Report of the
Board of Pensions
2009 Review and Status (figures rounded for simplicity): The total of Ministers’ Retirement Fund (MRF) annuity payments to beneficiaries in 2009 was $196,000 (compared to $201,700 in 2008 and $211,300 in 2007): see Statement of Cash Receipts and Disbursements. This is the third 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 were three beneficiaries who went home to the Lord in 2009, and survivor benefits are being paid to the widows, if applicable. 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 $2,900,000.
During 2009, the Net Assets in the MRF decreased by $13,000 due to disbursements exceeding receipts.
Annual Funding: As a result of the BFC transition to the new BFC Executive Board (ExecBrd) format and the two percent conference-wide assessment beginning in 2010, there will no longer be direct contributions from the individual churches to the MRF. The Board of Pensions and the ExecBrd will annually agree on a funding amount which will come from the two percent assessment. For 2010, the planned amount is $160,000, which is projected to be $29,000 less than the projected payments of $189,000. The shortfall will come from the Net Assets of the MRF, which were $68,000 at the start of 2010. Depending on actual mortality experience and the actual conference income and expense, adjustments to the support level will be needed. As shown on the graph, the worst case assumption may require a small amount of BOP Notes to be issued beginning in 2012. Based on current mortality assumptions, the total amount of Notes would be less than $125,000.
403(b) Plan: Refer to the 2009 Yearbook for details. No changes in IRS requirements for 2010.
Planned Giving: The benefits of planned giving were clearly evident in 2008 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 BFC Executive Director.
Administration: The Board of Pensions expresses its appreciation to Pension Plan Administrator Rick Volpe of Asset Planning Services for his faithful service to the Board of Pensions.
Board of Pensions: David J. Watkins, Chairman; Keith E. Plows, Secretary; Clyde D. Bomgardner, Jr., Jay H. Fasnacht, Robert Gaugler, Ellis Hostetter, L. James Roberts, Jr., David Schoen, Thomas P. Shorb.
The Board of Pensions recommends the following resolutions to Annual Conference:
1. Whereas, the MRF annuity rate for 2010 is $221 per year of service, and
Whereas, partial cost-of-living adjustments were part of the long-term phase out strategy of the MRF, and
Whereas, the final phase out was for calendar year 2010, be it
Resolved, that the MRF annuity rate for calendar year 2011 be $221 per year of service.
2. Resolution Relating to Rental/Housing Allowances for Retired or Disabled Ministers of this Conference for Calendar Year 2011
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 2011 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.”