2023 SPJST Advisory Council Meeting

The SPJST Advisory Council was established as the result of the corporate governance by-law provisions that were approved by delegates at the 2021 SPJST Convention. That provision appears as Article 11 in our current bylaws:

Article Xi Spjst Advisory Council

Section 57. Convention delegates shall serve as members of the SPJST Advisory Council between conventions. SPJST Advisory Council members shall serve on a volunteer basis and meet annually each spring with the Executive Committee with the objective of keeping the SPJST Advisory Council members engaged and responsive in matters relating to the growth and development of SPJST.

Opening of the Meeting

The meeting opened with a prayer led by Vice President of Sales and Marketing Delisle Doherty.

Executive Committee*

Participating in the Meeting

Along with Advisory Council members, participating in the webcast were SPJST Board of Directors - Board Chair/District Three Director John Engelke; Board Vice Chair/District One Director Donnie Victorick; District Two Director Jesse Pospisil; District Four Director Bobby Davis; District Five Director Bradley Stavinoha; District Six Director Annie Vahalik; and District Seven Director Regina House. Executive Officers - President/CEO Brian Vanicek; Vice President of Sales and Marketing Delisle Doherty; Vice President of Communications Melanie Zavodny; Chief Financial Officer Leonard Mikeska; and Controller Roy Vajdak.

* As a result of actions taken by delegates to the 2021 Convention, the directors and officers are now collectively referred to as the SPJST Executive Committee. Previously the term “Supreme Lodge” was assigned to that body

The following elements were addressed during the meeting:

➛ SPJST’s financial performance

➛ Review of SPJST’s investment performance

➛ SPJST sales and marketing initiatives achieved in 2022 and what to expect in the year ahead

➛ Review of SPJST’s fraternal engagement initiatives in 2022 along with some priorities in 2023

➛ Overview of camp initiatives which were achieved in 2022 as well as some projections for the current year

President/CEO Brian Vanicek’s Report

As President and CEO, my driving objective is to ensure the financial security and fraternal relevancy of SPJST. To that end, I thank my fellow officers, the Home Office staff, SPJST Directors, and all of you for working together as a team to help achieve SPJST’s fraternal mission of “Insuring and Enriching Lives.”

2022 Organizational Goals

We will begin the review with a look back at our 2022 Organizational Goals. A year ago, I stated that we were at a turning point in the evolution of SPJST. A point during which decisive changes were taking place and beneficial results were taking root. Today, I find myself optimistic and energized by what lies ahead for SPJST. With reference to SPJST’s 2022 Organizational Goals, the Society made good progress.

I want to start off by providing you with a glimpse of what goes on at the Home Office Board Room on Mondays at 1:30 p.m. for Team Meeting.

Department heads – that’s all of the officers along with Human Resources Administrator Nancy Miller and Insurance Department Manager Cynthia Hutka – meet weekly to review the activities of the preceding week, to address progress with ongoing projects, and to discuss those matters that sometimes “pop up” unexpectedly.

These visits gave us a chance to discuss any complex or pressing issues as well as talk through ideas and solutions. Over the years, the team meetings have helped to foster a sense of trust and camaraderie. Leonard does a good job of documenting these meetings and in turn, sharing them with team members as well and with our directors.

In addition to our quarterly meetings that you read about in the Vestnik, the Executive Committee also meets annually in the fall for a two-day strategic planning meeting. The main purpose of that two-day session is to identify departmental objectives, timelines, and accountabilities for the year ahead. Collectively, all of those objectives come together in our annual set of Organizational Goals.

Goal 1—Well-trained agents and high-quality customer service.

SPJST scheduled 49 scheduled sales training sessions in 2022. Delisle was the principal architect of this program, which included live classes throughout the state as well as monthly online classes that were held on the third Thursday of each month and facilitated by Melanie. The virtual training classes enabled participating agents to receive state-certified continuing education credits for their participation.

Getting all SPJST agents annuity-certified has been a priority. Of our current roster of 161 agents, only four remain to become annuity-certified. The rule is now if you want to sell for SPJST, you need to have your insurance license and be annuity-certified. It just stands to reason, when an agent is licensed and annuity-certified, that agent is better equipped to provide members and prospective members with competent information as well as being able to sell the full line of SPJST insurance and annuity products. High-quality customer service centers on being attentive – listening and attending to our members as well as our prospective members needs and desires.

