One FCMM investment option is substantially different from the other options. Unlike mutual funds (American, Vanguard, Timothy Plan), and FCMM stock (Option D) and bond (Option E) funds, the annuity value of Option C does not reflect the immediate rollercoaster ride of the markets.
Managed for the long term and designed to provide monthly retirement income like an annuity, Option C, titled Conservative Growth with Annuity Benefit Fund, has provided stable value and steady growth for participants.
FCMM launched Option C in 2003 when a similar fund (Option A) was closed to new investments due to a “guaranteed” structure that no longer fit market realities. The new option maintained the annuity feature and philosophy of long-term, steady growth. The fund is managed by professional investment advisors selected and overseen by the FCMM Trustees. Each year the trustees determine a rate of return for participant accounts that they consider to be sustainable from a long-term perspective, taking into account past and anticipated market performance. Adjustments in the rate are gradual and can be positive or negative.
Looking solely at 2013, the current 3% rate might appear unfavorable to stock market performance. But the picture over several years shows Option C’s steady growth while the market took a steep dip in 2008 and gradually regained ground. An Option C participant who planned to retire in 2008 or 2009 did not lose account value when the market dropped and did not need to defer retirement. Instead, an Option C account was steadily credited with positive growth and never followed either the highs or the lows of market earnings.
The graph shows the value of $100,000 placed in FCMM Option C from inception of the fund through 2013 as compared to the same amount in a fund consisting of a standard 60/40% (equities/bonds) mix invested like the Standard & Poor’s index. For valid comparison, the S&P mix returns were adjusted by 1% to account for investment fees, just as all FCMM fund returns are reported net of fees. Any given year shows some variance but the long-term value is similar. And the participant can plan with confidence for retirement without timing the date to market performance.
Each FCMM investor determines the allocation of his/her contributions to the various options. At present, nearly one-third of all retirement contributions are directed by participants into Option C. For many, placing a substantial portion of their contributions in Option C represents a sound core strategy, along with directing some portion to other options to add flexibility.
If the Option C investor chooses to take a lump sum distribution, the distribution is subject to a market value adjustment if the underlying fund investment is lower than the annuity credit. Taking distribution as an annuity, however, will apply the full balance without market adjustment to the annuity calculation.
Another option that exhibits stable value is the Adjustable Rate Investment with Christian Investors Financial (Option H), which pays a competitive rate of interest.
Detailed information is available on how to start receiving benefits and all investment options.
