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									Church of God
Benefits Board

                                                         Making a difference . . . One person at a time!
                                                                             July 2005 • Volume 7 • Issue 2

     Church of God Benefits Board's Assets Exceed
                     $200 Million

              ssets of the Church of God "Our growth has averaged nearly             members across the United States
              Benefits Board Inc. now    $17 million a year over the past five       and around the world through the
              exceed $200 million, the   years," said Art Rhodes, president          retirement services provided to mis-
    Board    of Trustees announced       and CEO of the Board. "Achieving            sionaries and military chaplains.
    recently.                            this milestone makes the Benefits           The retirement plan is available to
                                         Board a major participant in the            ministers and other church-related
    "When the Benefits Board was cre- industry."                                     employees in the Church of God.
    ated 11 years ago, none of us could
    have imagined reaching $100 mil-                                                  "While our assets are on the rise, our
    lion in assets, let alone $200 mil-                                               commitment to providing personal
    lion," said Jerry Dixon, chairman of                                              service to each of our participants
    the Board of Trustees. "God has                                                   will hold steady and strong,"
    truly blessed us with phenomenal                                                  Rhodes said. "Our mission is to pro-
    growth over the last decade."                                                     vide the best pension plan possible
                                                                                      for our ministers and church staff
    Dixon attributes the Board's dramat-     The Church of God Benefits Board, members."
    ic growth in assets to the number of     Inc., was created in 1994 as a sepa-
                                                                                                    In This Issue
    church-related employees joining         rate, but affiliate, organization of the
                                             Church of God, Cleveland, Tenn.                    •Locking in a Church
    the plan, the contributions made to
    the plan by the participants and their   Formally known as the Ministers'
                                                                                                •Put Retirement
    employer/church, and the Board's         Retirement Plan, the 403(b) church                 Savings First
    investments.                             pension plan has more than 4,500                   •Preventing Identity

   Internal Revenue Service                                                                         And More . . .
   Release Updated Publication for Ministers
   The Internal Revenue Service has released an updated version of Publication 517, entitled Social Security and Other
   Information for Members of the Clergy and Religious Workers. The publication can be accessed directly on the IRS's
   web site by going to
   Publication 517 is a summary document from the Service which provides basic guidelines for ministers concerning
   Social Security coverage, exemption from self-employment tax, earned income tax credit and much more. The publica-
   tion even contains updated information on ministers contributing to retirement plans, such as the Ministers' Retirement
   Most importantly, Publication 517 contains examples of completed tax forms, ranging from W-2s to a minister's Form
   1040. Ministers should find the updated publication to be most helpful.
                                                 "Locking" in a Church Loan
                    S   hort-term interest rates have risen eight times in the past                    While no one can predict how long the current conundrum

                        10 months, bringing the prime interest rate up from 4%                         will exist, there is no better time than now to look at getting
                    to 6%. In turn, adjustable rate mortgages for both residential                     out of your adjustable rate mortgage and locking in a fixed
                    and commercial loans have increased as well. Interestingly                         rate product. The Benefits Board will be happy to talk with
                    enough, long-term rates have not increased in a correspon-                         you about your church mortgage needs. We offer both
                    ding fashion. Fed Chairman Alan Greenspan calls such a                             adjustable rate mortgages and fixed rate mortgages. To
                    "conundrum," i.e. a difficult and complicated problem.                             obtain more information about our church loan program, you
                                                                                                       may visit our web site or contact Mr. J.T. Jones in the
                    This conundrum is allowing an opportunity for churches                             Board's office at 423-478-7131 or 877-478-7190 toll-free.
                    (and individuals) that currently are in adjustable rate mort-
Lo                  gages to move to fixed rate mortgages with little additional
                    costs. The difference, or "spread," between most adjustable
                    rate mortgages and the current fixed rates has narrowed so
                    that paying the slight difference for the fixed rate mortgage
                    is nothing more than locking in a good insurance policy.

