Curtis D. Sharp
Officer for Denominational and Public Relations
214-720-2127
Curt.Sharp@GuideStone.orgHawkins Reports Third Year of Positive Trends
November 9, 2006
DALLAS — A third year of positive trends in insurance rates were reported to trustees of GuideStone Financial Resources of the Southern Baptist Convention (GuideStone) along with positive performance of the investment funds during their Nov. 6-7 meeting in Dallas.
President O.S. Hawkins told trustees that for the third consecutive year, GuideStone has good news for its medical plan participants.
“For the third year in a row, we will have no medical inflation increase in our rates for participants in our personal medical plans. This year we were able to give 57% of our personal plan participants a rate decrease. For 2007, 40% of our personal plan participants will receive a rate decrease,” Hawkins said. “In an environment where national medical costs are trending upwards at 8-12% per year, we have effectively stabilized rates while improving benefits for our participants.”
The transition to a single network provider, Highmark Blue Cross Blue Shield®, has resulted in deeper discounts for medical services resulting in lower claims. Many participants have chosen higher deductible plans which have contributed to GuideStone’s ability to stabilize rates. GuideStone’s pharmacy coalition agreement with Medco Health Solutions has also contributed to containing costs. While the national trend in pharmacy increases is running approximately 12%, pharmacy costs for GuideStone’s plans have only increased by 6%.
In his report to trustees, Hawkins framed his remarks in the vision statement of GuideStone which states, “GuideStone Financial Resources exists to honor the Lord by being a lifelong partner with its participants in enhancing their financial security.”
“In every facet of our work, we look through the lens of this vision statement to focus our tasks,” Hawkins said. The theme that will further direct GuideStone’s work for 2007 is found in Matthew 25:21. “We want to say to our participants, ‘Well done’ as they serve in their places of responsibility. The value proposition we offer our participants is performance guided by values.”
Hawkins also informed the trustees that the staff has launched a feasibility study in response to the motion referred to GuideStone from the 2006 Southern Baptist Convention. The motion made by Gary Smith of Arlington, Texas, asked GuideStone to study the feasibility of making GuideStone’s products and services available to members of Southern Baptist churches. GuideStone trustees will hear a report of the study at their next meeting in February of 2007.
John R. Jones, GuideStone’s chief operating officer, reviewed the key financial indicators for the first nine months of 2006. “In each area of our operations we are experiencing success,” he said.
Jones noted that in addition to the good news regarding medical rates for 2006, the growth in medical plan participants is also showing positive results. “While in past years we have seen declining participation in our medical plans, we are experiencing significant increases in new participants since Jan. 1, 2006. This increase in participants gives testimony to the competitiveness of medical plans for our participants,” he said.
Jones reported that assets under management for GuideStone Financial Resources totaled $8.989 billion at the end of September. He also shared the success of GuideStone’s investment programs offered through GuideStone Funds.
“A significant milestone was reached in August as GuideStone Funds celebrated its fifth anniversary. The track record of the funds over this period of time affirms that the funds were launched with skill and excellence,” Jones said.
For the five years ending Sept. 30, 2006, 11 of the 13 investment funds provided by GuideStone Funds (GS4 share class) were ranked in the top half of their peer universe by Lipper and 12 of 13 GuideStone Funds (GS4 share class) were below the Lipper median for fees.1 The peer universe includes all registered mutual funds with similar objectives according to total returns.2 For the most recent investment performance and fund ranking, please visit www.GuideStone.org.
Jones also announced that GuideStone Funds is expanding its investment choices for eligible retirement and retail participants with the launch of the MyDestination Funds on Jan. 2, 2007. These five registered date target funds will be managed to specific retirement dates and may be a suitable solution for investors of all ages looking to create or maintain a diversified, age-appropriate retirement choice in a single fund. Each of the MyDestination Funds is a diversified “fund-of-funds” that has an asset allocation that gradually becomes more conservative as an investor approaches retirement. The funds are designed for investors willing to bear additional expenses in exchange for automatic rebalancing.3
“We are offering these funds because of strong interest expressed by our participants and plans sponsors in recent market research and the growing acceptance of date target funds in the industry,” he said.
