Pension and Health Benefits (BoPHB), Board of

The Board of Pension and Health Benefits works to care for those who serve and for those who have served, while also attending to the needs of the churches they have served and are serving. We attend to multiple retirement plans, healthcare for active and retired clergy and lay employees. We spend time with financial reports, actuarial reports, funding projections, requests for special grants, requests for exceptions, and concerns about the capacities of churches to fund ministry. In all that we do, we seek to address needs of our participants with sustainability and fairness. It requires paying attention to a

In all that we do, we seek to be faithful to God in our care for one another. Because of the nature of our 9 work, however, we are never fully successful. As with all other Christians and all other parts of the church, we are “going on to perfection”, but we are not there yet. We are thankful for your grace as we continue to work on your behalf. This is difficult, but important work.

Below is up to date information about the programs we offer, policies we have in place, a look ahead, a look at this moment in time, and two action items for the Annual Conference to act on.

I love the work of the Board of Pensions and Health Benefits, because our work is the work of the whole.

We serve the Annual Conference, seeking to do what we can to maximize fairness and justice while caring for those who are vulnerable. I am thankful to the entire board and its officers, and to the staff of both

Upper New York and Wespath who inform us, support us, and implement our decisions.

The guidelines by which our health benefits program is administered are presented here for the sake of clarity and understanding by all. Further information can be found on in the conference website: https://www.unyumc.org/about/pastors-compensation , click on the link “Clergy Support Policies”

Health Benefits for Full-Time Active (under age 65) Clergy: We continue to offer the Healthflex

Exchange for eligible active clergy, which combines a blended rate for churches with multiple healthcare options for participants. The blended rate in 2023 is $14,400. Participants receive a premium credit and decide what plans work best for them. Participants are encouraged to elect a pre-tax flexible spending account (HSA and/or FSA) to be deducted from their salary. The HSA and FSA are administered through

Health Equity. The purpose of the pre-tax benefit is to help participants pay for deductibles and other eligible medical, dental and/or vision expenses.

The UNYAC BoPHB continues to support wellness incentives through the Virgin Pulse Health Miles

Program. Participants can earn monetary rewards each year for walking, exercising, and participating in wellness activities and coaching.

Blended Rate (MED)—Since our health benefit plan covers all full-time clergy, our connectional responsibility requires that every church served by a full-time pastor pay the Blended Rate. The Blended

Rate is NOT an insurance premium for the individual currently serving as the church’s pastor. It is each full- time church’s equal [connectional] share of the total Conference premium that makes it possible for the 1 Conference to offer affordable health benefits to active clergy and their families throughout our diverse conference.

The costs of health care are increasing everywhere, and we are no exception. There will be an increase in 5 the blended rate in 2024, and participants will also see increased costs. More information will be available in the fall.

Retiree/Over age 65 Active Health Coverage through Via Benefits: The Conference will continue our 9 agreement with Via Benefits to provide a choice of Medicare Supplement, Part D prescription, dental, vision, and/or MedicareAdvantageHealth insurance plans for the conferences current and future eligible 11 retirees who are already enrolled or will be enrolled in Medicare. These plans will continue to be combined with an individual Health Reimbursement Account (HRA) for each eligible retiree and spouse, as applicable.

Retiree Health Eligibility: Retired clergy, age 65 or above, must be enrolled with the Social Security

Administration for coverage under Medicare Part A and Part B, before they can be enrolled in the Via

Benefits network.

A retired participant is eligible for the Via Benefits program if they were an active participant in the

Conference Healthflex Benefit Plan for at least five consecutive years immediately preceding their retirement effective date. The retiree must have primary coverage at retirement through Medicare Part

A and Part

The formula for retiree HRA funding is based on 3.33% of “fully funded HRA amount” per full-time equivalent years of service up to 30 years of service and the 5-year vesting rule. BoPHB determines the fully funded HRA amount annually and is continuing work on balancing the needs of retirees, their spouses, and our funding streams.

Clergy Who Retire Before Age 65: Clergy who retire before the age of 65 may continue their coverage in

HealthFlex until their 65th birthday, with a cost share. The Benefits Office will provide you with a calculation of your premium amount once they are notified of your official intent to retire. If such early retired clergy choose not to continue in the Conference HealthFlex program until they become eligible for Via Benefits at age 65, (e.g., they drop HealthFlex to go onto a spouse's healthcare program) they will forfeit their eligibility for Via Benefits and the retiree HRA. This decision is irrevocable.

UNYAC Healthflex Arrearage Policy: The Board of Pensions and Health Benefits is working with the UNY

Cabinet on a policy for responding to unpaid healthcare costs for active clergy.

Special Grants: UNYAC BoPHB has been providing assistance via special monthly grants, as established in previous years and as provided for in The Book of Discipline.

The Board of Pension & Health Benefits will annually review previous and future pension grants to retirees and widows/widowers but will not publish names, to protect their privacy and dignity.

