workbook (pgs E44 & following). The report notes that the Board of Managers of the Worker Benefit Plans (now Worker Benefit Services) is looking to make some real estate investments.
    There is a nice property on the eastern outskirts of Calgary that a District-prepared, Court-approved Plan has valued at $51 million. We are told that it is operating profitably & may well generate dividends for the shareholders.
    If WBS would buy the property (it is a good deal at $51 million, for over $90 million was invested in it), Church Extension Fund depositors could receive more than 22 cents on the dollar of their retirement life savings. If, on the other hand, it is silently endorsed by the church that it is okay for Church Extension Fund depositors (most of whom are retired senior citizen lay members of the church) to only receive 22 cents on the dollar of their retirement life savings, then surely it should also be okay for the Pastors to receive but a fraction of what they were promised to receive from their retirement Pension Plan if WBS has a “cash flow shortage” or a “funding shortfall.”
    If WBS buys Prince of Peace (aka SAGE) you or one of the WBS staff could become the Chief Executive Officer of Sage; the position pays $20,000 per month ($240,000 per year) — a win, win situation.

  • canluth (author) said:

    Dear Pastor Clifford
    Thank you for reading our report in the 2017 Convention Workbook.
    It is clear to me that your comments indicate a profound sense of disappointment and upset at the events that have unfolded surrounding the ABC Church Extension Fund. I can only imagine the personal hardship and anger that these events have inflicted on individuals who have lost money in the ABC Church Extension Fund.
    However, as you are no doubt aware, the benefit plans for LCC church workers are managed in a separate and independent manner from the Districts and are highly regulated to ensure that sound investment principles are followed and, that above all else, the best interests of the plan members are pursued.
    Let me assure you and other members of the benefit plans, that we approach this responsibility with the utmost seriousness and will do everything within our power to ensure we continue to provide sustainable group health and pension benefits to our plan members.
    Sincerely
    Dieter Kays, Chair
    Worker Benefit Services.

  • Rev. Robert Clifford said:

    Why was Dr. Kays reply to my question below deleted? His Comment was here; some, no doubt, read it, but now it is gone. It is referenced in the “Recent Comments” blue box below, but his Comment has disappeared. What does this mean?

  • canluth (author) said:

    Not sure why this happened. Here is his response again:
    Dear Pastor Clifford
    Thank you for reading our report in the 2017 Convention Workbook.
    It is clear to me that your comments indicate a profound sense of disappointment and upset at the events that have unfolded surrounding the ABC Church Extension Fund. I can only imagine the personal hardship and anger that these events have inflicted on individuals who have lost money in the ABC Church Extension Fund.
    However, as you are no doubt aware, the benefit plans for LCC church workers are managed in a separate and independent manner from the Districts and are highly regulated to ensure that sound investment principles are followed and, that above all else, the best interests of the plan members are pursued.
    Let me assure you and other members of the benefit plans, that we approach this responsibility with the utmost seriousness and will do everything within our power to ensure we continue to provide sustainable group health and pension benefits to our plan members.
    Sincerely
    Dieter Kays, Chair
    Worker Benefit Services.

  • canluth (author) said:

    Not sure why. Here it is again:
    Dear Pastor Clifford
    Thank you for reading our report in the 2017 Convention Workbook.
    It is clear to me that your comments indicate a profound sense of disappointment and upset at the events that have unfolded surrounding the ABC Church Extension Fund. I can only imagine the personal hardship and anger that these events have inflicted on individuals who have lost money in the ABC Church Extension Fund.
    However, as you are no doubt aware, the benefit plans for LCC church workers are managed in a separate and independent manner from the Districts and are highly regulated to ensure that sound investment principles are followed and, that above all else, the best interests of the plan members are pursued.
    Let me assure you and other members of the benefit plans, that we approach this responsibility with the utmost seriousness and will do everything within our power to ensure we continue to provide sustainable group health and pension benefits to our plan members.
    Sincerely
    Dieter Kays, Chair
    Worker Benefit Services.

  • Rev. Robert Clifford said:

    Years ago when the Defined Contribution Pension Plan was started all the Pastors received a special generous bonus to kick start their DC Plan based on years of service – longer serving Pastors received more, shorter serving Pastors received less. Presumably those monies came from the Defined Benefit Pension Plan. Was the DB Plan in a surplus situation at that time based on congregation remittances. How did that drawdown of DB Plan assets transferred to the Pastors’ DC Plan contribute to the present Defined Benefit deficit?

