Author Topic: Perils of Church-Related Pensions  (Read 9996 times)

jeric

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Re: Perils of Church-Related Pensions
« Reply #120 on: November 17, 2010, 09:28:45 PM »
Oh, and regarding pensions. We have been notified that the cut in our pensions next year will not be nine percent but about six percent.
[/quote]


Thank you for this info, Charles.  May I ask how you received it?  I have not heard this, yet.

John Ericksen

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Re: Perils of Church-Related Pensions
« Reply #121 on: November 17, 2010, 10:21:27 PM »
Oh, and regarding pensions. We have been notified that the cut in our pensions next year will not be nine percent but about six percent.

Yes, my sincere sympathies to you and all others affected.  This includes my father-in-law, a distinguished, retired ELCA pastor.  This really stinks and I pray that funding may be restored to all former servants of the church.  It may color the discussions though in ELCA corporate on what can be done for the Augsburg Fortress retirees.

Brian J. Bergs
Minneapolis, MN
But let me tell Thee that now, today, people are more persuaded than ever that they have perfect freedom, yet they have brought their freedom to us and laid it humbly at our feet. But that has been our doing.
The Grand Inquisitor

Charles_Austin

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Re: Perils of Church-Related Pensions
« Reply #122 on: November 17, 2010, 10:37:55 PM »
I said far upstream or in another thread that I "blame" no one for the 9 percent cut in my pension this year and the prospect of cuts for two more years. I am sort of honked off that at the formation of the ELCA we did not follow the advice of some financially-savvy people like the late Reuben Swanson and make sure that our pension plans were fully funded. But this would have required a hefty up front "contribution" from merger partners and it just wasn't going to happen. So, given the markets for the past couple of years, we take the hit now.
Word is, it's getting better; but I don't understand all the financial dynamics.
My retirement income has been adequate and can take the hit, but still; air fare to visit the grandchildren aren't going down. But we found a good deal on a trip to Dubai and a cruise to some of the United Arab Emirates early next year.
Those really suffering are pastors who were underpaid for 40 years or who tapped pension funds to buy a retirement home after enduring parsonages for decades.

shrimp

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Re: Perils of Church-Related Pensions
« Reply #123 on: November 17, 2010, 10:47:33 PM »

Oh, and regarding pensions. We have been notified that the cut in our pensions next year will not be nine percent but about six percent.


ELCA News reported last Friday,

Quote
ELCA NEWS SERVICE
November 12, 2010

ELCA Board of Pensions Trustees Announce Annuity Adjustment for 2011
10-285-JB

     MINNEAPOLIS (ELCA) -- Trustees of the Board of Pensions of the Evangelical Lutheran Church in America (ELCA) announced smaller-than-anticipated reductions in annuity payments for plan members in its Participating Annuity and Bridge Fund and in the interest crediting rate for bridge accounts.
     The Board of Pensions is an incorporated, self-supporting unit of the ELCA.  The trustees made the decisions here at their Nov. 5-7 meeting. 
     The trustees reduced annuity payments for 2011 by 6 percent for plan members in its Participating Annuity and Bridge Fund and set the interest crediting rate for 2011 at -0.3 percent for bridge accounts.

There's more here.


Then today,

Quote
ELCA NEWS SERVICE
November 17, 2010

ELCA Council Acts on Annuity Payment Reduction Recommendations
10-290-JB

     CHICAGO (ELCA) -- The Church Council of the Evangelical Lutheran Church in America (ELCA) authorized one-time payments from the ELCA Special Needs Retirement Fund "as soon as realistically possible in 2011" to help people most adversely affected by reductions in ELCA Board of Pensions annuity payments caused by the crisis in financial markets in late 2008 and early 2009.
     The council action was among a series of recommendations it approved from a report presented by an Ad Hoc Committee the council appointed in August....
     In addition the council asked the Board of Pensions and the management committee of the ELCA Special Needs Retirement Fund to "develop criteria based on need and a process for distribution of available funds" to those with the greatest need. It asked for more frequent reviews of eligibility, including periodic comprehensive reviews to address plan members' needs in light of economic realities, and requested more information about the implementation of the recommendations at the council's April 2011 meeting....
     In response to resolutions from nine synods, the council formed the Ad Hoc Committee in August to consult with the Board of Pensions to learn more about the decisions it made regarding the annuity and bridge fund. It asked the committee to explore ways to restore fund losses, increase payments to annuitants and explore ways to mitigate the adverse effects of fund losses.

Read it all here.

Shrimp
Shrimp of the Shellfish blog

G.Edward

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Re: Perils of Church-Related Pensions
« Reply #124 on: November 21, 2010, 08:12:00 PM »
Full disclosure:  I am one of the AF pensioners.  I only worked there 5 years, but that was the plan I was on.  Others, who worked their entire careers at AF in what they understood to be a ministry of publishing, are losing much more; and I feel for them.

As I understand it, part of the problem is that the money simply is not there.  

I would like to see the ELCA say, "Even though we have no financial responsibility in this case and nothing forces us to do so, we choose to help as we are able," and then undertake a fund-raising campaign to assist the pensioners.  

Thus far, that is not the route they have chosen and I confess I am disappointed in the ELCA because of it.  I know time are hard for everyone but it seems to me we might be pleasantly surprised what can happen if we just asked.