The Home Office reorganization initiatives which commenced in 2021 continued throughout 2022, had a positive impact on the way SPJST has been able to respond to our members. The new territory manager system became effective on October 1. It is now the responsibility of the territory managers to hire, train, and manage all of the agents who are working within their respective territories. The job description also mandates that the managers function in tune to the fraternal aspects of SPJST. By bringing the field management back in house, Delisle will have more control over their production and create accountability for the position. To that end, the territory managers will be motivated to identify and enlist agents who are more focused on SPJST, enhancing customer service and making the program stronger.

Goal 2—Improving technological capabilities.

On the technological front, the new illustrate, inc. illustration software went live on January 1, 2022. This package replaced the Praeses illustration software which was woefully inadequate in meeting SPJST’s illustration software needs.

To clarify, illustration software is a tool used by sales agents to present members and prospective members with insurance cost projections or in the case of annuities, expected growth charts. Since the implementation of illustrate inc., multiple upgrades have been added, providing SPJST sales agents with an effective web-based quoting, illustration, and application system.

Also, in 2022, SPJST began what is expected to be a three-year data migration and conversion process to the cloud-based Oracle Insurance Policy Administration software. This process represents a major investment in technology and will replace the USSI system which was installed in the early 1980s. Controller Vajdak serves as the primary SPJST Contact for the data migration and integration process.

Additionally, a Quality Assurance team is comprised of staff members representing various areas. Quality Assurance team members are Linda Hill (death claims), Marissa Salinas (annuities), Doni Powell (underwriting), Lisa Mills (agents and issuing), Lisa Kirby (billing), and Cynthia Hutka (annuity issuance). Other staff members may be designated as the project builds.

On the SPJST accounting front lines, the integration of the new administrative software platform mandates that SPJST integrate new accounting software as the existing USSI suite will no longer be functional in the new environment. Roy is currently contemplating accounting software solutions that will effectively manage all of our core finance and accounting functions.

The DocuSign agreement which went into effect in 2021 was thoroughly integrated throughout the whole of SPJST operations in 2022. DocuSign, once again to clarify, is the business world’s most widely used electronic signature and it enables SPJST members and prospective members to sign and send practically every official agreement, contract, or form that we issue.

DocuSign’s authentication functions help prove that signers are who they say they are at the time of signing, helping to ensure that SPJST documents have non-repudiation in a court of law should it ever be necessary.

In the fourth quarter, the Insurance Department integrated Quest Diagnostics as a way to cut costs and increase efficiency in the insurance underwriting process. Quest Diagnostics maintains an extensive nationwide database of patient prescription and laboratory histories, enabling SPJST to eliminate several blood and urine requests as well as APSes (Attending Physician Statements). This tool alone is expected to reduce the costs that SPJST used to pay for medical examinations for prospective certificate holders by at least 50 percent.

Finally, late in 2022, SPJST began its implementation of the Paycor human resource management system.

Paycor is a comprehensive software application that will enable the Home Office to more effectively manage payroll, tax payments, 401k administration, and paid time off (PTO). Paycor was selected after a thorough vetting process of four human resource management systems. We’re utilizing the Paycor system now; however, there are some modules that are still being implemented.

Goal 3—Improving the workplace.

When we talk about improving the workplace, we’re talking about creating a positive work environment that increases productivity. I want to compliment our SPJST Home Office staff members for their professionalism. They had big gaps to fill in 2022 as we had four dear members of the Home Office family retire last year. Retirees included Data Entry Clerks Joyce Harris and Marie Wolf, Fraternal Assistant Ruth Hanusch, and Accounting Manager Debbie Dohnalik. Combined, these ladies represented a combined total of 103 years of service. We also lost Melinda Bigham, hospitality manager in charge of the kitchen at Camp Kubena, who passed away on June 18, 2022, and Mortgage Loan Manager Ann Paruzinski, who passed away on September 28, 2022, after more than 45 years with SPJST. May they rest in peace.

SPJST currently maintains a workforce of 37 employees. That’s down from the peak in 2016 which was 47 employees. That amounts to a 21 percent reduction in force – achieved largely through voluntary attrition. And just in case you’re wondering, that number – 37 employees – does include our five officers and the three full-time personnel at Camp Kubena.

Management introduced PTO (Paid Time Off) for the staff in 2022, and it has been working very well. The PTO policy combines vacation, sick time, and personal time into a single bank of days for employees to use when they take paid time off from work. It’s a structure that provides our employees with more flexibility to accommodate the demands of everyday life while also fulfilling the demands of their SPJST work schedule.

We also established an employee engagement committee during the fourth quarter of 2022. The committee is comprised of a group of employees – one representing each department – who meet periodically to exchange ideas and suggest ways to enhance staff satisfaction and work effectiveness. The main ingredient for any growing organization is amazing employees. That demands that SPJST be an amazing employer. We’re working on it.

