Conference Board of Pension and Health Benefits forms master funding task force

February 27, 2008

On Tuesday, February 19, 2008, a task force recently formed by the North Alabama Conference Board of Pension and Health Benefits met at the United Methodist Center in Birmingham. 

The purpose of this new task force is to develop and recommend to the Conference Board of Pension and Health Benefits a master funding plan for pension benefits, disability/death benefits, and retiree health insurance for our clergy. 

Currently, funding for clergy benefits (pension benefits, disability/death benefits, and retiree health insurance) is provided by three sources – local churches, excess funding of defined benefits due to actuarial gains, and Conference reserve funds. 

North Alabama Conference Treasurer Scott Selman says, “The cost of benefits to local churches continues to increase and, in fact, funding for clergy benefits is now a major part of the operating budget for many churches.”

He continues, “To illustrate, these benefits will be funded in 2008 by approximately $4.1 million from local churches, approximately $730,000 from excess funding of defined benefits, and approximately $250,000 from the Conference reserve funds (which are quickly being depleted). Thus, it is imperative that the Conference have a master funding plan that secures funding for these important benefits on a long-term basis.”

The Master Funding Plan Task Force includes a broad constituency of the North Alabama Conference including both clergy and laity.

The first meeting of the task force was an initial training session led by Jeanne Featherstone and Ron Coleman from the General Board of Pension and Health Benefits.  During the meeting the task force was introduced to the work before them and determined future meeting dates.

As the task force looked ahead to their work together, they began considering some of the following questions.

  • How are clergy demographics changing?
  • What trends are expected in clergy compensation?
  • How much money for pension benefits does the Conference anticipate it can raise from local churches and how can this amount vary over several years?
  • How much money does the Conference expect to have available from reserve funds for pension benefits on an annual basis?
  • How much of the current excess funding for defined benefits is realistically available to help with current pension costs?
  • What is the Conference’s current liability for retiree health insurance?
  • How are the costs of healthcare benefits changing and how does that affect pension funding?

Selman notes that this Master Funding Plan Task Force will not address health insurance for active clergy since health insurance for active clergy is funded solely from premiums paid by local churches.

The next meeting for the Task Force is scheduled for April.
 

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