Group Pension Report

The Arkansas Conference Board of Pensions is charged with the work of providing for and contributing to the support, relief, assistance and pensioning of the clergy and their families, other church workers, and lay employees of the UMC, its institutions, organizations, and agencies within the Annual Conference, except as otherwise provided for by the General Board of Pensions.  The board works closely with the General Board of Pensions of The UMC which provides excellent counsel, interpretation and guidance in our pension program.

All eligible clergy must be enrolled in the pension program (MPP). Eligible clergy include all clergy members, local pastors appointed within the AC; those who have been previously approved by the Conference Board of Ordained Ministry for service as full-time, part-time or student pastors, or a clergy person of another denomination who is under Episcopal appointment in the Conference, if they are not participating in a pension program of the denomination to which they belong.

Enrollment is the responsibility of the participant.  You must enroll self in writing no later than 30 days from the eligibility date.  Enrollment forms must be sent to Conference Benefits Officer, Mona Williams, at the Office of Finance and Administration, P.O. Box 3611 Little Rock, AR 72203-2941

The Board of Pensions recommends that:

1. The 2009 annuity rate for service completed prior to 1982 will be increased 2% to $543.00.

2. The MPP Plan ended December 31, 2006.Money on account is subject to market performance. The AC participates in the new retirement plan- Clergy Retirement Security Program (CRSP) Comprehensive Protection Plan (CPP) (full-time only are eligible for CPP) of the General Board of Pensions of The UMC as follows:

a.The contribution rate under CRSP is;

1. Monthly DB Retirement Benefit Calculation is 1.25% X Denominational Average Compensation (DAC) X Years of Credited Service after 12/31/2006 ÷ 12.

2. The DC contribution is 3% of your actual plan compensation (includes housing).

b. That the contribution to the Comprehensive Protection Plan (CPP) be 4.4%, up to 200% of the DAC. 

c. That current service be paid by apportionment by the churches of the conference.

d. That we include any ministers in the Comprehensive Protection Plan (CPP) who are eligible for special arrangement feature as determined by the AC annual Adoption Agreement.

3. That the surviving spouses continue to receive benefits at 75% of the formula benefit rate for pre-1982 service.

4. Allowance grants and local expenses of the Board of Pensions is paid by the Conference Treasurer, subject to the approval of the Conference Board of Pensions and the 2004 Book of Discipline. Employee compensation, benefit package, and office expenses for Conference Benefit Officers is to be shared equally with the Arkansas Conference Board of Pensions.

5. The institution, board or organization paying the salary of a minister on special appointment without annuity claim on the conference shall make provision for the pension of such person.  Attention is called to ¶1506.3a (3), 2004 Book of Discipline, regarding eligibility to participate in CRSP and Comprehensive Protection Plan (CPP).In order to provide adequately for the pension program (current and past funding) the churches shall pay as apportioned for 2009 an amount totaling $4,500,000.

Health insurance premiums for retirees shall be apportioned for 2009 in the amount of $1,200,064.

6. There shall be apportioned to each agency and institution served by a ministerial member under special appointment with annuity claim on the conference an amount equal to 16.4% of the Denominational Average Compensation (DAC).

7. We remind all pastors and local churches of ¶638.4d in the 2004 Book of Discipline, which sets forth the requirement that payments on the pension and benefit program of the conference be in exact proportion to payments made on the salary or salaries of the ordained minister or clergy serving it.  ¶638.4d requires the local church treasurer and/or pastor to adjust the cash salary and payment to be in the same proportion as the amount paid to the pension and benefit program of the conference.  ¶638.4d adds that it shall not be permissible for a pastor to receive a bonus or other supplementary compensation tending to defeat proportional payment

8. ¶638.4 of the 2000 Book of Discipline requires the Conference Board to keep a permanent record of defaults of the churches of the conference in paying the pension and benefit apportionment in full. The board is further required to render annually to each church that is in default a statement of the amounts in default for that and preceding years. According to our Conference Treasurer, in 2007 the following churches were in default by the following amounts: 

10. Listing of special appointments: 

The official record of annuity claim is kept by the General Board of Pension.To see the list of special appointments, see the appointments in section E of this Journal.

11. Notice of claims for pension credit shall be made in writing to the Conference Benefits Officer, PO Box 3611, Little Rock, AR 72203.

12. In determining years of service, the Board of Pensions shall carefully examine and consider those years listed in the conference Journal prior to accepting them as valid years; and any years in question shall be subject to validation by the applicant and by approval of the Board of Pensions.

13. Copies of individual service records may be obtained from the General Board of Pensions, 1201 Davis Street, Evanston, IL  60201.

