Missions board suffers loss of investment income
By Linda Bloom*
April 30, 2009 | STAMFORD, Conn. (UMNS)
Like many other institutions, the United Methodist Board of Global Ministries lost millions in its investments in 2008.
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Treasurer
Roland Fernandes reports April 27 on the financial state of the United
Methodist Board of Global Ministries during its spring meeting in
Stamford, Conn. UMNS photos by Cassandra M. Zampini.
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Roland Fernandes, the board’s general treasurer, offered an observation
before presenting the hard economic facts to directors during the April
27-29 spring meeting. “It’s probably the most difficult report I’ve had
to give in years, in terms of the numbers,” he said.
Unrealized losses for investments and trusts totalled $23.5 million.
The impact of the current economic crisis was even harder on the
Collins Pension and Health Plans administered by the board for retired
missionaries, where investments dropped by $53.3 million, of which
$25.9 million were unrealized losses.
Part of the reason for the high loss, according to Fernandes, is recent
pension legislation requiring the board to place the unfunded liability
of the Collins plans on its books. “Of lesser but not insignificant
impact is the drop in income from the Collins forest, which funds these
two plans, and the drop in investment income,” he reported.
To deal with the losses, the board’s finance committee recommended a
number of changes to both the pension and health plans, ranging from
introducing a vesting requirement for the pension plan to adjusting
reimbursement rates for the health plan. Those recommendations were
approved by directors.
Decline in net assets
Overall, the operating revenue of the Board of Global Ministries was
$68 million for 2008, higher than total operating expenses of $66.3
million, Fernandes reported.
After the board experienced a decline in net assets in excess of $112
million between 1999 and 2002, its assets had increased significantly
in 2006 and 2007, partly due to the sale of stock. But those gains
halted abruptly with the economic downturn. “Over the last year, the
assets of the board have fallen by 62 and a half million (dollars),” he
told directors.
In February, the Board of Global Ministries announced it would
reduce its 2009 operating budget of $57.6 million by $3.9 million, or 7
percent, because of a combination of economic factors. That action was
affirmed April 29 when directors adopted a 2009 revised budget of $53.7
million. The board’s projected income for 2010 is even less -- $51.5
million.
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The Rev. Bau Dang chairs the mission agency’s finance committee.
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The previously announced budget reductions included $2 million in
program and $700,000 in personnel expenditures, with the expectation
that 17 staff positions eventually would be eliminated or left unfilled.
Critical time
“This is a critical time for this agency, as it is for other
entities within the church,” Fernandes said. “Most of the general
church agencies have experienced budget cutbacks. Within the next two
to three months, we will need to put together the 2010 budget. As we
deal with the financial realities facing us, the recommendations of the
operational audit will provide us with a tool that will enable us to
reshape ourselves as we strive to become more effective and efficient
in our ministry.”
Fernandes added that one of his concerns was the board’s increasing
dependence on the denomination’s World Service Fund, derived through
apportionments from local churches and annual conferences. The agency
now receives 40 percent of that fund, “by far the largest share of any
agency,” he noted.
The push from other church agencies to change how World Service
Funds are divided could provide challenges for the Board of Global
Ministries, he told directors.
*Bloom is a United Methodist News Service news writer based in New York.
News media contact: Linda Bloom, New York, (646) 369-3759 or newsdesk@umcom.org.
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Resource
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