                Home Buyers Using Adjustable Rate Mortgages
                    I  n the past year or so, mortgage rates
                       have gradually inched up as the
                    Federal Reserve raised short-term
                                                                     matter of fact, the number of con-
                                                                     sumers seeking adjustable rate mort-
                                                                     gages (or ARMs) at the end of March
                                                                                                                                ing costs of the adjustable rate mort-
                                                                                                                                gages. In addition, if those consumers
                                                                                                                                divert money from their other spending
                    interest rate. While mortgage rates are          2005 was the highest since records on                      to pay the mortgage, then the whole
                    not directly tied to the actions of the          such were started in 1990. Some 36.6%                      economy could suffer.
                    Fed, indirectly the Fed's increases have         of mortgages, including refinancings
                    put pressure on mortgage rates. Such             and new purchases, had adjustable rate                     If you are only going to be in your
                    has led to fixed-rate, 30-year mort-             mortgages. That amount is up more                          home for a short period of time, an
                    gages that are priced around 6.0%.               than 9 percentage points over the same                     adjustable rate mortgage is probably a
                                                                     time period a year earlier.                                wonderful financing tool. However, if
                    The increase in the rate on fixed-rate                                                                      you plan to stay in the home for 5-7
                                              mortgages              With the average rate on a one-year,                       years, or more, a fixed-rate mortgage
                                              has caused             adjustable rate mortgage at 4.39%,                         (preferably on a 15-year term) is gener-
                                              many con-              most consumers choosing ARMs are                           ally the best alternative. Even at 6%,
                                              sumers to              doing so primarily to keep their house                     historically such is a good rate for a
                                              flock     to           payments low. Many economists, how-                        fixed-rate mortgage. So evaluate your
                                              adjustable             ever, are concerned that as rates contin-                  adjustable rate mortgage. It may be
                                              rate mort-             ue to rise these homeowners may find                       time to convert to a fixed rate before
                                              gages. As a            it more difficult to keep up with the ris-                 interest rates go higher.
Board of Trustees

                                                               Officers & Staff

                     Jerry Dixon, Chairman
                                                                                  President/CEO Arthur D. Rhodes

                     B. J. Moffett, Vice Chairman
                     Tim Hill                                                     Executive Vice President J. T. Jones
                                                                                                                                                    Senior Editor   Arthur D. Rhodes
                     Dudley Pyeatt                                                Corporate Secretary Gayla Iles
                     Dennis Watkins                                               Director of Member Services Donna Hendren
                                                                                                                                                    Editor & Design   Denise Chaney
                     Herbert Buie                                                 Executive Assistant Lynn Golden
                     Gerald McGinnis                                              Receptionist/Benefits Specialist Ruth Brown
                     Bill Sheeks
IRS Requires Contributions to be Timely Sent
N     ew regulations from the Internal Revenue                secretary of this requirement. It is very probable that

      Service now require that withholdings by the            by the end of the year the IRS will prohibit us from
employer/church must be remitted to the retirement            accepting contributions that are not sent to the
plan within at least 15 days from the end of the month        Benefits Board within a "reasonable time" - in other
in which they were withheld. For example, contribu-           words, within 15 days from the end of the month in
tions withheld from the participant's salary during           which they were withheld.
January must be sent to the Benefits Board by no later
than February 15.                                             Also, you should remember that it is to your advan-
                                                              tage to get the money into your account as quickly as
If you are not responsible for sending in your contri-        possible so that it can begin to accumulate earnings to
butions, you should advise your church treasurer or           build up your retirement for the future.

IRS Web Site for Retirees
The Internal Revenue Service has recently devoted a full web site to information of
special concern to retirees. The web page can be accessed at
als/retirees/index.html. The web site contains multiple links to IRS documents that
provide advice and counsel to retirees and seniors in general. There is even a fre-
quently asked question list that provides quick and simple responses to many of your
common concerns.

Check out the IRS site. We think that you will find it helpful as you plan for retire-
ment and as you go through retirement.

                                       2004 Audit is Complete
  A     t the spring meeting of the Board of
        Trustees, the Benefits Board's out-
  side auditing firm, Henderson,
                                                  2004, church loans made up less than
                                                  30% of the assets of the Board while at
                                                  the end of 2002, for example, church
                                                                                                The audit pointed out that our cost of
                                                                                                administering the plan in 2004 was only
                                                                                                $616,002 - less than 1/3 of one percent.
  Hutcherson, & McCullough, presented             loans accounted for more than 41% of          Most internal costs of pension plans run
  the Trustees with the completed audit for       the total assets.                             from 0.50% to 1.5% of total assets. We
  calendar year 2004. The audit confirmed                                                       are pleased that our costs were 0.31% -
  that the Board continues to grow at an          In 2004, the Board had investment             down from 0.32% in 2003. Those costs
  unprecedented level.                            income of over $12 million, compared to       pay salaries, expenses, record-keeping
                                                  $11.5 million in 2003. However, partici-      costs, etc.
  As of December 31, 2004, the assets of          pant contributions were slightly off in
  the Board stood at $199,268,513 - an            2004 at $13.15 million, compared to           A complete copy of the audited financial
  increase of more than $16.8 million over        $13.3 million in 2003. Distributions to       statement is available upon request.
  the year before. The audit also showed          participants were also up in 2004 at $7.8     Please contact the corporate office of the
  that the plan's assets are much more            million compared to distributions of $7.7     Board with your request.
  diversified than in previous years. In          million in 2003.