14. Participants eligible and enrolled in the CPP Comprehensive Protection Plan who have been continuously covered with contributions 2 consecutive years directly prior to retirement and have been retired by the Arkansas Conference will have their death benefit coverage provided through the Comprehensive Protection Plan (CPP). 

15. We recommend that all retired ministers, widows, and dependent children who are the responsibility of the Annual Conference and were enrolled 2 years immediately prior to retirement are covered by the Conference Health Insurance program. Clergy and or Spouses who enroll after the deadline are ineligible to receive the following benefit and will responsible for paying the entire premium. The Annual Conference will pay health care cost of retirees and surviving spouses, starting the first day of the month in which pension annuity begins under the following guidelines:

a) Retired Clergy, Spouses, Surviving Spouses and Ministers on Disability at the time of Unification shall continue to receive benefits under the plan in effect for their respective Annual Conferences.

b. Effective July 1, 2006 - Retirees and their spouses will have payments made on their behalf for Conference Medical Insurance premiums based on years of service up to the Medicare Supplement Rate for those under age 65. Example: Clergy age 62 with 30 years of service (and spouse age 59) would receive $420.00 toward the $1040.00 monthly premium and would be responsible for $620.00 monthly.Conference payments will start when Clergy becomes annuitant.

c) The “premium gift” is calculated in the following manner;

For years of service 1-20 years X 4% and 1% thereafter to the cap stated above.Clergy with 40 years of service must be age 65 (spouse also age 65) before 100% is provided.

2008 RATES:

Clergy- early age retiree/ single coverage - $410.52
Clergy-early age retiree/ Spouse under age 65 - $1040.00
Clergy- early age retiree/ Spouse full age 65 - $947.26
Clergy- full age 65 retiree / single coverage - $210.00
Clergy- full age retiree/ Spouse under age 65 - $947.26
Clergy- family both over full age 65 - $420.00

NOTE:  Participant’s portion is based on current premiums and may vary yearly with rate increases and annual changes in Board of Pension policy.

f) Retired individuals, eligible for Medicare, shall personally pay Medicare premiums.

g) The health insurance premium of an under-age Surviving Spouse will be paid for 5 years and there-after will be based on the formula paid for retired Clergy service year credit.After the 5 year payment, the Surviving Spouse is required to request monetary assistance in writing if needed.

h) When a surviving spouse of a retired clergy person remarries that surviving spouse will be responsible for 100% of the insurance premium.

i) Spouses and dependent children, under the age of 65, of a clergy person who dies while active will have their health insurance premiums paid by the Annual Conference for 5 years following the death of the clergy.In the event of extenuating circumstances, an extension of payments may be requested by the surviving spouse.Each case will be reviewed annually.When the unmarried surviving spouse reaches 65, the guidelines above go into effect.

j) If a retired minister marries after June 1, 1995, the new spouse will be eligible for coverage under the Health Insurance Plan. The total premium will be his/her responsibility.

k) Eligible dependents of a retired minister who are not currently enrolled in the Arkansas United Methodist Health Insurance plan may, if eligible, enroll in this plan with preexisting conditions waived provided:

1) The dependent(s) have been covered by an employer-sponsored group insurance plan for a minimum of one consecutive year; and

2) Enrollment is made within 30 days of termination of the employer-sponsored group insurance plan.

3) The participant is responsible for the premium.

16. Resolutions Relating to Rental/Housing Allowances for Retired or Disabled
Clergy persons of the Arkansas Conference

The Arkansas Conference (the “Conference”) adopts the following resolutions relating to rental/housing allowances for active, retired, or disabled clergypersons of the Conference:

WHEREAS, the religious denomination known as The United Methodist Church (the “Church”), of which this Conference is a part, has in the past functioned and continues to function through ministers of the gospel (within the meaning of Internal Revenue Code section 107) who were or are duly ordained, commissioned, or licensed ministers of the Church (“Clergypersons”);

WHEREAS, the practice of the Church and of this Conference was and is to provide active Clergypersons with a parsonage or a rental/housing allowance as part of their gross compensation;

WHEREAS, pensions or other amounts paid to active, retired, and disabled Clergypersons are considered to be deferred compensation and are paid to active, retired, and disabled Clergypersons in consideration of previous active service; and

WHEREAS, the Internal Revenue Service has recognized the Conference (or its predecessors) as the appropriate organization to designate a rental/housing allowance for Clergypersons who are or were members of this Conference and are eligible to receive such deferred compensation;

NOW, THEREFORE, BE IT RESOLVED:

