The Board Bulletin Summer 2023

The annual meeting of the Board of Directors of The Board of Pensions of the Presbyterian Church (U.S.A.), held June 22-24, 2023, highlighted the agency’s ongoing drive to serve more, serve better, and serve the Church through the Benefits Plan of the PC(USA) and the Board of Pensions' education and financial assistance programs.

Directors voted to replace the Medicare Supplement Plan with a Medicare Advantage PPO plan to ensure quality healthcare coverage for retirees at lower costs than the current plan. They received a report on the season of rebuilding, the initiative to assess the Benefits Plan, and an overview of the Board of Pensions Balanced Investment Portfolio, which notched a solid positive return in the first quarter of this year despite market volatility.

To honor the service of the Reverend Dr. J. Herbert Nelson II, who is stepping down as the Stated Clerk of the General Assembly of the PC(USA) on June 30, Directors approved a gift to the Office of General Assembly.

Details from the annual meeting follow.

Medicare Advantage plan to replace Medicare Supplement

Directors reinforced the agency’s commitment to the well-being of retired members of the Benefits Plan and their spouses and surviving spouses, replacing the Medicare Supplement Plan with a fully insured Medicare Advantage PPO plan. They approved a contract with Humana to offer the Humana Group Medicare Advantage PPO plan, effective January 1, 2024.

The Humana plan provides retirees more services and benefits than are available through Medicare Supplement, and at lower costs. In contracting with Humana, the Board of Pensions will offer medical, dental, vision, and hearing aid benefits, as well as prescription drug coverage and other wellness support, including SilverSneakers, the popular fitness program for older Americans.

Because of its extensive track record of effectively managing federal funding provided by the Centers for Medicare & Medicaid Services, Humana can pass along savings to members in the form of no monthly premium. As a result, Board of Pensions retirees will pay no subscription fees for the Humana Group Medicare Advantage PPO plan for the first four years. In contrast, in 2023, the Medicare Supplement rate increased 24 percent, to $340 a month. With an increase also forecast for 2024, the agency saw that fewer and fewer retirees would be able to afford Medicare Supplement and sought a change.

Current Medicare Supplement participants will be automatically enrolled in the Humana plan for 2024 coverage, unless they choose to opt out. In addition, any member who was enrolled in Medicare Supplement as of December 31, 2022, and pensioners with 2023 retirement dates may enroll in the Humana plan for 2024. Eligibility for this coverage will be expanded to include additional Medicare-eligible members, effective January 1, 2025. The Board and Humana are working together and will share more details in the coming months.

In offering more benefits and lower costs than Medicare Supplement, the Humana Group Medicare Advantage PPO plan bolsters the Board of Pensions commitment to fostering wholeness in retirees, reinforcing the agency’s commitment to supporting Benefits Plan members throughout the stages of life.

Board leaders present update on season of rebuilding

Leaders of the Board of Pensions updated Directors on the season of rebuilding initiative, launched nearly six months ago. The initiative is a two-year, transformative effort taken in collaboration with the Church to assess and redesign the Benefits Plan of the PC(USA) to better meet the needs of local congregations.

Agency leaders reported that in meetings with over 400 mid council, congregational, and pastoral leaders, they found strong support for a redesigned dues structure that would incorporate flexibility, be more inclusive, and respond to congregational needs. The dues structure of the Benefits Plan has not changed in nearly 40 years, while the Church has not stopped changing. The agency continues to gather input in a Virtual Town Hall series.

Feedback received so far has included a call for inclusivity and responsiveness — to be heard — a call sounded most loudly by small-church representatives. Members of communities of color stressed the need for trust-building as the season of rebuilding moves forward. The exchanges also revealed a varied pastoral leadership model at work in the denomination — dramatically different from 40 years ago, when the installed pastor model dominated. Today, there is a mix of installed pastors, ministers serving in non-installed positions, bi-vocational ministers, commissioned ruling elders, and leaders of new worshiping communities.

