UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ___________ to ___________
Commission File Number: 333-17007
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Farm Bureau 401(k) Savings Plan
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FBL Financial Group, Inc.
5400 University Avenue
West Des Moines, Iowa 50266
<PAGE>
INFORMATION PROVIDED
1. Financial statements and schedules of the Farm Bureau 401(k) Savings Plan
(formerly known as the Iowa Farm Bureau Federation and Affiliated
Companies 401(k) Savings Plan) prepared in accordance with financial
reporting requirements of Employee Retirement Income Security Act of 1974
are incorporated herein by reference and are attached hereto as Exhibit
1.
2. A written consent of Independent Auditors is attached hereto as Exhibit 2
and is incorporated herein by this reference.
1
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: June 23, 1999
By /s/ Edward M. Wiederstein
---------------------------------------
Edward M. Wiederstein
Trustee
By /s/ Richard D. Harris
---------------------------------------
Richard D. Harris
Trustee
FARM BUREAU 401(k) SAVINGS PLAN
By: Iowa Farm Bureau Federation
(Administrator of the Plan)
By /s/ Edward M. Wiederstein
---------------------------------------
Edward M. Wiederstein
President
By /s/ Richard D. Harris
---------------------------------------
Richard D. Harris
Secretary and Treasurer
2
Exhibit 1
FINANCIAL STATEMENTS AND SCHEDULES
FARM BUREAU 401(k) SAVINGS PLAN
(FORMERLY IOWA FARM BUREAU FEDERATION AND
AFFILIATED COMPANIES 401(k) SAVINGS PLAN)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
Farm Bureau 401(k) Savings Plan
Financial Statements
and Schedules
Years ended December 31, 1998, 1997 and 1996
CONTENTS
Report of Independent Auditors..............................................1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits........................2
Statements of Changes in Net Assets Available for Plan Benefits.............3
Notes to Financial Statements...............................................4
Supplemental Schedules
Line 27(a) - Schedule of Assets Held for Investment Purposes...............11
Line 27(d) - Schedule of Reportable Transactions...........................12
<PAGE>
Report of Independent Auditors
The Board of Directors
Iowa Farm Bureau Federation
We have audited the accompanying statements of net assets available for plan
benefits of the Farm Bureau 401(k) Savings Plan (formerly Iowa Farm Bureau
Federation and Affiliated Companies 401(k) Savings Plan) as of December 31, 1998
and 1997, and the related statements of changes in net assets available for plan
benefits for each of the three years in the period ended December 31, 1998.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for plan
benefits for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at December 31, 1998, and schedule of reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audit of the 1998
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1998 financial statements taken as a whole.
The information presented in the schedules of assets held for investment
purposes and reportable transactions assume cost to be equal to current value as
historical cost information is not available. Disclosure of cost information,
which is not considered material to the financial statements taken as a whole,
is required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
/s/ Ernst & Young LLP
Des Moines, Iowa
May 21, 1999
1
<PAGE>
Farm Bureau 401(k) Savings Plan
Statements of Net Assets Available for Plan Benefits
DECEMBER 31
1998 1997
--------------------------
ASSETS
Investments:
Mutual funds, at fair value:
EquiTrust Series Fund, Inc.:
High Grade Bond Portfolio $ 347,804 $ 232,311
High Yield Bond Portfolio 413,173 306,352
Managed Portfolio 1,650,871 1,360,349
Money Market Portfolio 144,598 48,083
Blue Chip Portfolio 2,468,505 1,214,649
Value Growth Portfolio 2,514,378 2,808,449
--------------------------
7,539,329 5,970,193
EquiTrust Money Market Fund, Inc. -- 140,880
--------------------------
Total investments in mutual funds 7,539,329 6,111,073
Flexible premium deferred annuities 4,380,732 3,735,072
FBL Financial Group, Inc. common stock 5,902,070 3,246,585
Notes receivable from participants 820,749 709,933
--------------------------
TOTAL INVESTMENTS AND NET ASSETS AVAILABLE
FOR PLAN BENEFITS $18,642,880 $13,802,663
==========================
SEE ACCOMPANYING NOTES.
