News Release -- 2005

BBT Board agrees to dialog with Caterpillar regarding use of the firm's bulldozers to destroy Palestinian property

Dec. 8, 2005, Elgin, Ill.

The Bulldozers are commonly seen as instruments of construction, used to raze old structures or sculpt land for development. But what if these machines are used for destruction, such as destroying houses, farms, ancient olive groves, roads, and water and sewer pipes that are currently in use?

According to Human Rights Watch, Israel has used Caterpillar’s large D-9 bulldozers, which have been purchased through the U.S. military and outfitted with tons of armor plating, to wreak havoc on Palestinian settlements by illegally destroying property and infrastructure.

As a Caterpillar shareholder, the Brethren Benefit Trust Board in November decided to try to engage in dialog with Caterpillar, asking the Peoria, Ill.-based firm to cease selling equipment that makes its way to Israel to be used for violent purposes against humanity. BBT manages more than $350 million of investments for its 4,000 Pension Plan members and 200 asset management clients, and uses shares that it owns on behalf of its members to promote Brethren values through shareholder activism initiatives.

The Board’s deliberation of this issue came at the request of On Earth Peace, which, like BBT, is one of the five official Church of the Brethren Annual Conference agencies. In its Oct. 14 letter to BBT, OEP asked BBT to divest of its Caterpillar holdings “to seek investment of these funds in companies whose business enriches the lives of Palestinians and Israelis.”

After lengthy discussion by the Board, which was meeting at the Brethren Home Community in New Oxford, Pa., the Board decided to attempt dialog with Caterpillar with the understanding that divestiture could come if the dialog fails. There were several reasons for this decision.

First, BBT’s socially responsible investing policy calls for BBT not to invest in companies that make more than 10 percent of their sales in alcohol, tobacco, defense, and gambling. Companies BBT invests in are checked against these benchmarks annually; in 2005, Caterpillar was not excluded on this basis. Second, BBT works at shareholder advocacy initiatives with companies that do not get screened out of BBT’s investment portfolio but have at least one area where changes are advocated, based on Annual Conference statements. Third, BBT has engaged in dialog with Caterpillar regarding the AIDS pandemic in Africa, and has found the company to be responsive to shareholder dialog. Finally, Israel’s use of the D-9s for destructive purposes goes against Caterpillar’s worldwide code of conduct, which calls on its host countries to “honor their agreements, including those relating to rights and properties of citizens of other nations.”

The Board also endorsed inviting OEP to participate in the dialog with Caterpillar.
During the Board’s discussion, Wil Nolen, BBT president, told the Board that a resolution related to this topic could be making its way to the Pacific Southwest District Conference. As of the BBT Board meeting, BBT staff had not learned of the status of that proposed resolution. However, the Nov. 18 Newsline, which did not reach BBT staff until after the conclusion of the Board meeting, reported that Pacific Southwest District had indeed approved a resolution on “Divestment from Companies Selling Products Used as Weapons in Israel and Palestine.” The resolution will be forwarded to the 2006 Annual Conference for possible action.

“This is a human rights issue that needs to be addressed,” said Nolen, upon hearing of the Pacific Southwest District’s resolution. “BBT Board members and staff look forward to addressing this issue with OEP and the Annual Conference. Through our shareholder dialog, we hope that the Church of the Brethren peace witness will help prompt Caterpillar to decide not to sell machines that are used against humanity.”


2006 budget provides for two new initiatives
A new wellness initiative and an increased emphasis on promoting BBT’s ministries throughout the denomination were approved by the Board when it ratified BBT’s proposed 2006 expense budget of $3,041,460.

The wellness initiative calls for a new focus on improving or sustaining the physical and mental health of Brethren nationwide, including Brethren Medical Plan members. This new ministry, which is expected to be a collaboration among BBT, Association of Brethren Caregivers (ABC), and the General Board, is to be implemented through the hiring of a staff member that will be lodged with ABC. BBT’s increased promotional emphasis, which also includes the approval of hiring up to one additional staff member, calls for increased relationship building through activities that range from one-on-one interaction to participation at select denominational events.


