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Tomorrow Newsletter 4th Quarter 2016

Dear Friend,

Another year is almost behind us and the articles that we share with you in this issue represent a small slice of the work we have been engaged in to serve you better.
Throughout 2016, Rev. Dr. Margaret Marcuson has served as our guest writer with an insightful series on Stewardship and Giving. In this issue, she concludes that series with the article, “Moving Beyond Scarcity to Sufficiency.” We are grateful for the wisdom she has shared which has enriched our understanding of giving and the ways that pastors can model and encourage generosity.

We know from our research that debt stress is higher amongst pastors than the average American. With this in mind, we begin a three-part series on Debt Management with the article, “Three Steps to Effectively Manage Your Debt.” The Christmas gift-giving season can be a time during which many people accumulate debt. We hope that this series will provide helpful tools to map out a plan for reducing your debt in 2017.

MMBB Investment Manager, Mark Menchin, has written an in-depth article, “The Relationship Between MMBB Investment Options and Risk” which explains the principles involved when you consider the time horizon of your investments relative to your expected retirement date. Understanding the impact that time can have on investments may help you to clarify your investment choices as you save for retirement. For assistance with this or any aspect of your portfolio or putting together a financial plan – please call us at 800.986.6222 or email .(JavaScript must be enabled to view this email address).

The annuity payout was announced during a webinar that was held on November 7, 2016. The webinar can be found online at “The MMBB Financial Services Annuity – 2017 Payout” reviews the factors that need to be considered by the Board of Managers in order to calculate the annuity including the actual value of a unit in the Annuity Fund, investment experience, the 4% advance earnings assumption and actuarial experience.

Many of you have received notification by mail and email of the Long-Term Care coverage that we are making available to MMBB members through ACSIA Partners. We outline again the highlights of this offering for your consideration as the enrollment period draws to a close on December 31, 2016.

Finally, let us not forgot the true meaning of this Advent season as we remember the birth of the Christ child. He is called Emmanuel, a reminder that in him, God is with us. May the Hope, Peace, Joy and Love of this season be with you and yours.


Louis P. Barbarin, CPA, Chief Executive Officer

By Margaret J. Marcuson

We live in a culture that has abundant resources, but as the church landscape has changed, many congregations are more focused on their diminishing resources and a sense of scarcity. When we can preach God’s sufficiency, proclaim it, and live it, we can help our people move away from fear and toward freedom.

It’s true that many churches are smaller than they used to be, and have fewer resources. Even those that are growing notice differences in how their people give, and can struggle to meet their operating budget. Pastors wonder how they will support their ministries in the future, and this raises everyone’s anxiety. The Rev. Dr. Amy Butler, pastor of The Riverside Church in New York, says, “We are undergoing this great institutional shift. People keep saying the church is dying—the church is not dying, the church is changing.” She adds, “Every time something familiar changes, we flip out. That is where this attitude of scarcity weasels its way into our corporate life. When we think we are losing members, or we don’t have as much money as we used to, we clutch things harder.” It’s challenging to provide leadership for the future when everyone in the room is worried about survival. Rev. Phineas Marr, pastor of the First Baptist Church of Kenosha, Wisconsin, says, “Any church I’ve been in operates out of scarcity and fear.” He sees how churches have the mindset of trying to survive, grasping for more members. In congregation after congregation this mindset shuts down creativity and experimentation—the very qualities we need, not only to survive, but to thrive as communities of faith.

How can leaders help congregations move beyond scarcity to a sense of sufficiency? Marr says it’s not easy. He tries to give his small church perspective. Though it may be nearing the end of its life, he says to his people, “You lasted 180 years, three times longer than the Crystal Cathedral.” He challenges them to celebrate the ministry they have had over those years. We have to be honest about the losses, while framing it in the wider context of God’s grace and hope. Butler suggests that simply naming what is going on can help: “There will not be as many people in the pews on Sunday as 50 years ago. That is not failure, that is a fact. Name that, and give people a framework for interpreting it.” This is an opportunity for the church to imagine a new future: “We worship a God who is bringing life out of death; ever creating.” She says that churches are living out this process right now. Leaders can look beyond apparent death to God-given opportunities for renewal.