In January, the Board of Directors approved the initiation of the Educational Support Program. This is a program that invites and encourages continuing education – at the collegiate level for fulltime and part-time employees after one year of employment. The coursework must be strategic to SPJST’s business, regardless of whether it’s related to the employee’s current role. All employees are eligible for course tuition and fees up to $4,000 annually or $2,000 per semester. Work-related courses must be taken at an accredited college or university and may be taken online. Employees must earn a B grade average in order to receive reimbursement in the subsequent semester.

Knowledge is power, and we want Home Office employees to be well-positioned to fill the mid- and senior-level management positions as they become open. Succession planning is something that we all need to consider. Whether it’s in the Home Office, on the Board, or in the lodge – you want to motivate and develop talented individuals to step up and take on a more significant role in the future.

Goal 4—Conditioning lodges for growth.

I’m going to commence with a little preamble here . . . From a fraternal perspective, 2022 was a big year for SPJST. We marked its 125th anniversary on October 15 with a grand celebration at Texas Czech Heritage and Cultural Center in La Grange. With not one but two proclamations from the Governor, the big 125-prize raffle, great entertainment – and a shout out here to the orchestras that joined us from Lodge 84, Dallas and Lodge 88, Houston . . .

There was so much going on that beautiful and sunny day . . . and such a satisfying feeling – a public acknowledgment that SPJST is something so very dear and worthy of celebration. That great day was emblematic of so many of the major and minor member and community events hosted by SPJST lodges throughout the state in 2022.

My sincere thanks and appreciation to those members who in 2022 demonstrated the commitment, wherewithal, and creativity – a very important element – to working to keep their lodge and district events relevant to their members and the communities that they serve.

You could see it in every single issue of the Vestnik . . . And as good as that sounds – there’s a flip side to this –many of our lodges have been stalled by declining and in some cases non-existent member involvement. I could say that our sister fraternals, veterans groups, and civic organizations are dealing with the same scenario – but there’s really no comfort in that. In some ways, the distancing that was forced upon our lodge system by the coronavirus appears to have accelerated the decline in active membership that existed before this crisis came into play.

Our mission statement, “Insuring and Enriching Lives,” reflects the very premise upon which the Society was founded which was to bring people together for their mutual aid and empowerment. This goal of “Conditioning lodges for growth” was all about reengaging our members and reenergizing our lodges. It’s a process that has carried over into 2023 and will likely be with us for the foreseeable future.

Part One of the revitalization process commenced in February of this year with the reassignment of members. We started by focusing on the 15 communities where new lodges had been designated but were never officially organized or chartered. This includes the areas of Trinity, Fairfield, Palestine, Tyler, Waxahachie, Corsicana, Mineral Wells, Plano, Brownwood, Vernon, Goldthwaite, Amarillo, Denver City, and Odessa representing a total of 342 members. In each case, the members assigned to these unchartered areas were reassigned by the Home Office to the active SPJST lodge nearest the address that we have on file for the member. Individuals who were reassigned had the option to accept the reassignment or have their membership transferred to any other active SPJST lodge.

Part Two of the reassignment process is currently underway and is being directed at reassigning members from inactive chartered lodges to active chartered lodges. Inactive lodges will be determined on the basis of reviews and consideration by directors and management. Per the by-laws, lodges which experience a reassignment of membership will remain in inactive status for a period of five years from the time of reassignment. At some point during this 60-month period, the Executive Committee and/or local membership may find it practical to “reorganize” the lodge.

Bringing lodge members together by merger or reassignment is only part of the equation. The key to any successful lodge revitalization includes reestablishing an identity and clear purpose for the lodge. It simply isn’t enough to say a lodge has to meet regularly. Ideally, the process should also be about creating a vision – setting a direction – for where the members want to take the lodge and then communicating that message to the members and to the community.

Moving forward, district directors will be directly involved in this along with Home Office support teams in working with local lodge officers in planning, promoting, and advancing SPJST revitalization initiatives. A good place to start is by looking at what could be gained by cultivating closer camaraderie between the members of sister lodges and even units of our sister fraternal organizations in any given area.

What can we expect to achieve?

How about new and exciting activities and programs based on common inter- ests; joint sponsorship of community service and cultural projects; and a heightened awareness of SPJST possibly resulting in an increase in active membership.

Just this past week – you may have seen it on the news – the Surgeon General’s Office issued a General Advisory calling attention to the public health crisis of loneliness and lack of connection in our country. In that context, fraternalism is right for the times! Here I want to share our SPJST Vision Statement:

Our vision is to provide financial security for our members; build a wholesome family environment; and encourage cherished Czech traditions.

