The Board Bulletin Fall 2017

A​fter 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. This Bulletin reports key information presented and actions taken at the fall 2017 meeting that affect plans and programs administered by the Board of Pensions.

​Optimism for the future shared at Board of Directors meeting


He brought him outside and said, "Look toward heaven and count the stars, if you are able to count them ... So shall your descendants be."         — Gen 15:5

"Sometimes God reveals to us that ... our idea of what is possible is limited by assumptions we ourselves have made," the Reverend Margaret Fox said in her sermon during Board of Directors worship Friday morning, urging the Board of Pensions to challenge its assumptions and open itself to new possibilities.

Rev. Fox, who is a Director, recalled the exchange between Abram and God in Genesis 15:1-6, when Abram reveals to God his doubts and fears about the future. She said God "reveals to him that something else, something new" is possible; God responds with "a vision of a future ... as bright and as vast as the night sky."

Following worship, the Reverend Frank Clark Spencer, President of the Board of Pensions, addressed the Directors, saying: "You challenged us to question our assumptions and get creative in how we serve more, serve better, and serve the Church."

The Board of Pensions accepted that challenge, and early signs are promising. The 2017 Benefits Plan redesign created flexibility and made it possible for more church workers to be included in the plan. A restructuring of administration and plan provisions eliminated restrictions that had served as barriers to inclusion.

Major initiatives that began with listening to the needs of the Church and plan members resulted in congregations and other employers providing benefits coverage to approximately 1,600 new individuals in 2017.

Since the addition of menu options to the Benefits Plan, month after month more members have joined the plan than have left. In sharing this data, Rev. Spencer stated, "We've started to make a difference after 30 years of a declining trend in membership."

To better serve the Church, Rev. Spencer stressed, a new generation of ministerial leadership must be nurtured. He shared a 10-year analysis of all ministers ordained in the Presbyterian Church (U.S.A.) from 2007 through 2016. In addition to showing an overall decline in ordinations, the analysis revealed the unfortunate trend of ministers without benefits being 50 percent more likely to leave active ministry within five years than those who receive full benefits. "It is my hope that every minister ordained have a full benefits package," Rev. Spencer said.

In the months ahead, the Board of Pensions will refine ideas for expanding plan membership. One idea: Reduce coverage costs for ministers under age 40 installed in small churches that have abandoned pastoral leadership or in newly created positions in churches currently with pastors. Another: Dramatically expand an educational debt reduction program to help ministers achieve the long-term economic security essential to wholeness. At its meeting in March 2018, the Directors will be presented with specific, detailed proposals.

The Board's work over the past two years has built on A Theology of Benefits, which calls for just compensation for all church workers.

The meeting of the Board of Directors concluded with a sense of optimism, with a sense that "something else, something new" is possible for the future.

Balanced Investment Portfolio returns 12.4 percent for nine months ended September 30, 2017

The Reverend Dr. Lindley G. DeGarmo, Chair of the Investment Committee, provided an overview of the work of the Investment Committee on behalf of members of the Benefits Plan and their beneficiaries.

The Balanced Investment Portfolio has three major components: U.S. and international equity, fixed income, and alternative investments. The Committee meets three times a year and reviews each component in depth. At the meeting October 27, 2017, the Committee reviewed the fixed income component of the Balanced Investment Portfolio.

The Committee had educational forums on investing in U.S. equity and investing in secondary funds in private equity. The Committee approved the retention of a U.S. equity manager and a commitment to a secondary fund for private equity.

The Committee affirmed the long-term strategic asset allocation ranges approved by the Board of Directors and confirmed that the September 30, 2017, asset allocations of 34.1 percent in U.S. stocks, 22.2 percent in international stocks, 1.2 percent in global stocks, 28.6 percent in fixed income, and 13.9 percent in other assets were within the approved ranges.

It is the responsibility of the Investment Committee to review and receive reports from the Committee on Mission Responsibility Through Investment (MRTI), including the annual General Assembly Divestment List.

The Investment Committee adopted the 2018 Board of Pensions Prohibited Securities Lists, to include the 2018 General Assembly Divestment List, which will be distributed to all separate account managers.

Judith D. Freyer, Executive Vice President and Chief Investment Officer, reviewed 2017 year-to-date performance of 12.4 percent within the framework of global economic and political events. The Balanced Investment Portfolio exceeded the return of the Asset Mix Policy Benchmark for the 20 years ended September 30, 2017. The Policy Benchmark assumes passive management of the portfolio using index funds. The Balanced Investment Portfolio also exceeded the 6 percent long-term investment return assumption for the 20 years ended September 30, 2017.

The Balanced 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 September 30, 2017, the portfolio had a market value of $9.3 billion.

Assistance updates

2017 Christmas gifts and 2018 Assistance Program budget

The Directors voted to continue the following:

  • Christmas gifts from the Assistance Program for the recipients of Income and Housing supplements (qualifying retired plan members and surviving spouses) were renewed for 2017. Single individuals will receive gifts of $250; members with spouses, $500.
  • The 2017 maximum annual guidelines for Assistance Program spending were continued for 2018, resulting in an approximately $5 million budget for assistance spending while preserving capital for future generations.

Directors vote to expand income support

The Directors approved the following changes to Income and Housing Supplements:

Income Supplement target levels to better reflect service

The Directors affirmed that the current income target levels for Income Supplements are the appropriate minimums for 2018, enabling qualifying church workers to live with dignity during retirement. At the same time, the Directors increased the income target levels of eligible church workers based on their years of Pension Plan participation to recognize the value of long service to the Presbyterian Church (U.S.A.).

An income target level is the maximum income a retired single person or member with a spouse will have after an Income Supplement is added to all other sources of income. It is the most a member’s income will be after financial assistance from the Board is added.

​2018 income target level guidelines ​ ​
​Years of Pension Plan participation​Retired single members​Retired members with spouses
​10 to < 20​Prorated​Prorated
​20 to < 25*​$30,420​$36,540
​25 to < 30​$31,941​$38,367
​30 or >​$33,462​$40,194

*These target levels are 50 to 60 percent of the median income of actively serving full-time pastors.

The target levels for qualifying retirees with 25 to less than 30 years of Pension Plan participation will be 5 percent greater than those with 20 to less than 25 years, and 10 percent greater for those with 30 or more years.

Target levels are prorated, or reduced, for church workers who served the PC(USA) between 10 and 20 years.

Housing Supplement maximum income levels renewed

The maximum income a retired plan member may have to qualify for housing assistance if he or she meets certain other eligibility guidelines is $42,640. This income maximum, which is approximately 70 percent of the median income of actively serving full-time pastors, will remain in effect for 2018.

Housing Supplement assisted living income eligibility guideline unchanged

The assisted living income eligibility guideline of $60,910 will continue for 2018. The guideline is designed to help retired plan members whose incomes are not sufficient to meet the cost of assisted living but exceed the income limit for Housing Supplements.

Age threshold added to eligibility criteria

Effective immediately, eligibility for Income and Housing Supplements begins at normal retirement age, which, under the Benefits Plan, is 65. Current Income and Housing Supplement recipients who are not yet 65 will be exempt from this age requirement.

Medical coverage rate updates

Board staff presented the 2018 rates for the Medicare Supplement Plan, medical continuation coverage, and the Dental Plan.

Internal auditor engagement

The Directors approved the engagement of Protiviti as internal auditors for the remainder of 2017 and the year ending December 31, 2018. Protiviti is a global leader in internal audit solutions.

The next meeting of the Board of Directors is scheduled March 1-3, 2018. For further information about the meeting, please contact the Corporate Secretary at