Trustees and CF&A unanimous in support of AC22 recommendation to reduce pension liabilities for disaffiliating churches
CF&A review shows CTC finances/pension plan secure going forward with updated policy
Updated policy to only reduce pension liability portion of exit costs for disaffiliating churches – no funds to be paid to churches leaving the UMC
Updated Disaffiliation Exit Costs expected to be available by early August
Acting as swiftly as possible following the conclusion of the 2022 Central Texas Annual Conference, the Conference Board of Trustees met on June 23 to review the recommendation of the Annual Conference
to apply all undesignated cash and invested funds to reduce pension liabilities as determined by Wespath (insert graphic with official verbiage of the motion).
After carefully and prayerfully considering all available data and related financial impacts, the Trustees unanimously approved the recommendation and updated its Disaffiliation Exit Policy
On June 28, the Trustees held a joint meeting with the Conference Finance and Administration board (CF&A) to review the updated policy. CF&A unanimously affirmed the Trustee's decision, which will serve to reduce (not eliminate) the pension liability portion of the exit costs for churches who have duly decided to disaffiliate from The UMC.
“I firmly believe that this updated disaffiliation policy not only builds upon the gracious spirit of cooperation brought forth during Annual Conference, it also keeps our conference pension plans secure,” stated Rev. Fred Bates, Chair of the Conference Board of Trustees. “I cannot thank our Trustee and CF&A board members, our Conference staff partners and Chancellor Wilson Woods enough for their excellent and expedient response to the conference’s motion on this matter. We, as a conference, are truly blessed by their leadership and care for ALL of our churches.”
Rev. Bates also reminded churches that Wespath is expected to release revised pension liability calculations at the end of July. Revised exit cost numbers will be made available as soon as possible following the receipt of the updated calculations. “Should we get Wespath’s revisions as expected, we will have those updated exit costs ready and communicated by early August at the latest,” acknowledged Fred.
According to the updated Disaffiliation policy, the reduction in pension liability to disaffiliating churches is made possible through the use of Conference reserve and certain other designated funds. The net pension exit liability will be determined by deducting the available conference reserves as calculated by the Conference Treasurer from the net market value
liability provided by Wespath. The net pension liability will then be allocated to the disaffiliating church using the current year CMG decimal.
The reductions in pension liability will result in greatly reduced pension liability costs for churches willing to disaffiliate. However, it is vital to note that the updated policy does not affect Connectional Mission Giving (CMG) liabilities.
Churches disaffiliating in 2022 are still required to pay any unpaid 2021 CMG and its entire 2022 CMG.
“The Trustees did an outstanding job of responding to the Conference motion in a grace-filled, fair and economically strong manner,” said Jeff Roper, recently retired Conference Benefits Officer and Executive Director of the Roberts Center for Leadership and Administration. “It’s very important to note that the conference reserves and designated funds will not be touched at this time. We are simply using those amounts to calculate the pension exit liabilities.
“The data we receive from Wespath, while very real numbers, are ‘theoretical future liabilities’ to which to conference would be liable should significant changes occur in investments and/or the lifespan of participants,” Jeff continued. “The Trustees and CF&A are confident in this updated plan in large part because the Conference is not expected to pay these liabilities anytime soon.”
Currently, the three pension plans supporting the women and men who have served Central Texas Conference churches – Pre-82 plan, MPP, CRSP – are well-funded at an average of 121 percent based on normal funding liabilities.
“I commend the leadership of Rev. Bates, Jeff Roper and all of our Trustees and CF&A team on this updated policy,” said Bishop Ruben Saenz, resident bishop of the Central Texas Conference. “This updated policy is both fair and just for those churches who prayerfully discern to leave our United Methodist connection as well as protects the financial future of all our churches and clergy who are committed to Be UMC.
“We were all blessed by the leading and peace of the Holy Spirit at Annual Conference,” continued Bishop Saenz. “We will continue to walk in faith, hope, and love as we expand and enhance the inclusive and saving gospel of Jesus Christ in the United Methodist tradition efficiently and effectively throughout the boundaries of the conference and in the world.”
For questions related to the updated Disaffiliation policy, please contact your District Superintendent or email firstname.lastname@example.org