As James says, we will have to wait and see what comes of the situation.

I'd like the ELCA to say that, too.  Taking responsibility for "the least of these," and for the promises that were made, maybe even "bearing one another's burdens" would be painful and difficult in the short term, but like Paul says in Romans 5, "suffering produces endurance, and endurance produces character, and character produces hope, and hope does not disappoint us, because God's love has been poured into our hearts through the Holy Spirit that has been given to us." 

The money is not there because the AF pension program was underfunded for years based on overly optimistic forecasts of future returns and increasing life-span.  The ELCA is facing the same problem with it's pension.  Everyone tacitly agreed not to fix the underfunded pension plans of the predecessor church bodies, hoping the market would magically erase the deficit without additional contributions.  Compound interest is a powerful mechanism, but it needs money to work.

Over 20-30 years the additional annual contributions would have been relatively small.  Now, when more and more folks need the money that was supposed to be there for their retirement years our best answer is "sorry, you'll just have to make do with less because we mismanaged the fund?"  That answer would be ethically deficient coming from any human organization, but especially from the church.

Mike Bennett

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Re: Perils of Church-Related Pensions
« Reply #125 on: November 22, 2010, 04:27:34 PM »
Oh, and regarding pensions. We have been notified that the cut in our pensions next year will not be nine percent but about six percent.

Yes, my sincere sympathies to you and all others affected.  This includes my father-in-law, a distinguished, retired ELCA pastor.  This really stinks and I pray that funding may be restored to all former servants of the church.  It may color the discussions though in ELCA corporate on what can be done for the Augsburg Fortress retirees.

Brian J. Bergs
Minneapolis, MN

Apples and oranges.

A. The "pension" to which Pr. Austin refers is a DEFINED CONTRIBUTION plan which never promised a specific return but offered one option that estimated a particular return but had always been subject to investment returns on the contributions invested.

B. The AF pension plan is a DEFINED BENEFIT plan which promised a specific return to its participants, the function of a forumula stated in the plan, and not subject to investment returns.

The sponsor of Plan B has made a promise of a certain pension to its participants.  the sponsor of plan A has not.

Mike Bennett
“What peace can there be, so long as the many whoredoms and sorceries of your mother Jezebel continue?”  2 Kings 9:22

G.Edward

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Re: Perils of Church-Related Pensions
« Reply #126 on: November 24, 2010, 01:22:54 AM »
Oh, and regarding pensions. We have been notified that the cut in our pensions next year will not be nine percent but about six percent.

Yes, my sincere sympathies to you and all others affected.  This includes my father-in-law, a distinguished, retired ELCA pastor.  This really stinks and I pray that funding may be restored to all former servants of the church.  It may color the discussions though in ELCA corporate on what can be done for the Augsburg Fortress retirees.

Brian J. Bergs
Minneapolis, MN

Apples and oranges.

A. The "pension" to which Pr. Austin refers is a DEFINED CONTRIBUTION plan which never promised a specific return but offered one option that estimated a particular return but had always been subject to investment returns on the contributions invested.

B. The AF pension plan is a DEFINED BENEFIT plan which promised a specific return to its participants, the function of a forumula stated in the plan, and not subject to investment returns.

The sponsor of Plan B has made a promise of a certain pension to its participants.  the sponsor of plan A has not.

Mike Bennett

Right.  And it is precisely that abandonment of the "defined benefit" feature of the pension plan of the publishing house of the ELCA (a shirking of responsibility) that I raised before the 2010 Upper Susquehanna Synod Assembly only to be told (in oh so clinical parlimentarian language) that it was none of our business how AF handled their relationships and would not be discussed by the Synod Assembly.
« Last Edit: November 24, 2010, 01:24:42 AM by Gregory Davidson »

Bergs

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Re: Perils of Church-Related Pensions
« Reply #127 on: January 12, 2011, 01:28:30 PM »
Well, fruit discussions aside, it appears that this unfortunate situation is now entering the legal phase.  David Barnhart links this item:

Pastors sue Lutheran church over pensions

http://www.twincities.com/ci_17066631?source=most_emailed&click_check=1&nclick_check=1

Brian J. Bergs
Minneapolis, MN
But let me tell Thee that now, today, people are more persuaded than ever that they have perfect freedom, yet they have brought their freedom to us and laid it humbly at our feet. But that has been our doing.
The Grand Inquisitor

Keith Falk

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Re: Perils of Church-Related Pensions
« Reply #128 on: January 28, 2011, 07:07:21 PM »
Update on A-F Pensions Lawsuit

ELCA News Service Press Release... some quotes from the article:

"Seven of the nine claims against the ELCA were dismissed. Seven of the 12 claims against Augsburg Fortress were dismissed."

"However, without making any judgment on the truth or legal sufficiency of the allegations, the district court judge let stand other state law allegations involving breach of contract and other matters against the ELCA and Augsburg Fortress Publishers.
     Among those claims, the federal court ruling allowed allegations to go forward that the ELCA is an "alter ego" of Augsburg Fortress, saying that the plaintiffs "asserted sufficient factual allegations" to support such a theory."

Rev. Keith Falk, STS