The United Methodist Church has three mandatory benefits programs for its clergy in the United States – health insurance, pension and disability.
One program which often causes confusion among local churches is clergy pension. So recently, Bishop Will Willimon and North Alabama Conference Treasurer Scott Selman sat down to discuss this topic. A video of this conversation is below.
One thing that makes this an important issue for local churches today is that beginning in 2007 clergy pension was no longer included in the apportioned part of the Conference Budget which goes to United Methodist benevolences. Instead, local churches are now “direct billed” for the total cost of their clergy’s benefits.
“We’re reestablishing that connection that the total cost of having a clergy person at your church is what you pay them on a cash basis plus what you remit to the Conference to cover their benefits cost,” said Selman. “And that’s actually the real cost of having a pastor on your staff.”
Bishop Willimon notes that clergy benefits is the largest major area of increase in the North Alabama Conference budget.
Selman explained that for years, in order to keep the Conference budget increase at a minimum, the Conference Board of Pensions subsidized the cost of providing clergy benefits through a reserve fund. That reserve fund for clergy pension and disability once exceeded $7 million. Selman says it is now less than $3 million.
Local churches now must pay the entire cost of clergy benefits as part of their clergy’s compensation. The benefits cost have risen and Selman expects in the near-term for those costs to continue to escalate.
He adds, that the United Methodist denomination is exploring steps to help address these issues. One such step is a Task Force, with which Selman has worked, to explore what is causing benefits to be so expensive and how that affects local churches.
Noting that the current benefits program does not seem like one local churches can sustain over time, Selman notes he expects legislation to come to the 2012 General Conference. He explains that it takes an act of General Conference to make changes to the mandatory benefits program.
For more information please watch the Understanding Clergy Benefits video conversation below.