To help lodges achieve the worthy objectives outlined in the vision statement, the SPJST Executive Committee developed the new 88-page SPJST Lodge Operations Manual, copies of which were distributed at the district annual meetings. The manual, which is also available online, will be updated on a regular basis.

Goal 5—Increasing investment performance.

SPJST’s investment income and annuity program enabled the Society to post strong operating results through year-end 2022. Investment income increased 7.2 percent to $12.233 million compared to $11.356 million at year-end 2021. We’ll elaborate on that performance when we get to the Investment Section.

Goal 6—Enhanced member activities and services.

Goal 6 is really closely related to Goal 4 – conditioning our lodges for growth . . . In January 2022, the Board of Directors designated Vice President of Communications Melanie Zavodny with the added charge of daily oversight of SPJST’s member engagement section, which includes the SPJST youth program and local lodge outreach and assistance. As a practical matter, I remain active and involved within in the broad realm of fraternal programming and outreach. Since the beginning of 2022, Melanie and State Fraternal Director Frank Horak have been working with the DYCs, youth leaders, and parents collecting their input on the many and varied aspects of the SPJST youth program.

Melanie will address these initiatives and the evolutionary changes that were conceived in 2022 and being introduced in 2023.

Goal 7—Establish a visual identity for SPJST that conveys heritage, culture, and promise.

This was an objective which really got underway with the new SPJST signage in 2021 and continued through 2022. These activities have been primarily taking place through the offices of Vice President of Sales and Marketing Delisle Doherty and Vice President of Communications Melanie Zavodny. The thought process here is that a well-designed visual identity and marketing effort will boost SPJST’s brand awareness and serve as a powerful tool for telling SPJST’s story. That initiative expanded in 2022 to include a print, radio, and audio-visual advertising, something that Delisle will be expanding on during his presentation.

At this point, I’d like to turn over the program to Controller Roy Vajdak who will speak on SPJST’s 2022 financial performance as well as the many other projects his area was responsible for, including information technology.

Controller Roy Vajdak’s Report

The 2022 annual statement has both positives and negatives. The emphasis is squarely focused on investing in the business end of operations. I’d like to share some numbers now focusing on the positives first. What I’ve done is construct the charts in such a way as to illustrate the five most recent years of activity. In that way, I believe you can see a more visual representation of the trends and where they may be leading.

I’m going to start with Total Society Assets. Total society assets increased from $243 million in 2018 to $262 million in 2022. That’s a substantial increase over where we were in 2018.

Next, I’ll move on to Net Investment Income. It was $9.9 million in 2018 and increased to $12.2 million in 2022.

Next, I’ll move on to General Operating Expenses. You can see that general operating expenses have declined from $3.2 million in 2018 to $3 million in 2022. This is due to the Home Office focusing on reducing expenses where we can and on a reduction of staff.

The next two charts, respectively, illustrate the Death and Annuity Benefits (on page 7) that SPJST has paid to members over the past five years. You can see that in death claims, we were consistent in paying more than $3.7 million to members in 2018 and 2019. However, beginning in 2020, we saw a substantial increase by about $2 million each year in our death claims.

Annuity benefits are consistent at about $10 million-plus per year. However, in 2021, we saw an increase due to the special offer on annuities that was made to some of our members.

Now, let’s take a look at an Unallocated Surplus. Unallocated surplus is basically the retained earnings of SPJST. You’ll see that our unallocated surplus has declined from $16.8 million in 2018 to $11.8 million in 2022.

The decline in unallocated surplus for the year 2022 can be attributed to two items. First, SPJST incurred a net loss of $581,320 from operations . . . $200,000 comes from the increase in death benefits paid in 2022. Also, surrenders increased by $100,000. Given the increase of inflation in 2022, the increase in surrenders was not unexpected. Finally, Camp Kubena incurred a loss of $291,000. Brian will explain our efforts to address the camp loss later in the program.

Additionally, SPJST committed in 2021 to replacing our policy administration system. This project started in the summer of 2022 and is projected to be completed in the fall of 2024. All costs of this project are required to be capitalized until the software is placed in serv-

Total Society Assets

Net Investment Income

ice. To make this even worse, is the National Association of Insurance Commissioners (NAIC) classifies software as a non-admitted asset. Therefore, SPJST could not recognize software expenses of $845,766 which reduces surplus.

If any member would like to receive a digital copy of the SPJST Annual Statement, please email me at royv@spjst.com, and I’ll be happy to provide you with a complete digital copy of the report by email.