                                            Church of God Benefits Board, Inc.
                                                   Post Office Box 4608
                                                Cleveland, TN 37320-4608
                                          (423) 478-7131 • (423) 478-7889 (fax)
                                                (877) 478-7190 (toll-free)
                                                                                 retirement, you have lost the benefit of time - and
                                                                                 the power of time in compounding your returns
    Making a difference . . . One person at a time!                              within your retirement account. Small contribu-
                                                                                 tions early on go further than larger contributions
Put Retirement Savings First                                                     made closer to retirement age.
                                                                                 • Saving for retirement may actually even
W       hen asked why they are not saving more for retirement, many
        individuals respond that they are either using their "excess"
money to put into a college fund for their children or they are using
                                                                                 improve your children's chances of getting finan-
                                                                                 cial aid to go to college. Pre-tax salary reduction
                                                                                 contributions to a 403(b) retirement plan, such as
those funds directly to pay college expenses for their children. The
                                                                                 the Ministers' Retirement Plan, actually reduce
question then arises as to whether parents should be saving for their
                                                                                 your reportable income. In addition, the federal
retirement or saving for their kids' college education.
                                                                                 financial aid formula doesn't include money
While parenthood is about sacrifices, the experts agree that there is            invested in retirement accounts when calculating
one thing you shouldn't sacrifice for the kids: your retirement securi-          how much your family can afford to pay for col-
ty. While it may sound heartless, your retirement savings should                 lege.
come before your children's college fund. Financial planners list a
                                                                            So while you should strive to have a college fund for your
couple reasons for this:
                                                                            children, you should not set up such
    • While your child can borrow money to pay for college, you
                                                                            an account to the exclusion of giving
    can not borrow to pay for retirement. If possible, we would
                                                                            to your retirement account. If you do,
    prefer that our children never have to borrow money for col-
                                                                            your college-educated children could
    lege. However, they will have an income stream to pay the
                                                                            end up having to support you later
    money back if they do have to borrow money. On the other
                                                                            in life when they have their own
    hand, a retiree has no such income stream.
                                                                            family obligations.
    • Catching up on retirement savings is harder than you think.
    If you wait until the kids are out of college to start saving for

Tax Treatment of Fringe Benefits
 F    ringe benefits are an important part of a minister's com-
      pensation package. In the church environment we like to
 talk about fringe benefits because we automatically associate
                                                                       become taxable to the minister or church-related employee.

                                                                       A summary discussion about fringe benefits can be found in the
 such with benefits that are not taxable. However, the IRS would
                                                                       Minister's Compensation Manual and the Church Treasurer's
 prefer that you take a different approach - all fringe benefits are
                                                                       Manual, available without cost on our web site at www.bene-
 taxable unless tax law specifically provides an exclusion or

 There are many different benefits that can be defined as "fringe      In addition, the Internal Revenue Service has just issued an
 benefits" to an employee. In the church world, the most com-          exhaustive guide on fringe benefits that can be accessed direct-
 mon fringe benefits are medical insurance and retirement plan
                                                                       ly     by        going     to
 contributions. If properly approved by the church, documented,
                                                                       tege/fringe_bnft_flsg.pdf or by going to the Forms section of
 and/or substantiated by receipts, both can be non-taxable bene-
 fits to ministers and church employees. Without proper docu-          the Benefits Board's web site. This guide is must reading for
 mentation and substantiation, even funds for these benefits can       ministers and church treasurers.
   Making a difference . . . One person at a time!