Other initiatives include new retirement plan products available to GuideStone plan participants as of Jan. 1, 2007. “Recent legislation has made it possible to permit Roth 403(b) and Roth 401(k) contributions in our retirement plans. We are pleased to offer our participants greater flexibility in how they save for retirement,” Jones said.
In the Insurance area, Jones updated trustees on the growth of GuideStone’s insurance program for the first nine months of 2006. As of the end of September, enrollment in GuideStone’ personal and group medical plans has experienced a net increase of more than 1,000 since Jan. 1, 2006.
Trustees received a report that participants receiving fixed annuity payments will not see an increase in their benefits in January of 2007. This report was based on the annual valuation of the Fixed Benefit Fund. The Fixed Benefit Fund is a pool of assets that is used to pay benefits to participants who have chosen to take a fixed annuity at retirement and also to pay benefits under Plan A. Unlike some corporate pension plans or Social Security, a fixed annuity payment does not include cost of living adjustments. In the past 20 years GuideStone has been pleased to pass along some benefit increases due to unusually good investment returns. However, most investment managers believe it is highly unlikely that investment returns in the foreseeable future will be similar to the returns experienced during the late 1980s and 1990s.
Gregory A. Bibb (KY), chairman of the trustees’ budget subcommittee, reviewed the operating budget proposed for 2007 and it was unanimously adopted by trustees.
“The trustee budget subcommittee and the staff have carefully prepared a budget that under girds our ministries and provides the resources to move ahead in developing future strategies that will help us fulfill our vision to enhance the financial security of our participants,” Bibb said.
GuideStone receives no Cooperative Program funds for operations from the Southern Baptist Convention, but pays all expenses from an advisory fee on its investment funds offered through GuideStone Funds. All receipts from Cooperative Program money are paid as financial assistance to needy retired ministers or denominational workers or their widows.
The trustees’ relief committee approved applications for nine, two-year monthly grants, and two for one-time emergency grants. Twenty-three individuals were added to the financial assistance roll or upgraded in their benefit amount during the quarter.
Other action by the relief committee included approving a $200 Christmas check for each financial assistance recipient on the roll Dec. 1, 2006. Funds to provide the special Christmas check are made possible through GuideStone’s endowment program. Individuals and churches are invited to participate in the Adopt An Annuitant program.
For more details on the Adopt An Annuitant ministry, call toll-free at 1-888-98-GUIDE (1-888-984-8433); visit the Adopt An Annuitant Web site; or send an e-mail message.
The next scheduled meeting of GuideStone trustees will be Feb. 26-27, 2007, in Dallas.
1Past performance is no guarantee of future results. Results reflect fee waivers and reimbursements by the investment adviser that will expire April 30, 2007, unless extended.
2Lipper Inc., a Reuters Company, is a nationally-recognized organization that compares the performance of mutual funds having similar investment objectives. The comparison is made across registered mutual funds, ranking the funds with similar objectives according to total returns. These investment returns are calculated after operating expenses have been deducted from each fund, but the rankings do not take sales charges into account. Lipper rankings are subject to change monthly, and past rankings are no guarantee of future results.
3By investing in the MyDestination Funds, participants will incur the expenses of the funds in addition to those of the underlying funds. Investors may invest in the funds directly, except for the Global Bond Fund. MyDestination Funds are also subject to the risks of the underlying funds they hold.
You should carefully consider the investment objectives, risks, charges and expenses of GuideStone Funds before investing. For a copy of the prospectus with this and other information about the funds please call 1-888-98-GUIDE (1-888-984-8433) or download a prospectus (pdf). You should read the prospectus carefully before investing.
A REGISTRATION STATEMENT FOR THE MYDESTINATION FUNDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. SHARES OF THE FUNDS MAY NOT BE SOLD, NOR MAY OFFERS TO BUY BE ACCEPTED, PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS COMMUNICATION IS NOT AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF FUND SHARES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION IN ANY SUCH STATE. Shares of the MyDestination Funds can be purchased on Jan. 2, 2007. A preliminary prospectus (pdf) may be obtained by calling, 1-888-98-GUIDE (1-888-984-8433). You should read the final prospectus carefully before investing.
GuideStone Funds shares are distributed by PFPC Distributors, Inc., a registered broker-dealer and underwriter of the funds, 760 Moore Rd., King of Prussia, PA 19406.
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