wfn.org | Church agency moves ahead with global benefits work

[NewsDesk <NewsDesk@UMCOM.UMC.ORG>]

July 24, 2001 News media contact: Tim Tanton·(615)742-5470·Nashville, Tenn.
10-31-71B{330}

NOTE: This report is accompanied by a sidebar, UMNS story #331.

BALTIMORE (UMNS) - A United Methodist agency has taken a major step toward
developing a pension benefits plan for church clergy and lay workers outside
the United States.

The voting members of the churchwide Board of Pension and Health Benefits,
meeting July 20-21, unanimously approved the concept of a global pension
benefits system. The next step will be the formation of a denominational
task force comprising representatives of the board, the churchwide Board of
Global Ministries, the United Methodist Publishing House and United
Methodist Communications.

Barbara Boigegrain, top staff executive of the Board of Pension and Health
Benefits, described the decision as "historic."

Much work lies ahead. At best, Boigegrain said, the board might have some
pilot programs under way during this quadrennium - the four-year period of
church work that ends in 2004.

"I'm receiving a lot of interest right now from annual conferences in
developing countries, and we're trying to hold that off until we can provide
some systemic ways of providing (benefits)," she said.

The initial focus will be on providing pension benefits only. Annual
conferences in developing countries of sub-Saharan Africa and parts of the
former Soviet Union will be emphasized. The Philippines also is a priority
area, though United Methodists there are weighing whether to become an
autonomous Methodist church. Other central conferences will have the
opportunity to participate too.

Boigegrain said she has received positive feedback from the general church.
"There is great passion about supporting these developing countries," she
told board members.

She stressed that the participants in the U.S. plan will be safe. "We will
protect participant monies."

The global benefits plan will include creating an offshore trust to protect
the pension money from tax issues in the countries that are served and the
United States, said Gale Whitson-Schmidt, deputy general secretary. The
assets will be handled in U.S. dollars. While cost figures are unknown at
this point, board executives expect the trust to be funded initially with
$50,000 to $70,000 from contingency funds in the agency's current operating
budget.

In her presentation to board members, Boigegrain offered the image of a
pension tree to illustrate how the global benefits system would work. The
tree's boughs represented the overarching philosophy of providing benefits,
while the individual conferences and other partners worked under the
branches on implementing the system at the local level. In the tree model,
the board envisions sharing a common language about pension benefits,
thereby avoiding the issues that resulted from the different histories and
pension systems of the U.S. annual conferences. 

Boigegrain said the board's model will help the long-term sustainability of
the plan, enable the agency to better manage its risks and potential
liability, and leverage the board's expertise.

She emphasized the importance of having local people handling the system,
and board members affirmed that approach. Issues surrounding the local laws
and currencies in individual countries are "tremendously complex," she
noted. The local conferences will work with those issues, and the board will
"not become enmeshed in that."

The Rev. Bill Wyman of Charlotte, N.C., said that valuing the nationals or
local people was the "most significant part" of the board's plan. 

Boigegrain and other Board of Pension staff have been working with the Board
of Global Ministries and Publishing House executives on the global benefits
issue. The Board of Global Ministries reported to the 2000 General
Conference that in the past, "a block grant from the former World Division
allowed conferences and churches outside the U.S. with a relationship to the
board to administer annual pension appropriations."

"More recently, the dollars available and the administrative systems have
not kept up with the needs," the board reported. "The pensions of pastors
and lay workers in some areas are jeopardized or lost."

The Publishing House historically has used part of its own net income to
provide support for pensions in the annual conferences. After keeping a
certain amount of net income for its own reserves and growth needs, the
Publishing House passes on surplus dollars for church pensions, based on a
Board of Pension and Health Benefits distribution formula. Conferences in
developing countries received a "significant increase" in the amounts they
received this year, and some U.S. annual conferences returned their checks
to support pensions in those countries, Boigegrain said.

The United Methodist Church's top legislative assembly, the General
Conference, directed the Board of Pension and Health Benefits last year to
provide a "just plan" for distributing proceeds that the Publishing House
provides for pensions in the annual conferences. "The just plan may
encompass disproportionate allocations to annual conferences where there is
a desperate need relative to other annual conferences, as, for example, in
underdeveloped nations relative to developed nations," the General
Conference stated in its resolution.
 
At their meeting, the Board of Pension approved naming three members to the
task force: Jim Branscome of Richmond, Va., Rukudzo Murapa of Mutare,
Zimbabwe, and the Rev. Peary Wilson, of Rapid City, S.D. With
representatives from the other agencies on the task force, they will work on
creating a unified vision for the pension plan; developing an action plan;
defining resource needs; and preparing any enabling legislation that might
need to be taken to the 2004 General Conference.

Issues such as what the plan will cost and how the expense will be shared
among the agencies remain to be worked out, board executives said.

"If you want to be biblical, this is a new thing, and all the answers are
not here yet," said Bishop William Morris, chairman of the board and leader
of the church's Nashville Area. "... Some things are just not known."

In other business, board members heard a report on the agency's investment
performance, which has reflected the weakness in the financial markets. As
of July 20, the Domestic Stock Fund was down 7.7 percent so far this year;
the Domestic Bond Fund was up 5.1 percent; the Money Market Fund was up 4.6
percent; the Balanced Social Values Plus Fund was down 4.6 percent; and the
International Stock Fund was down 15.7 percent. 

Despite the numbers, the agency is outperforming its peer groups. "In almost
every case, we are exceeding our benchmark returns," Whitson-Schmidt said.
 
The Asset/Liability Committee asked the board's staff to look into providing
more flexibility for constituents regarding the movement of money into and
out of their own investment accounts. Currently, if a participant withdraws
money from the board's investment plan, the money is taken from the various
funds in proportion to how much of the participant's investment is in each
fund. An e-mail writer requested that the board give constituents the
ability to decide for themselves how much money would be withdrawn from each
fund.

The board also:
·	Remembered the life and contributions of John English, a member who
died March 27 from complications related to an aortic aneurysm. Elected to
the agency's Investment Committee in 1988, he had been a member of the full
board since 1992. 
·	Heard a report on staff member Vidette Bullock Mixon's July 2-8 trip
to China, where she visited two factories used by Wal-Mart suppliers. Mixon
and two staff members of the Interfaith Center on Corporate Responsibility
also met with representatives of Wal-Mart and nongovernmental organizations
in Hong Kong. While noting that Wal-Mart is committed to holding its
suppliers accountable for their conduct, Mixon told the board's Social
Responsibility Committee that concerns remain in the areas of overtime,
wages, environmental health and safety.
·	Learned that Mixon will write a follow-up letter to major
pharmaceutical companies, asking them to share what they're doing to address
the AIDS and HIV crisis in Africa.
·	Watched a new video, "Reclaiming a Natural Balance," focusing on the
board's environmental work.
·	Amended the Ministerial Pension Plan to cover retired clergy members
and local pastors serving under episcopal appointment.
·	Learned that of 26 shareholder resolutions filed this year, 14 have
been voted on so far in corporate annual meetings, with favorable votes
ranging from 1 percent to more than 15 percent. The resolutions deal with
issues such as genetic technology, pornography, financial practices,
equality, environmental impact, global accountability, militarism and
corporate governance.
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