You would probably find the report of the Pension Board to the latest GCE more helpful.

http://gc40.united-church.ca/files/gce_1111_workbook.pdf

pp 43-50.

RevMatt or DKS, I wonder if you could tell me something.

If a minister becomes a minister at 50 and works for 10 years, as compared to becoming a minister at 20 and working for 30 years....is there the same kind of difference in pensions as there are in the corporate space?

note:  i will say that new hires at our firm do not get a pension option.  It has been removed from the benefit package

The United Church Pension Plan is what is called a Defined Benefit plan. You pay money in (4% employtee contribution, 4% employer contribution) and get it back, with interest, when you start collecting it. Eligibility to collect starts at age 55 and you have to stop contributing at age 71, I think. You can start withdrawing a full pension starts when your chronological age and years of service equals 90. In my case, as I started ministry in my mid 20's, I can start collecting a full pension at age 61, if I so choose.

A few years ago I got a plan member out of the plan, as the retired premium for health care benefits (drugs, etc.) was more than his actual pension (he has served as a part time caretaker, but was a plan member). He could use the cash, as his seniors benefits covered almost as much as the health care benefits.  

I would be surprised if our plan were in danger.  It has a long history of very good management from a financial point of view.  The ethics of the investments is a more controversial topic.

That said, I don't really pay attention.  If the formula remains the same, I have most of 30 years minimum left, and I expect it will all be long gone by then.

In answer to the length of time and pension - the longer you work the more the pension is - if you begin at 50 or later than your pension is smaller than if you began at 25.   This assumes retiring at 65, but we can now work longer - to 71 and than increases the pension.

We are in good shape, but the economy means increases may not be forth coming - that is my pension remains the same - the question is will we have to pay more into the plan - church and minister?  That will hit congregations and as David has pointed out in another spot, it may lead to more part time ministries.

Then there is the whole issue of those retirees working and saving money for the cong. At the expense of younger clergy.

As I said elsewhere,

I'm glad you're all reading your Foresight!

Just to clarify:

Contributions are actually 4% of pensionable earnings for ministry personnel and qualifying lay employees; 7% for employers. Pensionable earnings are (in most cases) equal to salary for lay employees, and for ministry personnel 'pe' is salary +40%.

And, although a much more detailed letter will come to all members and employers in January, I would like to reassure one and all that the pension NOT folding, nor is it in danger of 'being gone'. The Pension Board has spent a huge amount of time working on strategies to keep the pension meaningful and affordable, but in the current economic climate--which clearly now is not a blip, but a fundamental change in economic expectations-- changes are neccessry.

Please take some time to read the Pension Promise, and the Annual Report ('10):

http://www.united-church.ca/minstaff/pension

Questions are always welcome!  1-800-268-3781, ext: 3161

Just a footnote:

We have 2 different posters here

REVMATTHEW wo started this post and REVMATT

 I also emailed directly with a Matthew. I assumed one was here :)

I agree with Martha that this is no blip that we are wading into.  And yes, the Pension board does work hard to make the plan function well.  That said, it will be more than interesting to see what the results of the work, conjecture, planning and prayer will be.  2012 will be interesting.   Might make an interesting thread to start by asking the question if it's O.K. to pray for the markets to do well that others,and oneself, have a better pension.  Would that kind of prayer be an ethical investiment of time.?

That may help, although prayer for good stock market returns is likely not a new practice!!

The key thing(s) to remember with the United Church's pension is:

• there are a number of really very talented, experienced and dedicated volunteer members on the Pension Board, the Pension Plan Advisory Cte and the Investment Cte.
• All of these people are extremely interested in the ongoing success of this penison plan; as much as the members (us), in my experience
• The changes this year are big news, but by no means the end of the story; work continues on monitoring and evaluation of all aspects of the plan all the time.

I know I pray all the time for healthy stock market returns.  "Healthy" might not be the right word for this year; but I know I'm better off than many and so give thanks for the returns I do have.  The people doing the work are good people; the pension fund is in good hands, and "what will be, will be."...As far as I'm concerned success is that I get any pension at all.  There are plenty of people who don't and aren't prepared for retirement.   Strangely enough, lots of the ministers who do and will get a pension aren't prepared either - despite the best efforts of GCO to help them prepared.

I know I pray all the time for healthy stock market returns.  "Healthy" might not be the right word for this year; but I know I'm better off than many and so give thanks for the returns I do have.  The people doing the work are good people; the pension fund is in good hands, and "what will be, will be."...As far as I'm concerned success is that I get any pension at all.  There are plenty of people who don't and aren't prepared for retirement.   Strangely enough, lots of the ministers who do and will get a pension aren't prepared either - despite the best efforts of GCO to help them prepared.

