Guiding Benefits Design: Principles and Values

Rev. Frank Clark Spencer, President

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Goals

• Fulfill Church’s covenant with teaching elders — retired, active, and yet to be ordained

• Serve more employees who serve the Church

• Provide employing organizations with flexibility and a competitive benefits package

• Help employing organizations be the best employers they can be

• Maintain financial strength

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3 Types of Benefits Plans Predominate in Today’s PC(USA)

BOPLocally Sourced

PlanNo Plan through

Church

70% of active teaching elders

Some number of teaching elders

Balance of teaching elders

Less than 10% of lay employees

60% of lay employees

30% of lay employees

75% of PC(USA) Employers pay for only one member.

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Current Reality

• Call neutrality

• Community nature

• National portability

• Pension benefit from housing allowance

• Transitional coverage

• Local employment markets don’t need certain features

• Portability & flexibility make 403(b) plan the norm

• Results in 2-tiered plan serving few lay employees (number is shrinking)

Benefits Plan designed for ministers

Lack of flexibility for other employees

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Principles To Guide Redesign

• The Board will continue to provide retirement and healthcare benefits to the Church’s teaching elders as mandated in the Book of Order

• Teaching elders have particular needs that a church agency can best fulfill, which do not exist in commercial alternatives

Principles To Guide Redesign

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• We are an employer-based benefit plan

• Board has no revenue source for healthcare other than employer contributions

• Employers must pay annual cost

• Board should provide ethical benefits that employers want, at a cost that is competitive in the marketplace

• Board should help employers be the best employing organizations they can be

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Principles To Guide Redesign

• Financial transparency is part of good stewardship

• Traditional percentage-based dues preserve important values for ministers

• Sharing cost information for other employees in dollars rather than percentages increases transparency and improves decision making for employing organizations

• Subsidies must be explicit to be fair

Principles To Guide Redesign

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• Decisions on compensation and the value of the benefits package for other employees should remain with the local employer

• Board should provide financial flexibility for employing organizations

• Unbundling of benefits – Menu based

• Discretion of employer contributions

• Employee choice of needed benefits within a range

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Principles To Guide Redesign

• Our goal should be to grow the number of members served

• Promotes relational nature of PC(USA)

• Models good stewardship by reducing per capita administrative costs

• Assess plan design for new forms of ministry

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Our Commitment

• Faithfulness: Keeping promises

• Flexibility: Meeting needs where possible

• Transparency: Sharing data and challenges openly

• Hopefulness: Expecting transformation