Beginning Jan. 1, 2025, new options will be available to congregations. They’ll provide parity regardless of ordination status
by the Board of Pensions of the Presbyterian Church (U.S.A.) | Special to Presbyterian News Service
Photo by Rosie Sun via Unsplash
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 information and actions taken that affect plans and programs administered by the Board of Pensions. Following is the Spring 2024 Bulletin.
Directors approve redesigned Benefits Plan
The Board of Directors approved a redesigned Benefits Plan of the Presbyterian Church (U.S.A.), effective Jan. 1, 2025, that supports congregations and provides parity regardless of ordination status. The redesign is the outcome of the season of rebuilding initiative the agency launched in 2023 to restructure the plan to meet the needs of the changing Church.
During the last year, the Board of Pensions gathered input from more than 1,000 leaders throughout the Church, in face-to-face meetings with mid council leaders and in virtual town halls. Through these conversations, and with guidance from the Board of Directors, the agency developed plan changes to enable more congregations to support pastoral leadership through membership in the Church’s plan.
The redesigned plan introduces two new dues packages — the Covenant Package and the Congregational Pastors Package. Dues for the new packages are paid entirely by the congregation or employer.
The Covenant Package provides income protection for any eligible employee working at least 20 hours a week, regardless of ordination status. Pension and death and disability benefits, including temporary disability, and the Employee Assistance Plan are part of the package, along with access to the agency’s assistance and education programs.
The Congregational Pastors Package is designed to support congregational leadership. It is required for installed pastors and may be offered to any minister of the Word and Sacrament or commissioned pastor scheduled to work 20 or more hours a week.
The redesigned plan also offers Transitional Pastor’s Participation, which may be provided to any minister who is enrolled in Pastor’s Participation as of Dec. 31, 2024. This option will sunset Dec. 31, 2027.
Additional details on the 2025 Benefits Plan, including dues and the costs of medical coverage for family members, will be available on seasonofrebuilding.pensions.org on or before April 5.
The current Benefits Plan was designed 40 years ago for a different type of pastoral leadership and a different family structure. As a result, fewer and fewer churches can afford to enroll their pastors for coverage — and the most likely to be excluded are women and those who serve communities of color and small congregations. The redesigned Benefits Plan will allow congregations the flexibility and choice to structure benefits packages that best serve their context of ministry. Congregations are encouraged to have conversations with congregational pastoral leaders and their presbyteries about their benefits needs.
Balanced Investment Portfolio returns 13% in 2023
Donald A. Walker III, Executive Vice President and Chief Investment Officer, reviewed the Board of Pensions Balanced Investment Portfolio asset allocation, liquidity profile, and 2023 performance of 13% within the context of global economic and political events. Except for the 2023 return, annualized returns for all reported periods over the last 20 years exceeded the portfolio’s asset mix benchmark, represented by blending 65% MSCI All Country World Index, 30% Bloomberg U.S. Universal Bond Index, and 5% 90-day U.S. Treasury Bill returns.
The Balanced Investment Portfolio is the investment fund for the Defined Benefit Pension Plan, Financial Protection Programs, Endowment Fund, and Assistance Program assets. On Dec. 31, 2023, the Balanced Investment Portfolio had a market value of $11.3 billion.
Balanced Investment Portfolio Performance as of Dec. 31, 2023
| Year to Date | 2 Years | 3 Years | 5 Years | 10 Years | 15 Years | 20 Years | |
| Portfolio | 13.0 | -0.1 | 4.7 | 9.0 | 7.0 | 9.3 | 7.2 |
| Benchmark | 16.8 | -0.6 | 3.4 | 8.7 | 6.4 | 8.2 | 6.6 |
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 Presbyterian Church (U.S.A.) and their beneficiaries. The committee reviewed the objectives, liquidity profile, and overall risk tolerance of the agency portfolio and concluded that the current asset allocation would meet the long-term objectives of the benefits plans and programs.
The committee received a regularly scheduled review of the equity component of the agency portfolio, its performance, performance attribution, and benchmarks as well as a report on overall manager fees.
The table below illustrates the asset allocations as of Dec. 31, 2023.
Asset Allocations as of Dec. 31, 2023
| Asset Class | Sub-Asset Class | Adopted Ranges | Allocations as of
Dec. 31, 2023 |
| Public Equity | 35-65% | 56.7% | |
| US Equity | 25-50% | 32.9% | |
| International/Global Equity | 10-30% | 23.8% | |
| Alternatives | 10-25% | 13.8% | |
| Fixed Income (including cash) | 25-40% | 29.5% |
The Investment Committee approved an investment in a second public equities manager, which employs a sustainability theme in the construction and management of the portfolio. The new allocation expands the Balanced Investment Portfolio’s investments in innovative and sustainable strategies, bringing the total investment in the two portfolios to $200 million. The committee also approved new and 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 and received an update from the PC(USA)’s Committee on Mission Responsibility Through Investment (MRTI). The relationship with MRTI helps the Board represent the PC(USA)’s values to Wall Street.
Directors grant experience apportionment
The Board of Directors granted a 4.5% experience apportionment for the Defined Benefit Pension Plan, effective July 1, 2024. Apportionments are tied to the overall funded status of the pension plan. The funded status was 156% at year-end 2023, compared with 150.1% at year-end 2022.