I'm just sorting through the mailing lists now!  We are very much hoping to have this letter (there are three, actually: one for employers, one for pensioners and one for 'active' --working-- members) out to you folks on the 23rd of January.

Once it's 'out the door', I'll post the letters in the Church Leadership Network at http://churchleadership.united-church.ca (in the Pension and Benefits "Conversation").

Interesting times!

The letter to plan members arrived in my mailbox today. I posted a scanned copy and opened a discussion in CLN (apologies, Martha).

Basically, contributions by plan members go up Jan. 1 2013 to 6% from 4% of Pensionable Earnings. Contributiuons by pastoral chages and other participating employers go from 7% to 9%. The accrual rate drops from 1.7% to 1.4%.

While the impact of these changes is highly individual, it would appear that we will be paying in more but receiving less. Sample contributions in dollars are in the letter.

Ah David: you beat me. I am posting them (all 3 different letters) by the end of the week. Along with a FAQ we're working on right now. :)

So, any questions? Anyone? Anyone?

Not much TO say. The letters are clear. More clarity will come later this year when the pension statements come out. What would be more helpful is if directions were given to figure out the impact on congregational budgets.

What will be the impact?

Congregational budgets will take a big hit, especialy in multiple staff situations. Plan members wil retire with less, especially those who are second career. Makes you think twice about cashing in the RRSPs to study theology, eh?

Long term impact?  

There will not be a clergy shortage. Any talk of a clergy shortage in the short term is simply silly. Most of those reaching 60 will continue to work long past 65, not because we want to, but because we will have to. And all the retired clergy will work half-time, so churches will be able to exist longer. And retired clergy will come with a HUGE advantage. Congregations no longer have to pay the pastoral charge portion of the pension assessment if they have a retired appointment. Instant savings of $5,000 in the budget right there.

Wouldn't it be a bit short sighted for a congregation to hire a retiree?  If there are only limited employment opportunities for younger people there wouldn't be much incentive for them to pay for the job training.  (I think it is usual to say that one is 'called' to ministry - but it would be way harder to follow through if there aren't really jobs available).

Money trumps mission and vision, in my experience.

Here is another problem:  because the pension is not going up many retirees will depend on sunday supply ( which is different than an appointment), and in some presbyteries there are lay worship leaders.  They tend to get first call and the number is increasing in some places.  Most of these lwl have jobs and they do the sunday supply because they like to preach. 

This is not an area that we can talk about.  I know clergy who are on ei and have not been called to do sunday supply ( it helps the financial situation) because of lwl.  So should we be creating more lwl?

Just another example of anti-clerical bias, I guess.

ANd our complete lack of clarity of what we mean to say we value an educated ministry.

A colleague was telling me of the most recent recent annual meeting where the congregation heartily congratulated the minister for NOT spending any of the Con Ed money in the buget in the previous year.

sigh

What is Con Ed?  I'm thinking it might be for ministerial education, as in Continuing Education.  If I belonged to a church I would not be pleased to learn that my minister wasn't interested in learning.   The message it would send to me would be - I don't have to go to anything educational connected to church because my minister doesn't value education.

Precisely kay.  PRecisely

Not all continuing education costs money. I find many day-long seminars run by our hospital or non-profits like the Alzhiemer's Society (OK, you may pay for a lunch) are excellent and give me lots of insight into pastoral matters. Cost is minimal. Big ticket events are nice (the Festival of Homiletics comes to mind) but they aren't always affordable, and certainly not on $1275/year.

 http://www.otpp.com/wps/wcm/connect/otpp_en/Home/Plan+Funding/Videos/

One of the Pension Board members sent me this link:  It's a number of short videos (all under 4 minutes) on the Teacher's Pension Plan website that describe some of the challenges Defined Benefits plans are experiencing.

Defined Benefit plans, such as Teacher's and the United Church's, all have similar challenges because of the design of the pension: the benefit is defined, or known, before the date of retirement.

(Defined Contribution plan benefits are determined by the market value of the investments at the time of retirement.  The value of these investments, selected by the member during their employment years, are entirely dependent on the market at the time of retirement. This is a more common pension plan, but one that places 'market risk' entirely on the pension member.)

Thanks Martha"

Those are actually pretty informative videos and speak to the teacher's and yes, even to our situation.

After having my RSP value wiped out twice now in the course of my career and having the pension plan give pretty interesting predictions, well, there will have to be changes. Trouble is the bank robbing thing just isn't working out....:)