Board of Pensions response to OVT-062

Comment from the Board of Pensions

The Board of Pensions recommends that the General Assembly disapprove this overture. Recognizing the potential loss that the 2025 Benefits Plan redesign represents for those who had received the highest subsidies under the previous plan (those receiving full family coverage at the minimum dues level), the Board still believes that a transparent and flexible pricing structure that represents the actual cost of coverage is necessary to preserve the possibility of installed pastoral leadership and provide benefits that congregations can afford.

Throughout the plan redesign process, the Board has been listening to and engaging the concerns of the Church. The Board of Pensions has carefully assessed the demographic and actuarial data and consulted with over 1,000 PC(USA) leaders in developing the new Benefits Plan. The Board of Directors, all elected by the General Assembly and after more than a year of study, has unanimously voted in favor of the changes.

The 2025 Benefits Plan explicitly subsidizes benefits in small congregations through the Congregational Pastors Package, extends benefits to marginalized groups who have been excluded in the past, is more just and inclusive than the plan that was created in the 1980s, and brings the plan in line with the current demographics of pastoral leadership. These changes align the PC(USA) with other mainline denominations, none of which provides full family coverage at what amounts to no cost.

Under the current dues structure, most congregations have abandoned the installation of pastors. Fewer than half have installed leadership. For churches with fewer than 150 members, the installed percentage drops to 28%. For African American congregations, only 20% have installed pastors, regardless of size. The National Black Presbyterian Caucus cited the dues structure requiring full family coverage at no cost to the pastor as a major impediment to installation. Continuing to require dues at 43% of effective salary in 2025, regardless of family status or availability of alternative coverage, is a justice and equity concern. Lower cost and greater flexibility will lead to more enrollment.

Since 2007, the PC(USA) has ordained 4,219 new ministers of the Word and Sacrament. 1,269 of those ordained have never been enrolled for any benefits with the Board of Pensions. 63% of that group are women. 2022 was the worst year so far recorded, with 54% of those ordained excluded from benefits through the Board. The Covenant Package for income protection at 10% of salary will help reverse this trend.

The Benefits Plan that has been crafted for 2025 is based on the Church as it is, not as it was. Considering the current demographics and data in the abstract, it would not make sense to develop a dues system that resembles Pastor’s Participation. The economics of healthcare have changed dramatically since the 1980s. Mandating dependent care subsidies as part of the plan’s community nature was reasonable then, but is no longer reasonable today.

Fewer than half of those enrolled for Pastor’s Participation select family medical benefits, yet the current system compels congregations to pay for this unneeded benefit whenever they install a pastor. The plan redesign provides important transparency of pricing and flexibility of selecting needed benefits and allows congregations to create appropriate budgets and retain any savings. It does all this while maintaining community nature and subsidizing small congregations for the pastor-only portion of the coverage.

The Benefits Plan must be evaluated as it is designed, not compared to what once was. Its subsidies are meaningful. Using the two most extreme examples, the medical minimum ($37,500 effective salary) and the medical maximum ($106,250 effective salary), one finds the following:

Pastors Only PPO
$6,000 (subsidy of $4,900)
$17,000 (premium of $6,100)

Lower dues rates of 26% vs 43% create additional savings for all congregations. The prices of adding children, spouse, or family are fixed based on the national community rating of those groups and thus the subsidy carries through in all cases, regardless of congregation size. The redesign does not privilege large congregations at the expense of small ones. Instead, it retains the subsidy for lower-paid pastors and sets dependent coverage at cost.

PC(USA) Research Services shows us that our ministers are no longer sole bread winners in their families, as 76% of PC(USA) ministers report spouses who are gainfully employed. It is no longer a reasonable assumption that ministers should provide the sole family income nor be the sole source of family health coverage. While this is true in some cases, it is the exception rather than the rule.

To address the need of some to have more time to adjust and continue a family medical subsidy, the Board has created a three-year transition program. Transitional Pastor’s Participation is available to all employers with a minister currently in Pastor’s Participation on the same terms, but at a modestly higher price. Total dues as a percentage of effective salary will be 43% in 2025 (10.25% increase), and at least 47% for 2026 and 51% for 2027. The minister’s contribution is still zero, as this is paid solely by the congregations.

The Board will use the enrollment patterns of these three years to determine what ongoing subsidies or plan changes might be needed for 2028.

The Board of Pensions is setting aside funds to subsidize innovative ministry. Beginning in 2025, whether it be shared ministry by two small congregations or partnerships between large and small, the Board will subsidize half of the benefits cost for full-time ministry up to $10,000 per year. For organizing ministers or evangelists in job code 301, the Board is providing grants that cover the entire cost of benefits for three years, ramping down in years four and five. The funds for innovative ministries will be available for other ideas yet to be implemented but are designed to promote full-time employment with access to benefits in a congregational setting.

Recognizing the current realities of pastoral employment in the PC(USA) and supporting a sustainable denomination going forward, the Board of Pensions has worked with extreme care to fashion a Benefits Plan that will support congregations and their ministers.