The upturn in global financial markets brought good news to the Presbyterian Church (U.S.A.)’s Board of Pensions (BOP) as it met here Oct. 22-24: the board’s balanced investment portfolio is up 21.2 percent through the end of September and the church’s Pension Plan remains fully funded.
The BOP portfolio plunged 28.6 percent last year in the middle of the sub-prime mortgage crisis and resulting global financial meltdown. As a result, the Pension Plan’s “funded ratio” (assets vs. liabilities) dipped to 98 percent after averaging 151 percent between 2005 and 2007. The current funding ration is 114 percent.
Despite the encouraging news, BOP Investment Committee chair Tom Jennings, an elder in Georgetown Presbyterian Church in Washington, cautioned against “irrational exuberance” in current financial market conditions.
“We’ve all heard Alan Greenspan use the term ‘irrational exuberance’ to describe the markets during the dot-com boom,” Jennings said. “I believe we are experiencing irrational exuberance now. We need to remain very cautious.”
With five health care reform bills currently before the Congress and the outcome on any of them uncertain, the board also spent much time focused on the national health care debate.
George Olsen, a health law attorney who has worked in the field for 25 years, told BOP’s directors Oct. 23 that it may be January before any plan is signed into law and that would represent only the beginning of genuine reform. Each of the bills only provides “an architecture,” he said, and details would need to be filled in. Olsen estimated it could take two to three years for the phase-in of any new health care plan.
“If they pass this legislation, we are at the beginning, not the end, of reform,” Olsen told the board. “If you think about the legislation as creating the big architecture, that is what they [the Senate and the House] are doing. All the doors and windows and walls and floors are going to be created through the sub-legislative process. It will be much less transparent.”
Pat Haines, the BOP’s senior vice-president of benefits, said the board will maintain its focus on what is best for Medical Plan members and their employing organizations.
“It is important that we are viewed as open to the possibility of change if it is the best interest of these two constituent groups,” she told the Healthcare Committee Oct. 23. “We could take the view of simply protecting our plan,” she said, “but instead we need to take the view that we are protecting benefits coverage for our plan members in working with any new government plan. We certainly need to stay on top of it.”
Later, Haines told the Presbyterian News Service: “We are not necessarily on the same page as other denominational plans. Preserving all elements of our current plan is ultimately less important than ensuring that, post-reform, our members have access to the highest quality of coverage at the lowest possible cost.”
In other actions, the board:
- Approved a $5 monthly increase in Medicare Supplement dues for 2010 from $194 to $199 per month and a $7 monthly increase in dues for limited income plan members from $118 to $125 per month;
- Approved a 7.1 percent increase in medical continuation dues effective Jan. 1, 2010, from $310 to $332 per month for those enrolled prior to 1987 and from $527 to $564 per month for those enrolled after 1986;
- Increased subscription rates for the Affiliated Benefits Medicare Supplement Program — which covers administrative and non-installed church employees who are covered by Medicare — by 2.6 percent, also effective Jan. 1;
- Received an update on the transition from Care Allies to ActiveHealth for the board’s health management services. The new partnership, which becomes final Jan. 1, will provide Healthcare Plan members with secure and confidential access to a variety of personalized health information; andApproved an incentive program for 2010 that will reward members for completing a “Health Assessment” as part of building their personal health record.
The Rev. Bill Lancaster is associate executive for Foothills Presbytery until his retirement on Oct. 31, 2009, and is a frequent contributor to Presbyterian News Service.