Giving to Churches Decline
T    he Barna Group recently released survey results showing
     that during 2004, nearly four out of every five adults
donated money to one or more non-profit organizations. The
                                                                   highest percentage of tithers, only 23% of evangelicals
                                                                   acknowledged tithing on a regular basis.

results show that 65% donated at least some money to a church      It seems as though tithing has given way to tipping - and
or other place of worship. The average amount donated to a         Christians are proving to be very poor tippers.
church was $895 per donor.
                                                                   The Barna survey pointed out several reasons why people do
While the dollar amount sounds impressive, the Barna Group not give to their local church including those who lack motiva-
noted that, factoring in inflation, giving to churches has actual- tion to give, those who do not see a sufficient return on their
ly decreased by 2% since 1999.                                     investment, those who are unaware of the needs of the church,
                                                                   those who are ignorant of the Bible's teachings on tithing and
When considering the practice of "tithing", defined as donating giving, and those that are just purely selfish.
at least ten percent of one's income to the church, the Barna
Group found that only 4% of Americans gave such an amount To learn more about this amazing survey, you can visit the
to churches. While evangelicals were the largest givers and the Barna Group on line at

Direct Contributions by Chaplains and Evangelists
C     haplains and evangelists are the only participants in the
      Ministers' Retirement Plan who can make direct contribu-
tions by personal checks to their retirement accounts. All oth-
                                                                   On the other hand, Publication 571 notes that chaplains should
                                                                   take a deduction for their contributions by writing "403(b)" on
                                                                   the dotted line next to line 35 and deducting their contributions
ers must make their contributions by salary reduction or by        on that line.
employer contributions by the way of an employer (or church)
check. Since our plan is a before-tax, income retirement sav-      Both provisions allow the evangelists and the chaplains to
ings account, in other words a 403(b) account, all contributions   deduct their contributions from regular income just as though
must be made by the employer before the money is taxable to        they were in an employment situation as a pastor or staff mem-
the participant. We are currently prohibited from taking "after-   ber of a church
tax" contributions, such as could be made to a Roth-type indi-     and such was
vidual retirement account. Again, the only exception is for        deducted off their
chaplains and evangelists.                                         W-2     Box      1

IRS Publication 571 goes into great detail on this subject. For    Please remember
evangelists (the IRS calls evangelists "self-employed minis-       that these special
ters") Publication 571 states that you must report your total      rules only apply
contributions to your 403(b) plan as a deduction on your tax       to evangelists or
return by deducting them on line 32 of Form 1040.                  chaplains.
     Making a difference . . . One person at a time!

                                    Preventing Identity Theft

      dentity theft is a hot topic in the news today. Crooks are          tional scams or offers that sound too good to be true.
      becoming more and more creative in how they steal your
     personal information and what they do with it. Instead of You should also be aware that "contesting" the charges made to
moving to a deserted island, here are a few basic ideas to keep your credit card may not be enough. For example, if you contest
in mind to help avoid becoming a victim of identity theft.            a charge made to an American Express card, they only have to
                                                                      show that the charge was actually made to that card - and then
                                                                      you are responsible for the charge. If you know without a doubt
    • Never give your personal information to someone you
                                                                      that you (or someone you authorized) did not make the charge,
    don't know, especially when the request comes out of
                                                                      then you should contest the charge and report that the charge has
    the blue by e-mail or telephone. Just don't respond.
                                                                      been fraudulently made without your permission. For American
    • Shred your personal information, including receipts,
                                                                      Express and many card companies, contesting a charge is noth-
    monthly statements, bills, and pay stubs. Don't make it
                                                                      ing more than a request to verify the transaction. However, the
    easy for someone sifting through your trash to find
                                                                      allegation of fraudulent use of the
    information on you.
                                                                      card moves the review and investiga-
    • Monitor your credit report to catch fraudulent activity         tion of the charge to a criminal level.
    as soon as it happens.
    • Review and reconcile your statements from banks and             Your credit history depends on you
    credit card companies every month. This will allow you            protecting your identity from crimi-
    to catch any suspicious transactions sooner.                      nals who seek to use your identify for
    • Finally, remember the old adage - "if it sounds too             nefarious purposes. Take care to pro-
    good to be true, it probably is." So beware of promo-             tect your identity today.