The 2023 special grants include two retired clergy and two surviving spouses equaling a cumulative annual payout of $13,730.28

Clergy Retirement Security Program (CRSP) and Comprehensive Protection Plan (CPP) 75%-and-above 3 Appointments: We have not made changes to CRSP or CPP. CRSP pension benefits are for active clergy 4 serving 75%-timeappointments and above. Clergy who voluntarily contribute at least 1% of their total compensation to their United Methodist Personal Investment Plan (UMPIP) account will receive a matching 1% CRSP contribution through the program to their defined contribution CRSP account, as prescribed plan agreement, as long as their congregation pays their benefit obligation.

CRSP - To fund this plan, all congregations that have 75%-time-and-above appointments are billed a percentage based on their pension-based compensation (salary plus housing). There is no change to the

13.8%

CPP – Churches with clergy in full connection, serving in 75% appointments as well as all full-time appointed clergy, will continue to be billed 3% of the clergy’s pension-based compensation (salary plus housing). CPP term disability, and survivor benefits to clergy and their families.

Clergy Retirement Security Program Defined Benefits (CRSP-DB) and Ministerial Protection Plan (MPP)

Annuities: The current retirement plan for clergy is CRSP, which replaced MPP. CRSP has two parts: the defined contribution portion and the defined benefit portion. The defined contribution portion creates an 20 account balance at Wespath that will be accessible to a participant after retirement. The defined benefit portion is distributed as a monthly benefit based on Denominational Average Compensation and years of

The Board received the pension actuarial report from Wespath dated September 28, 2022, outlining the components of UNYAC’s CRSP-DB, MPP Annuities as well as our conference specific Pre-82 report. For end of year 2022, the UNYAC 2020 owed a CRSP-DB contribution in the amount of $1,536,187 which was due by Dec. 31, 2022. Accordingly, the UNYAC BoPHB paid the 2022 CRSP-DB contribution in its entirety.

UNYAC’s CRSP is currently fully funded. The amount paid reflects current benefit accruals under CRSP-

DB.

According to the report, for year-end 2023, the UNYAC BoPHB is estimated to owe $1,380,339 to Wespath for the CRSP-DB. For year-end 2024, the UNYAC BoPHB is estimated to owe $1,322,495 to Wespath for the CRSP-DB.

Retirement: Julie Valeski, UNYAC’s Benefits Administrator, once again held a very successful retirement seminar for clergy and spouses who are approaching retirement age. We will continue this program in

2023-2024.

Financial Planning: Wespath has partnered with EY (formerly Ernst and Young) to offer free financial planning services to active participants, surviving spouses, and terminated and retired participants with a pension account balance of at least $10,000. EY’s financial planners provide confidential, objective guidance on making investment decisions, saving for retirement, managing debt, understanding tax issues and evaluating insurance needs. This service has been significantly under-utilized. Retirement planning can be a confusing and stressful activity. The professionals at EY can assist you at no cost. We stronglyencourageyoutousethisamazingservice.You can get started by calling EY directly at 1-800-360-2539.

Investment Update : UNYAC’s Fossil Fuel divestment resolution has been implemented and we have 1 begun making quarterly changes in our investments to remove our financial support of fossil fuels. It will

2 be completed over a five-year period, at the end of 2026.

When General Conference convenes in 2024, they will consider legislation from Wespath to end the Clergy

Retirement Security Program (CRSP) and move to a new plan called Compass. The Compass plan would still be a retirement plan, but its design is significantly different from past retirement programs that were a combination of Defined Benefit (DB) and Defined Contribution (DC).

The Compass plan would be made entirely of Defined Contribution (DC). It would be an account-based plan, with three types of employer contributions:

• $140 per month flat dollar contribution*

• 3% contribution of pay

• $1 for $1 conference match on up to 4% of pay

*amount to be indexed for inflation.

Wespath has recommended these changes to the clergy retirement plan so we can continue to provide reliable and sustainable retirement income to those who serve.

Pros:

• More support built into the Plan for lower paid clergy, and recent seminary graduates

• Lower cost to churches

• Increased sustainability by Conferences, ensuring reliable retirement benefits for future generations of clergy

• Balanced affordability with income adequacy - strives to provide sufficient retirement income for clergy, at a cost that is affordable to annual conferences

• Provides flexibility that allows benefit portability for clergy and allows clergy the ability to leave account balances to their heirs

• Once retired, your annuity provides you a guaranteed income stream for life (or some period), no matter how the stock market or the economy performs

Cons:

• A smaller amount of money will be put into clergy retirement accounts by their church(es) and the annual conference(s) which could lead to insufficient funds in retirement if clergy do not elect pre-tax contributions from their paychecks to save for retirement

• If a clergy person does not make their own pre-tax contributions in addition to the Conference contribution made on their behalf, their retirement balance will be much smaller in retirement

• The Compass program moves more of the risk/reward to the clergy person as the markets fluctuate, which means some clergy may need to revisit assumptions a little more often

It may be worth noting that if General Conference passes the legislation enabling the Compass plan in

2024, it will still take some time to implement. Under those conditions, it would likely come into effect in

2026. If the Compass plan passes, we will be working hard to keep everyone educated about the changes, what they mean, and how to create the most secure possible retirements under this new plan.