10 heat map which greatly improves our ability to identify and manage risk. The world around us is changing more rapidly than we sometimes imagine. We, the managers of the organization, are aware of the need to be innovative and relevant. The challenges of the need for change that will make us relevant to our younger members can test our management skills; however, we will move forward with new methods and new technology, and we will be competitive in this new environment. We focus a lot of attention to converting paper records to electronic form for efficiency and in preparation for enabling our members to electronically log in to their certificates and membership information. We will make new technology our focus to provide better service to our members. One of the significant challenges SPJST has faced is the current low interest rate environment. SPJST has a variety of programs that were put in place when interest rates and investment returns were as much as two to three times current returns. Investment returns provided an abundance of extra funds to support many of the programs that came to define SPJST. It soon became apparent that with traditional fixed income investments yielding 4 percent or less, new opportunities for investment would need to be put in place to meet the challenge of funding our programs and our 3.25 percent annuity payout rate. By reducing operating expenses and taking advantages of new and innovative opportunities, we have been able to continue our programs and fraternal benefits as well as our good annuity
Special VESTNIK Supplement: 2021 Pre-Convention Reports Issue payout rate. An important responsibility of the CFO is to maintain and motivate a staff that will provide the best possible service to our members and to oversee the many diverse administrative duties of this corporate office in a professional manner. My many years of experience as Secretary-Treasurer, Vice President, and Chief Financial Officer have equipped me to meet the challenges of this time. I have an insurance license, annuity certification, decades of insurance administration and management experience, a Bachelor of Science degree, and a love of new technology. In the 1990s, I adopted the phrase, “The Best is Yet to Come.” I truly believe that for SPJST, “The Best is Yet to Come.” Appreciation and acknowledgment are expressed to the members of the CFO Department in alphabetical order: Janie Coakley, Rudy Constancio, Tamara Gettys, Linda Hill, Ann Paruzinski, Marissa Salinas, and Carol Wolf. I praise each of you for your dedication in serving our members and acknowledge how each of you have grown professionally. Now, I thank God and give Him the glory for His blessings and all that He has done in leading us to victoriously meet the challenges we have faced and overcome. My wife Dorothy and I thank you for your friendship and hospitality. Thank you and be blessed. Fraternally yours Leonard Mikeska, FIC Chief Financial Officer —SPJST—
VISIT KILLEEN ~ FALL IN LOVE WITH CENTRAL TEXAS Killeen, Texas – located in Bell County – has grown in multitudes of people from all over the world, thanks to Fort Hood. With the addition of the University of Central Texas A&M, Central Texas College, and homes being built at a rapid rate, Killeen is becoming one of the fastest growing cities in America. As the population grows, new businesses are pouring in. Killeen is known as the neighbor of Fort Hood. The Killeen economy is heavily dependent on the Fort Hood post, soldiers, and their families. Killeen has a strong talent pool with U.S. Army veterans, an accessible community college, and a stand-alone, state-supported university. American values are strong here. At one time, Elvis himself was stationed at Fort Hood and lived in Killeen. The Central Texas area has a wide variety of entertainment venues to choose from. Whether it is touring the world’s largest military installation with awesome fighting power and two fine military museums or enjoying the Vive Les Arts Theatre. At Green Avenue Park, Killeen hosts a farmers’ market each Friday, beginning in May from 11 a.m. and 3 p.m. and also Food Truck Fridays! There are more than 20 parks located in this city and a 2.5-mile hike and bike trail. Community pools – Long Branch Park and Pershing Park – let your little swimmers three and under in for free. Killeen is easily accessible by highway from IH-35 to US190 or SH195. Arrow Trailways has a local office and buses may be rented for tours. A rail system, and the new Killeen-Fort Hood Regional Airport has over 36 flights daily, with service by American Airlines, Continental, Houston, or Delta. The Central Texas Corridor – Interstate 14 (currently US Highway 190) is in the works. The designated Central Texas Corridor begins in West Texas and generally follows US Highway 190 through Killeen, Belton, Bryan-College Station, Huntsville, Livingston, Woodville, and Jasper before terminating on State Highway 63 at the Sabine River.
—From visitkilleen.com
Pre-Convention Report Controller Roy Vajdak This report is submitted in accordance increased to $16,379,403 by the time of with Article VI Section 8(b) and Article the 2012 Convention and to $19,279,571 VIII Section 31(m) of our 2016 SPJST for the year ending before the 2016 ConBy-Laws. vention. However, the surplus has deI have had the pleasure of serving as creased by $5.9 million to $13,384,513 Controller (previous titles were Financial for the year ending on December 31, Secretary and Director of Accounting/In- 2020. formation Technology Services) for the There are two main reasons for this past nine and decrease. The one-half years first reason is the and want to thank discovery in 2016 the Supreme that our prior Lodge for their actuary had not support. The properly calController is reculated the responsible for all serve credit on accounting funcour reinsurance. tions of our SociThe credit was ety including overstated and reboth financial duced our reserve and statutory rerequirement. We porting and all IT had to reduce surfunctions. My deplus by $1.6 milpartment prolion to correct the vides member reserves we held. servicing in the The second reaareas of billing son is the Net questions, adLoss from Operadress and phone tions in 2018, number changes, 2019, and 2020. I Roy Vajdak and general cerwill give more intificate questions. formation on the We have continued the task of digitizing operating losses later in this report. the SPJST’s paper certificate records. In 2016, the SPJST had a Net Gain from Operations of $362,002 and a realFinancial Statement ized capital gain of $175,219. However, I have included a financial statement we had to increase reserves by $1.6 milof SPJST for a five-year period, which lion as noted above. This resulted in a deincludes 2016, 2017, 2018, 2019, and cline in surplus of slightly more than $1 2020. All official figures are taken from million. the annual statement as submitted to The Society had a Net Gain from OpTexas Department of Insurance (TDI) erations in 2017 of $81,059 but realized and National Association of Insurance capital loss of $988,371 from the bankCommissioners (NAIC). Please see the ruptcy of a bond holding in our bond statement on pages 11 and 12. portfolio. SPJST is required to hold an This financial statement enables you Asset Valuation Reserve (AVR) to help to compare assets, liabilities, net income, offset the effects of a loss on our investexpenses, and surplus. Assets have in- ment portfolio. The AVR offset this loss creased by approximately $8.2 million and enabled us to recognize a $71,000 over the last five years. Total liabilities gain in surplus. have also increased by $14.3 million There is no way to sugar-coat 2018, over the last five years primarily due to 2019, and 2020. The capital loss the increase in reserves. SPJST has con- recorded in 2019 from the complete liqtinue to suffer under the low interest en- uidation of our common stock portfolio vironment that has existed since the should not be a main focus. We are reeconomic downturns of 2008 and 2009. quired to mark-to-market common In 2008, our Unallocated Funds (surplus) stocks. Therefore, the capital loss dropped to $13,022,948. The surplus had recorded in Net Income is offset by the
