DALLAS?GuideStone Financial Resources recently notified participants age 60 or older in the Church Retirement Plan of a new method GuideStone will use to calculate fixed-life annuity benefits beginning this January. These modifications will not affect any fixed life annuities that are established on or before Dec. 1, 2010.
The new methodology will use an annuity funding rate that more accurately reflects market conditions and is in line with industry standards. Currently, GuideStone sets a floor?or minimum?funding rate that is well above industry norms. However, the current economic climate necessitates this modification. Just as one can no longer find bank certificates of deposit with an interest rate of 8 percent or 9 percent, one cannot find fixed annuity funding rates that are kept artificially high.
An adjustment in the annuity funding rate can impact the potential monthly income amounts. Generally a 1 percent move in the annuity funding rate (e.g., from 6 percent to 5 percent or from 6 percent to 7 percent) would impact a single life annuity benefit amount by about 10 percent with all other assumptions being equal. GuideStone has implemented a mechanism to ensure the annuity benefits will consistently fall within the top quartile of the industry. Because the funding rate may change each month, participants will be able to learn of a new funding rate 45 days before it takes effect: For example, participants can learn the funding rate for April 2011 as early as Feb. 15, 2011.
GuideStone offers a variety of benefit combinations to its participants. To learn about those options and the unique benefits GuideStone can offer ministers for tax purposes, please request the “Retirement Income Solutions” workbook by calling GuideStone. Participants can learn more about retirement income needs and GuideStone benefit options by logging into their account and using the Retirement Income Solutions interactive tool at GuideStone.org/retirementincome.
Each month GuideStone offers free live webinars for participants to learn more about benefit options and to answer questions about upcoming modifications to new benefits. Visit GuideStone.org/pfr and click on the link under Live webinars.
For more than 90 years, GuideStone’s Fixed Benefit Fund has consistently provided annuity benefits to meet the needs of the participants it is privileged to serve. During the explosive growth of the financial markets in the 1980s and 1990s, the robust investment performance of the Fixed Benefit Fund enabled GuideStone to pass on multiple discretionary benefit increases to its annuitants?a practice unique and unduplicated in the secular industry.
GuideStone believes the new methodology will help to enhance the long-term security for its annuitants today, as well as those who are nearing retirement and those who will retire in the future.
For a full list of commonly asked questions, please visit GuideStone.org and choose the “News about annuity benefits” link in the Popular Items section of the homepage. Trained specialists are available to answer questions about GuideStone retirement accounts and available benefit options by calling 1-888-98-GUIDE (1-888-984-8433).