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Finance
Statistics Forms
By the time you read this Newsletter you should have completed and returned your statistics forms. If you haven't then please complete them as a matter of urgency. The information in the statistics forms is to be used in a research project that forms a part of the initiatives described in the Directions paper. We want to get the research underway as soon as possible so we will be chasing those parishes that have not returned their forms.
If you have any suggestions for improvements to either the forms or instructions please enclose a short note with the return explaining the change required. I would like the forms to be as easy as possible to use. One point of clarification is required though this might come a little late for most. The number of persons under pastoral care should include members on the roll.
Beneficiary Fund Annuities
We were able to pay the new annuity rate from July. Margaret Fawcett worked some long days and weekends to get the new rates loaded into the payroll. It was a very good effort considering she was also having to deal with many late property valuations at the same time.
Amalgamated Investment Fund
The interest rate paid on deposits with the Amalgamated Investment Fund has been increased by 0.25% to 6.75% per annum. The new rate applies from 1 August and follows the decision by the Reserve Bank to increase the overnight cash rate by a similar amount.
Ministers Mortgages
The interest rate payable on Ministers' mortgages has been increased to 7.49% per annum. Mortgage interest rates have increased following the decision of the Reserve Bank to increase the overnight cash rate. The rate is linked to the interest rate charged by the BNZ for its mortgages.
Insurance Renewal
In last month's Newsletter I indicated that the Insurance Fund had been returned to the control of the Insurance Committee and the Committee was looking at how they could use the fund to reduce premium costs. The Committee decided that it would use the Fund to increase the level of loss carried by the Church before it made a claim on the insurance company thereby reducing premium costs.
The Insurance Fund will carry the cost difference between the deductible on the insurance policy and the deductible received by the parish. A considerably lower premium results from the changed approach as the Church carries the cost of small claims rather than the insurance company. The Church has taken insurance (excess of loss) against the claims it pays exceeding a certain amount to limit the possible losses it could incur. The cost of the excess of loss cover plus the maximum amount of the uninsured loss is less than the premium savings we are achieving. We are therefore guaranteed a profit on this transaction. This profit together with the interest earnings on the insurance fund are being returned to parishes, support and schools in the form of lower premiums. We have contracted Aon to manage claims that are below the deductible for the insurance company. New claims arrangements are in place and are detailed in the insurance manual.
Premium savings are to be returned by way of a prompt payment discount of 15% on material damages premiums. Premiums paid on or before 30 September will receive the discount. The Church has to pay its premium by this date so is offering the discount in a way that will help ensure that it receives its premium income before having to pay that premium across to its insurers.
We experienced some last minute difficulties putting in place our liability cover. Recent adverse publicity covering sex scandals in catholic schools has caused the market to become suddenly very wary of the risks in our section of the market. A substantial increase in premiums is likely, in the order of 40%. The insurance has only just been placed so we are still working through the exact financial effect. However the cost per parish is not great. Parishes paid $100 per year plus GST for liability insurance last year and this cost might rise to $140 this year.
Premiums in the insurance market have increased substantially this year. Our brokers and ourselves have worked very hard to keep rises to a minimum. I believe we have been successful in doing that. The increase in premiums has highlighted the need to focus on risk management to reduce the level of losses. Many of our losses will now be carried by the Church not a faceless insurance company. Every dollar of losses we save is a dollar that can remain in the insurance fund to reduce premiums in the future. Please study the section in the insurance manual on loss control and implement the simple but effective suggestions. In many cases no money need be spent, we just have to change the way we do things
By the time you receive this Newsletter you should have received a letter containing details of your insurance arrangements for the year and a revised version of the insurance manual. If you haven't please contact Margaret Fawcett in this office.
Anniversary
I have now completed my first year with the Church. It has been interesting, challenging and above all enjoyable. Over this period I have noticed a distinct lack of knowledge in parishes on what the Assembly Office does and why it does it. With a year of understanding of how the Church operates behind me I am happy to include a segment in each month's Newsletter explaining a particular aspect of the Church's operation. Topics could include such matters as, significant regulations and benefits of the Beneficiary Fund, the workings of the AIF, the various levies, insurance etc. If you have an interest in such information send me an Email on geoffb@pcanz.org.nz. You could include suggested topics for coverage. If there is sufficient interest I will commence the articles next month.
Manager, Financial Services