President/CEO Vanicek’s Commentary

The two sets of numbers – “Death Claims Paid” and “Annuity Benefits Paid” – perhaps more than any others –communicate the important role that SPJST has played for generations of Texas families . . . the very reason we were chartered and the fundamental reason that we exist. And that is to provide financial support to the beneficiaries of our members when they die.

We can never replace a loved one or a friend; however, as fraternal brothers and sisters, we can offer our condolences to the survivors, and we can offer our assistance. The $24 million –almost $25 million in death benefits that SPJST delivered over the past five years most certainly helped to ease the financial burdens of those left behind. And, as the second set of numbers shows, during that same five-year period – from 2018 through 2022, SPJST distributed just under $68 million in annuity benefits to our members. Seldom do we draw attention to these statistics.

Since the year 2000, SPJST has delivered more than $74 million in death claims to beneficiaries and more than $210 million in annuity benefits. Collectively, that’s right at $284 million – a quarter of a billion dollars, and that’s just since the year 2000. It really does add up, and it speaks well of the strength and fidelity of SPJST.

Also, in his report, Roy made reference to the $291,000 loss recorded for Camp Kubena. From an accounting perspective, Camp Kubena is treated much the same as any other SPJST investment. Line 3 of the Summary of Operations lists our net investment income for 2022 at $12,232,746. Had Camp Kubena “broke even” for 2022, it would have increased our investment income by a little more than 2 percent. That may not sound like much; however, when you’re talking 2 percent of $12 million, it’s something we want to see improve.

So, what’s being done to increase revenues at the camp?

Foremost, there’s a new rate structure that went into effect for 2023 at Camp Kubena . . . That will make a positive difference; however, it’s only the beginning. Even as Camp Kubena is consistently booked throughout the summer months, efforts are being made to eliminate the “off-season” that is typically associated with camp/retreat properties. There is a realization on the part of the Executive Committee and Camp Director that it is imperative that Camp Kubena branch out into new types of off-season programs that generate income and introduce the property to a new and appreciative audience.

The types of programs that Camp Kubena doing business as “Round Top Meadows” can offer in the fall, winter, and spring require a different approach to marketing and staffing.

The Camp Kubena Advisory Committee which is comprised of camp personnel, and select members of the Executive Committee and Home Office personnel are working on ways to bring projects like family camping, faith community retreats, work-group retreats and picnics, wedding venues, and seasonal public events to the property. While the shift from summer camp to off-season programming will be challenging, the Executive Committee believes that the rewards will be worthwhile—the property will generate additional income, build the reputation of its facilities and programs, and cast a positive light on the value that SPJST places on enjoying, protecting, and experiencing life lessons in the great outdoors.

Chief Financial Officer

Leonard

Mikeska’s Report

Note: President/CEO Brian Vanicek presented the first portion of CFO Mikeska’s report. CFO Mikeska’s comments and overview follow the presentation.

Chief Financial Officer Leonard Mikeska conferred with me earlier and shared information on SPJST’s investment performance for 2022 and offered some insight into our investment portfolio and how it is being managed.

I want to emphasize the increase of year-end income from 2020 to 2022. From $9.3 million to $12.2 million. That close to $3 million bump represents 24 percent increase in two years.

And none of that relates to gains achieved in the stock market.

Looking back, the events of the past three years have generated waves of great uncertainty and anticipation in the marketplace.

A lot of the information that we’re presenting today covers five year periods. This chart does the same thing in that it depicts the period from 2018 to 2023. Check out the blue line. That’s the Dow Jones Industrial Average – the stock market. The red line: That’s the Consumer Price Index or CPI. You hear economists and financial reporters referring to it constantly. Essentially, it mirrors the changes in the price of consumer goods. When that line goes up as you see it doing here, that’s inflation.

The short answer to that question is ‘yes.’ SPJST annuities are guaranteed in their entirety based on the financial strength and claims paying ability of the SPJST.

SPJST’s investments have actually fared quite well in recent years. The old “slow and steady wins the race” strategy has prevailed. Here’s why: High grade corporate bonds played and continue to play the leading roles in SPJST’s diversified securities portfolio. The strategy itself is simple: As a life insurance company, our aim is to invest our members premiums in longer-duration, low-risk fixed income assets.

That does three things for us: strategy has also enabled SPJST to take advantage of some great opportunities, including business bridge loans and some select business mortgages. jectives as well as the strategies that AQS should apply in meeting these objectives.

