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The Board Bulletin — Summer 2015


After each regular meeting of the Board of Directors of The Board of Pensions of the Presbyterian Church (U.S.A.), the Board of Pensions publishes The Board Bulletin, providing a record of actions taken at the meeting. This Bulletin reports key information presented and actions taken at the summer 2015 meeting that affect plans and programs administered by the Board of Pensions.

Board Forges Groundbreaking Partnership with Presbyterian Foundation

The Board of Pensions has formed an innovative partnership with the Presbyterian Foundation. The agencies see the partnership as a critical step in their efforts to better serve the Presbyterian Church (U.S.A.). Through it, funds development by the agencies is being consolidated under the Foundation, which has helped raise, steward, and distribute funds for ministry and mission for 216 years. The Board of Pensions maintains responsibility for annual fundraising for the Assistance Program, which provides critical assistance to PC(USA) pastors, other church workers, and their families in need.

Kevin J. Garvey, a Board employee who now serves jointly as its Chief Development Officer and the Foundation’s Chief Ministry Relations Officer, will join the Foundation full time July 1, 2015, as Senior Vice President for Development. Mr. Garvey, who has coordinated the agencies’ funds development work since 2012, will continue to serve the Board in a consultative capacity.

Balanced Investment Portfolio Returns 4.0% for Five Months Ended May 31, 2015

Judith A. Harris, Vice Chair of the Investment Committee, provided an overview of the Committee’s work on behalf of members of the Benefits Plan and their beneficiaries.

The Committee affirmed the long-term strategic asset allocation ranges and the May 31, 2015, asset allocation of 36.3 percent in U.S. stocks, 20.7 percent in international stocks, 29.7 percent in fixed income, and 13.3 percent in other assets. The Committee reviewed the fixed income component of the portfolio and approved the retention of current managers. Ms. Harris reported that, following an initial discussion of currency hedging strategies at the March 2015 meeting, the Investment Committee reviewed and approved the policy for currency hedging at the portfolio level.  

Chief Investment Officer and Treasurer Judith D. Freyer reviewed the 2015 year-to-date performance of 4.0 percent within the framework of global economic and political events that resulted in volatile investment performance for many asset classes. The portfolio exceeded the return of the Asset Mix Policy Benchmark year-to-date and for the 10, 15, and 20 years ended May 31, 2015. The Policy Benchmark assumes passive management of the portfolio using index funds. 

The Balanced Investment Portfolio is the investment fund for the Pension Plan, Death and Disability Plan, Endowment Fund, and Assistance Program, as well as restricted gifts made to the Board of Pensions. On May 31, 2015, the portfolio had a market value of $8.84 billion.

Traditional Program Medical Dues Remain Stable for 2016; Alternate Dues Method Approved for Eligible Employers

At the recommendation of the Healthcare Committee, the Board of Directors assured medical dues stability for employers and members in 2016 by 

  • maintaining the current dues for Traditional Program medical coverage through 2016; and
  • holding the medical dues minimum and maximum at 2015 levels.

The current dues of 23 percent for Member-only coverage and 24.5 percent for Member + Family coverage will remain in effect for 2016 (subject to the medical participation minimum of $44,000 and maximum of $124,000, which also are remaining constant).

The current medical dues-sharing option will again be available: Employers may — subject to presbytery policy, as applicable — require members with family coverage to pay some or all of the allowable dues share in 2016 (the 1.5 percent portion of the 24.5 percent dues for Member + Family coverage).

“It’s critical that we provide dues stability while undertaking a redesign of the Benefits Plan. We look to offer, by 2017, a single benefits plan that includes different choices for employers and members,” said the Reverend Frank Clark Spencer, President of the Board of Pensions. (Watch Rev. Spencer in Serving More, Serving Better, Serving the Church for key listening session takeaways that guide the Board’s benefits plan redesign work.)

Alternate Dues Method May Help Some Employers Manage Medical Costs

In addition to keeping dues stable, the Directors voted to offer employers that provide Traditional Program coverage to teaching elders who are not in installed positions and/or to lay employees the flexibility of using an alternate method to pay medical dues for 2016. This option affects approximately one-third of the employers currently invoiced by the Board for medical coverage. It enables them to pay medical dues for teaching elders who are not in installed positions and/or lay employees using a dollar amount by coverage level rather than a percentage of effective salary.

Employers who provide Traditional Program coverage for those employees may choose the dues method — percentage or dollar amount (alternate) — that best meets their needs and those of their staff. Employers must use the same method to pay dues for each employment classification. For example, an employer would have to use the same dues method for the classification of exempt lay employees.

