CHICAGO, IL (August 24, 2017) – Paul Hawkinson, ECC treasurer and director of finance, said denominational leaders continue to seek input on possible changes to the pension plan for Covenant ministers.
The video of his presentation at the 2017 Annual Meeting held in June is available online as is a downloadable informational memorandum. Hawkinson encourages all church members and leaders to watch the video and download the memorandum as any future changes will affect both churches and ministers. An email address at Covpensionfeedback@covchurch.org has also been established to directly submit feedback to Hawkinson and the Board of Pensions and Benefits (BPB).
Hawkinson said the finance team and the BPB are engaged in a proactive evaluation process and do so from a position of financial strength to “Ensure the highest quality retirement benefits for our pastorate,” as well as provide 100 percent of promised benefits to past and current participants.
The evaluation is guided both by the increasing risk of defined-benefit plans overall as well as the increasing diversity in ministerial service pathways, causing the “one-size-fits-all” plan to be less effective in meeting the needs of the overall pastorate, Hawkinson said.
According to the memorandum, officials “anticipate narrowing our list of potential plan revisions (if any) for review by the BPB in October 2017, with further analysis through the winter leading to a target initial decision date of February 2018. Plan changes (if any) would then be brought through the Covenant Offices Leadership Team and the Executive Board, and ultimately presented at Gather 2018, with implementation dates to be determined based upon the scope of any such changes.”
The plan covers more than 2,200 active and inactive clergy and spouses.
The current plan is a defined-benefit plan, but the BPB is considering several alternatives, including a switch to a defined-contribution plan.
Most denominations have moved away from defined-benefit plans and have implemented a defined-contribution or some form of hybrid plan, Hawkinson notes.
At the Annual Meeting, Hawkinson said some sister denominations have been forced to cut benefits up to 50 percent for people under the age of 80 and that the ECC is one of the last denominations to offer a defined benefit plan. He reiterated that the ECC evaluation is proactive and from a relative position of strength—in hopes of avoiding any such future scenario.