The thoughts and ideas being shared with the Board of Pensions are supporting the discernment process as it unfolds across the next year or so while the agency, in collaboration with the Church, seeks to better meet the needs of local congregations. Updates on the season of rebuilding are expected to be provided at the Polity, Benefits, and Mission Conference in October 2023. The Board of Directors is expected to vote on a final design at its meeting in March 2024, and any revised Benefits Plan is expected to take effect January 1, 2025.

Balanced Investment Portfolio returns 5.4 percent through April 30, 2023

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 5.4 percent through April 30, within the context of global economic and political events.

Through April 30, 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 April 30, 2023 (except year to date)

Year to Date1 Year

2 Years 3 Years 5 Years 10 Years 15 Years 20 Years
Balanced Investment Portfolio

Asset Mix Benchmark

The Balanced Investment Portfolio is the investment fund for the Defined Benefit Pension Plan, Financial Protection Programs, Endowment Fund, and Assistance Program assets. On April 30, 2023, the Balanced Investment Portfolio had a market value of $10.8 billion.

Asset allocations as of April 30, 2023, were within Board-approved ranges, as shown below.

Asset allocations as of April 30, 2023
Asset Class
Sub-Asset Class
Approved Ranges
Allocations as of April 30, 2023
Public Equity
US Equity

Global Equity
Fixed Income (including cash)

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 discussed the evolution of its investment governance and oversight of the Balanced Investment Portfolio considering new risk management software and staff enhancements. This type of periodic review allows the Investment Committee and the Board of Directors to regularly integrate new investment capabilities into a comprehensive reporting and oversight framework.

The committee received its regularly scheduled report on the fixed-income component of the portfolio, including cash, and added a new core fixed-income manager to the lineup of Balanced Investment Portfolio managers. The committee also approved additional investments and co-investments in private equity and real estate.

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.

Pastor’s Participation dues to remain unchanged in 2024

Directors voted to keep 2024 medical dues for Pastor’s Participation at the current 29 percent of effective salary, and to set the maximum annual dues amount at $36,000 and minimum annual dues amount at $12,500. Total dues for the Pastor’s Participation benefits package will remain at 39 percent.

Enrollment in dues incentive programs extended

The Board of Directors approved an extension for current participants in the agency’s dues incentive programs through December 31, 2024. Under the dues incentive programs — Pathways to Renewal, Benefits Grants for Organizing Pastors and Evangelists, and the Pittsburgh Presbytery project — church employers enroll ministers in Pastor’s Participation at reduced dues for a defined number of years.

Repayment format for educational debt relief programs is modified

Directors modified the repayment format for Minister Educational Debt Assistance and the Employee Vocation Program. Effective September 1, 2023, the Board of Pensions will pay 90 percent of eligible participants’ minimum monthly payment amount until either the maximum total award of $25,000 is reached or the loan balance is fully forgiven through the Public Service Loan Forgiveness Program (PSLF). The modification makes for a simpler repayment format and reflects expansion of PSLF eligibility and the end of the pause on federal student loan repayment, imposed during the COVID-19 crisis. Forbearance ends June 30, 2023, with loan payments to resume September 1, 2023.

Changes to committee charters approved

The Board of Directors approved updates to the charters of its Board Development and Governance Committee and Legal Committee. The updates included formalization of the General Counsel and Corporate Secretary roles.

Directors receive 2022 audited financials

Board of Pensions staff presented the Board of Directors with the 2022 audited financial statements and the 2022 Annual Review. The lingering pandemic and economic volatility made 2022 a year of much uncertainty. But the agency met or exceeded its goals for the year and continued to provide strength and support for the Church amid a rapidly changing society.

Counsel and auditor engagements

The Directors reaffirmed the designation of the following advisers and auditors:

  • WTW (formerly Willis Towers Watson), as pension actuarial counsel
  • Milliman Inc., as medical actuarial counsel
  • Ballard Spahr LLP, as external legal counsel
  • Deloitte & Touche LLP, as external auditors
  • Protiviti Inc., as internal auditors

The next meeting of the Board of Directors is scheduled for October 26-28, 2023. For further information, email the Corporate Secretary or call 215-587-7600.