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.
Nearly eight years ago, The Board of Pensions of the Presbyterian Church (U.S.A.) entered an era of transformation. The 221st General Assembly (2014) had elected a new class of Directors to the agency’s board and confirmed the election of a new Board of Pensions President. Today, those Directors are near the end of their terms. They were celebrated at the Board of Directors meeting March 10-12, 2022.
The tenure of these Directors is marked by an unprecedented expansion of access to agency benefits and programs under the signpost: Serve more, serve better, serve the Church. A Theology of Benefits was developed as a scriptural foundation on which to build, and the Benefits Plan of the Presbyterian Church (U.S.A.) was redesigned. More employers entered the plan, and the membership decline reversed. Benefits began to be added or expanded yearly. And starting April 1, 2022, Medical Plan members will have access to care navigation services.
Minister’s Choice was introduced under these Directors, giving more ministers access to financial protection, assistance, CREDO, and other wholeness support. More than 800 ministers received grants totaling over $8 million through the Healthy Pastors, Healthy Congregations financial education program. And this year, with the addition of Minister Debt Relief, the Assistance Program has two programs that relieve ministers of burdensome debt. Finally, dues incentive programs have resulted in over 100 new calls, including to small congregations and nontraditional worshiping communities.
The outgoing Directors have been central to the agency’s response to cries for racial justice. Their class led the development of recommendations on advancing diversity, equity, and inclusion throughout the Board of Pensions. Adopted by the full Board, those recommendations guide the agency leadership and staff as well as the Board of Directors itself.
As these Directors depart, they leave an agency that is poised to serve even more, to serve better, and to continue serving the changing Church. The era of transformation continues.
Agency finances are strong: In a report to Directors, Michael F. Fallon Jr., Executive Vice President, Chief Financial Officer, and Treasurer, conveyed the strength of agency finances. Assets available for benefits and programs totaled $13.6 billion as of the end of 2021, and all programs meet the reserve requirements. Despite substantial growth in the agency, administrative expenses were just 7.5 percent of total benefits provided and have remained below 8.2 percent for eight years. Generally, the standard of excellence for nonprofits is to hold administrative expenses at 10 percent or less.
More information from the Board of Directors spring meeting follows.
In addition to celebrating the outgoing Directors, the Board of Directors elected new officers. The leadership of these individuals will be critical in the year ahead as the agency’s era of transformation continues. Their one-year terms begin when the 225th General Assembly (2022) adjourns and will conclude with the Directors’ 2023 annual meeting, June 22-24. The new officers are
The Reverend Margaret O. Fox, Chairperson;
Andrew Junkin, First Vice Chair;
S. Bradley Perkins, Second Vice Chair.
Donald A. Walker III, Executive Vice President and Chief Investment Officer, reviewed the Board of Pensions Balanced Investment Portfolio asset allocation, liquidity profile, and 2021 performance of 15.0 percent within the context of global economic and political events. Annualized returns for all reported periods over the last 20 years exceeded the Board’s required long-term return of 6 percent.
The Balanced Investment Portfolio is the investment fund for the Defined Benefit Pension Plan, Financial Protection Programs, Endowment Fund, and Assistance Program assets. On December 31, 2021, the Balanced Investment Portfolio had a market value of $12.3 billion. (See 2021 Investment Review.)
Suzanne P. Welsh, Chair of the Investment Committee, provided an overview of the committee’s work on behalf of Benefits Plan members and their beneficiaries. The committee affirmed the Board-approved, long-term strategic asset allocation; reaffirmed its investment policy allocation targets; and approved illiquid private partnership investments in private equity and real estate.
The committee reviewed the liquid growth components of the portfolio, comprising U.S. equity, international equity, and marketable diversifying strategies, and approved an emerging markets equity strategy. The committee affirmed the December 31, 2021, asset allocation of 32.7 percent in U.S. stocks, 23.1 percent in global/international stocks, 27.3 percent in fixed income, and 16.9 percent in other assets.
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.
The Board of Directors granted a 4.5 percent experience apportionment for the Defined Benefit Pension Plan, according to the Board of Pensions experience apportionment policy guidelines. The apportionment will take effect July 1, 2022.
The policy guidelines tie apportionments to the overall funded status of the plan. The funded status was 143.4 percent at year-end 2021. The guidelines are designed to ensure long-term financial stability of the plan, maintain generational equity, and protect against inflation over the long term.
Since inception of the policy, in 2005, apportionments have exceeded inflation overall. This latest apportionment, the 10th consecutive, yields a decade cumulative increase of 34.7 percent.
The assets and liabilities of the Death and Disability Plan are evaluated independently of the other plans the Board of Pensions administers. Directors review investment and actuarial experience, reserves, and inflation to determine whether to increase the disability benefit. After this most recent review, Directors approved a 7 percent increase in the benefit, effective July 1, 2022.
Increases in the benefit are intended to keep the benefit aligned with the purchasing power of plan members who are currently receiving it. Those who were receiving the disability benefit as of December 31, 2021, will receive the increase.
Directors changed the length of the Benefits Grants for Organizing Pastors and Evangelists (for ministers in job code 301) for those currently in the program, from five years to six. Dues coverage for these participants will be at 100 percent for the first through fourth years.
Directors established the program in 2019 to support presbyteries planting churches and cultivating new ministries. In summer 2021, the number of grants was expanded, from 30 to 50. Now, as the pandemic has delayed development of new forms of ministry, Directors have extended the program for the current 32 participants, including leaders of immigrant fellowships and new worshiping communities.
For future participants, the guidelines for Benefits Grants for Organizing Pastors and Evangelists remain unchanged from when the program was established. It is a five-year program that assists presbyteries in enrolling ministers in the Pastor’s Participation benefits package. Presbyteries pay no dues for the coverage for the first three years and reduced dues for the fourth and fifth years.
In response to a request from the Diverse Voices Table and the Presbyterian Church (U.S.A.) agency and entity executives, the Board of Directors passed the following resolution: “The Board of Pensions affirms the work of the Diverse Voices Table, supports the Antiracism Statement, and commits to the principles developed by its Diversity, Equity and Inclusion Task Force as adopted at its meeting October 23, 2021, and posted on pensions.org.”
Directors committed to supporting the recommendation of the Presbyterian Committee on Mission Responsibility Through Investment (MRTI) that Chevron, ExxonMobil, Marathon Petroleum, Phillips 66, and Valero Energy be added to the General Assembly’s Divestment/Proscription List. If the 225th General Assembly (2022) approves the recommendation, the five energy companies would be added to the Board of Pensions Prohibited Securities List for 2023.
The next meeting of the Board of Directors is scheduled July 21-23, 2022, in Philadelphia. For further information, email the Corporate Secretary or call 215-587-7600.