4.9.4 Board of Pensions

adjustment and will be around 5%. The committee approved proposed changes to the Personnel Policy Manuel to reflect our practice of requiring sexual harassment prevention training. Discussion was held on the policy for phone reimbursement for staff working from home who may be using their personal cell phones for conference business. Dave Stucke is looking into alternatives such as a Zoom phone. Jeff and Rebecca reported it has been a challenge to stay connected with staff now that very few work from the office. Rebecca and Jeff are working at having regular meetings where their staff are all together in person. We remain focused on communication and keeping our staff aligned as we move forward. Submitted by Barry Whipkey, chair, Human Resources Committee

4.9.4 Board of Pensions

Pensions Board of Pensions of the Dakotas Annual Conference of The United Methodist Church, Inc. and South Dakota Annual Conference United Methodist Board of Pensions, Inc.

The Dakotas Conference Board of Pensions (Board or BOP) administers the pension, healthcare, and other benefit programs available to clergy and lay employees of United Methodist institutions (local churches, annual conference, and other UM related entities). The purpose of the Board is to wisely provide pension and health care benefits for its clergy, lay employees, and their families so that they can more freely equip the local church to make disciples of Jesus Christ for the transformation of the world. (See Para. 639.1 in the 2016 Book of Discipline). Major accomplishments over the last year include: (1) began Wespath HealthFlex Exchange for the addition of three-quarter time clergy with the option to opt out for full-time and three-quarter time clergy if qualifying; (2) continuation of Medicare Part B premium grants for surviving spouses as those rates continue to increase each year; (3) continuation of premium grants for eligible retired clergy (Pre-65 and 65+) to assist with premiums in active and retiree health insurance; (4) continuation of medical grants to eligible clergy for large out-of-pocket medical expenses; (5) continuation of parental leave grants to churches to cover lay supply expenses while pastor or spouse is on maternity leave; (6) continuation of no apportionment dollars; (7) Active Health Fund for future funding of health insurance in the midst of denominational uncertainty; (8) gave discretionary rebates to churches and discretionary bonuses to clergy and lay staff for those participating in pension and health. Funds were set aside for HealthFlex Direct Bill transition grants for churches with three-quarter time clergy on health insurance beginning in 2022. Clergy Medical Leave: Clergy members Dayne Zachrison and Robert Duemig were approved to continue medical leave and to receive Comprehensive Protection Plan (CPP) Disability Benefits for the conference year of July 1, 2022-June 30, 2023. Clergy members Howard Baird and Kevin Kloster were approved to continue medical leave for the conference year of July 1, 2022-June 30, 2023. The Pre-82 (Past Service) Annuity Rate: The Board recommended that the 2023 Past Service Annuity Rate (effective 1/1/2023) be set at $792 for each year of pre-82 service in the Dakotas Conference. This is a 2.86% increase over 2022. Discretionary Bonus Policy: In the event the Dakotas Board of Pensions has overfundedness, the Board may approve a discretionary bonus to be paid directly to clergy and/or lay staff.

UPDATES ON THE HEALTHFLEX PROGRAM:

HealthFlex is offered to Annual Conferences through Wespath. This plan is specifically designed for active and younger than age 65 retired United Methodist clergy and lay employees. Blue Cross and Blue Shield of Illinois is the health insurance carrier which administers the plan and processes claims. The HealthFlex insurance plan has strict guidelines regarding payment of premiums. Beginning in 2022, HealthFlex coverage includes three-quarter time active clergy. All of the same options and premium credits will be available to these clergy as available to full-time clergy. The option for both three-quarter time and full-time clergy to opt out was added as long as they qualify for one of the five opt-out reasons. Please check with the conference benefits officer for clarification on the optout reasons.

The chart below shows the actual cost for each category of participant enrolled in the 2023 HealthFlex Exchange: ACTIVES

Single 2 Party Family H3000 Plan $8,700 $16,536 $22,632 H2000 Plan $9,984 $18,960 $25,956 H1500 Plan $11,016 $20,928 $28,632 C3000 Plan $9,852 $18,708 $25,584 C2000 Plan $11,316 $21,492 $29,400 B1000 Plan $11,784 $22,392 $30,636

The conference will provide a Premium Credit of the following: Single Coverage $ 8,484 2 Party Coverage $16,116 Family Coverage $22,056

Eligibility to participate is specified in the HealthFlex Plan Documents and Conference Policy.

