Report of the
Board of Pensions
Ministers’ Retirement Fund (MRF) annuity payments to the 34 current beneficiaries rose to approximately $196,000 in 2002 (compared to $186,000 in 2001: see Income Statement). There are 11 future beneficiaries of the MRF, the youngest of which will begin receiving benefits at age 65 in the year 2013. Based on the current mortality assumptions, the final year of MRF payments to beneficiaries is projected to be 2035. Between now and then, it is estimated that the MRF will distribute future benefits totaling nearly $4,300,000. The Present Value lump sum cost of funding these future annual benefits is $2,350,000. The present balance in the MRF is just over $123,000 (see Balance Sheet). Therefore, in round numbers, the present value shortfall is approximately $2,227,000, which is being funded by contributions from the Administrative Budget and the churches (see discussion below).
Interest-Bearing Notes: The near-term liquidity shortfall illustrated in the Report Book for the 119th Annual Conference (April, 2002) will be funded by the issuance of interest-bearing notes, as approved by the 119th Annual Conference. As illustrated in the accompanying graph, it is anticipated that the Board of Pensions will issue $40,000 worth of interest-bearing notes on an annual basis for the next 6 years.
These 5-year notes will pay annual interest at a rate that is 2.5% higher than the current rate of a 5-year U.S. Treasury Note at the time of issue. The notes will be issued in face amounts of $10,000, and can be redeemed or renewed at the end of each 5-year period. The Board of Pensions will offer these notes first to the agencies of the Bible Fellowship Church. In the future, when there would not be adequate agency resources, these notes would be offered to the churches on an annual lottery basis. Notes will not be offered to individuals. It is anticipated that there will be adequate agency participation to cover the years of 2003 and 2004.
As illustrated in the accompanying graph, it is projected that the notes can be paid off between 2015 and 2020. However, as noted over the past several years, future projections are heavily dependent on the mortality assumptions.
Annual Funding: The Board of Pensions is requesting a contribution from the Administrative Budget in the amount of $55,000 for 2004, and $57,000 for 2005. As approved at the 119th Annual Conference, the rate for churches is currently $8.00 per member plus $800. Projected contributions from the Administrative Budget and the churches are shown in the accompanying tables.
The Board of Pensions recommends the following resolutions to Annual Conference:
Whereas, the MRF annuity rate for 2003 is $208 per year of service, and
Whereas, partial cost-of-living adjustments are part of the long-term phaseout strategy of the MRF, therefore be it
Resolved, that the MRF annuity rate for calendar year 2004 be $209 per year of service.
Resolution Relating to Rental/Housing Allowances for Retired or Disabled Ministers of this Conference for Calendar Year 2003
Whereas, the religious denomination known as The Bible Fellowship Church has and functions through Ministers of the Gospel who are duly ordained or licensed; and
Whereas, the practice of The Bible Fellowship Church is to provide a parsonage or a rental allowance as part of the gross compensation for each of its active ordained or licensed ministers; and
Whereas, pensions paid to retired and disabled ordained or licensed ministers of The Bible Fellowship Church are considered as deferred compensation and are paid to said retired and disabled ordained or licensed ministers in consideration of previous, active service; and
Whereas, the Internal Revenue Service has recognized that The Bible Fellowship Church is the appropriate organization to designate a housing/rental allowance for retired and disabled ordained or licensed ministers who are members of this Conference;
Resolved,
1. An amount equal to 100% of the pension payments received during the year of 2003 be and is hereby designated as a rental/housing allowance for each retired and disabled ordained or licensed minister of The Bible Fellowship Church who is or was a member of the Bible Fellowship Church Minister’s Retirement Fund.
2. This rental/housing allowance shall apply to each retired and disabled ordained or licensed minister who has been granted the retired relationship or placed on disability leave by the Bible Fellowship Annual Conference and whose name and relationship to the conference is recorded in the Journal of The Bible Fellowship Annual Conference and in other appropriate records maintained by the conference.
3. The pension payment to which this rental/housing allowance applies shall be the pension payment resulting from all service of such retired or disabled ordained or licensed ministers from all employment by any local church, Annual Conference or institution of The Bible Fellowship Church or of any former denomination that is now a part of The Bible Fellowship Church, or from any other employer who employed the minister to perform services related to the ministry and who elected to make contributions to the pension funds of The Bible Fellowship Church for such a retired minister’s pension.
Note: The rental/housing allowance which may be excluded from a minister’s gross income is limited to the lesser of (1) the amount of the rental/housing allowance designated by the minister’s employer or other appropriate body, (2) the amount actually expended by the minister to provide his or her housing, or (3) the legally-determined fair rental value of the parsonage or other housing provided. As specified in Rev. Rul. 71-290 C.B. 92, “the only amount that will qualify for exclusion under section 107(2) of the Code as a ‘rental allowance’ is an amount equal to the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.”
Resolution Relating to Rental/Housing Allowances for Retired or Disabled Ministers of this Conference for Calendar Year 2004
Whereas, the religious denomination known as The Bible Fellowship Church has and functions through Ministers of the Gospel who are duly ordained or licensed; and
Whereas, the practice of The Bible Fellowship Church is to provide a parsonage or a rental allowance as part of the gross compensation for each of its active ordained or licensed ministers; and
Whereas, pensions paid to retired and disabled ordained or licensed ministers of The Bible Fellowship Church are considered as deferred compensation and are paid to said retired and disabled ordained or licensed ministers in consideration of previous, active service; and
Whereas, the Internal Revenue Service has recognized that The Bible Fellowship Church is the appropriate organization to designate a housing/rental allowance for retired and disabled ordained or licensed ministers who are members of this Conference;
Resolved,
1. An amount equal to 100% of the pension payments received during the year of 2004 be and is hereby designated as a rental/housing allowance for each retired and disabled ordained or licensed minister of The Bible Fellowship Church who is or was a member of the Bible Fellowship Church Minister’s Retirement Fund.
2. This rental/housing allowance shall apply to each retired and disabled ordained or licensed minister who has been granted the retired relationship or placed on disability leave by the Bible Fellowship Annual Conference and whose name and relationship to the conference is recorded in the Journal of The Bible Fellowship Annual Conference and in other appropriate records maintained by the conference.
3. The pension payment to which this rental/housing allowance applies shall be the pension payment resulting from all service of such retired or disabled ordained or licensed ministers from all employment by any local church, Annual Conference or institution of The Bible Fellowship Church or of any former denomination that is now a part of The Bible Fellowship Church, or from any other employer who employed the minister to perform services related to the ministry and who elected to make contributions to the pension funds of The Bible Fellowship Church for such a retired minister’s pension.
Note: The rental/housing allowance which may be excluded from a minister’s gross income is limited to the lesser of (1) the amount of the rental/housing allowance designated by the minister’s employer or other appropriate body, (2) the amount actually expended by the minister to provide his or her housing, or (3) the legally-determined fair rental value of the parsonage or other housing provided. As specified in Rev. Rul. 71-290 C.B. 92, “the only amount that will qualify for exclusion under section 107(2) of the Code as a ‘rental allowance’ is an amount equal to the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.”
Board of Pensions: David J. Watkins, Chairman; Keith E. Plows, Secretary; James A. Beil, Ellis Hostetter, Robert Gaugler, David N. Schoen, Thomas P. Shorb, William R. Singletary, Richard J. Volpe.