BBT Board approves five new investment options, expands SRI guidelines.

In order to provide its members and clients with a wider array of investment options, the Board of Directors of Brethren Benefit Trust (BBT) has approved the addition of five additional fund choices for both Brethren Pension Plan and Brethren Foundation.

At its annual fall meeting, held Nov. 19-21 in Greenville, Ohio, the board approved the addition of a Treasury Inflation-Protected Securities Fund, a High-Yield Bond Fund, an Emerging Markets Stock Fund, a Public Real Estate Fund, and a Commodities-Based Fund to the investment guidelines of both entities. In the next few months, staff will be working with investment consultants to determine which funds are appropriate to offer to members and clients at this time, and the implementation of these funds will be completed as quickly as possible in 2010.

The board also approved staff recommendation that the Brethren Pension Plan’s Common Stock Fund be unbundled, which means staff may now consider also offering one or more of the five investment components of the Common Stock Fund as individual investment options. These include Value, Growth, Core, Small-Cap, and International investments.

"Our members and clients have been asking for additional investment options, and we are committed to developing new investment choices that complement those already offered by Brethren Pension Plan and Brethren Foundation," said Nevin Dulabaum, BBT president. "We do believe that the increased selection will bring an increased demand for asset allocation assistance, and so we are working to develop such a service that we anticipate providing in some form."

The board also accepted a significant revision of its socially responsible investing guidelines, as prompted by statements of the Church of the Brethren Annual Conference. These include prohibitions against companies generating 10 percent or more of their income from firearms and weapons of mass destruction ("Violence and the Use of Firearms," 1978 Annual Conference, and "Children and Violence," 1999 Annual Conference); and abortion procedures or the manufacture or sale of products used primarily to complete abortion procedures ("Statement on Abortion," 1984 Annual Conference).

Additionally, restrictions now apply to both domestic and international companies with a history of child labor ("Statement on Child Exploitation," 1997 Annual Conference); slavery ("Resolution on Slavery in the 21st Century," 2008 Annual Conference); violations of human rights; and violations of environmental regulations.

Brethren Pension Plan and BFI’s SRI guidelines continue to restrict investments in companies that generate 10 percent or more of their income from the manufacture and sale of alcoholic beverages and tobacco; the production, sale, or distribution of pornography; the manufacture or operation of gambling devices; or through contracts with the US Department of Defense. Publicly traded companies holding the 25 largest Defense contracts are also excluded from BBT’s investment portfolios.

"The previous guidelines served us well, but we wanted to be certain that they are seated in the positions of the Church of the Brethren as defined by Annual Conference statements," said Steve Mason, director of Brethren Foundation and coordinator of socially responsible investing activities for BBT. "We discovered a few gaps in our SRI policies, and we have now filled them."

One of BBT’s strongest allies in its socially responsible investing program has been Boston Common Asset Management, one of BBT’s eight investment management firms. Geeta Aiyer, Boston Common’s president and chief investment officer of US Equities, and Matt Zalosh, CIO of International Equities, reported on the firm’s management of BBT and BFI’s US large-cap core equity and international equity funds over the last three years. Because it continues to meet BBT’s performance standards--staying in the top quartile among its peers and meeting or exceeding relevant benchmarks--the board voted to keep Boston Common as the manager of these funds.

In other business, the BBT board worked on improving insurance and pension services. As BBT’s Brethren Medical Plan becomes a stand-alone provider starting Jan. 1, 2010, the board recognized the need for an additional management position in that department and moved to create a manager of sales for health and welfare benefits position. Similarly, the board approved a BBT staff recommendation to create a manager of Pension Operations position, so that Brethren Pension Plan director Scott Douglas can spend more time meeting with members and addressing increased regulatory requirements. This latter move will return Pension Plan staffing to the level it had for most of this decade.

These positions are reflected in the approved 2010 BBT budget, which reflects total expenses of $3,730,195.

The Church Workers’ Assistance Plan was the subject of much discernment at the two-day meeting. The plan provides financial assistance to any active or retired Church of the Brethren pastor or church worker through grants; $147,567.59 was distributed through this program in 2009. Congregations that participate in the Pension Plan contribute one percent of their total employee compensation to the plan; an Annual Conference resolution mandates that congregations not in the Pension Plan contribute a similar amount.

The board approved a resolution declaring that 100 percent of Church Workers’ Assistance Plan grants and Pension Plan income can be considered housing allowance. This resolution includes a statement indicating that, because the Internal Revenue Service has not declared the eligibility of this grant as housing allowance, to do so could be treated as a violation of code; grant recipients are directed to consult with a tax adviser before designating a grant as housing allowance.

BBT staff members will further examine the Church Workers’ Assistance Plan, including issues related to eligibility, the intended use of the plan, and funding, with the Council of District Executives and the Pastoral Compensation and Benefits Advisory Committee in 2010. Proposed changes to the plan are expected to be presented to the board at its July meeting in Pittsburgh, Pa.

In an effort to increase communication between BBT and its constituents, the staff and board met with 40 local members at a luncheon at the Brethren Retirement Community in Greenville, Ohio, on Nov. 20.

-- Brian Solem is publications coordinator for Brethren Benefit Trust.

Source: 1/14/2010 Newsline