Availability of all relevent pension information

ELCIC Bishop “Susan Johnson” and ELCIC National Church Council (“NCC”) have unilaterally cancelled the long-standing policy of including congregational petitions in the ELCIC Convention Book of Reports. Rhenish Church of Canada (Member Congregation of the ELCIC), Markham, Ontario, submitted a petition, Regarding Availability and Transparency of ELCIC Pension Information relating to the ELCIC pension plan. The past service pension liabilities assumed by ELCIC head office decision-making bodies have required the transfer of millions of dollars of both ELCIC assets and congregational assets to the ELCIC pension plan

ELCIC Group Services Inc. (“GSI”), the entity charged with administering the pension plan’s assets and liabilities, has refused to release any actuarial information prior to 2006. After having decided not to release this actuarial information, Ms. Hildy Thiessen and GSI distributed the following statement to the retired pastors receiving an ELCIC pension:

“All ELCIC congregations continue to make contributions to the unfunded liability that arose in 2002 and 2003 and we anticipate it will be fully funded in 2015.”

The assumptions that allow GSI to make this statement are not stated. However, if those assumptions are based on mortality table UP94 (the mortality table that has been used in 2006 and 2007), it may indeed prove to be a false hope. If GSI anticipates full funding of the pension plan by 2015, why would GSI refuse to release actuarial reports prior to 2006 in order that pensioners may indeed be reassured of those projections? All projections must of course, take into account GSI costs which amounted to $ 920,652 in 2007.

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Pension Available Information Request

10^th February 2009

Mr. Don Storch

Secretary

National Church Council

c/o Evangelical Lutheran Church in Canada

302-393 Portage Avenue.

Winnipeg, MB

R3B 3H6

RE: Petition - 2009 ELCIC National Convention

Dear Don,

The Rhenish Church of Canada is submitting the attached motion for the upcoming ELCIC National Convention in June 2009.

The petition is pertaining to the Availability and Transparency of ELCIC Pension Information and the detail of the motion is listed in the subsequent pages and we respectfully request this petition to be included in the Bulletin of Reports which is to be distributed to all the delegates of the National Convention 2009.

Kindly confirm in writing either via email or fax on your receipt of this petition and that it will be included in the Book of Reports for the delegates in the 2009 National Convention.

Sincerely yours,

____________________________ ____________________________

Esther Au Alven Choi

Chairperson – Congregational Council Secretary – Congregational Council

Resolution Regarding Availability and Transparency of ELCIC Pension Information

Motion:

That the ELCIC Bylaws be amended to add the following Section to Part XV Benefit and Pension Plans:

Section 5 All documentation pertaining to the pension fund administered by ELCIC, or its subsidiaries, be made available to any pension beneficiary, pension member or congregation of the ELCIC. Such documentation is to include, but not be limited to, actuarial reports, correspondence with regulatory authorities, investment reports, reports relating to pension plan income and administrative expenses, and minutes of any meetings related to the pension plan.

Rationale:

For many retired pastors and surviving spouses of retired pastors, their ELCIC pension plan benefit forms a significant portion of their retirement income. The integrity and transparency of the administration of the pension plan is critical to the financial security of retired pastors and surviving spouses.

The ELCIC transferred $ 2,000,000 of ELCIC assets to the pension plan in December, 2005. This amount is approximately double the total 2007 ELCIC benevolence receipts. Note 5 of the financial statements of the pension plan for December 31, 2007 indicate that the ELCIC contributed an additional $ 550,000 to the unfunded pension liability. After the 2007 ELCIC Convention, the National Church Council of the ELCIC assumed a liability of $ 5,000,000 by providing the Superintendent of Pensions with an Irrevocable Letter of Credit. If the Superintendent of Pensions demanded that the ELCIC place $ 5,000,000 of its liquid assets up as security for the pension plan liability, it appears that the plan may be in serious trouble. Total net assets of the ELCIC, excluding illiquid Mortgages Receivable and Land investments, amount to approximately $ 8,000,000. If the Superintendent of Pensions requires full payment on the Letter of Credit, net assets of the ELCIC excluding illiquid Mortgages Receivable and Land investments will be reduced to approximately $ 3,000,000.

The ELCIC has demanded extra contributions from congregations to cover the pension liability for pensions promised to retirees. In 2007, congregations were required to provide approximately $ 1,700,000 to the ELCIC for the ELCIC’s unfunded pension obligation. This means that congregations are providing approximately 70% more funds to the ELCIC in past service pension assessments than they are providing in total benevolence for ELCIC operations. The past service ELCIC pension liability payments have become a significant burden on many congregations. Therefore, it is imperative that congregations and other stakeholders have access to all relevant information regarding the management of the pension fund, including actuarial mortality assumptions. The actuarial mortality assumptions and actual results of the past two years as per the Mercer (Canada) Limited actuarial report prepared for the ELCIC and Superintendent of Pensions is as follows:

Actual Number of Deaths Predicted Number of Deaths

2006 19 27

2007 18 29

If the number of predicted deaths of pension members is consistently higher than the actual number of deaths, the actuarial mortality assumptions may be too optimistic. The determination of the ELCIC pension liability may be understated if the estimate of the size of the pension liability is based on overly optimistic mortality assumptions.

The impact of optimistic actuarial assumptions could massively increase the pension liability, which would require the ELCIC to transfer additional assets to the pension plan and/or demand even higher contributions from congregations.

If the ELCIC requires that congregations fund its past service pension obligations it should insure that all administration of pensions assets and liabilities is open and transparent to all stakeholders including pastors and spouses receiving pensions.

The unfunded pension liability, as per page 5 of the 2007 Annual Report of the ELCIC Pension Plan (“Annual Report”), is $ 9,516,274. This liability increased by 32.4% from the prior year. This means that even after congregations contributed an extra $ 1,700,000 and the ELCIC contributed an extra $ 550,000 to the ELCIC pension plan in 2007, the unfunded liability increased by $ 2,326,233. If this trend continues, the size of the pension liability poses a serious threat to the financial security of retired pastors, surviving spouses and the future existence of the ELCIC. This increase in liability was calculated employing mortality assumptions that understated pension member deaths by an average of 33% in 2006 and 2007. If the pension liability was calculated using mortality assumptions that reflect the actual mortality of the past two years, the pension liability would be much higher.

Any predictions for future pension liabilities are based on assumptions. The 2007 Annual Report (page 3) concludes with the statement, “We also express our deep and sincere thanks to the congregations and all the ELCIC members for meeting the funding requirements this past year and their continued commitment to seeing the deficiency eliminated over the next eight years.” If this statement is accurate, it is essential that all stakeholders be informed of the assumptions on which the prediction is based. If this statement is based on inappropriate mortality assumptions, the prediction of eliminating the pension deficit in eight years may be incorrect. It is imperative that, in order to meet the commitments of the pension plan to retired pastors and surviving spouses, all relevant information should be made available to all stakeholders, including congregations.

The availability of all relevant pension information should allow congregations, synods, and active and retired pastors to determine if the existing method of administrating the pension assets and liabilities by ELCIC Groups Services Inc. is the most appropriate and efficient structure. The December 31, 2007 audited financial statements of the pension plan indicate that management, custodial and administration fees amounted to $ 920,652. There may be other approaches to administration of the pension assets and liabilities that could be more effective and offer more financial security to both active and retired pastors at a lower cost to congregations. It is impossible to properly analyze whether the current pension structure will meet the commitments made to hundreds of retired pastors and surviving spouses without full and transparent access to all relevant pension information.