General Board of Pension and Health Benefits of the United Methodist Church, Evanston, will suspend the annual 3% base-interest credit for its $9.4 billion Diversified Investment Fund because of "the extended bear market the second worst in the history of the U.S. stock market, according to the board.
The action is necessary "to prevent further deterioration of DIFs reserve position, the board noted in a statement. As a result, participants wont receive any interest on their allocations to the fund participants receive the annual base-interest credit instead of participating in the full performance of the DIF. The investment performance of the fund wasnt available.
"Once the recent trends have reversed and the DIFs reserve position has measurably improved, the board will consider reinstating the base credit, the statement said.
The allocation of the balanced fund, which is run by 26 external managers, was 42% domestic equity, 30% domestic fixed income, 22% international equities and fixed income, 4% cash and 2% real estate as of Sept. 30, the latest information available.
Board officials couldnt be reached for comment.