2
<PAGE>
Farm Bureau 401(k) Savings Plan
Statements of Changes in Net Assets
Available for Plan Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1998 1997 1996
----------------------------------------------
<S> <C> <C> <C>
Additions:
Investment income:
Interest $ 279,466 $ 281,559 $ 307,156
Dividends 226,018 633,765 101,967
Net unrealized and realized gains (losses) on
investments (266,580) 1,211,853 1,213,023
----------------------------------------------
238,904 2,127,177 1,622,146
Contributions:
Employees 3,188,032 635,753 548,285
Employer 1,459,263 499,702 306,004
Rollovers from other plans 625,769 77,865 142,604
----------------------------------------------
Total additions 5,511,968 3,340,497 2,619,039
Deductions - benefits paid to participants (671,751) (765,507) (348,256)
----------------------------------------------
Net additions 4,840,217 2,574,990 2,270,783
Net assets available for plan benefits at beginning
of year 13,802,663 11,227,673 8,956,890
----------------------------------------------
Net assets available for plan benefits at end of year $ 18,642,880 $ 13,802,663 $ 11,227,673
==============================================
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
Farm Bureau 401(k) Savings Plan
Notes to Financial Statements
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
Investments in EquiTrust Series Fund, Inc. (formerly FBL Series Fund, Inc.),
EquiTrust Money Market Fund, Inc. (formerly FBL Money Market Fund, Inc.) and
common stock of FBL Financial Group, Inc. are stated at fair market value, based
on the latest quoted market price. Investments in flexible premium deferred
annuities, which are considered fully benefit-responsive contracts, are valued
at contract value (including earnings attributed to the investment). Contract
value approximates fair value.
Notes receivable from participants are stated at the unpaid principal balance
plus accrued interest, which approximate fair value. The interest rate is 1-1/2%
above the FBL Flexible Premium Deferred Annuity Rate and ranged from 7.50% to
7.75% and 7.75% to 8.35% during the years ended December 31, 1998 and 1996,
respectively, and was 7.75% during 1997.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
Farm Bureau 401(k) Savings Plan (the Plan, formerly Iowa Farm Bureau Federation
and Affiliated Companies 401(k) Savings Plan) is a defined contribution plan
which covers substantially all employees of the Iowa Farm Bureau Federation and
affiliated companies (the Companies) including, beginning January 1, 1998,
employees of the Arizona Farm Bureau Federation and the New Mexico Farm and
Livestock Bureau and is designed to provide retirement benefits. Effective
January 1, 1998, the Plan was amended to discontinue 401(m) post-tax participant
contributions and implement a 401(k) feature which allows only before-tax
contributions. Under the amended plan, participants may contribute from 1% to
18% of their salaries, pre-tax, to the Plan, subject to certain limitations
described in the plan document. The Companies are required to match 50% of
participant contributions up to 4% of eligible annual salary, excluding agency
managers, assistant agency managers and, effective October 1, 1998, office
assistants, who are employees of Farm Bureau Mutual Insurance Company as well as
participants who have accrued certain minimum benefits under the Farm Bureau
Retirement Plan. Company matching contributions currently are in the form of
common stock of FBL Financial Group, Inc., an affiliate. Participants are
immediately fully vested in the contributions they make to the plan and, after
three years of employment, contributions made on their behalf through the
Company match. Agency managers, assistant agency managers and office assistants
who are employees of Farm Bureau Mutual Insurance Company are eligible for a
non-elective Company cash contribution.
4
<PAGE>
Farm Bureau 401(k) Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
During 1997 and 1996, participants were allowed to contribute from 1% to 15% of
their salaries, after-tax to the Plan, with matching contributions determined at
the discretion of the Companies. All amounts were 100% vested.
The Plan also allows for participants to borrow money from the Plan subject to
certain provisions.
On termination of service, the participant may elect to receive either a
lump-sum amount equal to the value of the account or equal installment payments
over a period of time not to exceed the life expectancy of the participant.
The foregoing description of the Plan provides only general information. A more
complete description of the Plan's provisions may be obtained from the plan
administrator.
