Pre-Conference Workbook - North Carolina Conference of The ...

plan will continue until all pastors with past service benefits and their surviving spouses
are deceased and is administered by the General Board of Pension and Health Benefits
(GBOPHB).
B. Current Past Service Rate: For many years, the Book of Discipline has defined Pre-82
Plan defined benefits as a fixed payment per year of past service. This fixed payment is
the Past Service Rate (PSR). The benefit goal is stated to be a PSR of 1% of the
Conference Average Compensation (CAC). Participation in the Clergy Retirement
Security Program requires that an Annual Conference maintain its PSR to at least 0.9%
of the CAC. The 2013 CAC for the North Carolina Conference is $68,999. The 2013
PSR is $655 or 0.95% of the CAC. Our Conference Board would like to maintain a PSR
of at least 0.9% of CAC. North Carolina CAC has increased by an average of 3.05% per
year over the past 10 years. We estimate future PSR increases to average
approximately 5.0% 2.5% each year.
C. Funded Status: The Conference is required to fund all future benefits of the Pre-82
Plan by December 31, 2021. Funded Status (previously called unfunded liability) is the
difference of the current assets held by the GBOPHB for future benefits of North Carolina
participants and the total present value of all future benefits to be paid under the plan at
the approved PSR. The GBOPHB values assets and liabilities of the plan every two
years and projects data to current years based on the increase in PSR and investment
earnings. For the 2013 Funding Plan, GBOPHB and the Conference use an assumed
earnings rate of 7.0%.
The General Board of Pension and Health Benefits has determined that the portion of the
pre-82 plan liability attributable to North Carolina Annual Conference is $39,683,028 with a
5.0% 2.5% PSR increase assumption based on a 2013 PSR of $655. Plan funds currently
held with the General Board of Pension and Health Benefits have a value of $15,475,250 as
of January 1, 2011 (for 2013 funding plan).
The difference between the total plan liability and current plan funding is $24,207,778.
This represents the unfunded plan liability and will be provided through apportionments and
non-plan funds that are held in various investment sources. The Conference intends for
contributions to be made within the 9-year period, ending December 31, 2021. The minimum
annual contribution due December 31, 2013 is currently estimated to be $3,030,756
D. Funding Plan for 2013: Our conference pays for plan benefits through several potential
funding sources. Both the interest and principal of non-plan funds may be available for
retirement funding needs. Below is a description of the non-plan assets available to pay
the present value of future contributions. Our Conference expects to utilize annual
apportionments from the local churches as the primary source for pre-82 pension
funding. Our Conference expects to receive annual apportionments in an amount of
$3,300,000 for 2013 through 2015, then increasing $200,000 each year through 2018.
Apportionments of $3,700,000 are expected for the year 2018. The present value of the
expected apportionments is $8,660,243. This apportionment funding was originally
approved by the 1991 Annual Conference.
The Conference maintains a General Deposit Account with the General Board of Pension
and Health Benefits that has a value of $11,494,074 as of January 1, 2013. Both the interest
and principal from this account are available to meet future contribution requirements.
The Conference maintains and manages various liquid asset accounts that are available
for Supplement One of the Clergy Retirement Security Program funding. The current value of
these accounts are $3,068,509 as of January 1, 2013. Both the interest and principal from
these sources are available to meet future contribution requirements.
The Superannuate Endowment fund has a value of $444,708 as of January 1, 2013. All
of it is available except for the original balance of $87,195.39, from which interest only is
available.
The 2013 funding plan as of January 1, 2011 is summarized below:
Supplement One of the Clergy Retirement Security Program funding Liability:
Assuming a PSR Increase of 5.0% 2.5% $39,683,028
Current Plan Funding as of 1/1/11 $15,475,250
Unfunded Plan Liability as of 1/1/11 $24,207,778
Projected Unfunded Plan Liability as of 1/1/13 $20,912,792
2013AnnualPensionsRpt
Printed on 5/22/13
Page 5 of 22
45