1. Steady flow of income.

2. Guard against stock market volatility.

3. The ability to take advantage of new opportunities.

First, fixed-income investments provide SPJST with a steady flow of income. Our bond maturation dates are laddered in such a way as to provide the Society with a steady cash flow that enable it to meet its varied obligations.

SPJST’s bond portfolio is very diverse and as of today includes 266 position which support various US businesses and local governments. Pictured here are some of the well-known corporate issues that are included within the portfolio.

The SPJST NAIC Distribution chart shows how our bonds are rated according to the NAIC – National Association of Insurance Commissioners – rating scale: 55.7 percent are NAIC 1s. 43.6 percent are NAIC 2s. And less than 1 percent are NAIC 3s. We have no holdings in the NAIC 4, 5 or 6 range.

Bonds that are rated NAIC 1 and 2 are considered Investment Grade and are considered the most safe. Bonds which are rated 3, 4, 5, or 6 are considered noninvestment grade and carry a higher degree of risk.

The Executive Committee meets with AQS each quarter and the management team – especially CFO Mikeska –meets with them periodically throughout the week. AQS also routinely provides SPJST Executive Committee complementary access to continuing education finance and investing seminars.

Note: Chief Financial Officer Mikeska thanked and complimented President/CEO Vanicek for a very thorough presentation of our investment performance and presented the following additional information.

Now, recall the market crash that hit in late February 2020? You can see how the market took a dive. By year-end, though, the market was up again. And from that point forward, the market has been in constant state of flux. Various reasons for that. Initially, there were fears of a resurging Covid epidemic. More recently, it’s inflation and the government’s efforts to keep it down that has been causing the erratic highs and lows. And again, just this past Wednesday, the Federal Reserve increased its key interest rate by a quarter percent, making it the 10th rate hike in 14 months.

Without question, those rate hikes and loose banking oversight that contributed to the three US bank failures we’ve seen so far in 2023 – Silicon Bank, Signature Bank and – again – just this past week – the closure of First Republic Bank. Collectively those three banks account for 2.4 percent of all assets in the banking sector.

In light of the banking failures, it’s no surprise that the Home Office has been hearing from concerned members wanting to know if their financial positions –especially as that relates to annuities are safe.

Second, fixed-income investments offer protection against the whims and volatility of the stock market. This past week – some of you may have noticed – many of the regional banks were scrambling to convince the public of their financial soundness as their stock prices were plunging

Third, the laddered structure of our bond portfolio enables us to us take advantage fixed-income investment opportunities that present themselves throughout the year. In recent years that

The two bonds that we own in the NAIC 3 category are Ford Motor bonds, and they have not presented us with any payment issues nor do we anticipate that they will.

SPJST’s trusted partner in navigating these investment seas is AQS Asset Management of Austin, Texas. AQS has been with us three years and already we are seeing impressive results. These results are the result of a very deliberate process. SPJST investments are closely managed according to the guides of an Investment Policy Statement. It’s actually a lot more than a statement. It’s a 10-page agreement between SPJST and AQS which specifies our investment ob-

SPJST NAIC Distribution

Being aware of the fiduciary responsibility to our members, the management engaged our actuary to perform an especially important test. A known fact is that our life insurance policies written today will extend out 10, 20, 30, or some even up to a hundred years in the future. The Society assets must manage our investments so that we can pay all claims extending years into the future. Knowing that interest rates and returns will change numerous times over the life of a policy, under guidance of the SPJST actuary, cash flow testing is done annually. The object of the testing is to assure that the Society has adequate funds to pay your claims under changing interest rate scenarios. The results of the actuary’s recent cash flow test were positive. The test assured us that the investments will provide adequate funds under changing interest rate scenarios. The actuary determined that no additional reserves needed to be set up at this time.

Goals for 2023 are to continue to look for opportunities to increase investment income. During the past three years, there was significant improvement in the quality of the investment portfolio and an equally important goal for 2023 is to continue this trend of improvement.

Vice President of Sales and Marketing

Delisle Doherty’s Report

Note: President/CEO Vanicek provided a brief lead-in to Vice President of Sales and Marketing Delisle Doherty’s report:

Effectively serving the insurance needs of our existing members and their extended families with high quality life insurance and annuities remained a key component of SPJST’s invigorated efforts to achieve new growth in 2022 and beyond.

Under the leadership of Vice President Delisle Doherty, the marketing department’s emphasis is on achieving sustainable, year-over-year growth that is aligned with the mission of the Society.

I’d like to turn the program over to Delisle who will provide us with a review of SPJST’s sales and marketing initiatives and accomplishments and what we can expect on a go-forward basis.

