The Board of Pensions’ fall bulletin 2022

A summary of the fall meeting of the Board of Pensions' board of directors.

The Board Bulletin is published after each regular meeting of the Board of Directors of The Board of Pensions of the Presbyterian Church (U.S.A.), and represents key information and actions taken that affect plans and programs administered by the Board of Pensions.

At its fall meeting, the Board of Directors approved plans designed to ensure that the Board of Pensions continues to meet the demands of change in the Church. The 2023-2024 Strategic Vision will guide the agency through a season of rebuilding, and the 2023 Business Plan is the blueprint for the groundwork that will be laid next year.

Directors also took stock of immediate need. They made more ministers, employees, retirees, and surviving spouses eligible for grants in the Assistance Program and expanded program offerings. Among the changes were the addition of a well-being program for ministers and educational debt assistance for employees of retirement communities. Information on the assistance changes follows, along with other matters addressed by Directors.

Directors further extend Assistance Program reach

Directors broadened eligibility for the Board of Pensions Assistance Program, increased grant amounts, and added new programs. This latest Assistance Program expansion will be effective January 1, 2023.

Emergency Assistance

Eligibility for Emergency Assistance is being greatly expanded. Currently, to be eligible for grants of up to $5,000, a member must be enrolled in the Medical Plan or the Defined Benefit Pension Plan or be receiving the pension benefit. Directors voted to extend eligibility to anyone enrolled for at least one benefit through the Board of Pensions (excluding term vested members and those enrolled only in the Employee Assistance Plan).

Minister assistance

More ministers will be eligible for Minister Educational Debt Assistance, Minister Debt Relief, and Sabbath Sabbatical Support. Directors excluded the manse allowance from the effective salary eligibility requirement for all three grant programs, and removed household adjusted gross income (AGI) as an eligibility requirement for Minister Education Debt Assistance. Further, the effective salary eligibility requirement for Minister Debt Relief was increased, to a maximum of $80,000, so it mirrors that for Educational Debt Assistance and Sabbath Sabbatical Support. The Sabbath Sabbatical Support grant was increased by $1,000, to $5,000.

Retirees: Adoption Assistance, medical grants

Directors expanded access to Adoption Assistance and Transition-to-College Assistance for pensioners and surviving spouses. Retirees and surviving spouses receiving benefits from the Defined Benefit Pension Plan will be able to apply for these grants.

Directors also expanded eligibility for Retiree Medical Grants. With the change, retirees and surviving spouses will need five years in the Defined Benefit Pension Plan, a reduction from the currently required 15 years, plus up to 10 years of additional church service, for a combined 15 years’ service. This change mirrors those made to Housing and Income supplements that took effect this year, further expanding assistance access to those whose faithful service to the Church included years without plan enrollment.

New well-being program for ministers

Directors approved Clergy Wellness Support, further expanding Board of Pensions support for minister well-being. The program will assist with respite and vocational support. Up to $5,000 will be available for program and travel fees.

Ministers who are enrolled in Pastor’s Participation or Minister’s Choice and have an effective salary that does not exceed $80,000 (excluding manse allowance) will be eligible. The grant is being provided in partnership with several preapproved programs. Other programs that address vocational, spiritual, mental, and physical wellness will be considered.

Educational debt relief for affiliated employees

Benefits Plan members who are employed by retirement communities that are affiliated with the Presbyterian Church (U.S.A.) and participate in the Benefits Plan may be eligible for educational debt relief. To qualify, an employee must

  • work for the affiliated employer at least 20 hours weekly;
  • be enrolled in the Medical Plan for at least six months;
  • have an effective salary that does not exceed $80,000 per year; and
  • have documented debt with a national student loan lender.

Up to $5,000 of assistance a year for up to five years, totaling $25,000, will be provided. This is a pilot program, capped at 150 enrollees for the first year.

Christmas gifts approved for retirees, surviving spouses

Retirees and surviving spouses who are receiving Housing and Income supplements from the Assistance Program as of November 1, 2022, will receive the annual Christmas gift, as approved by Directors. Single members and surviving spouses who are receiving either or both supplements will receive $400; each member with a spouse will receive $800.

Portfolio returns negative 12.1 percent for 8 months ended August 31

Donald A. Walker III, Executive Vice President and Chief Investment Officer, reviewed the performance of the Balanced Investment Portfolio for the eight months ended August 31, 2022, with a negative return of 12.1 percent.

The portfolio exceeded the 6 percent long-term investment return assumption for the three, five, 10, and 20 years ended August 31, 2022. Despite recent negative absolute returns, the Balanced Investment Portfolio outperformed a blended benchmark of index funds, which approximates the portfolio’s asset allocation (65 percent MSCI ACWI, 30 percent BC US Universal, and 5 percent 90-day US Treasury bill) for the one-, three-, five-, 10-, 15-, and 20-year periods.

The Balanced Investment Portfolio is the investment fund for the plans and programs managed by the Board of Pensions. On August 31, 2022, the portfolio had a market value of $10.5 billion.

Suzanne P. Welsh, Chair of the Investment Committee, provided an overview of the committee’s work on behalf of members of the Benefits Plan and other beneficiaries. The committee reviewed reports from staff relating to the illiquid growth portion of the portfolio and proxy voting for 2022 and approved the development of proxy voting guidelines for 2023.

The Investment Committee also received a report from Rob Fohr — Director of Faith-Based Investing and Corporate Engagement and lead staff person to the Mission Responsibility Through Investment (MRTI) Committee — and discussed the process for development of the General Assembly Divestment/Proscription List. The Investment Committee adopted the 2023 General Assembly list as the 2023 Board of Pensions Prohibited Securities List. The list, which will be distributed to all separate account managers, includes Chevron, ExxonMobil, Marathon Petroleum, Phillips 66, and Valero Energy, as approved by the 225th General Assembly (2022).

The committee affirmed the long-term target asset allocations as well as the long-term strategic asset allocation ranges approved by the Board of Directors. The committee also affirmed the 6 percent long-term investment return assumption.

The August 31, 2022, asset allocations of 56.8 percent in liquid growth investments (U.S., international, and global stock strategies), 28.4 percent in income strategies (core fixed income, high-yield bonds, international bonds, liquid short-duration fixed income, and cash management), and 14.8 percent in illiquid growth strategies (private equity, venture capital, distressed debt, and real estate) were within the approved ranges for each asset class.

The committee approved one new investment commitment to private real estate.

Funds transferred to support Medical Plan

The Board of Directors approved a transfer of up to $50 million from the Financial Protection Program to the Medical Plan. The transfer will help cover losses forecast for the plan from 2022 through 2024 due to negative investment returns and rising medical claims costs. Board of Directors policy enables such transfers when assets are available that might benefit plan members and employers.

2023-2024 Strategic Vision and 2023 Business Plan approved

Directors approved the Board of Pensions 2023-2024 Strategic Vision and the 2023 Business and Financial plans. These documents will guide the agency as it moves through a season of rebuilding to ensure that the Board of Pensions continues to provide strength and stability for the changing Church.

The next meeting of the Board of Directors is scheduled March 2-4, 2023. For further information, email the Corporate Secretary or call 215-587-7600.