Reposted with permission from snarkypastorrants.blogspot.com.
While the Commission on the Way Forward was meeting, my response to the question “What do you hope happens?” was “I’m not sure, the devil is the details.” Because I don’t know what will happen at General Conference, nor what amendments might be made to plans, this is basically still my answer.
Thus, you’d think that I’d be prepared to find the devil in the details.
At least, I wasn’t prepared to find a devil quite this fiendish. Rev. Keith Boyette’s “Disaffiliation” petition, found on page 201 of the ADCA (here) could reasonably be considered the WCA’s official plan, what with Boyette being their president and all. So, this is THE Un-“gracious exit” plan, submitted under another name. Others wrote some too, the rest aren’t so vicious.
Now, to understand why this is so mean, you have to be willing to pay a little bit of attention to nuance of finance, reserve funds and pension funding. I know that sounds awful, and it sort of is, but I’ll make it as quick and painless as I can.
Pensions We currently have three pension systems operating in The United Methodist Church. The system before 1982 is called the “pre-82” Plan. Then we had the Ministerial Pension Program (MPP) from 1982-2006. Starting in 2007 we got the Clergy Retirement Security Program (CRSP), although we changed the specifics on that in 2013. The pre-82 plan was funded very differently in different places. As in, some places (ahem, the South of the USA) figured church growth would continue indefinitely, and figured money that came in later could pay for retirees in real time (kind of like how Social Security works). Clearly, this hasn’t worked out. Part of the reason we have several plans is that the new plans put new restrictions in place, so conferences actually have to fund them.
Together, as a denomination (specifically, all the Annual Conferences in the USA) we have unfunded pension liability, most if it in the Pre-82 plan. We hold it together. While there has been a mandate for each AC to fund their Pre-82 plan completely, variances in the market as well as actuarial models make this a moving target. Also, not everyone is equally determined to so do.
(I actually serve on our Conference Board of Pensions and Health Benefits, and I really care about how we “care for those who serve” and I’m terribly sorry if I’ve been too factual and not snarky enough.)
The gist of all this is that we, together, have “net unfunded pension liability,” and if we are going to break up, we have to figure out who owes what so that our retirees are cared for.
This is something Boyette cares for in his Disaffiliation petition, and you might be feeling grateful for his attention to it, until you find out HOW he is doing so. Boyette proposes that churches can leave the denomination if they pay their fair share of their Annual Conference’s fair share of the net unfunded pension liability. That sounds right, right?!
EXCEPT he proposes changing the formula. (Few things make me angier than independent sources proposing changing carefully vetted and hard-fought agreements on formulas.) He says that we should take the “net unfunded pension liability” of each Annual Conference, and then subtract “their portion” of the unrestricted reserves of all the boards and agencies, and then subtract any unrestricted reserves of the Annual Conference ….. and then what is left is the part that a local church would need to pay their share of.
What is the rhyme equivalent of “liar, liar pants on fire” but for stealing rather than lying?
I fear boring you again, but I can’t help it. Unrestricted reserves, both of General Boards and Agencies and of Annual Conferences actually have reasons for existing and are needed. They have various sources. Sometimes they are acquired by gifts or bequests, sometimes they exist because of a budget surplus (or careful spending), sometimes because investment returns go well, sometimes because of sale of property or other assets. They have nothing to do with pensions.
The only way you could think they have something to do with pensions is if, say, you really, really hated the General Board of Church and Society and thought it was a good idea to steal their money so you don’t have to pay out of your own pocket for something you agreed to, and are liable for. Just, say, for example. 😉
Unrestricted reserves are also pretty important, in how real life works. When apportionment giving doesn’t meet projections, or when it comes in sporadically, or when there are unfunded mandates, or when there is a new mission focus, unrestricted reserves save the day. In addition, there can be Book of Discipline restrictions on how the money can be used (such as Annual Conference funds acquired through the sale of urban church properties that must be reinvested in mission activities in urban settings). Which is to say, these aren’t slush funds. They’re mostly the equivalent of “emergency funds.”
So saying that the emergency funds of the General Boards and Agencies AND the Annual Conferences should be deducted from the net unfunded pension liability is to say that the General Boards and Agencies and Annual Conferences should be incapacitated so that churches wanting to leave the denomination (because they can’t enforce their will on others) should be able to abandon their moral and legal responsibilities to care for their retirees.
This is mean.
This is stealing.
This is intentionally trying to kill the United Methodist Church on their way out. Thanks WCA.
I need to admit that I actually tried to read that petition a few times and my eyes glazed over. I found it boring, too. My husband, who pays great attention to details, was the one who saw what they did and what it meant. (Thanks!) So, just so we are clear, the devil IS in the details, and the devil in Boyette’s Disaffiliation petition is out for blood (ok, fine, money. The devil wants the money.)
Congrats – you made it through the boring details. Go you!!
Also, I’m interested to note that Maxie Dunnam’s “Modified Traditionalist Plan” does not follow Boyette’s devious devil. Dunnam just says that churches that leave have to pay their portion of pension obligations, except that he specifically only talks about the Clergy Retirement Security Program and doesn’t mention the other two at all. Does this mean he’d only have departing churches and annual conferences pay their proportional obligations of one of the three pension programs (and notthe one with the primary unfunded liability)? If so, does that mean he doesn’t intend to be part of the church that stays and gets stuck with the bill, despite having written the plan?? If you know, please enlighten me. (ADCA p. 214)
- The Devil in the Details: WCA, Disaffiliation, and Pensions - January 22, 2019