3. INVESTMENTS
Contributions are invested in the mutual funds, flexible premium deferred
annuities sponsored by or offered by the Companies or common stock of FBL
Financial Group, Inc. Participants may elect in which portfolios of the mutual
funds to invest their contributions. The portfolios invest primarily in common
stocks, fixed income, high quality corporate bonds, debt securities of the
United States Government and short-term money market instruments. Participants
electing to have contributions deposited into the Flexible Premium Deferred
Annuities receive interest at a rate determined by the Board of Directors of
Farm Bureau Life Insurance Company, with a guaranteed rate of 3%. These rates
vary based upon the investment experience of the general account of Farm Bureau
Life Insurance Company. The interest rate credited to these contributions ranged
from 6.0% to 6.25% and 6.25% to 6.85% during the years ended December 31, 1998
and 1996, respectively, and was 6.25% during 1997. Participants who elect to
purchase stock in the Company do so at its market price when the trade is
executed.
5
<PAGE>
Farm Bureau 401(k) Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Total investments and changes in total investments for each investment option
are as follows:
<TABLE>
<CAPTION>
HIGH GRADE HIGH YIELD MONEY
BOND BOND MANAGED MARKET BLUE CHIP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total investments at January 1,
1996 $ 225,532 $ 246,354 $ 825,183 $ 65,997 $ 516,020
Interest and dividend income 13,289 17,907 29,356 2,037 3,529
Net unrealized and realized
gains (losses) on investments (1,860) 9,748 106,246 -- 109,081
Contributions:
Employees 13,883 18,650 93,830 7,631 53,842
Employer 1,922 9,692 67,123 -- 83,182
Rollovers from other plans 1,212 774 33,410 3,462 18,209
Benefits paid to participants (5,586) (3,559) (30,159) (5,221) (23,266)
Transfers between funds (36,533) (60,832) (119,904) (22,258) (38,371)
---------------------------------------------------------------------
Total investments at December 31,
1996 211,859 238,734 1,005,085 51,648 722,226
Interest and dividend income 12,942 19,862 126,382 1,883 5,982
Net unrealized and realized
gains (losses) on investments 6,043 8,099 (15,418) -- 191,968
Contributions:
Employees 14,560 23,712 92,175 9,522 74,355
Employer 2,307 19,956 96,606 -- 135,613
Rollovers from other plans -- 2,208 16,758 -- 10,501
Benefits paid to participants (2,355) (3,824) (60,422) (962) (35,727)
Transfers between funds (13,045) (2,395) 99,183 (14,008) 109,731
---------------------------------------------------------------------
Total investments at December 31,
1997 232,311 306,352 1,360,349 48,083 1,214,649
Interest and dividend income 16,075 21,915 64,140 4,943 16,995
Net unrealized and realized
gains (losses) on investments (3,206) (6,376) (300,679) -- 269,016
Contributions:
Employees 101,173 121,480 532,504 35,734 775,406
Employer 4,378 16,216 85,589 582 132,092
Rollovers from other plans 21,865 5,627 89,937 105,033 193,935
Benefits paid to participants (30,237) (23,644) (53,797) (10,943) (97,451)
Transfers between funds 5,445 (28,397) (127,172) (38,834) (36,137)
---------------------------------------------------------------------
Total investments at December 31,
1998 $ 347,804 $ 413,173 $ 1,650,871 $ 144,598 $ 2,468,505
=====================================================================
</TABLE>
6
<PAGE>
Farm Bureau 401(k) Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FBL
EQUITRUST FLEXIBLE FINANCIAL NOTES
VALUE MONEY PREMIUM GROUP, INC. RECEIVABLE
GROWTH MARKET DEFERRED COMMON FROM TOTAL
PORTFOLIO FUND, INC. ANNUITIES STOCK PARTICIPANTS INVESTMENTS
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total investments at January 1,
1996 $ 2,154,425 $ 70,356 $ 4,273,444 $ -- $ 579,579 $ 8,956,890
Interest and dividend income 27,671 2,540 268,960 5,638 38,196 409,123
Net unrealized and realized