Premiums will be paid in accordance with conference policies regarding such payments (see Policy section of the 2022 Journal). For 2023, the annual Direct Bill to churches will be 75% of the total active 2022 C2000 HealthFlex premium for full- and three-quarter time clergy. The Direct Bill to churches for full-time clergy that opt out, three-quarter time clergy that enroll, and retirees that follow a full-time clergy will be 50% of the full-time Direct Bill. Direct Bill to churches with three-quarter time clergy that opt out will be 25% of the full-time Direct Bill. The Direct Bill for any interim appointment following a full-time or three-quarter time clergy will remain the same. For 2022 and 2023 the Dakotas Board of Pensions granted funds to help churches in this transition.

ELIGIBILITY FOR ACTIVE PARTICIPATION IN THE CONFERENCE HEALTH BENEFITS PLAN

See the Pensions and Health Benefits Guidelines in the current Journal for all eligibility rules.

UPDATES ON VIA BENEFITS FOR RETIREES:

The average HRA to a participant for 2022 is $3435. 58.9% of all our retiree HRA accounts had funds roll over from 2021. Of those accounts, 74% rolled over a minimum of $1000.

Effective 1/1/2022, this policy will also apply to clergy appointed three-quarter time in this conference or within the connectional structure to a unit of this Conference. Also, full-time, and three-quarter time clergy that opted out of HealthFlex prior to retirement will continue to earn credit for years of service. These clergy will be eligible at the same rate as full-time appointed clergy that were on the active plan prior to retirement. See 2022 Journal for all eligibility rules.

UPDATE ON THE RETIREE HEALTH LIABILITY FUNDING PLAN AND NEW INFORMATION ON A RETIREE HEALTH FUNDING PLAN/HEALTH REIMBURSEMENT ACCOUNTS:

To fund the Health Reimbursement Account (HRA) contributions, the Board uses funds accumulated in the Retiree Health Fund invested with Wespath, as well as the Frank Lynch Trust and Georgia Lynch Trust invested in Union Bank. In 2019, all the stipulations within the Lynch Trusts were fulfilled to allow the funds to be transferred to the Retiree Health Fund. As of December 31, 2019, the Frank Lynch Trust was transferred to the Retiree Health Fund to bring that balance to $14,177,895. The Georgia Lynch Trust still needs to be transferred with a balance of $249,517 as of 12/31/2021.

It is the policy of the Board to manage these funds like an endowment so that 4.5% of the average balance is made available for HRAs. By managing the Retiree Health Fund in this manner, the Board intends to grow the balance of this fund as well as the amount contributed to HRAs.

Regarding Corpus Amounts Endowment and Trust Fund: The corpus was established at $1,000,000 for the merged Dakotas Conference as of 1/1/1994. Additions since the merger total $84,646.59. The corpus of the endowment is $1,084,646.59, as of 12/31/21. The corpus is not viewed as a “target balance.” Instead, it is the foundation of all Dakotas Pension and Health Plans and cannot be expended for any reason. The Board has adopted a strategy of “reserve savings” with accompanying policies endorsed by the Conference Council on Finance and Administration which will enable the Dakotas Conference to “weather” large increases in health insurance premiums, secure the Ministerial Pension Plan and the Pre-82 Plan, and provide funding for CRSP liabilities. Reports of the amount of this “reserve savings” and its use will be reported to the annual conference upon request. Administration of All Plans and Work of the Board: The Board recommends that the following be authorized to sign necessary documents relative to the Dakotas Board of Pensions for 2022-2023: Board Chair, Conference Benefits Officer, and Treasurer of the Board.

Pension Payments and Rental/Housing Allowance Resolutions Relating to Rental/Housing Allowances for Active, Retired, Disabled, or Former Clergypersons of the Dakotas Conference

The Dakotas Conference (the “Conference”) adopts the following resolutions relating to rental/housing allowances for active, retired, terminated, or disabled clergypersons of the Conference: WHEREAS, the religious denomination known as The United Methodist Church (the “Church”), of which this conference is a part, has in the past functioned and continues to function through ministers of the gospel (within the meaning of Internal Revenue Code section 107) who were or are duly ordained, commissioned, or licensed ministers of the Church (“Clergypersons”); WHEREAS, the practice of the church and of this conference was and is to provide active clergypersons with a parsonage or a rental/housing allowance as part of their gross compensation; WHEREAS pensions or other amounts paid to active, retired, terminated, and disabled clergypersons are considered to be deferred compensation and are paid to active, retired, terminated, and disabled clergypersons in consideration of previous active service; and WHEREAS, the Internal Revenue Service has recognized the conference (or its predecessors) as an appropriate organization to designate a rental/housing allowance for clergypersons who are or were members of this conference and are eligible to receive such deferred compensation;