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ARCRA Annual Meeting with Red Cross Leadership

03/31/2020 1:18 PM | Anonymous member (Administrator)

Annually, the ARCRA Board meets with Red Cross leadership to discuss issues of importance to retirees.  Due to the COVID-19 crisis we made some last-minute changes to our meeting, including changing from a face-to-face format to a video conference format.  Red Cross leadership was immersed in dealing with the COVID-19 situation both internally and how to serve the nation.  We truly appreciated their commitment to making it all work and participating with us.

1.    Human Resources:
We met with Human Resources leadership to discuss a variety of topics including the Retiree Medical Program, Pension System, Participant Satisfaction and their partnership with ARCRA.  In addition to the history and current status of these programs, we also discussed future possibilities.  As we have noted in past publications, pensions/annuities are backed up by federal or state pension guarantees that address stability in times of economic stress.  That is comforting when we see swings in the global economy.  The Red Cross has also taken actions over the past two years to ensure stability in the Red Cross pension system as noted in the Finance report below. 
Other programs like the Red Cross Retiree Medical Program are more discretionary.  The good news is that there are no plans for significant changes in the near term.  Medical insurance carrier and plan designs have not changed for 2020.  Likewise, the dental and life insurance will remain the same.  We know that this can evolve in a changing economic environment, and the ARCRA Board will continue to engage with Red Cross leadership regarding these benefits.
The Participant Satisfaction with Red Cross@Work Service Center remains high (most recent around 91%).  However, there are going to be exceptions and ARCRA does assist people that cannot seem to work through the system.  Retirees can contact the Red Cross service center at:
Red Cross@Work Service Center
http://digital.alight.com/redcross/
1-877-860-7526
Representatives are available Monday-Friday, 9 am - 5 pm Eastern Time
2.    Finance:
Brian Rhoa, ARC CFO gave a brief summary of overall financial trends at Red Cross as well as some comments about fiscal year 2020 which will end June 30.  He also updated us on pension plan funding and the related investment strategy.  Regarding Red Cross operations, he is projecting a net operating margin for FY 2020 of between $45 million to $65 million.  He defines this as "normal" operations which excludes the peaks and valleys of disaster contributions and expenses and other extraordinary items or circumstances.  Of course, that brings us to the potential impact of the coronavirus on Red Cross operations.  You have likely heard that blood donations have plummeted for all blood banks including the largest collector, Red Cross.  Brian had no projections through year end since the situation is still evolving and Red Cross management is determining how they can bring their resources to bear to alleviate suffering country wide.  Clearly, the economic impact of actions taken to control the virus are negatively impacting a huge proportion of our populations.  In addition to blood donations, the impact on financial support to the Red Cross is unknown at this time.

Regarding the Red Cross pension plan, for the portion of annuity payments not funded by Athene, Hancock or Aetna, (the monthly amount you receive from State Street Bank) the Red Cross has been taking actions for at least two years to aggressively fund the plan with contributions that exceed the annual minimum funding requirement.  This has resulted in the build up of a prefunding balance or credit that can be used to keep the funding percentage at 80% or above.  The last funding notice dated October 2019 showed an 80.01% funding percentage.  Management expressed confidence that the percentage would remain above 80% when we receive our next funding notice.

Finally, as we all see our current investment balances negatively impacted by the coronavirus response, the Red Cross began to hedge the pension plan portfolio near the end of calendar 2018, about 18 months ago.  What that means is that they progressively started to move money away from equities and into bonds to potentially blunt any significant downturn in the markets.  They didn't see the virus coming but this strategy was put in place to try to protect the underlying investments of our plan from this type of occurrence.  In the near term, this action should give us some comfort that plan assets will not be as negatively impacted as a more aggressive investment strategy.  However, there is no perfect investment strategy to address all contingencies so we will have to wait and see what happens when this crisis finally subsides.  The same is true for the three large insurance companies that fund portions of our retirement payments.

While we do not have this kind of direct access to annuity providers, Athene recently sent a message to their annuitants clarifying their financial security.
3.    Volunteers & Planned Giving:
We get questions regarding retiree participation with the Red Cross, and one of the goals for this meeting was to discuss how/where retirees might remain involved.  We met with leadership from Volunteer Services and Planned Giving.
Volunteer Services:  Matt Bertram, Vice President Volunteer Services. 
Matt noted that the COVID-19 crisis has placed some strain on the system.  Disaster volunteers are currently working remotely due to COVID-19, making service delivery a challenge.  In addition, the nation, including the Red Cross, is facing problems getting enough blood donors.  Many blood drives have been cancelled.
ARCRA will work with Volunteer Services to highlight specific opportunities in upcoming eNewsletters.  In the meantime, if you are interested in volunteering with the Red Cross, go to the Red Cross website or sign up in Volunteer Connection to find opportunities that match your interest.
In our discussions, we identified areas of opportunity for volunteering.  Here are some of them:
  • Disaster Services-DAT member,
  • Community preparedness volunteers
  • Blood-donor ambassadors and transportation specialists
  • Care Network Caseworker - Services to Armed Forces
  • Sound the Alarm volunteers – this program is temporarily delayed due to COVID-19.  This program is also a fun opportunity for teams of volunteers.  Think about teaming up with your fellow retirees!
  • Administrative volunteers within NHQ departments such as Communications, Marketing, Technology
  • Volunteer Advisor - Vietnam Commercial First AID
  • Government Operations - National Exercise Coordinator
  • Government Operations-NRCC-DOCC liaison
Rebecca Locke, Executive Director, Gift Planning:
Rebecca provided clarity around Planned Giving and how retirees could continue to support the Red Cross mission.  We will be working with Rebecca in the future to see how ARCRA can help communicate more specifics on Planned Giving options.
In the meantime, if you are interested in learning more about planned gifts with the Red Cross, go to https://www.redcrosslegacy.org/.
Some of the easiest planned gifts include:
  • Bequest in a will:  Additionally, the Red Cross has partnered with www.freewill.com/redcross.  The site will take you through the steps to make a will.  In some states like California, the system will recommend you get an attorney.  But for many states it will help you create a simple will.
  • Beneficiary designation:  Designating a charity for a percentage of an estate or simply a single investment is one of the easiest ways to do a planned gift.  There is no cost and it’s fairly easy to do. 


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E-mail: admin@arcretireeassoc.org
Tel: 202-303-7184

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