The Missouri Conference Finance and Administration Team, Clergy Support Team and Board of Trustees have had a very different year leading up to Annual Conference. The 75 disaffiliated churches represented over $1.8 million in apportionments or about 15% of the Conference budget. Each of those disaffiliations created a lot of work at the Conference office and the disaffiliating churches.
But there has been more going on than disaffiliations. There were some changes to health insurance over which the Missouri Conference did not have any control. The economy and markets have been extremely volatile, accompanied by higher inflation than the country has seen in more than 20 years.
Missouri Conference Director of Finance and Administration Nate Berneking chose a new tactic to share information this year for the Annual Conference Session. Rather than having team chairs read reports, he led a conversation around the topics with them seated on stage.
“Disaffiliation revealed the truth that we are all intrinsically connected,” Berneking said. “CFA and Clergy Support rely on each other and hang together delicately.”
He started by asking Rev. Mary Weaver, Clergy Support Team chair, about this year’s votes. She explained that there are three votes relating to her team:
- As they do every year, the Conference votes to approve the Pre-82 Past Service Rate. That’s the rate used to calculate pension benefits for retirees who were active in years before 1982.
- Also, every year, the session adopts the Clergy Support Team Report, which includes various business items:The Comprehensive Benefit Funding plan (we must prepare it by discipline and have had it approved by Wespath);
*Minimum compensation/salary levels for clergy;
*Equitable compensation guidelines;
*CRSP-DB and CRSP-DC eligibility and determination of service credit
*The policy on parsonage and cash housing Allowances that operate in the conference for local churches; and
*Churches should follow the guidelines for church-owned residences (i.e., parsonages).
- Finally, the adoption of the Clergy Support Team Policies & Procedures, which include: Re-affirming Healthflex (including the required premiums set by the insurers)
-Adoption of the “premium credit”
-Re-adopting the retiree Health Insurance every year, including the 2024 Pre-2008 retiree health insurance stipend (It’s increasing by 2% as usual to $295.80, up from $290).
-Introducing an additional grant program for the Medicare “donut hole.”
-Resolutions related to retiree housing (the IRS requires this for retirees).
-Moving expense reimbursements for retirees
-And our benefits arrearage policy
Following Weaver, Brad Kurtz, chair of the Conference Finance and Administration Team, explained that they also have three votes:
- Adoption of the moving policy, which governs the grants we provide to local churches receiving pastors.
- Adoption of CFA policies and procedures.
- And most significantly, the adoption of the apportionment.
Conference Standing Rules require a day between the initial presentation of the budget and the actual vote on that budget.
Addressing the budget, Berneking noted that there is a reduction of $2.1 million. It is a 16% reduction.
“We can’t get into the weeds just given our time limit, but some folks may be wondering, maybe anxious … maybe even a little panicky, that this is going to completely change the way the Conference has to do its work,” he said.
Kurz acknowledged that the Conference will look a little different with the disaffiliation of 75 churches, including some larger churches.
“We are entering a new reality. It’s going to take some time to fully understand what that reality means for us financially,” Kurz said. “However, at the same time, we’ve talked a lot, including in CFA, that we also want to make sure that everyone understands that the Annual Conference is and is going to remain strong, now and into the foreseeable future.”
The current apportionments reflect nearly $500,000 less in spending on Conference staff. Those cuts were accomplished entirely through natural attrition or simply not filling roles that hadn’t been filled. The directors worked very hard to find ways to work more efficiently.
“At some point, the Conference is going to have to think about how much it can send to local churches
and other ministries in grants,” Kurz said. “The best example is the reduction in the apportionment for Central Methodist University by $100,000. We’re proud of CMU and have a great relationship. Bishop made Dr. Drake aware of this needed reduction months ago. And to be clear, the apportionment has been set at $200,000 for nearly the entire history of the Missouri Annual Conference. Today, because of disaffiliations and closures, we are about half the size we were when it was set.”
