wfn.org | With Benefits Plans Secure, Board of Pensions Eyes Long-range Goals

[PCUSA.NEWS@ecunet.org]

31-October-1996 
 
 
96436              With Benefits Plans Secure, 
             Board of Pensions Eyes Long-range Goals 
 
                      by Jerry L. Van Marter 
 
PHILADELPHIA--With its pension plan stable and secure and its major medical 
plan robustly healthy after near catastrophic deficits just five years ago, 
the Presbyterian Church (U.S.A.) Board of Pensions turned its attention to 
long-term changes when it met here Oct. 26. 
 
     "A one-size-fits-all benefits plan is no longer viable or desirable," 
Board president John Detterick told the Board in an unusually lengthy and 
detailed report.  "Our benefits plan must be more flexible and contain more 
options to reflect the diversity of [plan members'] needs." 
 
     Reiterating a consistent theme of his three-year tenure as the Board's 
chief executive, Detterick said the "community nature of the benefits plan 
is the critical factor" undergirding planning and decision making.  "The 
church is not a secular business," Detterick said, "but a biblically based 
community with different values and a shared sense of responsibility to 
each other based on need and ability.  The church's benefits plan has 
reflected that sense of community in the past -- the challenge is to 
maintain the community nature of the plan into the future." 
 
     Acknowledging the anxiety caused by change, Detterick said he "does 
not want to endanger the comfort level of plan members," particularly those 
in or near retirement.  "But all change tends to be discomforting," he 
continued, "so communication and interpretation of what we're trying to do 
is critical." 
 
     The Board is in the midst of an extensive demographic study of plan 
members.  The study is scheduled for completion by mid-1997.  Detterick 
said he expects a package of proposed plan improvements based on the 
findings of the study to be ready for the Board's action at its February 
1998 meeting.  "I feel a strong sense of urgency to respond to the changing 
world and the changing needs of plan members as quickly as possible," he 
said.  Proposed changes must be submitted to the General Assembly for its 
consideration. 
 
     In the meantime, most plan members and employing organizations (who 
pay the dues) can expect more good news.  Beach Hall, chair of the Board's 
Healthcare Committee, reported that his committee foresees no need for 
further dues increases for major medical coverage "in the next few years," 
assuming the favorable trends continue.  And when the Board next meets, 
March 1 of next year, Hall added, "we could be recommending another dues 
credit for 1998."  The Board has granted a .5 percent major medical dues 
credit to employing organizations in 1997. 
 
     And Christopher W. Smith, chair of the Board's Investment Committee, 
reported year-to-date returns on the Board's investment portfolio of 8.2 
percent.  The Board's total assets have climbed above the $4 billion mark. 
"Our portfolios are well structured and we have a lot of confidence in our 
investment managers," Smith noted. 
 
     The rates for some of the Board's benefits programs are rising, 
however.  Subscription rates for major medical continuation benefits will 
rise 15 percent in 1997.  The new rates will be $151 per month (up from 
$131) for participants enrolled in the program prior to the beginning of 
1987 and $259 per month (up from $224) for those who enrolled on or after 
Jan. 1, 1987.  The 1,200 persons enrolled in major medical continuation are 
mostly early retirees and their spouses, younger spouses of retirees, 
divorced spouses of plan members and interim ministers. 
 
     Rates are also going up for participants in the Board's Medicare 
Supplement plan -- from $64 per month per person to $76 per month. 
According to the Board's major medical actuary, John Cookson of Milliman 
and Robertson, "the cost of prescription drugs is driving the cost of this 
program." 
 
     With the lifespan of retirees lengthening and hospitalization being 
increasingly replaced by outpatient treatment, increased prescription drug 
usage is expected, Cookson said, "but utilization of the Board's 
prescription drug progam has been far higher than we expected." 
 
     He said the culprit is not abuse of the program by plan members, but 
an out-of-pocket maximum that is the lowest of any plan with which he is 
familiar.  Because of the low limit ($200) before all prescriptions are 
reimbursed at 100 percent, 38 percent of all Medicare Supplement program 
participants had reached the out-of-pocket limit by the end of September. 
The projected 1997 deficit in the Medicare Supplement program is $1.7 
million. 
 
     The Healthcare Committee has docketed time at its Feb. 28, 1997, 
meeting "to take a long, hard look at the Prescription Drug Plan," Hall 
said. 
 
     In other business, the Board launched a cooperative effort with the 
presidents of the Presbyterian Church's racial-ethnic schools and colleges 
to promote the Christmas Joy Offering.  The Board and the schools share the 
proceeds from the offering.  Sammie Potts, president of Barber-Scotia 
College in Concord, N.C., and chair of the school presidents' roundtable, 
spoke to the Board and said he welcomed "this new partnership between our 
schools and the Board of Pensions." 

------------
For more information contact Presbyterian News Service
  phone 502-569-5504             fax 502-569-8073  
  E-mail PCUSA.NEWS@pcusa.org   Web page: http://www.pcusa.org 

--