Verhovayak Lapja, 1951 (34. évfolyam, 1-12. szám)
1951 / Verhovay Journal
VOL. XXXIV. JANUARY 17, 1951 NO. 1 Dividends To Be Paid On Membership Certificates Issued After January 1, 1949 — 2 Va % Certificates in force for two years to receive dividends. — Most of our fellow-members remember that two years ago, on January 1st, 1949, the Association adopted a 2 V2 % interest rate assumption, that means that the investment of the mortuary funds was expected to yield an interest income of 2V2%. The overwhelming majority of the American life insurance companies and fraternal societies have taken this step several years ago and it was their example that the Verhovay Fraternal Insurance Association followed because it became obvious that the downward trend of incomes from investments will not change in the near future. The change, of course, involved an increase in the insurance rates as well as in the non-forfeiture values of membership certificates issued since that date. As a result, a member who joined after January 1, 1949, was required to pay a higher rate than the one who joined during any of the preceding periods. Acting upon the report and the recommendations of the Actuary of the Association, the Board of Directors, at their September meeting, decided that the holders of these membership certificates shall be entitled to dividends by the end of two years’ membership in good standing and, accordingly, it was resolved that beginning with January 1, 1951, dividends be issued to the holders of such 2Ys% membership certificates shortly after the second anniversary of the date of issue. Since dividend payments had been discontinued several years ago, the question may arise how it is possible for the Association to pay dividends on these recently issued insurance certificates? ! The answer is simple: the rates of the certificates issued since j January 1, 1949, have been computed on the basis Of a 2V2% interest assumption. It has been found, however, that the earn- ’ ings of the Association on its investments have not decreased below the 3% level and, as a result, a certain profit had been realized on the 2y2 r; certificates. The Association, of course, is very happy to return these profits to the members whose mor-. tuary dues could be invested at a somewhat higher than expected rate of interest. There are other factors, too, that contributed to the possibility of declaring dividends at this time. One is the favorable mortality rate of the Association. The other is that the management expenses of the Association have not exceeded the limit as computed in reference to the 2Yz% certificates. It is due to these factors that dividends will be paid to those members in good standing whose membership certificates had been issued after January 1, 1949, following the second anniversary of the date of issue oj these certificates. Incidentally, modern business methods will be followed in issuing these dividends and it is expected that this change will prevent many of the errors and misunderstandings that arose under the method previously applied. It is to be expected that in connection with the dividend payments many questions will arise among our older members who .feel that because they have been paying dues for a long period of years, they’d sooner be entitled to dividends than those who have recently joined the Association. It is necessary, therefore, to point out the following: In fixing the rates maintained before January 1, 1949, no provision was made for the increased wages and costs of management the Association had to meet. It is a well known fact thai when the “loading” element (the part of the dues designated for the Expense Fund) had been set, no realistic consideration was given to the actual costs of management. As a result, the “Expense Fund” was never sufficient to cover the management expenses of the Association. A further difficulty arose from the fact that the reserves and rates of the certificates issued in former years had been computed on the basis of a 4%, then 3V2 and then 3% interest rate assumption. Since the investments earnings of the Association, like those of the largest leading insurance organizations, has not exceeded 3% for a long period of years, it is obvious that the investments of the mortuary dues of these certificates did not yield an income in excess of the rate of interest assumed. As a result, there was no profit that could have been returned to the members in the form of dividends. LAKEVIEW ALLEYS IN CHICAGO HOME OF THE 1951 TOURNAMENT Verhovay bowlers all over the country are getting ready to make the I.akeview Recreation center, 3239 North Clark Ave., Chicago 13, 111., the scene of a grand Verhovay reunion on the occasion of the 8th Annual Verhovay National Ten Pin Tournament. Shown above is the front of the building with the big sign advertising the 50 modern alleys housed in the establishment. There are 30 aUeys on the second floor and 20 on the third. All fifty alleys will be in use for the Verhovay Tournament to be held on May 5 and 6, 1951. There are two beautiful, spacious halls on the fourth floor where the buffet style dinner and the Tournament Dance will be held. Mr. John Jenkins, proprietor of the establishment, promised -to hire several Hungarian cooks, so that a real Hungarian dinner, hard to match in excellence anywhere, will be served to the assembled Verhovayans. And Mr. Jenkins knows whereof he is talking when he speaks of Hungarian cooking, because his wife, the former Helen Teller, is of Hungarian descent. Lakeview Recreation is one of the most modern, best equipped bowling establishments in Chicago and that means a great deal because the Windy City is well known as the home-town of bowling in America. And the fifty alleys will be in tip-top shape for May 5 and 6 when the 8th Annual Verhovay Ten Pin Tournament is going to take place. We hope that in participation this tournament will break all previous records. It’s true it will be a long trip for the eastern teams, but, then, the attractions may well compensate for the long distance. It is a city to see and the tournament offers a welcome opportunity to those who haven’t had a chance yet to make this trip. There will be excellent accommodations, all bowlers to be housed presumably in one hotel, the Sherman, in the downtown business district, at Randolph and Clark Streets. The thousands of Chicago members will go all out to make the visitors feel at home in their great city. And Lakeview Alleys will have the welcome mats rolled out for all Verhovayans who want to have, and will have, a wonderful time. Those who purchased insurance the rates of which had been computed on the basis of a 4%, 3?/2% and 3% interest assumption, enjoyed the benefit of low rates that could not be matched by other sound insurance organizations. Whenever they made a payment, they realized a substantial saving which is actually the equivalent of dividends. Those who have been paying these low rates for twenty, or thirty years, have been enjoying the benefits of these savings throughout the life-time of their contracts, in other words, they have been receiving dividends. If they would add up the savings realized throughout the period of their mem(Continued on page 2)
