Pension Fund Board Meets, Finalizes 2025 – 2027 Strategic Plan

Indianapolis - Pension Fund’s Board of Directors met Nov. 15 - 16, 2024 in San Juan, Puerto Rico. The purpose of the trip was a board education opportunity to support better understanding of the economics of the island and conditions for ministry. The Puerto Rican pastors and lay employees are part of the U.S. Trust, and the board makes decisions on their behalf. Puerto Rico is different than Canada, which functions as a separate legal entity with its own trustees.

The meeting entailed updates on the organization’s 2022-2024 Strategic Plan and finalization of the 2025-2027 Strategic Plan. Current funding levels and market returns did support awarding modest Good Experience Credits (GEC) on the Benefit Accumulation Account (2.1%) and the Tax-Deferred Retirement Account 403(b)/Roth 403(b)(0.50%).

While the headlines of the U.S.-based markets might lead one to believe that a larger GEC would be in store across all products, the wider markets only began moving in the late second quarter of 2024. In addition to earning the base rate of interest (3.5-4%), products needed to make up over 900 basis points, or 9%, in the last year to be considered for a GEC. GEC calculations are based on Sept. 30 assets and liabilities by product and awarded based on the average daily balance from Oct. 1 to Sept. 30.

Prior to the second quarter, the primary drivers of the market records were a handful of stocks. “As an example,” shared David Stone, Chief Investment Officer, “in any one day much of the movement of the S&P 500 was dictated by the direction of about seven of the largest companies in the index which currently account for about 30% of the index weight. These stocks have been responsible for much of the gains in the index over the past 10-15 years but are difficult to hold in such high concentration in a well-diversified portfolio due to risk.” Pension Fund is continually studying its asset allocation to ensure we are current with market trends while avoiding unnecessary risk and volatility. “Given that we bear the burden of market risk, we do have the portfolio dialed more conservatively than one who is seeking rapid growth, lest we also suffer unnecessary loss in down markets,” shared Rev. Dr. Todd A. Adams, President/CEO.

As the final steps in the 2022-2024 Strategic Plan, the board approved a change to the Pension Plan, adding a 5-year certain pension option for non-spousal beneficiaries. As part of the market study, Pension Fund learned that within our membership there are single pastors who are the head of household for a multi-generational family. Allowing single members, who retire on or after Jan. 1, 2025, to make an irrevocable election naming a 5-year beneficiary provides income security for these households and parity under the plan. Grace Caress, Senior Vice President of Operations informed the board that in her more than 30 years of defined benefit plan experience, she has never seen a plan like Pension Fund’s where a married member’s benefit is not reduced due to having a surviving spouse. Pension Fund does not reduce a married member’s benefit, so adding a non-spousal beneficiary for single members adds parity. Five years is the average life expectancy of a surviving spouse.

Additionally, the board approved a new Ministerial Relief and Assistance (MRA) program that will create a matching retirement opportunity for pastors who serve a historically under-resourced congregation. The match is available for pastors between 25-45 years old who meet certain income requirements, congregational budget requirements, and who are Disciples pastors with standing. The board also celebrated the successful launch of the Cornerstones pilot project through MRA that supports clergy health and wellness.

In other business, the Pension Fund board welcomed two new members, the Honorable William Clyburn of Washington, D.C., and Michael McCluskey of Dallas, TX. Rev. Sydney Avent of Alexandria, VA and Josh Santana of Lexington, KY concluded their service as board members.

The board’s next meeting is scheduled for April 23 – 26, 2025, where board members will meet virtually to consider Special Apportionment Credits based on Dec. 31, 2024 pension assets and liabilities.