Remember, leaders can’t teach their people what they don’t know. Pastors can be as caught in a sense of scarcity as the people in the pews. To move people toward a sense of sufficiency, we must claim it for ourselves. We can cultivate our own sense of sufficiency in several ways. First, consider our situation both globally and historically: you’ll see how wealthy we truly are, as individuals and as congregations. (See the website ( to get a global perspective on your own resources.) When I am tempted by thoughts of scarcity, I remember the countless sources of plenty, from the food I eat to the people who touch my life daily to the freedom to worship.

Second, giving helps us sense the sufficiency of God’s provision. Early on, Amy Butler’s mentor said to her, “You just need to tithe,” as a leadership tool but also as a spiritual practice. She has always built tithing into her financial life. The practice of regular giving enables us to loosen our grip on what we have and move beyond the fear that we won’t have enough.

A third way to claim sufficiency is by paying attention to our own spending and how we relate to the things we have. Marr tells his story of going through a divorce and having to significantly reduce his spending. As difficult as it was, it became a spiritual practice of simplicity. He says, “If people took the gospel seriously, people would have everything they need, because they don’t need that much.” Learning this lesson through experience has changed how he approaches his possessions. Consider what you truly need and how you spend what you have. This spiritual practice can transform our experience of money and give us a new sense of having enough.

Finally, we can look at our own people with the eyes of sufficiency. Marr sees it in his own church: “I used to look at my people and see what they are not, now I look at them and see what they are.” When pastors accept their churches as they are and see them as beloved by God and touched by hope, there is, paradoxically, more room for a shift to take place. If we claim for ourselves the message of hope amid hopelessness and death out of life, at least a little more today than we did yesterday, we will be better able to lead our people on the journey toward a sense of God’s sufficiency.

While it’s a challenging time for many churches, there are signs of hope. There’s a frequently expressed myth that young people don’t give, but as Amy Butler says, “People give to what they believe in.” Riverside experimented with offering a Freedom School this summer which needed $50,000 that was not in the budget. Using an online platform, they raised $80,000 in six weeks.

It’s easy for pastors to get frustrated and feel negative. It can be a challenge when the finance committee resists online giving or vetoes every mission opportunity because “we can’t afford it.” However, we can claim sufficiency by first celebrating the abundance of resources we have, both financial and interpersonal. Start by looking at your checkbook, your church building, your people and yourself and celebrating. We are enough, our people are enough, we have enough, and our God is enough.

Margaret Marcuson helps clergy and churches energize their ministry and fund their vision. She speaks and writes on leadership and works with faith leaders nationally as a consultant and coach. An American Baptist minister, she was the pastor of the First Baptist Church of Gardner, Massachusetts for 13 years.

Get the free mini-course “Six Shifts to Sustain Your Ministry.” at

The MMBB annuity is designed to meet the unique needs of the faith-based community.

Features of the MMBB Annuity The MMBB annuity provides you retirement income that will last as long as you live. If you chose one of MMBB’s joint annuity options, your spouse will also receive lifetime income in the event of your death.

The annuity payout is variable. This means the amount paid to you changes annually based on how the investment markets perform as well as other factors.

The MMBB annuity provides downside protection. Your annuity will not drop more than 5% in the first year of market underperformance or more than 10% in subsequent years of market decline.

MMBB credits you with 4% more units in the Annuity Fund than you actually purchase. In other words, if you purchase 100 units in the Annuity Fund, MMBB credits you with 4 additional units. We call this our 4% Advance Earnings Assumption.

How the Annuity Payout Value is Calculated Determining the annuity payout is a five-step process.

Step 1 – Investment Performance. From September 30, 2015 through September 30, 2016,the Annuity Fund experienced a gain of 6.48%, within 1% of what we might expect for long-term average return. Global stock market returns were mixed: MMBB’s investments in developed countries, including the US, were not impressive, however, the emerging markets where we also have a small allocation, surprised with a double digit return. More gratifying was that our private and real estate investments were positive contributors to the total return of the Annuity Fund. However, the payout value must be based on the underlying value of assets.

Step 2 – Underlying Value of the Annuity Fund. The payout value of $71.33 exceeded the underlying value of 9/30/15, which was actually $68.39. This is the amount from which to begin our calculation. When we apply the gain of 6.48% to the underlying asset value ($68.39), the result relative to the current payout value is reduced to 2.09%.

