Exit Path Fairness

COMMENTARY By Thomas Lambrecht –

The Renewal and Reform Coalition understands that the exit path passed by General Conference poses a potentially impossible expense for local churches desiring to exit from the denomination. The high cost is driven primarily by the need to provide for the pension promises made to current and former clergy who served that congregation. This is an obligation that all churches of an annual conference have agreed to assume together. When one congregation leaves, it needs to provide for the means to keep that promise, so that retired clergy do not suffer loss from that congregation’s departure.

We have been told that a congregation’s obligation under the pension provision could range from four to eight times the congregation’s annual apportionment. One factor that makes the expense so high is that it is calculated as a “worst case scenario.” The value of the pension liability takes into account the possibilities of stock market downturns, interest rate hikes, and increased longevity of beneficiaries. However, the “worst case scenario” might never happen. The money that a church pays in 2019 to depart might sit in an investment account and never be needed because the “worst case” does not happen.

All through the process, the Coalition’s intent was to provide a generous exit for congregations that could not live with the decisions of the 2019 General Conference, balanced by the need to keep the promises made regarding pensions. The exit path passed by the General Conference was not the one submitted by the Coalition, but we worked in St. Louis to make it more acceptable and generous.

The Coalition continues to work on ways to lower the high cost for churches to depart. Possibilities we might propose to the 2020 General Conference include:

• Reducing the amount of apportionments to be paid from two years to one year.

• Ensuring that funds held by the annual conference designated for pensions are used to help offset the unfunded pension liability calculated by Wespath.

• When a departing local church joins another denomination or entity, reassigning the pension liability to that new denomination, so that the local church need not pay any pension payment.

• When a departing local church becomes independent, requiring the church to pay one-half of its unfunded pension liability share, splitting the risk equally between the congregation and the annual conference.

Wespath has conceded that the adopted exit path and pension provisions were conceived in light of a few congregations exiting the denomination. Where there is a plan of separation or large numbers of congregations departing, a different method of dealing with pension liabilities will be needed. In this, as in all matters related to potential separation or departure, the chancellors’ advice to follow the Golden Rule is well taken.

Thomas Lambrecht is the vice president of Good News and was a member of the Commission on a Way Forward.

Comments

  1. David F Miller says

    Why does the pension liability have to be paid in a single payment. Why not pay over five, ten, or even twenty years? If these churches remained in the UMC they would not have to pay it all in one year. Why not allow departing congregations to continue to pay pensions apportionments as they are now.

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