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MMBB Financial Services 2018 Annual Report

Report of the Chief Executive Officer

By Louis P. Barbarin

Planning Your Path to Financial Wellness
Following a path or pathway is integral to the way we live our lives. Whether it is a physical path on a road or a set of goals on a career path, it moves us from points A to B. But before you start your journey, you should have a plan.

To reach a destination where you’ve never been before, determining a route in advance can be an efficient and effective way to assure success. Using a GPS or a physical map to guide you will more than likely help you travel the right roads and avoid the possibility of never reaching your destination.

When a minister prepares a sermon, he or she decides on the scripture and the theme, conducts biblical research and creates an outline to guide him or her during the writing process. Without preparation, the sermon may lack purpose and cohesion, and listeners may not follow the message.

As the builder prepares to build a house, he or she relies on an architectural plan before laying the first brick. Without such a plan, the builder could construct a home unsuitable for occupancy instead of one with a solid foundation.

At MMBB, planning is also essential to the way we serve our members and carry out our mission. Helping you start on the right path to financial wellness is the core of MMBB’s ministry. Financial planning is key to financial wellness. It gives you a solid foundation for reaching your goals. Our financial experts guide you every step of the way on your financial journey, helping you steer toward your financial objectives.

We can also help your church or faith-based organization evaluate a current plan or create its first retirement and benefits program from the ground up.

Life is filled with many twists and turns, some of which can be difficult to navigate. MMBB is here to help you decide which way to turn when dealing with a challenge.

You show me the path of life. In your presence there is fullness of joy; in your right hand are pleasures forevermore. Psalms 16:11 (NRSV)

MMBB’s Strategic Pastoral Excellence Program Is Changing Lives
As part of our emphasis on planning, we have continued our Strategic Pastoral Excellence Program (SPEP), one of the initiatives under our Lilly Endowment Inc. grant. It is a robust three-year program designed to increase financial confidence and competency. The expectation is that the clergy and their spouses who are accepted into the program will engage in a transformative experience that will strengthen their financial wellness and well-being. We are working with young ministers, helping them to develop financial plans that will free them up to focus on their ministry. Ministers who are engaged in their second or third calls and lay church leaders are also benefiting from the program.

SPEP participants work with our CERTIFIED FINANCIAL PLANNER™ professionals to help them decide what to do now and what to do next on their journey to financial well- being. One attendee said that not only was her CFP® a good listener, but that she was also very helpful in asking the right questions. This is a remark that we heard from other participants who have worked with our CFP®s. Participants also attend sessions on debt management, taxes, compensation and retirement planning.

Because planning is so crucial to financial goals, MMBB CFP®s encourage SPEP participants to create a budget by breaking down any and all expenses. They show members how to make their financial goals part of their budgets and how their budgets can be a tool to help them think ahead.

As one SPEP attendee said, “This group has given me the courage to overcome my inability to be intentional about tracking my expenses. Now I am able to make better decisions about how I spend my money.”

One couple reported that they had begun to thank God for their money matters and that also gave them the ability to change their money attitudes. Perhaps most significant is that many couples cited increased ability to pay down their debt, which was a major stressor in their lives.

SPEP is designed to also help participants break the cycle of poor money management habits that are sometimes unconsciously rooted in participants’ upbringings. We aim to shift their mindsets to have a positive effect on their families, their congregations and future generations. Many pastoral leaders explained that they were not only the go-to person in their congregations but also in their extended families. One pastor, who was single, shared how he was thought of as “Uncle Money Bags” by his nieces and nephews, and even his sisters and brothers. Pastoral leaders found that by learning to say no initially, it reinforced their decisions to save more and give more in meaningful ways.

In 2018, two of our four cohorts that met offsite included several lay leaders. There was an emphasis on communications between pastoral and lay leaders and how the laity can be advocates for pastoral leaders in their congregations. The inclusion of the laity was not only well received, but it provided for richer conversations during the SPEP offsite. It was also helpful for clergy and laity to hear the same information at the same time. We observed that when there is real communication secrecy decreases.

