The Pension and Benefits Board serves the Presbyterian Church family by managing the pensions of ministers, members of the diaconate and staff of various church institutions. It also manages the medical and dental plan for both active and retired members eligible for the benefits of that plan.
The pressures on the pension plan after the 2008 economic downturn in the economy required us to make adjustments. One such adjustment meant reducing the rate at which retirement benefits are accrued by members. This was agreed to by the 2012 General Assembly.
This took effect on January 1, 2013. For the vast majority of the active members of the pension plan this meant that the rate of accumulating pension credits began to be calculated at 1.5% of each year of service governed by a Maximum Qualifying Income. The MQI in itself helps to create a level playing field so that those earning much larger incomes can only earn pension credits at the same level as most with lesser incomes.
In fulfilling its duties, the Pension and Benefits Board brought before the General Assembly a request to create a more equitable pension plan for all 700 active members of the plan by setting the rate at which future benefits will be accrued at the same level for all active plan members beginning on January 1, 2016.
With the action of this year’s General Assembly, the affected 115 active members who entered the pension plan prior to January 1, 1990, who had been allowed to continue using a much more generous rate for calculating pension benefits, will participate in the pension plan at this same level with all 700 active members.
However, no benefits realized before January 1, 2016 are in any way affected. Simply put, all shall share in contributing at a similar percentage and all shall receive benefits calculated in a similar way.
Photo by Simon Cunningham via Flickr, CC 2.0