About two-thirds of directors meet face-to-face for the first time in months
by The Board of Pensions | Special to Presbyterian News Service
PHILADELPHIA — 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.
Accountability to the Church and Benefits Plan members for the resources entrusted to it is of paramount importance to the Board of Pensions. In accordance with its bylaws, the Board of Directors’ second meeting of the year is to be the annual meeting, at which the final audited financial statements for the prior year are presented. On Saturday, the Board of Directors concluded the annual meeting, during which the 2020 audited financial statements and the 2020 Annual Review were presented.
Hopeful and face-to-face discussions
As vaccination rates climb alongside rising temperatures, comfort with moving out into the world is growing. The Board of Directors convened its summer meeting with approximately two-thirds of its members face-to-face in Philadelphia. The renewed togetherness lent hopefulness to discussions around access, service, and financial sustainability.
Directors previewed ways to expand eligibility for the Assistance Program and also a proposal to enhance health outcomes for members. The Directors’ Diversity, Equity, and Inclusion Task Force presented a draft of proposed guiding principles and specific recommendations for implementation. The Board of Directors will vote on the DEI Task Force final recommendations at its fall meeting, October 21-23.
Every action the agency has taken in the last seven years has been to expand the circle of access — never to make it smaller. Leadership has redefined stewardship as delivering the most benefits to the most people without jeopardizing financial sustainability in order to keep the promises made to members and retirees. Actions taken at the summer Board of Directors meeting, reported below, continue the work of serving more, serving better, and serving the Church.
Solid equity returns drive portfolio growth
Donald A. Walker, Executive Vice President and Chief Investment Officer, reviewed the Board of Pensions Balanced Investment Portfolio in the context of global markets and events — pandemic and economic reopening, interest rate levels, equity valuations, and inflation expectations. The portfolio is the investment fund for the Defined Benefit 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 April 30, the portfolio had a market value of $11.9 billion. Returns exceeded the 6 percent return target in each annualized time period — 20-year, 7.6 percent; 15-year, 7.4 percent; 10-year, 8.8 percent; five-year, 11.6 percent; three-year, 11.6 percent; one-year, 35.1 percent; year-to-date, 8.3 percent.
Suzanne P. Welsh, Chair of the Investment Committee, provided an overview of the work of the Investment Committee on behalf of Benefits Plan members and their beneficiaries.
The committee reviewed the asset allocation, investment performance, and costs 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. The committee discussed the fixed income component of the Balanced Investment Portfolio and approved four new investments: a short-duration high-yield fixed income manager, two private equity funds, and a real estate fund.
The committee confirmed that the April 30, 2021, asset allocation of 36.6 percent in U.S. stock strategies, 22.5 percent in international and global stock strategies, 26.3 percent in fixed income, and 14.6 percent in other assets is within approved ranges. The committee affirmed current long-term strategic asset allocation ranges for the Balanced Investment Portfolio.
Support for new ministries grows with additional benefits grants
The Board of Directors expanded the number of Benefits Grants for Organizing Pastors and Evangelists, from the initial 30 up to 50. The grants support ministers’ enrollment in Pastor’s Participation. Directors established the program in 2019 to assist presbyteries planting churches and cultivating new ministries. Since then, 28 positions have been approved for grants. The one-year grants, for ministers in job code 301, are renewable for up to five years. The cost of coverage to a presbytery is free in the first three years and reduced in the final two.
Pastor’s Participation dues unchanged for 2022
Directors held the line on medical dues for Pastor’s Participation at 27% of effective salary for 2022, with no change to the minimum dues basis. As a result, total dues for Pastor’s Participation will remain at 37 percent of effective salary for the fifth consecutive year.
Pastor’s Participation is the comprehensive benefits package for ministers, fully employer-paid according to effective salary. It includes family medical coverage in the preferred provider organization (PPO), 27%; the Defined Benefit Pension Plan, 8.5%; Death and Disability Plan, 1%; and Temporary Disability Plan, 0.5%.
The Healthcare Committee recommended to the full Board of Directors that dues remain unchanged after a presentation by agency staff and Milliman Inc., the Board’s healthcare actuary.
Medicare Supplement will include vision benefit
A vision benefit will be included in the Medicare Supplement Plan, effective January 1, 2022. Directors approved the addition, with no increase in member cost for 2022.
Multiyear technology project approved
Directors approved a multiyear project to modernize the core technological systems that support administration of the Benefits Plan of the Presbyterian Church (U.S.A.) and the agency’s Assistance Program. Directors allocated $15 million for the project, which will unfold across approximately two and a half years. A reserve fund has been established to finance the modernization.
Counsel and auditor engagements
The Directors reaffirmed the designation of the following advisers and auditors:
- Willis Towers Watson, as pension actuarial counsel
- Milliman Inc., as medical actuarial counsel
- Ballard Spahr LLP, as 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 21-23 in Leesburg, Virginia. For further information, email the Corporate Secretary or call 215-587-7600.
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