The balanced investment portfolio of the Board of Pensions (BOP) of the Presbyterian Church (U.S.A.) staged a robust recovery in 2009, gaining 26.2 percent to a total value of $6.5 billion.

“What a difference a year makes,” noted Judith Freyer, the board’s chief investment officer, noting that in 2008 every class of investments ended the year in the red while last year every class finished on the positive side. “It was an incredibly strong year,” she told the board.

But not quite strong enough, however, to recoup the losses from the meltdown of the global financial markets in 2008. During the last two years the portfolio is down 5 percent and the last three years down 0.8 percent. As a result, the BOP at its March 6 meeting here voted not to grant an experience apportionment for 2010.

Experience apportionments are percentage increases in pensions for retired Pension Plan members and survivors and percentage increases in the accrued pension credits for active Pension Plan members.

Because apportionments are permanent obligations — each 1 percent apportionment increases pension fund liabilities by $48 million — the BOP uses a formula established in 2005 to weigh the value of the portfolio against the fund’s total liabilities. If the market value of assets relative to liabilities is at least 125 percent, an experience apportionment can be granted.

Since the market value-to-liabilities ratio at the end of 2009 was 118 percent, the policy indicated that no experience apportionment should be granted.

“Much of 2009 was spent rebuilding reserves in the Pension Plan,” said BOP Pension Committee Chair Don Fleischer. ”Because members rely on us to protect the plan and their future benefits, we think it prudent to continue to strengthen those reserves before granting another experience apportionment,”

In a separate action, the directors granted a disability benefits increase of 3 percent for disabled members receiving disability benefits on Dec. 31, 2009. The increase takes effect July 1, 2010. Disability benefit payments, which are funded separately by the board, are 60 percent of the disabled member’s former salary.

Not waiting for federal healthcare reform

Conversations in the board’s Healthcare Committee about comprehensive health care reform in Washington were about as inconclusive as the fate of the Obama administration’s overhaul proposal.

Senior Vice President for Benefits Patricia Haines said reform efforts are focused on five basic principles: access, affordability, competition, minimum uniform-quality benefits and improved health and wellness.

Political rhetoric surrounding the health care debate and the government’s role in health care clouds the reality, she said, that 59 percent of Americans are covered by employer plans, 9 percent by private plans and 28 percent by government plans, with 15 percent of the population uninsured.

The board is closely monitoring congressional activity, Haines said, and is working “with and through” a consortium of church plan executive officers, known as the Church Alliance, to assess the impact of the pending legislation on the BOP and other church plans.

In the meantime, Haines said, “2009 was a year of change in which we really did try to simplify the plan and make it more understandable by members,” adding that those efforts will continue into 2010. As always, she said, the twin foci of the BOP’s efforts are quality and cost.

Haines and Stewart Beltz, director of health and welfare, outlined some of the changes:

  • Integration to create parity between medical and mental health, with the same co-pays and one set of deductibles.
  • Simplification of pharmacy benefits, with the $100 deductible eliminated, a fixed co-pay for generic drugs and several other changes designed to encourage use of generic drugs, which right now is running at about 70 percent of all prescriptions.
  • Implementation of a dependent coverage waiver for plan members whose spouse or children have comparable coverage available.
  • Expanded coverage for habilitative services, including autism, cerebral palsy, Down Syndrome and spina bifida.
  • Expanded access to include licensed acupuncturists for treatments used primarily for headaches, joint disorders and back pain.

The transition for health management services from CareAllies to ActiveHealth Management on Jan. 1 of this year “went very smoothly,” Haines told the Healthcare Committee.

In addition to precertification, case management and care management services, ActiveHealth will later this spring launch MyActiveHealth, a website that features online personal health management resources.

Through this site, members can maintain, online, their own onfidential and secure personal health record (PHR). Haines said the goal is for at least 30 percent participation in the service by Healthcare Plan members and the BOP will offer a $100 healthcare gift card to help with qualified health care expenses as an incentive to participate.

“Personal Health Records can help members and their doctors make more informed healthcare decisions, leading to improved health,” Haines said, adding, “PHRs are a wonderful complement to other health management services already available to plan members.”

Income levels for supplemental programs raised

The board increased income supplement target levels from $26,160 to $26,760 for single persons and from $31,380 to $32,100 for married couples, effective April 1, 2010.

Through income supplements, the board guarantees a certain level of income for retired plan members when all their sources of income are combined.

The BOP’s Assistance Committee increased the maximum income level for housing supplement eligibility to $39,450 a year, also effective April 1 of this year. The previous target level, $36,000 a year, had been in effect since Jan. 1, 2008.

Retired plan members whose total retirement income falls below the maximum income level guideline may qualify for housing assistance if they meet certain eligibility guidelines.

New, retiring leaders

The board elected new leaders:

  • Chair: Thomas C. Paisley Jr., a Presbyterian elder in Lancaster, Pa., and executive healthcare advisor with Cogdell Spencer Erdman, a Charlotte, N.C., based real estate investment trust that invests in medical offices, ambulatory surgery centers and diagnostic centers and provides healthcare strategic planning, design, construction and property management services.
  • First vice chair: the Rev. Laird J. Stuart, interim president of San Francisco Theological Seminary after recently retiring as pastor at the Calvary Presbyterian Church in San Francisco, where he served from 1993 to 2010.
  • Second vice chair: Susan Reimann, a member of Community Presbyterian Church of Sand Hills, N.J., and a human resources professional with Pfizer Inc. for more than 20 years.

During its three-day meeting the board also recognized eight members whose terms of office expire with the conclusion of the upcoming 219th General Assembly: the Rev. Jefferson K. Aiken Jr., Orefield, Pa., Donald R. Fleischer, Wallingford, Pa., George H. Gotcsik, Lima, N.Y., Joseph J. Leube Jr., Philadelphia, B. Jack Miller, Bonita Springs, Fla., Thomas Parks Jennings, McLean, Va., Ann C. Petersen, Chicago and James A. Unruh, Paradise Valley, Ariz.