The factual basis for the statements of this video are below:
- The pension plans are fully funded: https://www.youtube.com/watch?v=TV4hkxV-rMM Bishop Scott Jones video to the Texas Annual Conference, minute 1:01-1:03
- Explanation that exit payments will not necessarily be used by Conferences to pay pensions: https://www.wespath.org/assets/1/7/5641.pdf page 6 pf 14
“Legislation passed by General Conference 2019 requires that a local church’s exit payment (“withdrawal liability”) be paid to its former annual conference. The Conference Board of Pensions or other decision- making body in the annual conference would determine the ultimate use of these assets, but they would be encouraged to use these assets for pension and benefits purposes .”
- Explanation of why fully funded plans need to pay an exit fee per Wespath: https://www.wespath.org/assets/1/7/5641.pdf 6 opf 14
If the conference’s pension plans are fully funded on a market basis (which would be a very rare circumstance), there would be no unfunded liability related to the mandatory pension plans. However, there may be other obligations to the conference that the local church may be asked (by the conference) to pay as part of its withdrawal liability payment to the conference. Even if the conference plans are fully funded on a long-term basis at the time the local church exits, there is no guarantee that the plans will remain fully funded over the next 10 to 50 years or beyond because of fluctuations in investment markets, mortality, etc. over the long term. Legislation passed by General Conference 2019 requires that a local church’s exit payment (“withdrawal liability”) be paid to its former annual conference.
- Wespeth exempting itself from ERISA: https://www.wespath.org/assets/1/7/3414.pdf, page 3
- Wespath’s assets: Review the annual reports: https://www.wespath.org/about-wespath/annual-report
- Difference between funding factor” and the “market basis:” https://www.wespath.org/assets/1/7/5641.pdf 5
- Pension plan liabilities on a long-term funding basis are calculated using a discount rate* that reflects the long-term, average expected earnings of the plan assets. All annual conferences currently make contributions on a funding basis for the defined benefit component of the Clergy Retirement Security Program (CRSP DB).
- Pension plan liabilities on a market basis are calculated at a discount rate that reflects what the liabilities would be priced at on the open market. A market-basis calculation is often the starting point that an insurer or other outside party would use in pricing the liabilities if it were taking over the responsibility for benefit payments from the plan sponsor (in this case, the annual conference). Such a third party would typically add on additional charges for the assumption of risk, profit and administrative fees.
- Explanation as to why “fully funded” plans are required by Conference for withdrawing churches: https://www.wespath.org/assets/1/7/5641.pdf page 6