Relationships between cohort members grew in their first year together, as they had the chance to connect even more intentionally through quarterly conference calls and offsite meetings. These relationships with other cohort members have created “safe spaces” for difficult discussions, giving participants the assurance that they are not alone. This has allowed them to learn from each other as they share best practices. SPEP members have not only worked to keep each other accountable for information shared but have also encouraged each other to build the confidence to change their financial stories.

A sustainability grant of $493,000 from the Lilly Endowment awarded in 2018 for the Strategic Pastoral Excellence Program runs through 2021. We look forward to extending this program to even more members.

Leveraging Our Publication Resources
In 2018, MMBB unveiled a new identity including a fresh public image with a new logo, messaging and color scheme that expresses the connection between faith and finance.

MMBB revitalized various publications including Getting Started on the Road to Retirement, which has a crisp new look, and the News and Notes annuitant newsletter. We added more lifestyle content on topics about healthy aging to help annuitants enjoy their golden years.

Three of our certified financial planning professionals appeared in an edition of Church Executive to discuss how to approach some of the biggest financial challenges for the clergy. Our Tomorrow newsletter included a three-part series discussing tax reform and how the Tax Cut and Jobs Act of 2017 may affect your finances. Other articles covered the Lilly Initiative’s Debt Stress Pilot Program, and a series concerning what members and spouses need to know when dealing with the death of an MMBB member. We also introduced a new column called Ask the CFP®, where our staff of CERTIFIED FINANCIAL PLANNER™ professionals answer your financial planning questions. We are taking advantage of every publication resource possible to assist members with improving their financial wellness.

I have taught you in the way of wisdom; I have led you in right paths. Proverbs 4:11 (NKJV)

Providing More Sophisticated Service Solutions
We completely revamped the satisfaction survey to focus on the overall satisfaction of those we serve so that we can enhance our response to members’ needs. Our Customer Relationship Management System lets us provide surveys in real-time so that we can address customer concerns immediately. We value member feedback and review it regularly to improve our service delivery.

When you went to college or seminary, you may have developed a plan to take coursework that would lead you on your path to a degree. You more than likely consulted with a counselor to make sure you took the appropriate courses for your major and to earn enough credits to graduate.

Similarly, our financial planners provide education that helps members navigate their way to increased financial literacy and wellness. Our financial planners are not driven by commissions and do not sell products: They are driven by ministry and therefore, this service is offered at no cost as a benefit of membership.

As one member commented, “MMBB is committed to building God’s kingdom and helping you to be better kingdom builders.”

We launched MMBB FINANCIAL PLANNERS, LLC, a wholly owned subsidiary of The Ministers and Missionaries Benefit Board (MMBB) to support financial literacy, wellness and personal financial planning among those we serve. We realize that financial planning is personal and specific to each individual, so it should be separate from MMBB Financial Services. MMBB Financial Planners, LLC, was created to be a readily identifiable entity dedicated to better customizing our financial coaching to individual members.

In 2018, staff continued to take advantage of new educational opportunities resulting in designations that are intended to enhance financial coaching and planning for you. A more specialized core of CFP®s with additional expertise can take a more
comprehensive look at your finances to help you determine if you have enough money to retire and to aid you in tackling monetary issues beyond retirement. The service center now has individuals who are qualified with the designations:

  • Wealth Management Certified Professional® (WMCP®) which takes a holistic view of a members’ finances.
  • Behavioral Financial Advisor™ (BFA™) that takes into account research on why people make financial decisions, which helps members focus on long-term goals rather than financial markets.

Our webinars, seminars and workshops teach members and their spouses about topics that will assist them in mapping out their financial goals. Last year, we offered six webinars: financial planning basics, retirement income planning, college planning, social security, long-term care planning and estate planning. MMBB provided 19 seminars and workshops, and 500 members attended Autumn Quest events. Autumn Quest workshops are designed to help members anticipate, plan and shape their retirement.

