Report of the
Board of Pensions
2008 Review and Status (figures rounded for simplicity): The total of Ministers’ Retirement Fund (MRF) annuity payments to beneficiaries in 2008 was $201,700 (compared to $211,300 in 2007 and $215,900 in 2006): see Statement of Cash Receipts and Disbursements. This is the second year that the total disbursements have declined. There are 8 future beneficiaries of the MRF, the youngest of which will begin receiving benefits at age 65 in the year 2013. There was one beneficiary who went home to the Lord in 2008, and survivor benefits are being paid to his widow. Based on the current mortality assumptions, the final year of MRF payments to beneficiaries is projected to be 2034. Between now and then, it is estimated that the MRF will distribute future benefits totaling nearly $3,100,000.
During 2008, the Net Assets in the MRF increased significantly due to the receipt of a $225,000 bequest which allowed the Board to pay off all BOP Notes outstanding, as well as eliminate the need for more borrowing in 2008. This bequest provided a direct financial benefit to every BFC church in the form of reduced funding requirements in the future, as well as a reduction in the amounts required from the Administrative Budget.
The current balance of nearly $84,000 is projected to be exhausted by 2015. However, based on conservative mortality assumptions, this is also the year by which the number of beneficiaries is expected to begin declining, and the projected MRF balance would then increase. This can be easily seen on the accompanying graph.
Interest Bearing Notes: All Paid Off! The most significant beneficial event for the MRF in 2008 was the receipt of the $225,000 bequest. The Board praises the Lord for His provision. All Notes were paid off, and no future Notes should be required, pending actual mortality experience.
Annual Funding: As a result of the bequest, the projected future assessments from Conference and from the churches have been significantly reduced. The Board of Pensions is requesting a contribution from the Administrative Budget in the amount of $72,000 for 2010, and $75,000 for 2011. The contribution rate for churches is projected to remain level at $9.00 per member plus $900 per church for the foreseeable future. Long-term projected contributions from Conference and from the Churches are shown alongside the accompanying graph. By 2025, the remaining annual needs of the MRF should be able to be covered on a relatively modest “pay as you go basis” from the Administrative Budget.
403(b) Plan: Pursuant to new IRS regulations, in December the Board of Pensions disseminated a prototype 403(b) Plan Document to all of the churches. Each church needs to execute its plan document by January 1, 2010. All necessary paperwork and explanations can be found on the BFC Website. Go to BFC Resources > Board of Pensions > BFC Board of Pensions Documents.
Planned Giving: The benefits of planned giving were clearly evident this year by way of the receipt of the bequest of $225,000. The Board of Pensions urges other members of the BFC to consider including the MRF in their estate planning arrangements. The simplest and most tax efficient method would be to name the MRF as a contingent or primary beneficiary (for married or singles, respectively) of a portion of an IRA or 403(b) account. This arrangement can be adjusted or revoked at any time, and does not involve changing one’s Will. For more information, please contact the Board at P.O. Box 148, Harleysville, PA 19438 or e-mail to Rick Volpe:
at rick@assetplanningservices.com.
Administration: The Board of Pensions expresses its appreciation to Pension Plan Administrator Rick Volpe for his faithful service to the Board of Pensions. Though he is no longer an elected member of the Board, Rick continues to provide both his services and advice to the Board. Most recently he has researched and informed the churches of new Federal reporting rules relating to the 403(b) Plan in effect for active Bible Fellowship pastors. We are grateful for Rick’s continuing assistance in the position of Administrator of our Retirement Plan.
Board of Pensions: David J. Watkins, Chairman; Keith E. Plows, Secretary; Clyde D. Bomgardner, Jr., Jay Fasnacht, Robert Gaugler, Ellis Hostetter, L. James Roberts, Jr., David N. Schoen, Thomas P. Shorb.
The Board of Pensions recommends the following resolutions to Annual Conference:
1. Whereas, the MRF annuity rate for 2009 is $218 per year of service, and
Whereas, partial cost-of-living adjustments are part of the long-term-phase-out strategy of the MRF, therefore be it
Resolved, that the MRF annuity rate for calendar year 2010 be $221 per year of service.
2. Whereas, churches outside of the United States are becoming recognized churches of the BFC, and
Whereas, newly-recognized churches are required to support the MRF, and
Whereas, the assessment could be an undue and disproportionate burden on these non-American churches, and
Whereas, both private and government retirement programs vary from nation to nation, therefore be it
Resolved, that these churches be exempt from supporting the MRF, and be it further
Resolved that each of these churches be encouraged to make provision for the ultimate retirement of their pastors commensurate with typical retirement plan programs of churches in their respective countries.
3. Resolution Relating to Rental/Housing Allowances for Retired or Disabled Ministers of this Conference for Calendar Year 2010
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, therefore be it
Resolved
1. An amount equal to 100% of the pension payments received during the year of 2010 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 Yearbook of the Annual Conference of the Bible Fellowship Church 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 minister 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 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.”