gains on investments 384,965 -- -- 604,843 -- 1,213,023
Contributions:
Employees 173,441 11,670 159,267 16,071 -- 548,285
Employer 76,094 -- 59,660 8,331 -- 306,004
Rollovers from other plans 17,746 -- 65,721 2,070 -- 142,604
Benefits paid to participants (77,415) (2,755) (200,295) -- -- (348,256)
Loans made to participants -- -- (412,000) -- 412,000 --
Loan repayments -- -- 437,030 -- (437,030) --
Transfers between funds (206,674) (23,996) (876,958) 1,385,526 -- --
---------------------------------------------------------------------------------------
Total investments at
December 31, 1996 2,550,253 57,815 3,774,829 2,022,479 592,745 11,227,673
Interest and dividend income 430,481 3,085 234,579 33,148 46,980 915,324
Net unrealized and realized
gains (losses) on
investments (232,728) -- -- 1,253,889 -- 1,211,853
Contributions:
Employees 193,170 7,318 138,235 82,706 -- 635,753
Employer 123,637 -- 48,230 73,353 -- 499,702
Rollovers from other plans 15,820 -- 25,624 6,954 -- 77,865
Benefits paid to participants (232,118) (830) (403,233) (26,036) -- (765,507)
Loans made to participants -- -- (599,900) -- 599,900 --
Loan repayments -- -- 529,692 -- (529,692) --
Transfers between funds (40,066) 73,492 (12,984) (199,908) -- --
---------------------------------------------------------------------------------------
Total investments at
December 31, 1997 2,808,449 140,880 3,735,072 3,246,585 709,933 13,802,663
</TABLE>
7
<PAGE>
Farm Bureau 401(k) Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FBL
EQUITRUST FLEXIBLE FINANCIAL NOTES
VALUE MONEY PREMIUM GROUP, INC. RECEIVABLE
GROWTH MARKET DEFERRED COMMON FROM TOTAL
PORTFOLIO FUND, INC. ANNUITIES STOCK PARTICIPANTS INVESTMENTS
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest and dividend income $ 38,889 $ -- $ 231,182 $ 63,060 $ 48,285 $ 505,484
Net unrealized and realized
gains (losses) on
investments (904,878) -- -- 679,543 -- (266,580)
Contributions:
Employees 797,565 15,931 300,475 507,764 -- 3,188,032
Employer 113,708 -- 59,744 1,046,954 -- 1,459,263
Rollovers from other plans 102,971 -- 26,422 79,979 -- 625,769
Benefits paid to participants (188,848) -- (233,595) (33,236) -- (671,751)
Loans made to participants -- -- (608,800) -- 608,800 --
Loan repayments -- -- 546,269 -- (546,269) --
Transfers between funds (253,478) (156,811) 323,963 311,421 -- --
----------------------------------------------------------------------------------------
Total investments at
December 31, 1998 $ 2,514,378 $ -- $ 4,380,732 $ 5,902,070 $ 820,749 $ 18,642,880
========================================================================================
</TABLE>
The fair values of individual investments that represent 5% or more of the
Plan's net assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
------------------------
<S> <C> <C>
EquiTrust Series Fund, Inc.:
Managed Portfolio (150,627 shares in 1998 and
102,668 shares in 1997) $1,650,871 $1,360,349
Blue Chip Portfolio (58,746 shares in 1998 and
33,397 shares in 1997) 2,468,505 1,214,649
Value Growth Portfolio (261,914 shares
in 1998 and 208,807 shares in 1997) 2,514,378 2,808,449
Flexible premium deferred annuities 4,380,732 3,735,072
Common stock of FBL Financial Group, Inc.
(243,014 shares in 1998 and 80,564 shares in 1997) 5,902,070 3,246,585
</TABLE>
8
<PAGE>
Farm Bureau 401(k) Savings Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated April 30, 1998, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code of 1986 (the "Code") and, therefore, is exempt from
taxation. Once qualified, the Plan is required to operate in conformity with the
Code and ERISA to maintain its tax-exempt status. The administrator is not aware
of any course of action or series of events that have occurred that might
adversely affect the Plan's qualified status.
5. ADMINISTRATIVE AND OPERATING EXPENSES
The Companies pay all administrative and operating expenses of the Plan.
