wfn.org | [PCUSANEWS] Self-examination under way at BOP

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

Note #8672 from PCUSA NEWS to PRESBYNEWS:

05142
March 11,2005

Self-examination under way at BOP 

Reserve provisions, governance among areas under review 

by Toya Richards Hill

PHILADELPHIA - In an effort to maintain members' trust and sustain its
reputation, the Board of Pensions (BOP) of the Presbyterian Church (USA) is
reviewing several of its guidelines and policies.

	The self-review takes in everything from the pension plan's
contingency reserve to how it recruits and trains prospective members and
governs itself.

	"Every few years, we undertake significant review, especially of the
valuation methodology for the pension plan and the death and disability
plan," said Robert W. Maggs Jr., the board's president and CEO. "It is of
paramount importance ... that the pension board have the absolute confidence
of its constituency.

	"We are trustees ... for over $6.5 billion dollars, and over 56,000
people count on us for their benefits or financial assistance. We can't risk
reputational harm because of non-compliance or a bad governance process."

	With that in mind, the 32-member board of Presbyterian clergy and lay
members from throughout the United States is at both ends of the microscope. 

	A key area being examined is how the board decides whether the
pension plan has the appropriate amount of money in reserve.

	"We want everyone to be comfortable with what we are doing," said
Donald R. Fleischer, a pension committee member and chair of the subcommittee
reviewing the reserve. "I think it's to make sure that everyone has an
understanding of what we are doing."

	The issue of contingency reserves - how much money the plan has left
after meeting all its obligations - has been a key issue over the past
several years. 

	In 2003 and 2002, there were no experience apportionments - increases
in retired members' pensions and active members' pension credits based on
stock market performance and reserve levels. An apportionment reduces
reserves on hand. 

	The 2005 experience apportionment, which also applies to disabled and
inactive plan members, has been set at 3 percent. The apportionment was 2
percent in 2004.

	Fleischer said the review was launched about a year ago because
officials were concerned that the reserve might become under-funded: "We were
saying, 'We don't want to get in that position if we can avoid it.'"

	The subcommittee handling the reserve review, which also includes
members of the BOP investment committee, expects to present its results to
the full board in July and to make its recommendations during the BOP's
October meeting.

	"If we do change our policy, it would be in place for the next
apportionment," Fleischer pointed out.

	Also under scrutiny is how the board governs itself - specifically,
how it recruits new members. For several months, a task force appointed by
BOP Chair Earldean V.S. Robbins has been examining governance and board
development issues.

	"In the process, we began thinking one of the particular facets that
we needed to be concerned with is getting board members that have particular
skill sets," said Jefferson K. Aiken Jr., the task force chair. 

	It is important for directors to have skills in actuarial sciences,
finance, investments and health care, Aiken said.

	Directors now are recommended by the General Assembly Nominating
Committee for General Assembly approval.

	"We're not dissatisfied  ... with what the General Assembly
Nominating Committee has done," Aiken said, "but we would like to perhaps
work in collaboration with the nominating committee a bit more in attempting
to get people ... with areas of special expertise."

	During its meeting earlier this month, the BOP approved a task force
recommendation of a new Board of Directors Development and Governance
Committee to develop board leadership and examine governance issues; this new
group would replace the BOP's nominating committees. The next step, Aiken
said, is for Jean Hemphill, the BOP's legal counsel, to draft amendments to
the BOP  bylaws to empower the new committee. 

	"It is just an effort to ... carry out our fiduciary responsibility a
little bit better," Aiken said.

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