November 2, 2020
Board of Trustees Approves 2021 Annuity Increases
Minneapolis — Each fall at its board of trustees meeting, Portico recommends annual adjustments to payments made to ELCA Participating Annuity Trust annuitants – changes to monthly variable annuity payments, annual dividends, and the bridge fund crediting rate. These adjustments take effect in January of the coming year.
Portico measures future annuity adjustments by calculating the Funded Ratio, which was positive (1.093) as of Sept. 30, 2020. This resulted in the Portico board of trustees’ approval of an annuity payment increase for 2021.
- For annuitants receiving annually adjusted monthly payments (the vast majority), their monthly payments will increase 3.1% in 2021.
- For annuitants receiving a dividend-eligible monthly payment, their monthly payments will remain the same and a lump-sum cash dividend of 14.5% will be paid out in Jan. 2021.
- For future annuitants with money in an ELCA Participating Annuity Bridge Account, their interest-crediting rate will be 6.3% in 2021.
“Thanks to broad diversification of investments, the annuity fund was able to weather volatility in 2020, retain value, and deliver these annuity increases,” said David Quello, Portico’s chief investment officer. “It’s important to remember, however, that continued volatility could negatively affect future payments.”
Each year, Portico follows an approved formula for determining annuity adjustments, based largely on the status of the Funded Ratio on Sept. 30.
- If the Funded Ratio exceeds 1.0 as of Sept. 30, an increase in payments is possible, with one-third of the surplus going to members, and the other two-thirds retained by Portico to help ensure future annuity payments.
- If the Funded Ratio is less than 1.0 as of Sept. 30, a decrease in payments is possible.
Members with questions about the ELCA Participating Annuity Trust can contact the Portico Customer Care Center at 800.352.2876 or via email at mail@PorticoBenefits.org.
About the ELCA Participating Annuity
The ELCA Participating Annuity provides monthly annuity payments for life to participating ELCA plan members. Participating annuity payments are adjusted based on the investment performance and mortality experience of the Investment Fund. The assets are held in trust and are separate from other Portico assets. The ELCA Participating Annuity Trust does not rely on future cash flows to pay current benefits, so annuitants are not dependent on active members to fund their annuity payments.
About Portico Benefit Services
Portico Benefit Services provides health, retirement, disability, and survivor benefits and related services for approximately 40,000 active and retired ELCA pastors, rostered laypersons, lay employees, and their families.