Roads are sometimes long and winding, but we are here to help members navigate the twists and turns that may arise on the path to financial well-being. Fundraising is a priority in those efforts. In 2018, through the Heritage of Sharing ministry, we awarded just under $4 million in grants and aid to assist members in need. This fundraising effort allowed us to provide emergency assistance, medical subsidies and educational grants to members and temporary premium assistance to churches in times of financial stress. Heritage of Sharing also enabled us to support the ministry through scholarships to career development centers for ministers and those seeking ordination.

Give careful thought to the paths for your feet and be steadfast in all your ways. Proverbs 4:26 (NIV)

We increased our efforts to strengthen our cybersecurity and deployed additional measures to protect our members’ and employers’ confidential data. As in previous years, MMBB met all cybersecurity compliance requirements mandated by the New York State Department of Financial Services for financial services organizations.

In 2018, we expanded our security awareness training for employees and implemented a new email screening system to enhance our efforts to maintain a safe environment for conducting business. This, in turn, allows us to increase safeguards to member and employer nonpublic information as we apply best practices for minimizing the risk of exposure.

During 2018, we completed testing of Ariel recordkeeping systems in order to launch the first phase of the project in January 2019. Ariel provides online financial and retirement/benefits solutions that will enhance MMBB’s ability to offer state of the art financial services, increase operational efficiencies and reduce cyber risk. The next phase in the effort, the Ariel Employer Portal, will position us to serve our employers more effectively as we transition from paper to online invoicing. It will also allow employers to perform certain activities online themselves through a self-service model. The paperless environment is faster and easier for employers and increases the accuracy of information. We are looking forward to rolling out additional features of the Employer Portal to enhance member and employer experiences.

Investment Strategy
2018 proved to be a challenging year for the capital markets, which is reflected in the investment performance of MMBB’s funds. Most notably, fears over trade wars and a global economic slowdown triggered volatility in the fourth quarter. As a result, the United States stock market experienced a nine percent drop in the broad equity indices in December. We continue to exert rigorous oversight of all assets under management.

MMBB’s Investment Committee approved a restructuring of the international equity asset class fund including changing money managers who comprise the asset class. The new architecture of the international equity asset class facilitates a better balance between growth and value stocks and allows us to significantly reduce management fees.

Early in 2018 MMBB launched the Fossil Fuel-Free Balanced Fund (“FFFBF”), expanding to 10 the number of fund options available to members. FFFBF offers environmentally sensitive members the ability to invest in a diversified fund of equities and fixed income, while excluding fossil fuels from their investments. The FFFBF implements excellent governance by using several screens to validate the exclusion of fossil fuels. MMBB continues to offer its original Balanced Fund and its New Horizons Fund, both diversified options.

At MMBB, we understand that a turbulent stock market may be a cause for concern for members who are retired as well as those nearing retirement. Despite economic factors and actuarial adjustments, the Annuity Fund had positive returns in 2018 resulting in an annuity payout value of $73.45 per unit that is modestly increased for 2019: 0.08 percent above the 2018 payout of $73.39. The payout was approved by MMBB’s Board of Managers at the Fall 2018 MMBB Board meeting. The Annuity Payout Value is determined on September 30 each year using the higher of three values: either the actual value of a unit of the Annuity Fund as of September 30; or the six-month average value of a unit of the Annuity Fund as of September 30; or the downside guarantee of 95 percent of the current payout value.

MMBB is here to help if the current value of the annuity payout puts stress on your finances. Our emergency funds provide assistance should you have to make choices about how to afford basic needs like food or medical services.

We live out our mission when we help our members achieve their financial goals. It is a joy for us to witness the transformation of people’s financial lives. It is a blessing to walk and work with our members on their journeys toward financial well-being. We continue to be inspired knowing that our ministry is making a difference in the lives of clergy, their families and their congregations.

Louis P. Barbarin
Chief Executive Officer

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