Sec ectio ion I I: Health I th Insuranc ance 2020 Sec ectio - - PowerPoint PPT Presentation

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Sec ectio ion I I: Health I th Insuranc ance 2020 Sec ectio - - PowerPoint PPT Presentation

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Sec ectio ion I I: Health I th Insuranc ance 2020 Sec ectio ion I II: Pen ension & & Ret etiremen ement R Rev eview ew Sec ectio ion I III: Gen ener eral C l Confer eren ence & ce & Futur ure P e Pen

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Sec ectio ion I I: Health I th Insuranc ance 2020 Sec ectio ion I II: Pen ension & & Ret etiremen ement R Rev eview ew Sec ectio ion I III: Gen ener eral C l Confer eren ence & ce & Futur ure P e Pen ensio ions

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Healthflex Exchange

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Healthflex Exchange

3 Vision 3 Dental 6 Health Plans

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GOLD 3 SILVER 2 BRONZE 1 Premium

High $$

Benefits

High $$ Low $ Low $

Healthflex Exchange

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GOLD 3 SILVER 2 BRONZE 1 Deductible

Low

Out-of-Pocket Max

Low High High

Healthflex Exchange

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GOLD 3 SILVER 2 BRONZE 1 Out-of-Pocket Cost

Low High

Healthflex Exchange

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FREE

money

to the

pastor

Defined Contribution

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Does t Does the d e defi fined ed con

  • ntrib

ribut ution ion eq equal ual the he prem emium ium of

  • f the

e plan? an?

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NO

Annual c l confer erenc ence a e adopted pted a define ined c d contribu tribution ion independe ependent o nt of any p premiu mium.

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Defined Contribution

Per Month Per Year Pastor $832.25 $9,987 Church $741.67 $8,900 Conference $90.58 $1087

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Individual Clergy Only Defined Contribution +$832.25 H1500 Plan

  • $838

Dental HMO

  • $ 14

Basic Vision (Exam Only) $ 0 Pastor’s Monthly Contribution $ 19.75

$9,987/YEAR or $832.25/MONTH

H1500: No Upgrade

=

Defined Contribution

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Individual Clergy Only Defined Contribution +$832.25 C2000 Plan

  • $861

Dental Passive PPO 2000

  • $ 35

Basic Vision (Exam Only) $ 0 Pastor’s Monthly Contribution $ 63.75

$9,987/YEAR or $832.25/MONTH

=

Defined Contribution

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Annual Election

  • Oct. 31-Nov. 14, 2019
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PASSIVE PPO

*g *goi

  • ing a

away i y in 2020 2020

Dental

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Dental

DENTAL HMO : Lowest Premium DENTAL PPO : Second Highest Premium (Default Plan) DENTAL PPO 2000: Highest Premium

NEW PLANS

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Addendum

  • Timing of premiums (occasionally after charge conference)
  • Always a great reminder (sometimes we forget what we pick)
  • Helpful for payroll

Why it’s helpful:

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What hat is is im impor

  • rta

tant nt wh when ch choosing a a plan? lan?

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  • Premi

mium

  • Free contribution to HR

HRA/HSA

  • Rx.

. Be Benefit – dif differen ent for

  • r each

each

  • Per

ersonal

  • nal saving

avings

  • Out

Out-of-po pock cket m t max.

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Why do y do pr premi miums keep go p going u g up? p?

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The he Mar arket et & & Grou

  • up C

Claim laims Perfor

  • rmance

ance

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Group Claims Performance

  • 2018 Data
  • Good News of 2019
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RETIREMENT

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Pensions Retirement Savings

Words We Use

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Words We Use

CRSP: Clergy Retirement & Security Program DB: Defined Benefit DC: Defined Contribution PIP: Personal Investment Plan

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Tech chnically i indi dicates an an empl ployer-funde ded pl d plan an, bu but generally g gets appl applied t d to

  • retirement be

benefits.

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A retirement pl plan an i in which the be benefit pai paid d to

  • retirees i

is de defined d an and d funde ded by d by the e empl ployer.

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Defined Benefit

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The Problem

The employer pays for benefits, the limits of which are not clear.

How?

By contributing on behalf of all active employees. Defined Benefit

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A ret etirement p nt plan i n in n whi hich h the he emplo loyer r makes a a set c contribu ribution ion to active e employees ees’ r retirem emen ent accou ccounts, w wit ith n no

  • pr

prom

  • mise of
  • f any

bene enefit a t and nd actual r ret etirement. t.

