wfn.org | [PCUSANEWS] 'A lifetime commitment'

[PCUSA NEWS <PCUSA.NEWS@ECUNET.ORG>]

Note #8664 from PCUSA NEWS to PRESBYNEWS:

05132
March 7, 2005

'A lifetime commitment'

Pension board approves 3 percent apportionment for '05

by Toya Richards Hill

PHILADELPHIA - Presbyterian Church (U.S.A.) pensioners can exhale now.

	It's 3 percent.

	That's the 2005 experience apportionment that the Board of Pensions
(BOP) of the PC (USA) approved during its meeting here earlier this month.

	The action lays to rest questions about how great an increase, if
any, pension plan members would get in retirement and survivor benefits
beginning July 1. The boost also applies to pension credits of active,
disabled and vested terminated plan members.

	The board also approved a 3 percent hike in disability benefits.

	"The experience apportionment is a lifetime commitment to plan
members," Caroline DeEsposito, chair of the board's pension committee, told
the BOP directors just before the vote. "As we determine the size of the
apportionment, we are making a commitment to plan members that stretches 40,
50 years or more into the future."

	The 2005 experience apportionment increase comes on the heels of a 2
percent increase in 2004 and two previous years of no increases at all. The 3
percent boost returns the apportionment increase to what it was in 2001, and
is almost equal to the 3.3 percent increase in inflation last year.

	Although the board's vote came with little fanfare or discussion, the
issue of apportionment was debated in some BOP committees. The pension and
investment committees met jointly to take a close look at the board's
investment performance and its financial reserves in preparation for the
decision.

	"We do have to be concerned about what we do, and our ability to keep
reserves at a comfortable level," said Thomas Parks Jennings, chair of the
investment committee.

	Before the 2005 apportionment, the pension plan had assets of $6.4
billion and liabilities of $5.4 billion, creating a contingency reserve of $1
billion - 22.8 percent of the present value of accumulated benefits.

	A 3 percent experience apportionment will reduce the reserve to $908
million - 19.3 percent of the present value of benefits.

	Jennings pointed out that there are a number of risks to the board's
investments, including inflation and rising oil prices. So far this year, he
said, investments aren't faring very well.

	"Right now things don't look so great," he said, referring to the
stock market's performance in January and February. "We have ...
uncertainties about where things are going. I think we still can expect some
volatility."

	Judith Freyer, the BOP's senior vice president, treasurer and chief
investment officer, agreed, saying, "I think I'm a little more cautious than
I was a year ago."

	The directors pointed out the several recent years when large
experience apportionments were given, sometimes well above inflation.

	In 1998, for example, the experience apportionment was 11 percent
while inflation was just 1.7 percent; the following year, the apportionment
was 10 percent and inflation was 1.6 percent.

	Some directors urged the board to keep in mind the pressing needs of
some pensioners.

	A significant number of pension members are seeing reductions in
their incomes, said the Rev. Arthur E. Sundstrom, vice chair of the pension
committee. "That's another piece that has to be put on this," Sundstrom said.
"I think we just need to be a little more hopeful and balanced in our
memories."

	In discussions before the pension committee, BOP's director, the Rev.
Adan A. Mairena, offered himself as an example of a young pastor with modest
income. He said he and his wife will have to delay starting a family and
defer other dreams until they are more stable financially. He said he knows
of other pastors who also are struggling.

	"Let's err on the side of generosity," he suggested.

To subscribe or unsubscribe, please send an email to
pcusanews-subscribe-request@halak.pcusa.org or
pcusanews-unsubscribe-request@halak.pcusa.org

To contact the owner of the list, please send an email to
pcusanews-request@halak.pcusa.org