The Board Bulletin is published after each regular meeting of the Board of Directors of The Board of Pensions of the Presbyterian Church (U.S.A.), and represents key information and actions taken that affect plans and programs administered by the Board of Pensions.
At their fall meeting, members of the Board of Directors received an update on the season of rebuilding initiative to redesign the Benefits Plan of the Presbyterian Church (U.S.A.), with a focus on choice and cost control for congregations. They also voted to make January 1, 2024, the final day for new enrollments in Pathways to Renewal, anticipating the addition of support for small congregations and innovative ministry with a plan redesign.
Directors are expected to vote on the proposed redesign at the Board of Directors meeting in March 2024. Recommendations proposed for the redesign were reviewed. The recommendations would enhance income protection plans, provide choice in healthcare coverage, create parity for all employees, subsidize small churches, create transparency in pricing, provide transition for those in Pastor’s Participation, and support innovative ministries. The Reverend Dr. Frank Clark Spencer, President of the Board of Pensions, presented a look at the recommendations this month at the Polity, Benefits, and Mission Conference.
Directors received a progress report on the replacement of the Medicare Supplement Plan with the Humana Group Medicare Advantage PPO plan, which they approved at their summer 2023 meeting. The new plan is effective January 1, 2024. In the four months since the new plan was approved, the Board of Pensions has moved to guide, and reassure, retired members and surviving spouses through the transition.
Information has been delivered in multiple ways. The Board of Pensions sent customized letters and emails to specific groups of retirees, including current Medicare Supplement Plan enrollees and 2022 enrollees who opted out of the Medicare Supplement Plan this year. Pensions.org content providing information on the Humana Group Medicare Advantage PPO plan has been developed, including FAQs.
In September, Benefits team leaders presented a webinar on transitioning to the new plan, attended by more than 1,000 people. The webinar recording is available on YouTube. This month, the Board of Pensions held two hourlong webinars with Humana on the details of the new plan and a third webinar is scheduled November 7.
Donald A. Walker III, Executive Vice President and Chief Investment Officer, reviewed the Board of Pensions Balanced Investment Portfolio asset allocation, risk, liquidity profile, and 2023 investment portfolio performance of 9.0 percent through August 31, within the context of global economic and political events.
Through August 31, 2023, the Balanced Investment Portfolio underperformed its asset mix benchmark, calculated by blending returns composed of 65 percent MSCI All Country World Index, 30 percent Bloomberg U.S. Universal Bond Index, and 5 percent 90-day U.S. Treasury Bills. Despite the recent period of volatile interest rates, the annualized returns for periods one year and longer met, or exceeded, the Board’s asset mix benchmark.
| Annualized returns shown as of August 31, 2023 (except year to date) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Year to Date | 1 Year | 2 Years | 3 Years | 5 Years | 10 Years | 15 Years | 20 Years | |
| Balanced Investment Portfolio | 9.0% | 9.6 | -1.6 | 6.8 | 6.5 | 7.7 | 7.4 | 7.7 |
| Asset Mix Benchmark | 10.5% | 9.6 | -2.6 | 4.0 | 5.8 | 6.7 | 6.1 | 6.9 |
The Balanced Investment Portfolio is the investment fund for the Defined Benefit Pension Plan, Financial Protection Programs, Endowment Fund, and Assistance Program assets. On August 31, 2023, the Balanced Investment Portfolio had a market value of $11.1 billion.
Asset allocations as of August 31, 2023, were within Board-approved ranges, as shown below.
| Asset allocations as of August 31, 2023 | ||||||
|---|---|---|---|---|---|---|
|
Asset Class |
Sub-Asset Class |
Approved Ranges |
Allocations as of August 31, 2023 | |||
|
Public Equity |
35-65% |
54.4% | ||||
| US Equity | 25-50% | 31.5% | ||||
International/ Global Equity | 10-30% | 22.9% | ||||
|
Alternatives |
10-25% |
16.6% | ||||
|
Fixed Income (including cash) |
25-40% |
29.0% | ||||
Suzanne P. Welsh, Chair of the Investment Committee, provided an overview of the committee’s work on behalf of members of the Benefits Plan of the PC(USA) and their beneficiaries. The committee adopted the process for the development of proxy voting guidelines for 2024. Further, the committee recommended, and the Board authorized, Proxy Voting and Agency representation for 2024. The committee also adopted the General Assembly’s divestment list as its 2024 Prohibited Securities List.
The committee heard several reports, including a report on the investment governance project and a regularly scheduled review of the alternatives component of the portfolio. The committee approved a new investment and co-investment in real estate and two additional commitments to existing secondaries and venture capital managers.
The committee reviewed the asset allocation and investment performance of the investment options in the 403(b)(9) Retirement Savings Plan of the Presbyterian Church (U.S.A.) and the 401(k) New Covenant Retirement Savings Plan.
Finally, the committee heard a report from its representatives to the Committee on Mission Responsibility Through Investment (MRTI) and how the work of MRTI may impact the work of the Board.
Directors approved the annual Christmas gift to retirees and surviving spouses who receive Housing and Income supplements from the Assistance Program. Single members and surviving spouses who are receiving either or both supplements as of November 1, 2023, will receive $400; each member with a spouse will receive $800.
The next meeting of the Board of Directors is scheduled March 7-9, 2024. For further information, email the Corporate Secretary or call 215-587-7600.