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Defined Contribution

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Money ney inv nveste ested b by an n in indiv dividual for a

  • r and

d restricted d unt ntil r reti etirement.

  • t. Employee

ees c can ha n have e mon money w wit ithheld f d from

  • m t

their ir pa paych checks. Different I t IRS ta tax x tr treatments th that t can be be dif differed u d until il wit ithdrawal.

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Retirement Savings

Before R e Ret etiremen ement

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Retirement Savings

During R Ret etiremen ement

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Defined Contribution: 3% of clergy compensation contributed by church to account

Clergy Retirement & Security Program

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2007-2012: 1.25% DAC x Years of service 2013 - PRESENT: 1% DAC x Years of service

 paid to retirees monthly

Clergy Retirement & Security Program

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How i

  • w is

s th the cle clergy ret etir iremen ement a t and nd s sec ecuri rity pr prog

  • gram f

fun unded?

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Churches ches c contr tribu ibute te 9.22% 22% o

  • f c

compens pensatio tion n (housi using + g + salary)

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With DC benefits, higher paid clergy receive more contribution and savings, but the DB equalizes retirement benefits.

Clergy Retirement & Security Program

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The Risk The DB portions spreads the risk of loss in

the market between clergy participants and annual conferences.

Clergy Retirement & Security Program

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Clergy Retirement & Security Program 9.22%

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What if the stock market crashes?

Clergy Retirement & Security Program

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What if retirees start to live 5-10 years longer?

Clergy Retirement & Security Program

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Risk is shared with the conference which sponsors the plan.

Clergy Retirement & Security Program

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If th the con conference h has to s to ma make a e a contr ntrib ibuti ution, wher here e will it ill it come? me?

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Loc

  • cal

al Chur hurch ches

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Legacy Plans

1982–2007: Ministerial Pension Plan Before 1982

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Acted like a DC plan At retirement 65% of the account balance is annuitized—converted to defined benefit

MPP

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The Risk

Past service rate Years of service

x

Annual Benefit

=

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The conference shares risk in three plans.

Churches share that risk.

The Risk

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What happens if the conference splits?

Clergy Retirement & Security Program

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What if we loose 50% of churches?

Clergy Retirement & Security Program

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What if church attendance continues to decline?

Clergy Retirement & Security Program

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Whe here i is s the the ri risk r sk reall ally? y?

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Onl nly the one the one hold holding the ben the benefit c t can lose an lose the ben the benefit

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General Conference & Future Pensions

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Ho How C w Can an we we provi vide quali uality y retir tirement an t and mitig itigate ate th the ri risk sks s to

  • conf
  • nfer

eren ences a ces and nd chu hurches ches?

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  • DC plans

C plans ONL ONLY

  • Defer S.S. un

until 67

  • Chu

hurch ches es contr contribute te to to DC

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Full SS benefit at 67 (not 65) Meant to replace approx. 35% of income

  • CRSP DC – 9%
  • CRSP DB – 20%

Social Security & Medicare

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  • It is not 100% of income at retirement
  • If you start SS early it’s less
  • Saving is critical!

Social Security & Medicare

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Clergy typically retire at 65  ensuring low SS income

The Problem

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The Problem

What if the pastor lives a long life and uses all their DC and PIP benefits?

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Using Lifestage Retirement Income, Wespath already tries to ensure the CRSP-DC and PIP money will last

The New Plan

FIRST:

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The New Plan

Every Pastor

$140 From church 3% compensation From church

New Pastors

2% + 2% match From church

Established Pastors

Up to 4% match From church

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The new plan will allow a person to defer SS for two years (until age 67), by receiving higher payouts

The New Plan

FIRST:

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The new plan will allow the purchase of deferred annuities that start at age 85  Insures against “running out”

The New Plan

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The new plan requires more individual responsibility and personal savings

The New Plan

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More fle flexi xibi bili lity in in denom

  • minat

ational al uncer ertain inty

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Shifting o

  • f f

futu uture cost sts s away from le less ss sta stable entities ( (co conferences an and ch d churches)

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Mone ney in in plan is lan is par artici cipan ant’s and and c can an be le left ft t to he

  • heir

irs

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Ris isk k of

  • f mar

arket t los loss shift fted to individua ual

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Inherently less “connec ectio ional al”

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Persona sonal l Respons

  • nsibilit

ibility

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Sec ection I I: : Health I Insur surance 2020 Sec ection I II: : Pen ension & & Ret etir ireme ment R Rev eview iew Secti tion I n III: General ral C Conference ce & Futur ure P Pensi sions

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