wfn.org | Benefits agency maps out pension plan changes

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

Nov. 19, 2002 News media contact: Tim Tanton7(615)742-54707Nashville, Tenn. 
10-71B{532}

By United Methodist News Service

United Methodist Church employees could be getting more flexibility and
greater protection in their pension plans in the next few years, through a
proposal being developed by the denomination's benefits agency.

The proposed changes would replace the current pension plan with a new one
that combines the features of a defined contribution plan with those of a
defined benefit plan. 

"For the participant, (the defined benefit piece) provides a level of
protection that they can count on at retirement and that they know they'll
have for the rest of their life," said Woody Bedell, chief strategic officer
for the United Methodist Board of Pension and Health Benefits in Evanston,
Ill. The participant will receive a guaranteed monthly payment at retirement.

"The defined contribution (piece) provides a contribution equal to 3 percent
of a person's compensation," he said. The contribution would be based on an
individual's level of compensation, he said. At retirement, constituents
could do as they pleased with their account balances, which would no longer
have to be annuitized.

Annual conferences would fund the basic clergy pension benefit, and the
conferences would have the option of adding to that benefit.

The new pension plan would provide similar benefits to the current one, while
creating less liability for the annual conferences and reducing overall
costs, Bedell said.

The recommendation would also provide for full- and part-time lay employees
with a year or more of permanent service to receive a minimum benefit of 3
percent of compensation to a defined contribution plan. Church sponsors would
have the option of adding to that. 

The governing directors of the Board of Pension and Health Benefits approved
the proposal, recommended by their Benefits 2004 Task Force, during a Nov.
15-16 meeting in Tampa, Fla.

"It's an historic moment," said Barbara Boigegrain, top staff executive of
the board. "The board has responded with insight and integrity by preserving
what participants have liked about the benefits while protecting the
long-term security of the pension benefits." 

The agency will present its proposal to the General Conference, the
denomination's highest legislative assembly, which meets in 2004 in
Pittsburgh. 

The directors also decided not to pursue developing a unified health plan,
which had been discussed at an earlier meeting. Instead, they will focus more
on marketing the existing HealthFlex plan as a voluntary option for all
conferences. The agency will create greater provider networks for discounts,
and it will promote health and wholeness initiatives identified by the task
force, Bedell said.

The proposal reflects many of the comments that the task force gathered
during a series of "listening" events held with church employees around the
United States.

"The task force recommendations sought to balance the paradoxes of fair and
equitable availability while managing cost," Bedell said. The group
considered many options, and in "the final analysis, it came down to
providing benefits in a different way," he said. "Our job now will be to help
the church understand how the new program works both for the church and the
individual." 
 
The board's directors also made several decisions regarding the investment
options available to people who have retirement savings in the agency's
Personal Investment Plan. As of Nov. 18, the board has started making two new
investment options available for participants' plan contributions: the
Multiple Asset Fund and the Stable Value Fund. 

The Diversified Investment Fund will remain available as an investment option
for employer and conference contributions. However, as of Dec. 31, the board
will no longer offer the fund to Personal Investment Plan participants. The
Diversified Investment Fund is designed for long-term investment, and
allowing participants to move in and out of the fund at any time is
inconsistent with that philosophy, the board decided. The two new funds will
have some of the same investment features while enabling Personal Investment
Plan participants to move their money around with greater ease.

More details about these and other changes, as well as information on the
board's investment funds, are available at www.gbophb.org or by calling the
Participant Response Center at (800) 851-2201.	
# # #
Mike Lee, a staff executive with the Board of Pension and Health Benefits,
contributed to this report. 

*************************************
United Methodist News Service
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