THAT an amount equal to 100% of the pension or disability payments received from plans authorized under The Book of Discipline of The United Methodist Church (the “Discipline”), which includes all such payments from the General Board of Pension and Health Benefits (“GBOPHB”), during the current year or years by each active, retired, or disabled Clergyperson who is or was a member of the Conference, or its predecessors, be and hereby is designated as a rental/housing allowance for each such Clergyperson; and

THAT the pension or disability payments to which this rental/housing allowance applies will be any pension or disability payments from plans, annuities, or funds authorized under the Discipline, including such payments from the GBOPHB and from a commercial annuity company that provides an annuity arising from benefits accrued under a GBOPHB plan, annuity, or fund authorized under the Discipline, that result from any service a Clergyperson rendered to this Conference or that an active, a retired, or a disabled Clergyperson of this Conference rendered to any local church, annual conference of the Church, general agency of the Church, other institution of the Church, former denomination that is now a part of the Church, or any other employer that employed the Clergyperson to perform services related to the ministry of the Church, or it’s predecessors, and that elected to make contributions to, or accrue a benefit under, such a plan, annuity, or fund for such active, retired, or disabled Clergyperson’s pension or disability as part of his or her gross compensation.

NOTE: The rental/housing allowance that may be excluded from a Clergyperson’s gross income in any year for federal income tax purposes is limited under Internal Revenue Code section 107(2) and regulations there under to the least of: (1) the amount of the rental/housing allowance designated by the Clergyperson’s employer or other appropriate body of the Church (such as this Conference in the foregoing resolutions) for such year; (2) the amount actually expended by the Clergyperson to rent or provide a home in such year; or (3) the fair rental value of the home, including furnishings and appurtenances (such as a garage), plus the cost of utilities in such year.

17. A Retired Minister’s Day is Recommended Each Year: Recommended to be the Third Sunday of May each year.  The purpose of this day is to recognize the service of the retired servants and their families, and to involve the local churches in the recognition of the needs, both present and future, of The Arkansas Conference Pension Fund. If a retired minister does not reside within the bounds of a charge, but a member of a retired minister’s family does, they shall be invited to participate in the service (or observance); otherwise, recognition of these servants, and their service, should be observed appropriately. “Appropriately” should be determined by the Pastor/Parish Relations Committee of each local church.  This committee shall have the responsibility of locating these people and relate the service of these persons to the local church and our Annual Conference.  The Conference Board of Pensions will be responsible for providing promotional ideas and some materials (i.e., total years of service, percentage of retired ministers serving churches while in their retired status, etc.) when requested.

18. We recommend that a special grant be made to Donna McCammon, dependent child.

19. We recommend that, ¶1506.3 (2), 2004 Book of Discipline, be enforced.

20. Participants in our pension programs should notify the Conference Benefit Officer, Mona Williams, at the Office of Finance and Administration, PO Box 3611, Little Rock, AR 72203 Phone 501-324-8003, Fax 501-324-8043 when:

a. A death in the immediate family occurs;

b. Any change in address or income occurs;

c. A change of beneficiary is desired;

d. Information relative to pension matters is needed

e. To enroll in our pensions program and/or health insurance;

f. Request for retirement is made to the bishop, cabinet, and board of ordained ministry;

g. You have a question of annuity credit for past service.

Arkansas Annual Conference Funding Plan
For Supplemental One to the Ministerial Pension Plan
As of January 2008

The 2008 Past Service rate (PSR) of $543.00 is .99% of Conference Average Compensation (CAC). The conference intends to maintain the PSR as a percentage ofCAC to the minimum allowable.We anticipate future Conference average compensation increase rates to be approximately 2% per year.

Based upon calculations provided by the General Board of Pensions and Health Benefits (GBOPHB), the pre-82 service liability for the Arkansas Conference based upon a 2008 PSR of $543.00 is $-0- as of January 1, 2008.The Arkansas Conference Plan funds currently held by GBOPHB are valued at $35,852,637 as of 01/01/08.

The $-0- difference between total liability and assets represents the Arkansas Conference unfunded liability for pre-82 service obligations. This unfunded liability will come from two sources:

1. Payments annually from apportionment dollars.

2. Conference assets on deposit at the GBOPHB.The amount of money to be paid on 12/31/08 for PSR obligations will be $-0-.

The 2006 Arkansas Conference Funding Plan is summarized below:

Supplement One Liability
With assumed 4% PSR increases $37,142,311
Current Plan Funding: $35,852,637

Additional Conference Assets
On deposit with MAF:$4,463,442

Submitted by
Bill Shirron
Board of Pensions

Mona Williams
Conference Benefits Officer