Step 3 – Applying the 4% Advance Earnings Assumption. When we apply the 4% Advance Earnings Assumption on your investment in the Annuity Fund, the future payout value then falls below the existing payout value by 1.84% or $70.02.

Step 4 – Actuarial Adjustment. In order to secure the Annuity Fund, we must calculate expected payout obligations based on expected lifetimes of our annuitants. If the actuarial assumptions change, we may have to make adjustments. The value must be adjusted to reflect a $0.86 decrease due to demographic experience and the difference between prior year payout and 12-month
average of underlying annuity units. The primary driver of this loss was mortality experience. This year the rate of deaths among our retiree population was notably lower than expected, and lower than prior years.

Step 5 – Determining a Value. When we calculate the payout value on September 30 for the ensuing year, we use the higher of

  • The unique or current value of a unit in the Annuity Fund – $69.16
  • The six-month average value of a unit in the Annuity Fund – $68.23
  • The downside guarantee (90% of the current payout value) – $64.20

As of September 30, 2016, the unique value was the highest of the aforementioned values at $69.16 (or 3.04% below the 2016 payout of $71.33).

MMBB’s Board of Managers voted to infuse the Annuity Fund to support a payout value of $71.33 for another calendar year, through the end of 2017. The infusion will be taken from the Special Benefits Fund. The Special Benefits Fund provides disability income, and Retirement Plan premium support and widowed spousal benefits, medical premium support, and other benefits for eligible MMBB members. The Board has the discretion to use the Special Benefits Fund for other purposes consistent with the objective of the fund to support MMBB members.

This action was taken in consultation with our actuary after it was determined that the Special Benefits Fund would remain sufficiently funded to meet all expected future special benefits obligations. Although the Board of Managers was able to keep the annuity payout unchanged, we realize that this may put stress on your finances. We can help.First, as part of our ministry, MMBB has funds available to provide assistance if you find yourself making choices about purchasing food, prescription drugs, medical services, home repairs or meeting other needs.

Second, we invite you to contact one of our Certified Financial Planner™ professionals at 800.986.6222 or They can work with you to develop a plan that enables you to meet your financial goals. Please do not hesitate to contact us.

To see how the relationship between the annuity payout value and the actual value of a unit of the Annuity Fund vary over time, see the Annuity Fund Gap Tracker :(> Our Services and Plans> The MMBB Annuity> Calculating the Annuity Payout). The Gap Tracker is updated at the beginning of each month.

By Rev. Dr. Patricia L. Hunter CFP

With this article, MMBB Financial Services begins a three-part series on how to effectively manage your debt so that you may focus on the important things in your life such as your family and your ministry. Part one addresses establishing goals. Part two will provide information on developing a budget and part three will demonstrate how to identify and eliminate debt.

MMBB understands the unique financial challenges faced by pastors and church workers because we are not only a financial services institution, but our ministry is dedicated to serving our members by providing financial services and education to ensure a secure future.

Consumer debt has risen to unprecedented levels among the U.S. population in recent years. (After adjusting for inflation, household debt has grown 15% faster than household income since 2003 according to a study by Having debt can prevent us from living our best life. We may spend time worrying about paying the next bill instead of quality time with family, friends, or engaging in recreational activities.

Managing excess debt can also prevent us from doing our best ministry. Energy needed to serve God’s people is instead focused on worrying about the next due date. When pastors are worried about debt, decisions about ministry may be made from a purely economic perspective instead of what is best for God’s people. Research reveals that the level of stress connected with debt is twice as high among pastors than the general population.

Debt stress has been linked to a wide range of problems for individuals, households and institutions. Debt levels adversely impact family life, job performance and health. The first step to alleviating this stress and managing debt is to establish goals.

Personal and financial goals give us incentives to reduce our debt. Setting realistic and measurable goals that allow you to track your progress is the key to achieving your financial goals. You need to ask yourself, “Where do I want to be financially in 5, 10, or 20 years?” Whether you are saving for a down payment for a home, children’s college education, a family trip to Europe, purchasing that dream set of golf clubs, or retiring at age 62, you need to visualize your goal. Know what you are working for by clearly keeping the goal in mind. Posting a reminder of the goal where you can see it throughout the week is one way to keep yourself motivated. The following questions should be considered when setting financial goals.

