Guiding Benefits Design: Principles and Values Rev. Frank Clark Spencer, President.
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Transcript of Guiding Benefits Design: Principles and Values Rev. Frank Clark Spencer, President.
Guiding Benefits Design: Principles and Values
Rev. Frank Clark Spencer, President
2
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
3
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.
4
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
5
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
6
• 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
7
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
8
• 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
9
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
10
Our Commitment
• Faithfulness: Keeping promises
• Flexibility: Meeting needs where possible
• Transparency: Sharing data and challenges openly
• Hopefulness: Expecting transformation