    Why is a special collection being made for Pastors – special assessments on congregations & asking for liens on congregation’s real estate? I look forward to the upcoming Information Sessions to get clarification, but an actual scenario as I understand it is as follows: A BC congregation – presently vacant – average attendance less than 20 – receives an assessment from WBS for $28,000 – WBS commences automatic withdrawals from the congregation’s bank account at $400+/month without receiving pre-approval from the congregation – the congregation has $130,000 in ABC-CEF deposits but has only received 22 cents on the dollar in cash repayment – similarly, individual congregation members have hundreds of thousands of dollars of their personal retirement life savings lost in ABC-CEF, & these are the retired senior citizen, faithful, life-long members who are now being asked to make further sacrificial offerings, from money they do not have access to. Is it true that WBS has accepted SAGE shares as payment from congregations? and/or alternatively, WBS is asking for liens on congregations’ real estate? If I recall correctly, there was an Overture at Convention to discuss the Church Workers Pension Plan – some of these questions were in the air prior to Convention; but the Resolution passed was to Decline the Overture. It would have been good to discuss these issues at Convention; Overtures had been submitted, congregation delegates had legitimate questions, but Synod in Convention declined to talk about it.

    Are the retirement life savings of ABC-CEF depositors (most of whom are lay people) less important that the retirement pension of Pastors?

    The lost CEF retirement deposits is actually a greater fiasco than would be a loss of pension income. Only a portion of the DB Pension Plan monies are the Pastor’s own deposit; the DB Pension Fund is made up of Pastor’s contributions, congregation contributions, & investment returns. Conversely, all of the CEF dollars are the depositors’ own money; the CEF deposits were actual monies that the depositors had earned & saved & deposited in “God’s bank.” A Defined Benefit Pension Plan, on the other hand, is a promise to pay a pension (of course, based on service rendered by the church worker), but if the promised commitment is too rich, the church workers could be told, as the ABC-CEF depositors were told when their retirement savings were lost, “we erred on the side of the Gospel” & “it’s all God’s money anyway.”

    The ABC-CEF “cash flow shortage” has resulted in a greater loss of money than the total deposits in the East District CEF & Central District CEF combined.

    The “funding shortfall” in the ABC-CEF has devastated the retirement income of more people & has lost an amount of money almost equal to the total assets held in trust in the Defined Benefit Pension Plan for church workers of LCC.

    Rather than topping up the Pastors’ DB Pension with special levies & liens, the church could also give attention to “widows & orphans” whose retirement life savings have been devastated by the church.

  • canluth (author) said:

    We are attempting to find out why some comments are disappearing. We appreciate your patience.

  • Rev. Perry Hart said:

    Dear LCC WBS Inc,
    Unfortunately I wasn’t able to attend the last information session held in our area, but wondered if a webinar or anything “virtual” as such, was on offer or could be made available.
    Thank you for your time and consideration. Blessed Lententide.
    Rev. Perry Hart

  • canluth (author) said:

    Yes. An online presentation will be scheduled. WBS will provide further information when a date is set.

  • Rev. J. Rinas said:

    Just wondering if an online presentation has yet been scheduled, or if a recording of one the previous sessions has been made available. I hadn’t seen anything posted yet and wondered if I missed it.

  • canluth (author) said:

    A date is currently under discussion. Thanks for your interest.

  • Melvin Klassen said:

    > … the congregation has $130,000 in ABC-CEF deposits
    > but has only received 22 cents on the dollar in cash repayment.

    IMHO, the important word is “cash”.

    My congregation had approximately $24,500 in ABC-CEF deposits.

    To date, we have received approximately 80% of our investment from the CEF Trustee. That 80% consists of approximately 34% in cash ($5000 “convenience payment” plus approximately $3300 later), and approximately 45% in SAGE shares (nominally valued at $1/each).

    I think that the cited congregation should similarly have received 80% of their investments, composed of cash (my guess: $44,000) and in (my guess: 60,000) SAGE shares.

  • Dennis Kendel said:

    As the Board Chair of an LCC congregation, I read with interest the detailed information and a very significant question posted by Re. Clifford on February 15th. The usual practice of canluth is to respond online to questions posted online. I didn’t see any response to Rev. Clifford’s question about some members of our church being fully sheltered from adverse impact of market investment risks while other are not.

    While I fully understand that there may be variance in regulations pertaining to registered pension plans versus the investments made by the ABC CEF, perhaps principles of fairness and equity within our Christian fellowship ought to supercede our necessary compliance with minimum obligations under secular regulations?

    I will continue to watch this site for a response to the question posed in Rev. Clifford’s February 15th posting.

  • canluth (author) said:

    Since we were experiencing difficulty with our commenting software at the time, and due to the specific nature of the comment, WBS responded by email. Questions like those raised in the comment are being addressed at the ongoing WBS presentations.

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