Complete 2012 Journal - 2012 NC Conference Journal

Section iV: Legislation and Reports 243
pating retired clergy for all service rendered to the North Carolina Conference
through December 31, 1981. This 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 (GBO-
PHB).
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 2012
CAC for the North Carolina Conference is $68,278. The 2012 PSR is $639
or 0.94% 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 3.48% per year over the past 10 years. We estimate future PSR increases to
average approximately 5.0% 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 GBO-
PHB 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 2012 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 $46,823,515 with a 5.0% PSR increase assumption based on a 2012
PSR of $639. Plan funds currently held with the General Board of Pension and
Health Benefits have a value of $15,315,270 as of January 1, 2010 (for 2012
funding plan).
The difference between the total plan liability and current plan funding is
$31,508,245. 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 10year
period, ending December 31, 2021. The minimum annual contribution due
December 31, 2012 is currently estimated to be $3,049,854.
D. Funding Plan for 2012: 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 2012 through 2015, then increasing $200,000 each year through 2017.
Apportionments of $3,700,000 are expected for the year 2018. The present
value of the expected apportionments is $18,442,889. This apportionment
funding was originally approved by the 1991 Annual Conference.