May 7, 2004
By Linda Green*
PITTSBURGH (UMNS) — United Methodist clergy now have a new pension program.
to the 2004 General Conference voted the program to provide “the
denomination with the best practices of major corporations” by combining
the characteristics of a defined benefit and a defined contribution
a vote of 615-215, delegates approved the new program to provide
“security with choice.” There are two components to the program offered
by the United Methodist Board of Pension and Health Benefits.
first is a defined benefit program that provides the same benefit to
all clergy across the church, based on a formula of 1.25 percent of the
Denominational Average Compensation multiplied by years of credited
new program also has a defined contribution component of 3 percent of
actual compensation, which allows participants to accumulate cash in a
self-directed individual account. The two components are to be funded by
the annual conference and would become effective Jan. 1, 2007.
also is recommended that church lay workers receive pension
contributions of 3 percent of actual compensation, effective Jan. 1,
board administers at least nine pension, relief or benefit programs
created before 1981 in either the United Methodist Church or its two
predecessor denominations, the Methodist Church and the Evangelical
United Brethren Church, which united in 1968. Some retirees today
benefit from both the current plan, known as the Ministerial Pension
Plan, established in 1982, and from one or more of the prior plans. The
latter are referred to collectively as “pre-82.”
is a very fair plan for all clergy throughout all of our
jurisdictions,” said Verna McKinney, Kentucky Annual (regional)
Conference. She observed the six different ways that contributions are
made to the ministerial pension plan and how differences vary from
conference to conference.
agreeing with the plan during assembly debate was Penney Schwab, Kansas
West. Calling it fair and balanced, she said it “does the most good for
the most clergy. It equitably shares the responsibility for pension
security for our clergy.”
Fred Haustein, Arkansas, disagreed. “I believe the plan is inadequate.
It is not our best stewardship to produce the result we want for our
pension responsibility,” he said.
referred to a study noting that if the church had been participating in
this plan for the last 20 years, the benefit would have been a $10,808
annual pension compared to the current plan of $13,464.
the vote, Joel Huffman, Desert Southwest, told the delegates that the
plan would stop the growing liability under the ministerial pension plan
for annual conferences and allow annual conferences to reduce pension
costs. He also said the new plan would allow reserves to be freed up for
the medical expenses of retirees and minimize the risk for clergy at
the most vulnerable times of their lives in retirement.
approval, delegates asked the Judicial Council, the denomination’s
supreme court, for a declaratory decision on the legality and
constitutionality of the plan. The council deferred the requests for a
decision until its fall meeting.
A similar plan for staff of United Methodist agencies also was approved by General Conference.
*Green is a United Methodist News Service news writer.
News media contact: (615) 742-5470.