What is the time horizon for your goals?

We can have both long-term and short-term financial goals. Short-term goals are smaller steps that help you achieve your long-term financial goals by adjusting your spending habits and lifestyle. Short-term goals can include putting a plan into place to pay off debt and actively contributing to an emergency fund. Long-term goals are those which you can accomplish in two years or more, as they require additional funds. Examples of long-term financial goals can include saving for retirement, amassing an emergency fund of 6-9 months of household expenses, and paying off consumer debt or a mortgage. List your future financial needs and desires, as well as how much you need to save.

Are your goals S.M.A.R.T. (Specific, Measurable, Attainable, Realistic, Timely)?

To stay focused be specific when describing your goals. You also need to be realistic. When people set goals that are overly ambitious, they tend to give up before reaching them. Goals should be difficult to achieve, but not impossible. Prioritize your goals and monitor your progress. Celebrate when you hit a milestone. Setting S.M.A.R.T. goals helps you stay focused on achieving them. Putting your goals in writing makes them seem more real. Be sure to read your goals out loud, and often. That will help bring them to life and motivate you further as you move from intention to actualization. At MMBB Financial Services, we believe that setting S.M.A.R.T. goals is an essential first step towards putting a financial plan into action. For more information on setting S.M.A.R.T. financial goals visit the Financial Planning section of the MMBB website and see Setting Goals.

Once you have established your financial goals, you can move on to developing a budget. This will be covered in part two of the series in the next issue of Tomorrow.

By Mark Menchin, Investment Manager

Active employees who are MMBB Financial Services members have a whole host of investment options to choose from in order to accumulate sufficient funds for retirement. However, an important question that you must consider is the degree to which risk should apply in making the appropriate investment decision.

Few people consider their time horizon (i.e., the number of years before retirement) and the impact it has on choosing an appropriate investment option as well as the period in which to invest in it. As you age, your time horizon before retirement declines, limiting the number and types of investment options that you should consider. For example, fixed income funds are generally considered to be much less volatile than equities. They are thought to provide more financial security to older participants who are concerned with poor return performance as they near their retirement. However, in terms of the probability of negative returns, plain “vanilla” fixed income securities can be risky. This is particularly true in the current period of very low annual yields when negative returns in the short run become more likely.

MMBB Defined Plan Descriptions
Although MMBB provides nine Defined Contribution (DC) investment options, our analysis will concentrate on four of the most popular investment options. The first option we’ll look at is the Balanced Fund which serves as the default option and constitutes approximately 82% of all net asset values. This is a multi-asset fund which invests in both equity and fixed income asset classes. The second fund, the New Horizons Fund also features equity and fixed income asset classes but also includes private equity, timber and real estate investments. The third option is the US Equity Index Fund. An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor’s 500 Index (S&P 500). The US Equity Index Fund is very similar to a Wilshire 5000 overall equity type of index. This registers the highest overall volatility of any of the fund options. Finally, we will examine the US Bond Fund which is a broad fixed income fund including government, corporate, and securitized instruments (like mortgage backed and asset backed securities). The benchmark for this fund is the Barclays US aggregate bond index. Together, these four funds comprise nearly 92% of all accumulated funds invested by MMBB active members. The following analysis demonstrates a possible distribution of returns for each of the four fund options based on average returns and the probability of favorable or unfavorable outcomes. The simulations are based on both historic data as well as projections of average returns between various types of asset classes. The objective is to determine downside risk measured by the probability that a person’s average return will be negative over various time periods. Obviously a negative rate of return will reduce your balance over the relevant time horizon. Regardless of which of the four options you choose, the longer the average time period, the lower the likelihood of volatility. This makes sense since daily, monthly and even annual rates of returns tend to be offset over longer periods of time as a result of
reducing short term irregularities over time. Clearly, equity returns will vary more than fixed income returns for any given time period. However, each asset class or fund will still measure less volatility as the time horizon widens.

