Board of Pensions Responds to Questions

March 7, 2012

Two days ago, I asked some questions and just received written reply from Andrew Browne, Corporate Secretary of the BOP. He commented that he would be adding these four questions and answers to the BOP FAQs on the matter. So by sharing his unedited (by me) comments, I am not talking out of school or putting words in BOPs mouth. These answers represent the BOP’s understanding of its relationship to and with the PCUSA.  So, here goes:

Question 1: what is the actual relationship between the BOP and the PCUSA? Can GA decisions bind the work of the BOP? Or does the Board maintain independence from the denomination? 
The PC(USA) incorporated the Board of Pensions as an independent Pennsylvania non-profit corporation. The General Assembly retained three reserved powers over the Board of Pensions: the election of its directors; the confirmation of the election of the president of the Board of Pensions; and approval in advance of any amendment of the Pension Plan that is in the nature of a pension benefit reduction or a Pension Plan dues increase.

The Board of Pensions serves as the plan sponsor and administrator of the Benefits Plan of the Presbyterian Church (U.S.A.). As a plan fiduciary, the Board has the legal obligation to administer the plan for the sole and exclusive benefit of the Plan members and their beneficiaries.

The General Assembly’s jurisdiction over the Board, as a church agency, relates to ecclesiastical issues and not matters of civil law. Traditionally, the General Assembly, respectful of the Board’s independence as a plan fiduciary, “urges” (rather than directs) the Board to consider certain plan actions. The Board generally defers to the General Assembly’s requests insofar as legally possible and to the extent that the requests are consistent with the Board’s legal duty to the Plan members and the Plan’s financial solvency.

Question 2: In the eyes of federal (or state) regulators, what kind of an organization is the PCUSA Board of Pensions? Are there matters of federal law that must be reflected in BOP’s operations? Is the BOP is “protected” as a religiously based organization? Was it a matter of discretion whether the PCUSA BOP included same-sex partnerships in its coverage, or did somebody (outside the church) require this action?
The Board of Pensions is an organization formed by the PC(USA) for the principal purpose of administering benefits plans and programs for employees of its churches and related organizations. The Benefits Plan is a “church plan” as defined in the Internal Revenue Code. Church plans are subject to some, but not all, of the federal laws and regulations that govern employee benefits plans.

Currently, there is a federal law, the Defense of Marriage Act, which defines marriage as between a man and a woman. Same-gender partnerships are not recognized under federal law. In fact, as noted in the Special Committee report, the benefits provided to same-gender partners will be subject to federal income tax reporting by the employer. There is another federal law, the Church Plan Parity and Entanglement Prevention Act, that exempts church plans from many state laws relating to benefits plans.

Put another way, no law compelled the action of the Board of Pensions; as explained in the Special Committee on Domestic Partner Benefits’ report to the Board of Pensions, the action was taken in response to the 219th General Assembly (2010) action on Item 18-06.

Question 3: I know that those vested in the Plan will receive their pensions under rules of retirement, whether they remain in the PCUSA or not. Is this guarantee required by federal regulation or is it defined solely by the BOP as its own rule and commitment? If the latter, is it possible that such a rule could be rescinded at some future time?
Church plans are not subject to federal pension vesting requirements but the Benefits Plan includes a vesting provision for pension credits. While the Plan could be amended in the future, with General Assembly approval, any amendment would most likely only apply prospectively to credits earned after the date of the amendment.

4. What exposure does the BOP have to civil lawsuit if it does not extend benefits to same-sex partnerships?
As noted above, there are no laws that require the Board to extend benefits to same-gender partners. The Board’s action was taken in response to the General Assembly action.

This is Mary now: The Board of Pensions acted only on the urging of the 219th General Assembly to include same-sex domestic partners in its medical and pension coverage. No other legal or regulatory pressure compelled them to do this. They did so at this time, rather than after the 220th GA, because they needed to report to the next GA how they responded to the last GA’s request.  The link between the BOP and the PCUSA is “ecclesiastical,” which means to me that the BOP could reasonably be expected to reflect in its policies the definitions (such as “marriage”) in the Book of Order. So even though the BOP respected the legislative issues of the previous GA, it was premature in its determination that essentially conveys that the PCUSA accepts and supports same-sex partnerships. Though the policy has been adopted, the real work of implementing it (which comes effective in 2013) will likely not commence until after the GA adjourns.

Tomorrow, I will make some brief comments (I promise—brief!) on what recourse people of conscience on this matter have.

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4 Responses to “Board of Pensions Responds to Questions”

  1. Jodie Says:

    For Two Thousand years Christians have set the bar on health care for the sake of Jesus. We have provided help to people nobody else considered worthy of care. We braved oceans and deserts, wars, plagues, persecution, contagion and martyrdom to provide medical assistance to those only Jesus loved.

    (How many hospitals have the name “Presbyterian” attached to them?)

    I just don’t get it. What has happened here? What ‘people of conscience’ need recourse?? Why are these questions even on the table???

    Jodie Gallo
    Los Angeles, CA

    • hallead Says:

      Jodie, I don’t think it is a matter of whether or not “beneficiaries” receive benefits but who is considered a “beneficiary.” In this case the understanding of a beneficiary has been extended to those who previously were not considered beneficiaries. There are those of us who disagree with the extension of benefits to anyone whose relationship with a plan member may be sanctioned by the state but, at least at this point in time, has not been sanctioned by the denomination.

      Glen Hallead
      Wellsboro, PA

  2. David Stearns Says:

    I believe there is currently an overture to GA to allow people to opt out of the benefits plan for reasons of conscience (OVT-036 from Presbytery of Stockton). If this passes it may provide a relief valve for some, although it could create major problems with the plan if a lot of people pull out, and it may be a financial hardship to some who might want to pull out.


  3. FWIW … one of the TEs who was on the committee that sent the recommendation to the GA, and which recommendation was sent on to the BOP has said that the original recommendation included that, if there was any change to include those same-sex partners under the health plan, a Relief of Conscience formula must be included.

    The BOP board evidently overlooked that provision.

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