Other reductions were made because we have other sources to fund the spending. For example, the Conference has long planned with NextGen Ministries to utilize the fund created by the sale of camp properties to reduce the apportionment required for camping. Similar changes are being made in congregational development and clergy support, where the Conference is using a fund we’ve long held to offset some costs more than we have in the past.
Weaver explained that the Clergy Support Team’s apportionment for next year is a perfect illustration of using a permanently restricted fund that has been held for a very long time to assist in lowering the burden on local churches. Last year, the Conference recognized a $140,000 reduction using a reserve fund. This year that is increased to $280,000. That is offsetting a million-dollar apportionment almost entirely related to the pre-2008 retiree health stipend. The reserve fund for this is permanently restricted and must be used only for retiree health benefits.
“If we don’t use it for the retiree stipends, we’re going to be hard-pressed to find a way we’d be allowed to use it,” Weaver said. “I wasn’t here yet, but I understand that the decision to move the stipend program was tough for the Conference, but it came at exactly the right time. I’m really happy to say that we are confident we can finish out that program even as health care costs and premiums for various insurance programs continue to increase.”
“In January and February of 2020, everyone remembers that we were preparing for General Conference, and as part of that, the Connectional Table, which is a general church agency that works with General Council on Finance and Administration to assemble quadrennial budgets, proposed a large reduction for General Conference to propose,” Kurz said.
GCFA calculated apportionments for 2021 based on that reduction and shared them with conferences. Then General Conference was postponed due to the pandemic. With GCFA’s full knowledge, most annual conferences still utilized the apportionment based on the reduced budget that was never passed. Most annual conferences are doing the same this year, but now we have a new issue: disaffiliations. Some conferences have already disaffiliated half or more of their congregations.
“We feel it critical to account for that loss ahead of 2024, and that’s why you see the reduction in General Church apportionments,” Kurz said. “The apportionment has been reduced by the percentage of loss from disaffiliations.”
Berneking noted there is more consistency than a change regarding what we have to do.
Berneking said changes are coming to health insurance in 2024 that the Clergy Support Team did not ask for but were implemented by Wespath in response to a constant rise in premiums, low participant satisfaction when it comes to customer service provided by insurers, and some IRS changes. He asked Weaver to explain the changes to health insurance.
Weaver started by explaining that one thing that isn’t changing is the amount the Conference charges a local church for its contribution to health insurance.
“We set the contribution at $8,900 four years ago, and CST voted to keep it at that same level for 2024,” Weaver said, noting that the actual premium had gone up by 5%. “Local churches have only seen a $140 increase in that contribution since 2012. That’s 1.6% in 12 years, which is unheard of for employers. That’s only possible because we are part of the connection in the UMC.”
Berneking responded that the cost of benefits has been remarkably flat for a very long time and explained how that was possible this year despite the rising premium.
“We’ve been able to keep the cost flat for local churches because the Conference has, and here we are revisiting one of our themes that Brad introduced, the Conference has been effectively utilizing funds held at Wespath to take on some of the burdens,” Berneking said. “Premiums are rising again, but the Conference is edging up its share of the contribution.”
Wespath is implementing what they are calling a concierge service. Rather than calling customer service for a problem with your health insurance, the insured will call this service, which will understand Healthflex, Wespath, the Conference and clergy far better.
Beginning in January, Healthflex will only utilize a Blue Cross Blue Shield network. The concierge will entirely replace Blue Cross’s customer service number. No one will ever call Blue Cross. Healthflex is simply using a Blue Cross network. Second, the number of providers in-network for United Health but out for Blue Cross is tiny. Kurz was initially concerned about out-of-network doctors in rural areas but is confident moving forward.
“Wespath did provide a report of providers that were shifting to out of network, and I was relieved by it,” Kurz said. “There were very few doctors that people are utilizing today that are now going to be out of network. And those few aren’t exclusively in rural areas or only one part of the state. I think a lot of us, especially on the east side of Missouri, have a historic understanding of Blue Cross that isn’t as true as it once was.”
All reports were voted on and approved without amendment during Sunday’s closing business session.