Comparisons of Fund Results
Simulations were figured over 1, 3, 5, 7, 10, and 15- year time horizons, producing probability distributions of average returns, standard deviations, and likelihoods of achieving specific levels of return. The criteria we used was to determine the probability that we could receive negative returns over any one of these time horizons.

The graph below compares the probability of registering negative returns for the Balanced, New Horizons, the US Equity Index Fund and the US Bond Fund. For Balanced Fund investors, the probability of a negative returns decreases significantly over an average 15- year period. This confirms the extent to which longer periods dramatically lower downside risk. This compares with a slightly lower negative probability over both a one year and a 15-year period for those investing in the New Horizons Fund. As expected the US Equity Index Fund has the highest likelihood of obtaining negative returns. While overall the US Bond Fund has the smallest likelihood of registering negative average returns, there is little difference in downside risk during any given single year period. This is due to the fact that since MMBB is expecting only a small average annual return for the US Bond Fund, even relatively low downside volatility during very short periods can lead to negative returns. In contrast the New Horizons and Balanced Funds have higher average annual returns. In the short run the much higher returns of these two funds are offset by their significantly higher volatility. This makes their short-term likelihood of downside returns within any given year quite comparable to the US Bond Fund. In summary this analysis demonstrates that participants who are less than ten years from retirement would be more prudent to invest in the Balanced or New Horizon Funds. The US Bond Fund provides only slightly more downside relief with significantly less return. As the time frame to retirement widens beyond ten years, greater exposure to the US Equity Index Fund becomes more prudent. This demonstrates that the risk of slightly higher negative returns is offset by higher potential returns relative to the other three options. The table shows that with 15 years before retirement there is less than a 10% chance of receiving negative average returns from even the US Equity Index Fund. However, if you invested in the US Equity Index Fund with less than a 7- year horizon the probability of receiving a negative return rises to above 15%. This creates the need for a stronger tolerance for the potential of downside risk.

To learn more about your MMBB investment options contact one of our Certified Financial Planner™ professionals at 800.986.6222 or

MMBB Financial Services is pleased to introduce an opportunity for members to acquire long-term care insurance. All eligible MMBB members recently received a mailing from ACSIA Partners detailing the availability of long-term care insurance.

We have invited ACSIA Partners, one of the largest long-term care insurance agencies in the nation, to assist our members and their families in preparing for the future through the expert advice of their licensed representatives. During the Open Enrollment Period, which began on October 1, 2016 and ends on December 31, 2016, MMBB members and their families will be able to take advantage of gender neutral pricing, a 5% discount and simplified underwriting (member only eligible for underwriting). Coverage is effective January 1, 2017. Long-term care coverage can help protect your family savings from the medical and care costs which are not covered by traditional health insurance or government programs such as Medicare.

Long-term care insurance may help you:

  • Maintain control of your care
    Long-term care insurance can be used to pay for care in a nursing home, assisted living facility, or an adult day care center, but can also be used to help fund in-home care services such as cooking and cleaning – allowing you to stay at home longer.
  • Protect your nest egg
    Long-term care insurance is often purchased to protect assets from the high cost of long-term care. Having a long-term care plan in place will help you avoid a gap in coverage and ensure you receive the quality care you need in the event of a debilitating accident or health condition.
  • Reduce stress on family members and friends
    You may think, “I don’t need long-term care insurance because I’m not going to a nursing home!” The reality is that you may be right; but don’t confuse that with needing care. Seventy-eight percent of those in need of long-term care receive that care informally from family members or friends.

We invite you to learn more about this important benefit and all of the options now available to you:

  • Visit, where you will be able to view a series of educational videos and other valuable resources on long-term care insurance. You can also register to view a long-term care webinar presented by ACSIA Partners LTC Specialists.
  • Contact ACSIA Partners at 888.640.0272 to schedule a no cost, no obligation 1-on-1 consultation.

If you have been considering long-term care insurance for yourself or a loved one, now is the time to act. Take advantage of the special MMBB member discount to save 5% on premiums for yourself and family members. Start preparing for your future today. The Open Enrollment Period ends on December 31, 2016. Call ACSIA Partners at 888.640.0272 for more information or to schedule your no cost, no obligation consultation.

Please be advised that this is not an endorsement by MMBB of ACSIA Partners or Transamerica.