Fraternity-Testvériség, 1980 (58. évfolyam, 1-4. szám)

1980-04-01 / 2. szám

REPORT

of the

PRESIDENT

for the year of

1979

Distinguished Members of the Board:

Dear Brethren:

In 1979 we experienced a two digit inflation. The government reported that in 1979 the rise in consumer prices was 13.3 per cent. The acceleration occured particularly in the food, energy, healthcare and housing sectors. The workers try to catch-up in wage and salary raises with inflation but year after year with the exception of a few cases representing a small minority they do not succeed.

President Carter in 1979 established a 7 per cent voluntary guideline to combat inflation. The President’s guideline for wage increase was accepted by the Commissioners of the State Insurance Departments for the insurance industry. They requested in writing that all the commercial companies and fraternal insurance organizations comply with the President’s 7 per cent guideline. The Board of Directors of the Federation complied with the guideline by unanimously passing resolution 17-A4 at the 1979 spring meeting. The text of resolution 17-A4 was communicated to the Commissioners of State Insurance Departments in which the Federation is licensed to operate.

A committee composed of labor, business and public representatives has proposed to President Carter the raising of the 1980 guideline to a range of 7.5 to 9.5 per cent. The consumer price index climbed at an annual rate of 18.2 per cent in January, with sharp increases in all the major areas except food. We have not seen the worst yet of inflation. The White House forecast the conservative figure of 13.3 per cent consumer price index for 1980. Since 1980 is an election year, most likely in spite of the ever growing pressure and public demand for strict wage-price control the Presidential guideline will again be temporarily voluntary.

In 1979 the Federation overspent the limitation of expenses of New York State for the fourth consecutive year. 1980 will be the fifth year and the amount will be the largest. We must find ways and means to voluntarily curtail our expenses before New York

State will force us to do so. When the Board will recommend to the Convention the revised text of our by-laws, the use of computerization and the restructuring of the Federation should be seriously and wisely considered. Since the annual dues income during the past four years had decreased and the operation expenses increased, the time has come to face the new situation courageously and act to keep the expenses of the Federation within the bounds of limitation.

Following the sale of the Kossuth House building the Executive Committee was in a position tc invest a substantial amount of money into short term government certificates yielding an impressive interest rate between 10 to 14 per cent. This was partly instrumental for increasing our assets in 1979 to $19,780,057, the highest in the history of the Federation and raising our solvency ratio to 121.15%, which is also the highest financial valuation the Federation ever had.

Thank God that the Federation’s few remaining commercial mortgages are financially good investments. However, we still need a few years to rid our portfolio from the low interest yielding bonds. Until then we hope that the ratio of our investment income will maintain a slow but steady continuous upward trend. I am happy to report that our 6.75 per cent in 1979 is also the highest ratio in the Federation’s history.

Inflation also greatly effects the sale of life insurance in the amount of face value and the amount of premium. Many small fraternal insurance organizations have been adversely effected by inflation. Detailed reports are made by my fellow officers whose concern are the evaluation of the effects of inflation on our annual production, our annual premium income, certificate lapses, certificate loans and the very life of our Federation.

In 1979 the Executive Committee (EC) held 37 meetings. The minutes were mailed by the National Secretary to the Board members. From the minutes the Board members were informed about the actions of EC and how the resolutions voted by the Board were carried out.

In 1979 many congregations celebrated their 75th and 85th anniversaries. I had the privilege to represent the Federation at many anniversary celebrations. I was proud to hear the grateful testimonies that the Federation helped the congregations with mortgage loans- to build their churches, fellowship halls, Christian education buildings and parsonages.

LABOR RELATIONS

In 1979 all the employees of the Home Office

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