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Proposed pension plan moves ahead

7/22/2003 News media contact: Tim Tanton · (615) 742-5470 · Nashville, Tenn.

PORTLAND, Ore. (UMNS) - A new pension program for United Methodist clergy is moving closer toward reality following a milestone decision by directors of the church's benefits agency.

The proposed program would provide both a defined benefit and a defined contribution plan to clergy. Directors of the United Methodist Board of Pension and Health Benefits approved the plan document for the program during their July 18-19 meeting. The document will be used as the basis for legislation that will go to the church's highest assembly next spring in Pittsburgh.

Three years in the making, the proposal reflects input from people around the church. "A tremendous amount of time and thought have been put into this," said Barbara Boigegrain, top staff executive, after the meeting.

Most large companies offer both defined benefit and defined contribution plans, board officials noted. The defined benefit plan would ensure a monthly payment in retirement, and the defined contribution part would provide an employer contribution equal to 3 percent of the person's pay.

If approved, the new Clergy Retirement Security Program - replacing the current Ministerial Pension Plan - would take effect Jan. 1, 2007.

Board representatives will work on familiarizing General Conference delegates with the legislation in advance of the April 27-May 7 assembly. Details will also be posted on the agency's Web site at www.gbophb.org.

Boigegrain described the proposal as "a combined approach for providing benefits that both ensure security and enable additional growth as the markets perform." It will provide support for church pastors as well as clergy serving in all other forms of ministry, such as teaching and general agency work.

The board also will present legislation for a separate program that would require coverage to local-church lay workers - for example, secretaries and music directors - in the United States. Sponsors would contribute 3 percent of compensation to the program. If passed, the plan would represent the first time that uniform retirement benefits have been made available to all U.S. lay employees, the board has said. It would take effect Jan. 1, 2006.

In addition, the board is developing a new plan to cover lay and clergy employees of general agencies.

Based in Evanston, Ill., the board provides benefits for more than 66,000 clergy, lay employees, dependents and survivors.

During their meeting, the board's directors also:

Â· Continued working on a system for providing pension benefits to clergy outside the United States. A small team will visit Russia in July and Mozambique in September. The board hopes to launch a pilot program in Mozambique.

Â· Learned that improved market conditions have helped increase assets to $11.3 billion as of June 30. Though that's up only slightly from $11.1 billion a year earlier, it is a marked improvement from $9.7 billion in mid-March. "This is a significant change for the better for our participants," said Gail Whitson-Schmidt, chief financial officer. Besides market conditions, assets were helped by the board sticking to its long-term investment plan, emphasizing stocks, Whitson-Schmidt said. The board's suspension earlier this year of the 3 percent base-interest credit rate remains in effect as the agency continues to rebuild its reserves. All of the funds in the board's investment portfolio were up for the year as of July 18 by amounts ranging from 1.5 percent to 15.2 percent.

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