wfn.org | Board of pension deals with plan changes, notes strong returns

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

July 22, 1999 News media contact: Tim Tanton*(615)742-5470*Nashville, Tenn.
10-31-71B{384}

EVANSTON, Ill. (UMNS) - Members of the United Methodist Board of Pension and
Health Benefits got down to the nuts and bolts of fine-tuning coverage plans
and lining up legislation for next year's General Conference during their
recent quarterly meeting.

However, amid the often technical discussions about disability benefits and
the alphabet soup of MPP, CPP, CBPF and DCAR, board members acted on social
concerns such as AIDS in Africa and invested more dollars in affordable
housing. They took steps to honor a former leader of the board, and they
remembered a young colleague who died unexpectedly a month ago. 

And continuing a trend at their meetings - one driven by an unflagging stock
market -- they learned that the investment portfolio managed by the agency
continues to post solid results.

The agency, based in Evanston, manages the pension and health benefits for
about 65,000 United Methodist clergy members, employees, retirees and
spouses. It has the biggest pension fund operated by a Protestant
denomination.

The board has been undergoing a turnaround in recent years, and top staff
executive Barbara Boigegrain told directors during the July 19-20 gathering
that the foundational changes necessary for moving ahead are in place. 

"We are now regaining our balance and moving forward with smaller and more
incremental changes." It will take the rest of the year to get to the
service level that the board wants to achieve, but the agency is on its way,
she said.

Citing some of the agency's achievements, Boigegrain said that 1998
statements are being mailed to participants this month. Calls to the
Participant Response Center are being answered more rapidly, with an answer
rate of 90 percent in July. Data is being tracked and handled more
effectively through new procedures that the board has put into place. And
Bishops Bruce Blake and William Morris, both board members, are leading an
effort to help the other U.S. bishops "understand that accurate data equals
accurate benefits," Boigegrain said in her written report.

The board agreed to consider making special distributions to its
constituents in the Diversified Investment Fund twice a year instead of once
annually. Effective Dec. 31, the distributions will be considered at the end
of April and October and will be based on a formula, instead of being a
matter of judgment each time. The fund is the agency's largest pool of
investment dollars.

Acknowledging that the base interest credit paid by the board is directly
related to the level of reserves, the directors decided to establish a
reserve target for the fund. The special distribution would equal actual
reserves minus the reserve target. The target hasn't been established yet.

The fund gained 8.2 percent for the first half of this year, investment
committee Chairman John English reported. The committee decided to reduce
its asset allocation in equities slightly from 67 percent to 64.5 percent.

Strong returns were also seen in the Personal Investment Plan. As of July
16, the plan's funds were all up for the year, led by the international
stock fund, which had risen 27.1 percent. The domestic stock fund was up
15.4 percent; the domestic bond fund, 0.1 percent; the money market plus
fund, 2.3 percent; the balanced social values fund, 7.2 percent.

The directors adopted 10 resolutions from the pensions benefits committee
that will go to the General Conference for final approval. One would require
that each annual conference launch a formal funding plan by July 15, 2002,
for retiring its pre-1982 pension obligations. Four of the resolutions
involve amending parts of the Book of Discipline, and the rest address
largely procedural details related to the Ministerial Pension Plan, the
Cumulative Pension and Benefit Fund, the Staff Retirement Benefits Program
and the church's General Agency Benefit Trust. 

A revised Comprehensive Protection Plan also was adopted and will go to
General Conference. The new plan would be effective Jan. 1, 2002, if
approved. It contains several changes, including one that would raise the
amount of replacement income for some pastors on disability. The current
limit is 40 percent of the denominational average compensation. The new
benefit would be 70 percent of actual compensation, limited by twice the
denominational average compensation, offset by Social Security.

The board's October meeting promises to be more weighted with legislative
issues, as the denomination's general agencies work toward a November
deadline for submitting resolutions for the 2000 General Conference. The
assembly, set for May 2-12 in Cleveland, is convened every four years and is
the church's top lawmaking body.

In response to an appeal from Bishop Felton E. May of the
Baltimore-Washington Conference, the board directors approved steps for
addressing the HIV-AIDS crisis in Africa. Staff will encourage
pharmaceutical companies and other businesses in which the board invests to
provide drugs for HIV-AIDS victims in poor countries and to adopt policies
in Africa that will improve worker health. The agency will invite investors
affiliated with the Interfaith Center on Corporate Responsibility to lobby
companies to respond to the crisis, and it will ask top corporate executives
for an opportunity for dialogue on the issue.

The HIV-AIDS item was presented by the corporate and fiduciary
responsibility committee. Chairwoman Dianne Reistroffer noted in a committee
meeting that the church must be concerned about the effect of AIDS on all
humanity, and that "many, many Methodists in Africa are being impacted by
this."

Reistroffer's committee works at the point where the rubber meets the road
in terms of making sure that the denomination's investments are in line with
United Methodist principles. While approving new companies for investment,
the committee supported the staff's decision to reject two stocks because of
involvement in military armaments; two because of involvement in alcohol;
five because of tobacco; five because of gambling; and one because of
pornography.

The investment committee approved committing an additional $140 million for
affordable housing work. The board's total commitment to affordable housing
is about $600 million.

"We are making substantial contributions to the stock of affordable housing
here in the United States," staff executive Dave Zellner told the committee.

In other business:

*	Funding was approved for the "global fix" plan adopted in April. The
fix, which brought all accounts into line with participant data, ended up
costing $4.8 million. Of that, $1.9 million came from endowment fund
earnings and the remainder came from the board's operating budget
contingency reserve. The adjustments were for 1998 and part of 1999.

*	The board voted to name a new award after retired Bishop Clay F.
Lee. The award will recognize past directors for contributions to the
agency. The bishop will receive the first Clay F. Lee Award on Oct. 22,
during the board's fall meeting in Philadelphia. Lee served on the board
from 1980 to 1988 and was president from 1992 to 1996.

*	The Rev. Tallulah Fisher Williams, who died of heart failure June
20, was remembered during the worship session and plenary. Williams, 45, was
a member of the board.

*	The computer resources task force reported that contingency plans
are being developed for the Year 2000 computer bug, and that the agency is
in "a good place" regarding preparedness.

*	The board approved the investment committee's request to allow fund
managers to invest in companies with a one-year operating history.
Previously, the board had a three-year requirement. The change will enable
the board to invest in emerging companies sooner.

*	Board members learned that the agency's total assets have grown to
$12.1 billion in assets as of May 31, from $11.5 billion on Dec. 31. Net
assets are $2.1 billion, up from $1.8 billion.
# # #

______________
United Methodist News Service
http://www.umc.org/umns/
newsdesk@umcom.umc.org
(615)742-5472