In 2022, we focused on five areas (many more, but five main areas):

1. Ensuring all agents are certified to sell annuities.

2. Creating an e-app system to speed up underwriting and eliminate errors.

3. Revamping some products like the final expense and annuities.

4. Increasing quality of sales by increasing persistency through training.

5. Continuing to create new member benefits.

By ensuring that all agents are licensed and certified, they can sell all the products. Without the proper licensing and certifications, more than half of our agents could not sell a third of our products, which included the more profitable annuities products. With the agents able to sell more products, our new annuity sales increased by 81 percent in 2022. Currently, 157 out of 161 agents are fully licensed and certified.

Creating an e-app system—By going to the electronic application, we are able to speed up our underwriting. Applications have less errors to allow underwriting to be completed in as little as two days.

Revamped and added new products—we simplified our final expense and increased the limit to $30,000. This allows us to jet issue the products on an approved or declined basis, making it easier for those with medical issues to get insurance. We added a juvenile term to 21 product that is also simplified to make it easier for children to get involved with SPJST. Then we added a 3year annuity.

We increased our persistency to over 84 percent through 2022 and over 92 percent in the first quarter of 2023. This means over 90 percent of our business is staying on the books over a 25-month period. Twenty years ago, less than 50 percent was staying on the books. This was done by having 49 classes throughout the state and continuing to increase our training. We currently do a monthly virtual training to be able to touch more agents, in addition to our regional trainings. Thru the first quarter of 2023:

• Earned premiums are up 37.53 percent.

• Life certificates are up 7.77 percent.

• Insurance issued up 34.08 percent.

We are currently looking to add new member benefits. This will include group short tour opportunities, like the Tyler Rose Festival, and longer tours such as the Czech Republic opportunity. We are also working with a law firm to create an educational website to guide members with wills, trusts, POAs, and DNRs, etc. In today’s environment, we are tasked more and more with taking care of our loved ones and elder care. This will help members maneuver through some of these complexities.

Vice President of Communications

Melanie

Zavodny’s Report

Note: President/CEO Vanicek gave a brief update of the Board of Directors’ decision to shift member engagement section daily oversight:

As previously noted, in January 2022, the Board of Directors designated Vice President of Communications Melanie Zavodny with the added charge of

! 9:9; daily oversight of SPJST’s member engagement section, which includes the SPJST youth program and local lodge outreach and assistance.

I’ll start out with a great big thank you to lodge officers and members for their fraternal devotion and dedication to SPJST and their communities. In lodges all over the state, members are once again volunteering their time and energy to support worthwhile causes, taking the best that SPJST has to offer — a tradition of helping people to care for their families — and extending these values to their communities.

Look through any issue of the Vestnik and you’ll see SPJST members having fun and doing good things for each other and for their communities. That’s what it’s all about, and that is always so good to see. Thanks to the devotion of Vestnik readers and reporters, we are never at loss for news and photos.

Through their participation in local SPJST Youth Clubs and statewide events, our young members between the ages of five and 18 developed a greater awareness of the common bonds that we all share. Throughout 2022, SPJST youth clubs worked independently and in collaboration with community-based organizations, tailoring programs to fit their local needs.

The Scholarship program also made a positive difference. A total of 51 SPJST scholarships were presented in 2022. 43 of those were presented in the spring and 8 were presented at SPJST State Youth Achievement Day on July 29.

I’m going to reserve commentary on Camp Kubena at this point as we will be receiving an update later from Camp Di-

! 9:99

Thank

!"#$%"&#'()*%&$+(,-./ Hours –44,603

Disbursements -$119,987

01223&4$5(6%"*47%

)*%&$+(,89/ Hours –17,650

Disbursements -$84,936

Total Events –1,238

Total Hours –62,253

Total Disbursements –$204,923

!"#$%"&#'()*%&$+(, :;<-. Hours –37,290

Disbursements -$190,652

01223&4$5(6%"*47%

)*%&$+(,/8< Hours –27,061

Disbursements -$168,270

Total Events –1,139

Total Hours –81,893

Total Disbursements$358,922 rector Rob Clift. Even so, a “shout out” is due to Camp Director Clift for the visionary role that he is fulfilling and his Camp Kubena team for the wonderful job that they are doing with the program.

Beginning in early 2022, State Fraternal Director Frank Horak and I worked with DYCs, youth leaders, parents, and youth to collect their input on many and varied aspects of the SPJST youth program. The vast majority asked for a dose of new life and energy to be injected into the youth program, which is celebrating its 70th birthday this year. Updates to the program continue to be rolled out – with two major events this summer. We will host one large statewide summer camp in June – instead of several smaller district camps AND we will host one statewide youth achievement day – or Youth Showcase – instead of the smaller district events. Combining these important activities creates improved efficiency and provides greater opportunities for our youth.

