November 8, 2021
Board of Trustees Approves 2022 Annuity Increases
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 and annual dividends. These adjustments take effect in January of the coming year.
Portico determines future annuity adjustments based on the Funded Ratio of the ELCA Participating Annuity Investment Fund as of Sept. 30 of the current year, which was 1.22. This indicates a surplus (above 1.00) and resulted in the Portico Board of Trustees’ approval of an annuity payment increase for 2022.
- For annuitants receiving annually adjusted monthly payments (the vast majority), monthly payments will increase 7.3% in 2022.
- For annuitants receiving a dividend-eligible monthly payment, monthly payments will remain the same and a lump-sum cash dividend of 33.3% will be paid out in January 2022.
“The annuity fund delivered solid performance in 2021 and the Funded Ratio as of Sept. 30 is the highest used for the annual adjustment calculation since the new adjustment methodology began in 2011. The diversified portfolio, along with the annuity adjustment formula, help to moderate the annual adjustments,” said David Quello, Portico’s chief investment officer. “While the fund has benefitted from strong market performance, it is important to remember that the annual annuity adjustments can be positive or negative.”
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 in the ELCA Participating Annuity Trust 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.