BMP shows improved claims ratio and enrollment numbers
Claims experience for the Brethren Medical Plan (BMP) has been better than expected for the first nine months of this year. The report, based on data through the end of September, shows claims paid at approximately 85 percent of premiums billed. Jeff Garber, director of Brethren Insurance Plans, cautioned that, although this experience is positive, it can change quickly.

Garber also reported that preliminary enrollment figures for next year appeared to be slightly higher than for 2005. This included about a dozen congregations new to the Plan. However, once all enrollment data was entered by early December, about 753 primary insurees (not including dependents) have enrolled for 2006, compared with 819 in January 2005. This decline of 66 members includes 25 active employees and 41 retirees. Given Annual Conference delegates’ approval this summer of a resolution that calls congregations and church agencies to support the BMP during a one-year period, Garber said the decline is a disappointment and is reason for concern.


BBT proposes changes to its Articles of Organization
BBT will select four members of its Board, rather than the current three, under proposed revisions to its Articles of Organization that were adopted by the Board. If the changes are adopted by Annual Conference delegates in July 2006, beginning in 2007 the Board will include four members nominated by BBT, four nominated by members of the Pension Plan, and four elected by Annual Conference. Since directors serve four-year terms, the change means one director from each group will be selected each year.

Employer groups will nominate the four Board members representing the Pension Plan. Two slots will be nominated by the Ministers’ Association and Council of District Executives, while the Agency Executives Committee and Fellowship of Brethren Homes will nominate one member each in every four-year cycle. The proposed change gives the BBT Board greater flexibility to seek out members with the specific background and skills the Board requires to give adequate oversight to the varied programs of the agency. The skill areas currently needed on the Board include banking and credit union operations, human resources, information systems, insurance, and financial planning.

A related change proposed to BBT’s Articles of Organization would allow the Board to appoint additional people to serve as Board advisers in a nonvoting capacity. This would further enable the Board to bring people to the discussion table to complement the skills of current, voting members.


Church Workers Assistance Plan supports current and former employees
The Church Workers Assistance Plan continues to provide critical financial support to active and retired employees of the Church of the Brethren. According to a report given to Board members, five clergy members have received grants from the Active Church Worker Support ministry in 2005. Another 14 retirees have received grants from the Retired Church Workers Insurance Premium ministry, with an average monthly grant of $205. A total of 40 retired employees have received support from the Retired Church Workers ministry. The average participant received a monthly grant of $319. The Board increased the Retired Church Workers Grants’ maximum income guidelines for support in 2006 by 4.7 percent, to $27,100 for couples and $20,400 for singles. This increase matches the rise in the Consumer Price Index for the 12 months through September 2005.


In other actions —

• The Board welcomed approximately 20 retirees, pastors, and church board chairs to its session on Friday morning to hear reports on the Pension Plan, Employee Financial Services, and Insurance Plans. The guests then joined the Board for lunch and a presentation titled, “What do we do when a gift comes in?” by Will Thomas, director of Brethren Foundation Operations.
• The Board adopted resolutions allowing retired ministers to designate as housing allowance for 2006 up to 100 percent of the amount received as a pension annuity, a grant from the Church Workers Assistance Plan, or as a long-term disability benefit.
• The Board awarded payments totaling $117,683 to participants in the Supplemental Income for Equitable Annuitants program. This group of approximately 110 individuals are former non-pastor church workers who were enrolled in an Equitable retirement plan prior to non-pastor church workers being included in the Brethren Pension Plan.
• The Board adopted dates and locations for its meetings in 2006 – April 22-23 in Elgin, Ill.; July 3 during Annual Conference in Des Moines, Iowa; and Nov. 17-18 in Bridgewater, Va.