Member growth projected to offset decline in new clergy
by Gregg Brekke | Presbyterian News Service
MIAMI — The Board of Pensions of the Presbyterian Church (U.S.A.) board of directors today concluded its three-day meeting in which it discussed investment results and strategies to grow membership through new products, incentives and assistance programs.
Responsible for holding and distributing pension funds for ministers and other church workers, offering medical and a variety of benefits products, and providing assistance programs for clergy and other church workers, the Board said it is actively seeking ways to expand its offerings under the mantra of “serving more, serving better, serving the church.”
A highlight of the opening day was the announcement that the Board of Pensions total assets under management eclipsed $10 billion this year. Citing strong year-to-date growth of over 12 percent, board leaders praised the investment group for its diligence and expertise in reaching this benchmark.
BoP President the Rev. Frank Spencer addressed the board of directors with a set of analytics he believes will influence the agency’s offerings. Rising medical costs, a decline in active ministers and a slowing trend of new ordinations, high debt levels for new pastors, uncertainty in the national PC(USA), a decline in mid council capabilities and a disparity of coverage between male and female clergy, he said, are not only problems for the denomination, but opportunities for the Board of Pensions to respond.
Calling attention specifically to gender disparity of those ordained between 2007 and 2016 — where 50 percent of men are pastor or associate pastor and just 37 percent of women are pastor or associate pastor, although they were 52 percent of the total ordained — he said, “This is something we need to be aware of and take action on as a denomination.”
Spencer also reviewed a chart showing the decline in newly ordained persons, with a parallel line of the number of Board of Pension members. The line, if unaltered, produced a negative number of new subscribers by the mid-2020s.
“We need to bend the curve,” he said, outlining the Board of Pensions’ role in changing the primary demand for hiring new ministers, creating a greater supply of new ministers, addressing age and gender dynamics in ordination, fulfilling the needs of racial ethnic and immigrant communities, and addressing medical plan dues, which he called “the most painful part of the plan for small churches.”
Seeking to slow the pace of the trend of medical dues increases, which have averaged 7 percent over the past five years, Spencer said the Board of Pensions would propose creating a separate reserve for a high-risk pool to support the expense of high-cost claimants by allocating earning on the $90 million contingency reserve to provide approximately $5 million to offset these large claims. Another proposed strategy to offset these increases is the introduction of a high-deductible plan that includes a health savings account with a prevention emphasis.
In addition to seeking ways to attract and retain the existing subscriber base of church workers, the Board of Pensions has, for several years, been offering its services to affiliated agencies.
One group of note, Presbyterian Senior Living, recently added 1,200 employees to the plan, accounting for a project revenue increase of nearly $14 million in 2018. In addition, 220 new church workers — 32 ordained and 188 lay persons — have been added in 2017.
An often-overlooked aspect of the Board of Pensions’ activities is its church engagement and assistance programs. The committee working to increase these activities proposed a number of programs for the full board to consider including increased racial ethnic and immigrant community engagement, education programs, assistance programs for retired pastors, emergency funding and expanded educational debt relief.
John McFayden, executive vice president and chief of church engagement, said the board is “Proactively pursu[ing] engagement with racial/ethnic and immigrant constituencies to allow them to inform us of their unique needs and concerns in order to better serve them and extend benefits to more church workers.”
Staffing and education opportunities, including CREDO, are being aligned, he said, to respond the needs expressed by these constituent groups and extends to historically related Presbyterian racial-ethnic institutions.
The Board of Pensions continues its “Healthy Pastors, Healthy Congregations” — a theologically based financial literacy program for pastors and congregations — pilot in North Carolina and is hoping to expand the program from one to 10 regions in 2019. The BoP wil seek a lead gift from the Lilly Foundation to establish a ministerial excellence fund of $10 million in support of this expansion.
Expansion of assistance programs includes a proposed increase in the educational debt reduction program from $10,000 to $25,000 along with an increase in supplemental income grants for pastors with more than 25 years of service. McFayden said the increases in assistance program grants will reduce the projected 2026 reserves for these funds from $160 million to $140 million, still well above defined minimums.
Michael Fallon, executive vice president and chief financial officer, during his financial report to the Board of Directors, said, “Our financial position continues to be incredibly strong.” In addition to the 12.4 percent return on investment, Fallon cited growth due to an overall expense reduction of 2.4 percent. The pension plan reported assets of $8.3 billion with $6.2 billion in liabilities.
The Board of Directors approved a $59.9 million operating budget for 2018 along with a $1.2 million capital budget in support of the BoP’s 2017–18 strategic plan.
For 2019, in response to market demands the BoP plans to explore lower cost coverage options, including a high-deductible health plan (HDHP) accompanied by a health savings account (HSA) for non-pastoral members.
Fairfax Fair, chair of the Board Development and Governance Committee, discussed the need to fill nine scheduled vacancies of the 27-member board during the 2018 General Assembly. Eight of the vacancies will be filled by persons recommended by the General Assembly nominating committee and one will be selected by the Presbyterian Mission Agency Board. In addition to seeking skills in actuarial science, investment and audit, Fair said the BoP will continue to uphold commitments to racial ethnic, gender and geographic diversity in its nominations.
The next meeting of the Board of Pensions board of directors will be held March 2018 in Philadelphia.
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