ELCA Leaders Offer Assurances in Light of Global Financial Crisis

CHICAGO (ELCA) -- The Board of Pensions of the Evangelical
Lutheran Church in America (ELCA) is holding steady and not
panicking during the current global financial crisis, Board
President John G. Kapanke, told the ELCA Conference of Bishops.
Kapanke addressed the conference Oct. 3. The ELCA
Conference of Bishops is an advisory body of the church that
includes the ELCA's 65 synod bishops, presiding bishop and
secretary. It met here Oct. 2-7.
"Keeping a steady course of action is really what is called
for," Kapanke said. The ELCA Board of Pensions, which manages the
church's retirement and health programs, has a "long view" of the
financial markets, he said. A disciplined approach is needed in
these times, Kapanke said. He said he is confident the U.S.
financial system will recover.
"We are experiencing the bursting of a broad-based housing
and credit bubble," Kapanke said. The credit crisis started more
than one year ago and is based in so-called sub-prime mortgages,
he said. Kapanke said he hoped the actions of the U.S. Congress
and government financial leaders would restore some confidence in
financial markets.
Board of Pensions funds are broadly diversified, but as
financial markets have declined, so have fund values, Kapanke
said. While diversification helps manage risk, it doesn't fully
protect against a general market decline, he said.
Some people have contacted the Board for financial
information since financial markets began their declines, Kapanke
said. Information has been sent to plan members and retirees and
posted at http://www.ELCAbop.org on the Board's Web site.
Christina Jackson-Skelton, ELCA treasurer, said many
congregations have investments in the Endowment Fund Pooled Trust
administered by the ELCA Foundation, a balanced fund managed by
the Board of Pensions. Distributions are normally 4.5 percent,
based on a five-year rolling average of the market value, she
said. "That really softens the impact that it could have on
congregations, and I think that's a helpful point to remember,"
Jackson-Skelton said.
Some Foundation trust assets are managed through Wachovia
Trust, she said. The parent company, Wachovia Bank, has been
weakened by failing home loans, and Wells Fargo is likely to take
over the banking operations and wealth management unit of the
company. "What's important is that these are trust assets. They
do not become assets of the bank, and the property is not subject
to the claim of the bank's creditors. We do not expect there
will be any direct impact on these assets as a result of the
shifts happening at Wachovia," the ELCA treasurer said.
The financial crisis has had no significant impact on the
ELCA Mission Investment Fund, she said. "The Mission Investment
Fund is highly capitalized in order to provide a greater level of
security to our investors," she said. The fund has capital of
more than $160 million, a net worth of nearly 30 percent of
assets, considerably higher than what most banks maintain,
Jackson-Skelton said. The fund does not engage in risky loan
practices, she said.
The MIF has grown by $82 million in the first nine months of
this year, Jackson-Skelton said. Nearly 800 MIF loans are
outstanding, valued at $480 million, she said. Delinquency rates
are low because the MIF works to ensure reasonable debt loads for
congregations, Jackson-Skelton said.
Jackson-Skelton said information about the Mission
Investment Fund's response to the financial crisis is at
http://www.ELCA.org/mif on the ELCA Web site.

For information contact:
John Brooks, Director (773) 380-2958 or news@elca.org
http://www.elca.org/news
ELCA News Blog: http://www.elca.org/news/blog