The overall goal for updating the youth program is to make it more appealing and relevant in the lives of our young members.

Conditioning our existing lodges for revitalization – and recommitting to the idea of volunteerism and service - also remains a top priority and one of our organizational goals for 2023.

We introduced quarterly community projects in January with the theme SPJST Gives. Cares, Shares. Many lodges and youth groups collected and donated soup to local food banks for the Souper Bowl in January through March. This quarter is Paws for a Cause, and already we are seeing lodges, youth groups, and members across the state collecting and donating supplies for local animal shelters.

THANK YOU for giving.

THANK YOU for caring.

THANK YOU for sharing. YOU are making a difference.

SPJST also introduced an exciting new program to engage members in community work and volunteerism. This program was created to motivate lodges and to reward them for their efforts to exhibit benevolence, humanity, and brotherhood in SPJST and local communities. The strongest lodges are the ones that meet regularly, maintain best business practices, and operate consistently with the SPJST Home Office.

Incentives for this program are granted to lodges that contribute volunteer hours in community service and fraternal activities; host social engagement activities; raise funds; hold regular lodge meetings/activities; submit all required forms; and report their success to the Vestnik.

So why do we track hours and all of this other information? SPJST is a 501(c)8 non-profit tax-exempt organization. We track these hours, expenses, and donations to ensure this tax-exempt status is maintained. Each year, the information is reported to the American Fraternal Alliance and ultimately to government agencies to protect our exemption and fraternal status.

We have created a video that outlines the new incentive program for our lodges. (Video can be viewed at spjst.org/gives)

A parallel incentive program has also been introduced for youth clubs with opportunities to earn hundreds of dollars for their clubs. We continue to make our way around the state working hand-inhand with lodge officers, FACs, and youth leaders training them on submitting their hours.

There’s just so much to say regarding SPJST’s non-contractual benefits. Benefits including PerkSpot, travel insurance, and group tours to the Czech Republic and the Tyler Rose Festival are all profiled on the spjst.org website.

I could go on; however, I’ll draw my section to a close and share a video from Camp Kubena Director Rob Clift with an update on camp and the upcoming activities. (Rob’s video can be viewed at 1:49:50 at https://vimeo.com/spjst/advisory-council-2023.)

Closing

Note: President/CEO Brian Vanicek and Vice President of Communications Melanie Zavodny closed out the webcast.

Sessions like ours here today, I believe, are important, too, for the transparency that they provide as well as bringing our management to accountability. I’ll grant you, the format that we are using today, isn’t perfect. I do enjoy the personal interaction that you get in face-to-face meetings. The key takeaway from today’s session is that the delegates remain in the ultimate position of control in SPJST. You elect the board and the management control flows down from the board.

One of the areas that Delisle touched on is our ongoing efforts to enhance the visibility of the SPJST statewide. Over the past year, SPJST continued to show strong support for a multitude of annual public events, most notably helping to sponsor such events as National Polka Festival in Ennis, Westfest in West and the Kolache Festival in Caldwell. The Society also offered lent its support to an array of cultural and heritage groups including Czech Heritage Museum and Genealogy Center in Temple, Czech Educational Foundation of Texas (CEFT), Texans of Czech Ancestry (TOCA), Czech Heritage Society of Texas, Texas Czech Heritage and Cultural Center in La Grange, Czech Center Museum of Houston, and Sokol. It was an honor for us to work with and to be affiliated with these fine organizations and the projects that they championed.

Advisory Council members will recall that the SPJST Foundation was established as an independent 501(c)3 nonprofit corporation in 2012 by SPJST to administer to the growth and development of the Czech Heritage Museum and Genealogy Center in Temple, educational programs at Camp Kubena, and endeavors of significant merit and in line with the Foundation’s objectives.

Since January 1, 2023, the SPJST Foundation has been tasked with the oversight and management of the Czech Heritage Museum and Genealogy Center in Temple. We believe it’s a worthy initiative, one which could also help to raise the profile of SPJST – and not just in Temple, but statewide. Night at the Museum programs on the second Thursday of each month through August have begun. This Thursday evening, it’s the Origin and Evolution of the Kolache. It’ll be a fun – and informative –evening! May the present and future generations of our SPJST Family benefit as a result of our harmonious and collaborative efforts.

Thank you for your time and attention. Best wishes from SPJST to you and your lodge.

Note: The meeting can be viewed at this link: https://vimeo.com/spjst/advisory-council-2023 —SPJST—