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. This Bulletin reports key information presented and actions taken at the spring 2018 meeting that affect plans and programs administered by the Board of Pensions.
The Reverend Dr. J. Herbert Nelson II, Stated Clerk of the General Assembly of the Presbyterian Church (U.S.A.), joined the Board of Directors in fellowship and its workings in committees. On Friday evening, he conducted a keynote, engaging with Directors and Board of Pensions staff on the state of leadership in the Church.
"We're at a significant place in the life of the Church," Rev. Nelson said. "We've been going through what I think is another reformation." In addressing the future of church leadership, he called for a return to "rigorous teaching" in the seminaries to prepare a pipeline of leaders. The "No. 1 work" of the Church is to strengthen leadership, Rev. Nelson said.
Rev. Nelson's words called to mind the earlier presentation to Directors by the Reverend Frank C. Spencer, President of the Board of Pensions. "We are called to raise up leaders to God's people," Rev. Spencer had said, introducing Benefit Plan innovations, including Pathways to Renewal. "J. Herbert and I share a deep faith that God is at work in this denomination," Rev. Spencer said as he introduced the Stated Clerk.
The Board of Directors approved a 3.9 percent experience apportionment for the Pension Plan, effective July 1, 2018, for a five-year cumulative increase of 18.4 percent. The apportionment, the sixth in as many years, complies with the Board of Pensions' experience apportionment policy guidelines. Those guidelines, which tie apportionments to the overall funded status of the plan, seek to balance short- and long-term goals: ensure the long-term financial stability of the plan, protect members against inflation, and maintain generational equity.
As of December 31, 2017, the Pension Plan was 131 percent funded.
An experience apportionment is a lifelong increase in pension benefits or credits, depending on employment status:
The Directors annually review plan reserves and other data. Experience apportionments are not guaranteed to be granted each year.
As part of the ongoing commitment to offer PC(USA) employers flexibility and choice in providing benefits to more employees, the Directors approved the addition of the following options and features to the Benefits Plan, effective January 1, 2019:
Other plan changes effective January 1, 2019, include a decrease in the cost of supplemental death benefits coverage. This action creates an additional income security opportunity, which employers may offer their eligible employees.
In addition to these options and features, the Directors approved the creation of a high-cost claims fund for 2019 and 2020 intended to slow the rate of increase in the cost of Medical Plan coverage.
Watch for further information in Board Connections, the Board's monthly newsletter.
Judith D. Freyer, Executive Vice President and Chief Investment Officer, reviewed the Balanced Investment Portfolio 2017 investment performance of 17.0 percent within the framework of global economic and political events, which resulted in superior investment performance for many asset classes. She provided an overview of investment strategies for 2018. The Balanced Investment Portfolio is the investment fund for the Pension Plan, Death and Disability Plan, Endowment Fund, and Assistance Program assets, as well as for restricted gifts made to the Board of Pensions. On December 31, 2017, the portfolio had a market value of $9.6 billion.
The Reverend Dr. Lindley G. DeGarmo, Chair of the Investment Committee, provided an overview of the Investment Committee work on behalf of Benefits Plan members and their beneficiaries.
The Committee participated in a discussion of global investing in volatile markets and the challenges and opportunities for investors in 2018. The Committee reviewed the U.S. and international equity components of the portfolio and affirmed the December 31, 2017, asset allocation of 35.7 percent in U.S. stocks, 23.2 percent in international stocks, 27.4 percent in fixed income, and 13.7 percent in other assets. The Committee also affirmed the current long-term strategic asset allocation ranges for the Balanced Investment Portfolio.
The Committee reviewed the alternative investment component of the portfolio and approved a limited partnership commitment to an existing partnership relationship for debt and equity investments in middle market companies.
Recognizing the need to nurture a new generation of ministerial leaders who will bring renewed vitality to congregations, the Directors approved a five-year pilot program, Pathways to Renewal, to enable more young ministers to receive full coverage in Pastor's Participation through the Benefits Plan. The program begins July 1, 2018.
Board staff proposed Pathways to Renewal in response to congregational trends revealed by the Board's detailed analyses in 2017 of congregational budgets, clergy compensation, ordination trends, and benefits distribution over the last 10 years.
The program is designed for
In either case, the newly employed minister must be under 40. The program reduces the cost to congregations of Pastor's Participation, in the Benefits Plan. Pathways to Renewal is designed to encourage congregations to call more ministers and to alleviate barriers to entering and remaining in ministry.
By nurturing financial stewardship in PC(USA) ministers and making full benefits more affordable for small churches, the Board believes the denomination can be transformed for generations to come. Small churches may understand a significant component of their mission to be providing a context for young ministers to develop their skills and deepen their call in ministry while larger churches may understand a part of their mission as supporting young ministers in new and innovative ministries.
*This digital edition of the Board Bulletin includes updates to program criteria after the newsletter's initial release.
The Minister Educational Debt Assistance program was created to reduce financial pressures on new ministers. Responding to changing needs of the Church and to support the objectives of Pathways to Renewal, the Directors approved the following changes to the eligibility guidelines for Minister Educational Debt Assistance Grants, effective July 1, 2018:
The minister must
The Directors voted to increase the maximum of the Minister Educational Debt Assistance Grant program. The minister may receive grants of up to $5,000 per year for up to five years, provided the minister participates in designated financial coaching and shares in reducing or eliminating his or her educational debt. Together, the changes in eligibility and grant size represent a significant expansion of the program — reflecting the Board's commitment to ministers' financial wholeness.
The Directors granted a disability benefit increase of 2.0 percent for members receiving disability benefits as of December 31, 2017. The increase, effective July 1, 2018, is intended to prevent the erosion of disability benefits through inflation.
The assets and liabilities of the Death and Disability Plan are evaluated independently of the other plans administered by the Board of Pensions. At the March meeting, the Directors reviewed investment and actuarial experience, reserves, and inflation and determined that the benefit increase is both necessary and appropriate.
Disability benefit increases are not guaranteed to be granted each year.
The Board of Directors took action to elect, from among current Directors, the following individuals to serve as Board officers for one-year terms beginning at the conclusion of the 223rd General Assembly (2018):
Fairfax F. Fair Chair
Fredric J. Bold Jr. First Vice Chair
Suzanne P. Welsh Second Vice Chair
John W. Hamm will continue to serve as Board of Directors Chair through the conclusion of General Assembly.
The next meeting of the Board of Directors will be in Philadelphia July 12-14, 2018. Please contact the Corporate Secretary for further information at firstname.lastname@example.org or 215-587-7600.