6. YEAR 2000 ISSUE (UNAUDITED)
The Companies developed a plan to modify their internal information technology
to be ready for the Year 2000. The plan, which includes the assessment and
conversion of critical data processing systems and determination of third-party
service provider compliance was substantially complete at December 31, 1998.
However, additional monitoring and testing, as needed, is planned for 1999. The
Companies do not expect this project to have a significant effect on Plan
operations. The Companies are currently developing contingency and continuity
plans to help minimize any impact, should problems arise.
9
<PAGE>
Supplemental Schedules
10
<PAGE>
Farm Bureau 401(k) Savings Plan
Line 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF ISSUER, DESCRIPTION OF INVESTMENT
BORROWER, INCLUDING MATURITY DATE, CURRENT
OR SIMILAR PARTY RATE OF INTEREST COST* VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EquiTrust Series Fund, Inc. Investments in mutual fund as
follows:
High Grade Bond Portfolio $ 347,804 $ 347,804
High Yield Bond Portfolio 413,173 413,173
Managed Portfolio 1,650,871 1,650,871
Money Market Portfolio 144,598 144,598
Blue Chip Portfolio 2,468,505 2,468,505
Value Growth Portfolio 2,514,378 2,514,378
Farm Bureau Life Insurance Company Flexible premium deferred annuities 4,380,732 4,380,732
FBL Financial Group, Inc. Class A common stock 5,902,070 5,902,070
-----------
$17,822,131
===========
Various participants Notes receivable, 7.5% to 8.6%, due
through December 2002 820,749
-----------
Total investments $18,642,880
===========
</TABLE>
The issuers of all of the investments above are considered as
parties-in-interest to the Plan.
* Cost is assumed to equal current value as historical cost information is
not available for all types of investments.
11
<PAGE>
Farm Bureau 401(k) Savings Plan
Line 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
TRANSACTIONS IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CATEGORY (iii) - ANY TRANSACTIONS INVOLVING SECURITIES OF THE SAME ISSUE, WHEN
AGGREGATED, EXCEEDS 5% OF PLAN ASSETS.
97 EquiTrust Series Fund, Inc.* Purchases of Blue Chip Portfolio
135 EquiTrust Series Fund, Inc.* Sales of Blue Chip Portfolio
76 EquiTrust Series Fund, Inc.* Purchases of Value Growth Portfolio
171 EquiTrust Series Fund, Inc.* Sales of Value Growth Portfolio
110 Farm Bureau Life Insurance Company* Purchases of Flexible Premium Deferred
Annuity
208 Farm Bureau Life Insurance Company* Sales of Flexible Premium Deferred Annuity
109 FBL Financial Group, Inc.* Purchases of FBL Financial Group common stock
66 FBL Financial Group, Inc.* Sales of FBL Financial Group common stock
</TABLE>
THERE WERE NO CATEGORY (i), (ii) OR (iv) TRANSACTIONS DURING THE YEAR ENDED
DECEMBER 31, 1998.
* Indicates party-in-interest to the Plan.
Cost information is not available. Purchases include expenditures for securities
and realized and unrealized gains/losses during the year. Sales represent
proceeds received upon sale of securities.
12
<PAGE>
<TABLE>
<CAPTION>
CURRENT VALUE NET GAIN
PURCHASE PRICE SELLING PRICE COST OF ASSET OF ASSET (LOSS)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,548,566 $ - $1,548,566 $1,548,566 $ -
- 294,710 294,710 294,710 -
252,101 - 252,101 252,101 -
- 546,172 546,172 546,172 -
1,637,570 - 1,637,570 1,637,570 -
- 991,910 991,910 991,910 -
2,746,841 - 2,746,841 2,746,841 -
- 91,356 91,356 91,356 -
</TABLE>
13
Exhibit 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-17007) pertaining to the Farm Bureau 401(k) Savings Plan (formerly
known as the Iowa Farm Bureau Federation and Affiliated Companies 401(k) Savings
Plan) of our report dated May 21, 1999, with respect to the financial statements
and schedules of the Farm Bureau 401(k) Savings Plan included in this Annual
Report (Form 11-K) for the year ended December 31, 1998.
/s/ Ernst & Young LLP
Des Moines, Iowa
June 22, 1999