Thinking the Unthinkable
T    he Financial Planning Association makes available a publi-
     cation that everyone should read. The publication, entitled
"Thinking the Unthinkable: What Everyone Needs to Know about
                                                                      recommends that you write a detailed letter telling your survivors
                                                                      how you want your affairs handled. Funeral arrangements, where
                                                                      to find important documents, people to contact, and even your
Estate Planning," is an excellent resource for planning for the       own obituary could be included in this letter. While it may not
future. The pamphlet provides detailed information on crafting a      have the legal affect of your will, it will provide specific direction
will, a durable power of attorney, a living will, and a medical       to your family as to how you want your final wishes carried out.
durable power of attorney. There is further discussion about insur-
ance and trusts.                                                      The pamphlet, "Thinking the Unthinkable: What Everyone Needs
                                                                      to Know about Estate Planning," can be downloaded from the
This pamphlet also makes a suggestion that is extremely impor-        Financial Planning Association's at
tant, but often not included in estate planning - write a letter to Taking
your family. In addition to the legal documents of a will and         ten minutes to read the pamphlet will benefit you immensely in
durable powers of attorney, the Financial Planning Association        your estate planning.
                    Making a difference . . . One person at a time!

                                                                                        F UNDS
         Large Capitalization Stock Fund • Manager v. Russell 1000                                              Small Capitalization Stock Fund • Manager v. Russell 2000 Index

Past Performance Does Not Guarantee Future Results.                                                        Past Performance Does Not Guarantee Future Results.
From December 2001 to present is the actual performance of the Church of God Benefits Board, Inc.          From December 2001 to present is the actual performance of the Church of God Benefits Board, Inc.
From November 2001 to inception represents a composite of multiple accounts not related to the             From June 2000 to inception represents a composite of multiple accounts not related to the Church of
Church of God Benefits Board, Inc. The Large Cap Stock portfolio’s inception is January 1981. 1, 3, 5,     God Benefits Board, Inc. Small Cap Manager Inception is December 1992. 1, 3, 5, and 10-year per-
10, and 15-year performance is ending March 2005.                                                          formance is ending March 2005.

          International Stock Portfolio • Manager v. MSCI EAFE Growth                                                      Church of God Benefits Board, Inc. • Trustees’ Fund

  Past Performance Does Not Guarantee Future Results.
  From December 2001 to present is the actual performance of the Church of God Benefits Board, Inc.
  From August 2000 to inception represents a composite of multiple accounts not related to the Church of
  God Benefits Board, Inc. International Manager Composite Inception December 1991. 1, 3, 5, and 10-year
  performance is ending March 2005.
                                                                        Making a difference . . . One person at a time!

    Permit No.                                                                          Toll-free: (877)478-7190
 CLEVELAND, TN                                                                          Phone: (423) 478-7131
       PAID                                                                             Cleveland, TN 37320-4608
  U.S. POSTAGE                                                                          Post Office Box 4608
  Organization                                                                          Church of God Benefits Board, Inc.

                                     Does God Care About Your Finances?

                                    I  n his wonderful book, The Blessed Life,
                                       author Robert Morris points out that God is
                                                                                        financial well-being through a retirement pro-
                                                                                        gram. As off-shoots of that mission, we have
                    Art’s Remarks

                                    clearly concerned about your finances. He notes     developed both church and member loan pro-
                                    that there are 500 verses in the Bible concerning   grams, as well as educational materials and pre-
                                    prayer and nearly 500 verses concerning faith.      sentations on building a complete financial com-
                                    However, there are more than 2,000 verses on        pensation package. We believe that God greatly
                                    the subject of money and possessions. In addi-      cares about your financial well-being and we
                                    tion, Jesus used parables 38 different times in     want to be of service to assist you in taking care
                                    the scriptures to convey his point; 16 of those     of your financial needs both now and in the
                                    parables dealt with money.                          future.

                                    It is critical that everyone understands money      When statistics like those above are used where
                                    and how to handle it from a biblical perspective.   there are 500 or so scriptures on prayer and over
                                    To quote directly from The Blessed Life, "How       2,000 on money, the question is often asked if
Arthur D. Rhodes                    you handle money reveals volumes about your         God cares four times more about our finances
President and CEO                   priorities, loyalties and affections. In fact, it   than he does our prayer life. That certainly does
                                    directly dictates many of the blessings you will    not seem to be the case. God simply knew that
                                    (or won't) experience in life."                     we were going to need a lot more guidance on
                                                                                        dealing with money issues than we might need
                                    A local bank advertises that they are "everything   in developing our prayer life. However, our
                                    financial." While the Benefits Board is not quite   money dealings and our prayer life should not be
                                    "everything financial," our main ministry mis-      mutually exclusive. Maybe if we did more pray-
                                    sion is to assist ministers and church-related      ing about our financial dealings we might have
                                    employees in providing for their long-term          less money problems. Just a thought!!

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