The apportionment results in a lifelong increase in pension benefits or pension credits accrued, depending on employment status:
- Retirees and survivors who are receiving a pension benefit will see a 4.5% increase in that benefit, starting with their July 2024 pension payment.
- Active and terminated vested members will receive a 4.5% increase in the pension credits they had accrued as of Dec. 31, 2023, effective July 1, 2024.
This latest apportionment, the 12th consecutive, yields a cumulative increase of 46.6% since 2013.
Apportionments are granted according to the Board of Pensions’ experience apportionment policy guidelines and are not guaranteed to be granted each year. The guidelines were established to maintain consistent, conservative stewardship of pension plan assets over the long term. The goal is to ensure ongoing financial stability of the pension plan, maintain equity among retiree generations, and protect against inflation over the long term. This consistency has improved both management of long-term liability and the agency’s provision toward pensioners’ well-being.
Directors receive update on Medicare Advantage implementation
Directors received a report on the replacement of the Medicare Supplement Plan with the Humana Group Medicare Advantage PPO plan, effective Jan. 1, 2024. More than 7,800 individuals enrolled in the Humana plan, which currently costs retired members $0 to participate.
Retirees enrolled in Medicare Supplement in 2023 were automatically enrolled in the Humana plan; less than 5% opted out. Enrollees in the Medicare Supplement Plan as of Dec. 31, 2022, who opted out for 2023, could enroll in the Humana plan for 2024. With the 2024 Medicare open enrollment period, for benefits effective Jan. 1, 2025, eligibility will extend to all Benefits Plan retirees and surviving spouses.
Communicating the change in plans to the affected Medicare-eligible population required special attention. In addition to letters and emails, a Board of Pensions webinar on the topic drew over 1,000 viewers. Three webinars held jointly by the agency and Humana drew nearly 2,300 participants.
The Medicare Supplement Plan was operating at a loss and serving less than a third of plan retirees, with substantial annual rate increases. After five years of no rate increases, Medicare Supplement rates increased 24% in 2023, from $275 a month to $340, and were forecast to top $400 per person in 2024. Faced with a critical affordability issue, the agency responded with urgency to better serve plan retirees and surviving spouses.
Increase in disability benefit approved
Directors approved a 4.5% increase in the disability benefit received through the Death and Disability Plan. The increase is effective July 1, 2024, for plan members who were receiving the benefit as of Dec. 31, 2023. Increases are intended to keep this benefit aligned with the purchasing power of current recipients.
Death and Disability Plan assets and liabilities are evaluated independently of the other plans administered by the Board of Pensions. A review of investment and actuarial experience, reserves, and inflation informed the Directors’ decision.
Assistance Program eligibility for ministers expanding
Effective Jan. 1, 2025, any minister of the Word and Sacrament who is enrolled in the Defined Benefit Pension Plan and/or the Medical Plan may qualify for these need-based grants:
- Minister Debt Relief
- Minister Educational Debt Assistance
- Sabbath Sabbatical Support
- Clergy Wellness Support
Currently, ministers must be enrolled in the Pastor’s Participation or Minister’s Choice benefits packages to be eligible for these programs. The Board of Directors’ vote to expand eligibility was the latest in a series taken by Directors in recent years to extend assistance to more Benefits Plan members. The agency has been especially focused on assisting ministers who carry debt that keeps them from living fully into their call.
New dues incentive program announced
Moving forward, the agency is expanding the shared ministry model it has piloted in The Pittsburgh Presbytery since 2021. Effective Jan. 1, 2025, the Shared Ministry Program will support small congregations and others with lean budgets. Under this model, multiple congregations call one individual as their pastor, and dues subsidies enable them to enroll the pastor in the Benefits Plan. A covenantal agreement binds the congregations, the presbytery, the minister, and the Board of Pensions.
The Board of Pensions began introducing dues incentive programs more than five years ago to support congregations and ministries. Directors reviewed the success of these programs, which have resulted in more than 140 new calls, and considered the programs’ evolution as ministry continues to take on new forms and surface in new contexts.
The first such program was Pathways to Renewal, which was introduced in 2018 and sunset in 2023. It enabled congregations to provide young pastors with full benefits at greatly reduced dues. In 2019, the agency introduced Benefits Grants for Organizing Pastors and Evangelists (church job code 301). These grants continue to support the evangelism efforts of presbyteries planting churches and cultivating new ministries by funding the enrollment of pastoral leaders in the Benefits Plan.
By encouraging innovation in ministry through the continuation of dues incentive programs, the agency acknowledges how vital innovation is to the flourishing of the changing Church.
Directors elect leadership for coming year
The Board of Directors elected new officers from among the current body. The leadership of these officers will be essential as the season of rebuilding concludes with implementation of the 2025 Benefits Plan to meet the needs of the changing Church. They will assume offices following the 226th General Assembly (2024). The new officers are:
- Bradley Perkins, Chairperson
- Andrew Junkin, First Vice Chair
- Krysten Holloway, Second Vice Chair
The next meeting of the Board of Directors is scheduled for July 18-20. For further information, email the Corporate Secretary or call 215-587-7600.
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