Seven months into the coronavirus crisis, the Board of Pensions remains aggressive in support of members as it evolves in its approach amid continued uncertainty. COVID-19 testing and treatment costs remain 100 percent covered. The fall meeting of the agency’s Board of Directors was convened as a hybrid. Some Directors attended in person in Philadelphia while most did so virtually.
COVID-19 is a powerful reminder of the importance of quality benefits in support of well-being. Directors approved the Board of Pensions 2021-2022 Strategic Vision and 2021 Business Plan, designed to grow membership in the Benefits Plan of the Presbyterian Church (U.S.A.) and expand access to the valuable Board of Pensions programs that serve members and their families. They also granted a dues holiday for Medicare Supplement enrollees and increased the annual Christmas gift for retirees and surviving spouses who receive Housing and Income supplements.
In addition to COVID-19, the global community faces an urgent cry for racial justice. Chairperson Rick Bold announced at the meeting that Directors have formed a task force to study Board of Pensions efforts in the areas of diversity, equality, and inclusion. More on this and other news from the meeting appear below.
Donald A. Walker III, Executive Vice President and Chief Investment Officer, reviewed the performance of the Balanced Investment Portfolio for the eight months ended August 31, 2020, with a positive return of 3.2 percent. The portfolio exceeded the 6 percent long-term investment return assumption for the one, three, five, 10, 15, and 20 years ended August 31, 2020.
The Balanced Investment Portfolio is the investment fund for the plans and programs managed by the Board of Pensions. On August 31, 2020, the portfolio had a market value of $10.2 billion.
Suzanne P. Welsh, Chair of the Investment Committee, provided an overview of the Committee’s work on behalf of members of the Benefits Plan and other beneficiaries. The Committee reviewed reports from the Committee on Mission Responsibility Through Investment (MRTI), including the annual General Assembly Divestment List. The Committee adopted the GA Divestment List as the 2021 Board of Pensions Prohibited Securities List, which will be distributed to all separate account managers.
The Committee affirmed both the long-term target asset allocations as well as the long-term strategic asset allocation ranges approved by the Board of Directors. The Committee also affirmed the 6 percent long-term investment return assumption. The August 31, 2020, asset allocation of 60.9 percent in liquid growth investments (U.S., international, and global stock strategies), 29.6 percent in income strategies (core fixed income, high-yield bonds, international bonds, liquid short-duration fixed income, and cash management), and 9.5 percent in illiquid growth strategies (private equity, venture capital, distressed debt, and real estate) was within the approved ranges for each asset class.
The Committee approved two new investment commitments: one to private equity and one to real estate. The Committee also approved an additional commitment to an existing real estate manager.
Rick Bold, Chairperson of the Board of Directors, announced the formation of a task force to study Board of Pensions efforts in the areas of diversity, equality, and inclusion. Mr. Bold named Director Philip Amoa, who chairs the Development and Governance Committee, as task force Chair.
Beyond the Board of Directors’ own dynamics, the task force will focus largely on the impact of the Board of Pensions in advancing diversity, equality, and inclusion in the following areas:
As a result of positive financial outcomes, Directors approved a dues holiday for participants in the Medicare Supplement Plan. The $275 monthly cost for each member and spouse enrolled in the plan is excused for December 2020. The cost of the Medicare Supplement Plan remains unchanged in 2021 for the fourth year in a row.
Directors approved a 40 percent increase in the annual Christmas gifts for retirees and surviving spouses who receive assistance in the form of Housing and/or Income supplements. Single individuals will receive $350; members with spouses, $700. Since 2004, the amounts have been $250 and $500. The gifts will go to those receiving supplements as of November 1, 2020. Through the years, recipients have shown great appreciation for this extra income, with many saying it has meant they could share in gift-giving at Christmastime.
Directors approved the Board of Pensions 2021-2022 Strategic Vision and the 2021 Business and Financial plans. These documents will guide the agency as it lives into its definition of stewardship: to provide the most benefits to the most ministers and employees possible while fulfilling financial responsibilities and supporting congregational leadership. Such support includes expanding partnerships with communities of color, immigrant fellowships, and congregations that worship in languages other than English.
In the year ahead, the agency will focus on educating church and affiliated employers on the Benefits Plan additions that take effect January 1, 2021. The additions amount to the most extensive changes since the 2017 Benefits Plan redesign. With an expanded universe of choice, employers have a greater number of possible mix-and-match combinations to consider when building benefits packages.
The Board of Pensions began adopting two-year planning cycles in 2015-2016 to allow for longer-term planning and align with the cycle of the General Assembly of the Presbyterian Church (U.S.A.).
With the 2021 Benefits Plan (adopted March 7, 2020), the Board of Pensions introduces a second benefits package for ministers, advancing on its long-term goal of having every PC(USA) minister enrolled in the church plan. Minister’s Choice provides important financial security and access to programs that support well-being and nurture ministries. Both Minister’s Choice and Pastor’s Participation include the new Temporary Disability Plan, which bridges the 90-day income gap preceding the existing disability coverage. A new Long-Term Disability Plan and a newly expanded Term Life Plan have also been added to the benefits lineup.
The next meeting of the Board of Directors is scheduled March 11-13, 2021, in Philadelphia. For further information, email the Corporate Secretary or call 215-587-7600.