Exclusions as of 06/30/2018 Company Name Country ... - Wespath
CPP Funding Update - Wespath vs. Typical Programs • Previous actuarial studies have established...
Transcript of CPP Funding Update - Wespath vs. Typical Programs • Previous actuarial studies have established...
Comprehensive Protection Plan(CPP) Risk Management Metrics
• Brief Benefit Overview
• Premium Ratio
• Reserve Metrics■ Target
■ Minimum
■ Rate Action
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CPP Benefits: Disability
Payable Upon Disability
While Premiums Are Paid
After Premiums
CeaseDisability income X
CRSP-DC contributions X
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CPP Benefits: Death of Clergy
Payable Upon Death of Clergy
While Premiums Are
Paid
After Premiums
CeaseLump sum benefit:
Active/disabled clergy death X
Retired clergy death X
Annuity benefits:
Minimum survivor’s pension X
Child income X
Child education X
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CPP Benefits: Death of Family
Payable Upon
While Premiums Are
Paid
After Premiums
CeaseDeath of spouse of:
Active/disabled clergy X
Retired clergy X
Deceased clergy X
Death of child of:
Active/disabled clergy X
Retired clergy X
Deceased clergy X
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CPP vs. Typical Programs
• CPP provides far greater coverage than the typical life and disability program both in terms of the type of benefits provided and the guaranteed coverage of spouses and children.
• Another unique feature of CPP is the long time horizon and process in effecting changes to either premiums or benefits.
• Benefits and premiums for most life and disability benefit programs at private plan sponsors are guaranteed only one year at a time.
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CPP vs. Typical Programs
• Previous actuarial studies have established that a market rate for the CPP program, starting new, would be approximately 4.5% of compensation compared to the pre-holiday rate of 3%.
• While historical asset levels have enabled a recent premium holiday, this is not sustainable longer term.
• The future sustainability of current benefits and the 3% premium is highly contingent upon strong investment returns and conclusion of the premium holiday.
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Premium Ratio
• The portion of future benefit payments that future premiums are expected to cover
• If less than 100%, CPP contributions will not be enough to pay for benefits due from the plan
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Minimum Reserve Metric
• The shortfall between expected future benefit payments and expected future premiums
• Compare to current assets
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Target Reserve Metric
• CPP is likely to endure* most market outcomes over the next 6-7 years
• 175% of Minimum Reserve
• Compare to current assets
* To maintain assets above Minimum Reservewithout adjusting either premiums or benefits
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Rate Action Reserve Metric
• CPP is likely NOT to make ends meet over time
• Petition General Conference to raise premiums*, lower benefits, or both
• 80% of Minimum Reserve
• Compare to current assets
* General Conference action is required to raise premiums above 4.4% T