The Board Bulletin Fall 2021

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.

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At its fall meeting, the Board of Directors formalized the Board of Pensions’ commitment to removing the effects of structural racism from the agency’s workplace and policies. It also voted to expand access to the agency’s Assistance Program.

Directors adopted the recommendations of their Diversity, Equity, and Inclusion Task Force. Over the past year, the task force developed a set of principles and a list of specific actions for living into those principles. The recommendations touch every aspect of the agency’s work, from the recruitment and training of agency staff to the selection of vendor partners.

The Board of Directors also supported expanding access to the Assistance Program, a significant source of support for members and retirees. A new grant for ministers was approved, as were changes to eligibility requirements that broadly affect Benefits Plan membership. The changes, in part, acknowledge the evolution of plan membership.

The majority of active plan members are no longer ministers of the Word and Sacrament. Membership is growing increasingly diverse as more employers affiliated with the Presbyterian Church (U.S.A.) support employees through the Benefits Plan. The Board of Pensions intends to provide support equitably, upholding its commitment to fostering the wholeness of each plan member.

A report on the actions mentioned above and others taken by the Board of Directors follows.

Directors adopt recommendations of DEI Task Force

The Board of Directors adopted the recommendations of its Diversity, Equity, and Inclusion Task Force. The Task Force stated that

  • to serve more, the agency must pursue “more intentional and targeted outreach … for the many diverse constituencies that compose Christ’s Church”;
  • to serve better, the agency must “eliminate artificial barriers that reduce opportunities for participation and cast a wide net to be intentionally inclusive”;
  • to serve the Church, the agency must “be adaptive and provide leadership in promoting Christian virtues through the Board’s work in the world.”

The Task Force laid out six principles to support pursuit of the above:

  1. The Board of Pensions rejects any form of racism, discrimination, or prejudice.
  2. The Board of Pensions will work to provide ever-broadening access to benefits, programs, employment, and other opportunities.
  3. The Board of Pensions recommits itself to creating a culture of belonging in which every person, being created in the image of God, feels welcomed, valued, respected, and heard.
  4. Led by the Spirit, the Board of Pensions will demonstrate empathy and openness as it invites all members, employers, employees, business partners, and its Board of Directors into partnership in pursuit of its mission.
  5. The Board of Pensions believes that diversity, equity, and inclusion enhances the standard of excellence it maintains in all aspects of its work.
  6. The Board of Pensions will hold itself accountable for progress in DEI by developing both quantitative and qualitative outcome measurements.

To engage the six principles, the Task Force recommended actions be taken in five categories:

  • Workforce
  • Business Partner Selection and Management
  • Members
  • Employers and Diverse Constituent Engagement
  • Board of Directors

In tandem with adoption of the Task Force recommendations, President Frank C. Spencer announced that he had signed the CEO Action for Diversity & Inclusion pledge, a leadership-driven commitment to advancing diversity and inclusion in the workplace. As a result, the organizational focus on DEI is complete. The Board of Directors and agency leadership have now joined the agency’s active employee group — the Diversity, Equity, and Inclusion Leadership Council — in formally committing to diversity, equity, and inclusion and to dismantling structural racism.

Directors’ vote propels Assistance Program toward greater inclusivity

The Board of Directors approved the addition of Minister Debt Relief to the Assistance Program, expanded assistance eligibility, and increased grant amounts. All changes are effective January 1, 2022.

Minister Debt Relief is a three-year pilot program for ministers earning less than the median effective salary ($62,100 for 2022). Program applicants must be enrolled for Minister’s Choice or Pastor’s Participation. The program will provide 150 grants a year, for up to $10,000 each.

The agency also expanded eligibility for assistance grants. One example of this is Transition-to-College Assistance, income-based aid for dependents of active members of the Medical Plan or Defined Benefit Pension Plan. Currently, it is available only for students enrolled full time in a four-year college or university. With the change, a student enrolled for any post-high school education or training, part time or full time, may be eligible.

Directors also loosened requirements for Income and Housing supplements, which provide valuable support to retirees and surviving spouses.

See more details on the Assistance Program expansion.

Healthcare addressed, including Medicare Supplement additions

The Board of Directors accepted several recommendations of its Healthcare Committee. Vision coverage and the Employee Assistance Plan (EAP) will be included in the Medicare Supplement Plan, effective January 1, 2022. Vision coverage, mirroring that provided to active members of the Medical Plan, comprises vision exam and eyewear benefits. The EAP, through Cigna Behavioral Health, lends support to assist with daily challenges or bigger concerns, including with emotional health.

Medicare Supplement cost will remain unchanged for the fifth consecutive year, at $275 per person. The agency was able to hold the line on coverage cost while also adding vision coverage and the EAP due to positive claims experience and cost containment over the last several years.

Directors also approved a value-add service, with no additional costs, designed to guide members and their enrolled family members through the healthcare system, helping them get the care they need and connecting them to available resources.

Christmas gifts going to retirees and surviving spouses

Directors approved the annual Christmas gift for retirees and surviving spouses who are receiving Housing and Income supplements from the Assistance Program as of November 1, 2021. Single recipients will receive $350 and couples, $700. Last year, Directors approved a 40 percent increase in the Christmas gifts, the first increase since 2004. The annual gifts are always greatly appreciated, with many recipients saying they made Christmastime gift-giving possible.

Portfolio returns 13.9 percent for 8 months ended August 31

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, 2021, with a positive return of 13.9 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, 2021.

The Balanced Investment Portfolio is the investment fund for the plans and programs managed by the Board of Pensions. On August 31, 2021, the portfolio had a market value of $12.4 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 Mission Responsibility Through Investment (MRTI) Committee, including the annual General Assembly Divestment List. The Committee adopted the GA Divestment List as the 2022 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, 2021, asset allocations of 61.2 percent in liquid growth investments (U.S., international, and global stock strategies), 27.2 percent in income strategies (core fixed income, high-yield bonds, international bonds, liquid short-duration fixed income, and cash management), and 11.6 percent in illiquid growth strategies (private equity, venture capital, distressed debt, and real estate) were within the approved ranges for each asset class.

The Committee approved two new investment commitments: one to private equity and one to venture/growth equity.

2022 Business Plan approved

The Board of Directors approved the Business and Financial plans for 2022. This is year two of the Board of Pensions 2021-2022 Strategic Vision and two-year planning cycle. The 2022 Business Plan identifies six streams of change that are affecting the agency: diversity, equity, and inclusion; workforce support; member and employer engagement; care navigation; investment process enhancement; and technology transformation. Addressing these changes will successfully lay the foundation for the next generation of Board of Pensions service.

The next meeting of the Board of Directors is scheduled March 10-12, 2022, in Philadelphia. For further information, email the Corporate Secretary or call 215-587-7600.