The approximately 2,200 employers who are eligible to use the alternate dues method will receive a letter from the Board in early July outlining details. Because the alternate method does not apply to every employer, churches and employing organizations considering using it should first consult with the Board of Pensions at 800-773-7752 (800-PRESPLAN).

Other Medical Dues Actions

Affiliated Benefits Program Dues To Increase

The Directors approved an increase in monthly dues of approximately 5 percent, on average, for active ABP participants and ABP early retirees. This increase, which takes effect January 1, 2016, reflects the claims experience for this population during the past year.

Through the ABP, churches and other employing organizations may offer medical coverage only — or medical with death and disability coverage — to teaching elders who are not in installed positions and lay employees who are scheduled to work 20 hours a week or more. This program does not include a pension plan, although ABP participants are eligible to participate in the Retirement Savings Plan of the Presbyterian Church (U.S.A.) where offered by the employing organization. Employers may require covered employees to share in the cost of their medical coverage.

Coverage Level
Continuation (Post-Employment)
& Early Retiree
Member + children
Member + covered partner
Member + family

Seminary Student Dues Remain Stable

In keeping with the decision to maintain dues stability for active member Traditional Program coverage, the Directors decided, for 2016, to keep dues for seminary student coverage at 2015 levels:

Coverage Level
Monthly Dues
Member + children
Member + covered partner
Member + family

Dues Action for Medicare Supplement Plan Deferred

Board staff and the Medical Plan’s actuary, Milliman Inc., presented a summary of historical actuarial forecasts for the Medicare Supplement Plan and an analysis of the plan’s more recent medical and prescription drug experience, in which they noted trend volatility and continued Medicare Part D subsidy income uncertainty.

The Healthcare Committee recommended that staff be authorized to establish the 2016 Medicare Supplement Plan subscription charges for all participants in the fall so that rates can be set using the most current information possible. The Committee stipulated that, absent further approval, any dues increase for the 2016 Medicare Supplement Plan may not exceed $40 per participant per month.

Highmark To Provide Medical and Behavioral Care Management Services

EAP Services Will Remain with Cigna

The Healthcare Committee authorized Board staff to sign a three-year renewable contract with Highmark Blue Cross for the provision of medical and behavioral care management services for active plan members beginning January 1, 2016.* Cigna Behavioral Health will continue to provide Employee Assistance Program (EAP) services for the same period.

The plan’s current vendors, ActiveHealth Management and Cigna Behavioral Health, will continue providing care management services for medical/surgical cases and mental health/substance abuse cases, respectively, until December 31, 2015. The Board of Pensions has sought and received assurances from all three service providers that transition plans will be in place, and followed, for those members receiving care management services at year-end.

The move to Highmark will produce a simpler, more integrated health plan service experience, as Highmark alone, rather than multiple vendors, will provide pre-certification services, claims administration, medical case management, and behavioral care management services for the large majority of active plan members.

Highmark also offers a more extensive network of behavioral healthcare providers than Cigna Behavioral Health. This means a greater number of providers will be “in network,” lowering overall costs for members and the Medical Plan. Members affected by the change will receive a letter with details about the transition in early December.

*Anthem, Triple-S, and Cigna Global Health Benefits enrollees should refer to their own plan’s provisions for behavioral health information.

New Health and Well-Being Technology Services To Come

The Healthcare Committee also authorized Board staff to contract with Limeade, a company that provides a technology platform and related tools to support members’ efforts to improve their health and well-being. Starting January 1, 2016, new technology with an emphasis on member engagement will replace the tools provided by ActiveHealth Management at

Watch for more information about this change in the fall.

Consultant and Counsel Engagements and Contract Renewals Approved

The Directors continued the designation of the following advisers:

  • Deloitte and Touche LLP, for independent audit services
  • Towers Watson, for pension actuarial counsel
  • Milliman Inc., for medical actuarial counsel
  • Ballard Spahr LLP, for legal counsel

In addition, contracts with the following Medical Plan service providers were renewed for one year unless otherwise noted:

  • Highmark, negotiated through the Church Benefits Association coalition (a three-year renewal)
  • Anthem Blue Cross of Kentucky
  • Cigna Global Health Benefits

Questions or Comments?

  • Write or
    The Board of Pensions of the Presbyterian Church (U.S.A.)
    2000 Market Street
    Philadelphia, PA 19103-3298
  • Call 800-773-7752 (800-PRESPLAN)

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