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Decision No. 324

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October 31 1969
In Re: Petition of Gulf Coast Annual Conference for a Declaratory Decision on the Legality of the Pension Provisions of Its Merger Agreement with Texas Annual Conference.

Digest of Case

This proceeding is continued on the docket for further consideration and determination at the first regular session of the Judicial Council held after adjournment of the 1970 General Conference.

Statement of Facts

Explanation The record before us is inadequate in several material aspects with respect to which we are calling upon interested parties for supplementary information. Pending receipt of this information and our further consideration of the case, the 1970 General Conference will have been held. Since the 1970 General Conference may wish to legislate, directly or indirectly, with respect to the important pension questions involved in this proceeding, we explain below the fundamental issues involved, the essential contentions of the respective parties and certain general views of the Judicial Council which have emerged from our deliberations to this point in the instant proceeding. The Gulf Coast Annual Conference and the Texas Annual Conference approved a plan of merger at their respective 1969 sessions under the terms of which the conferences agreed to merge into a successor Annual Conference to be effective as of June 1, 1970. The approved plan of merger contained two paragraphs dealing with ministerial pensions, as follows: "15. All members of the Successor Annual Conference shall receive the same annuity credit and rate for each year of service in the Successor Annual Conference. Prior years of service rendered in each of the Gulf Coast and Texas Annual Conferences shall become a claim on the Successor Annual Conference and the annuity rates for such prior years of service shall be $40 for prior years rendered in the Gulf Coast Annual Conference and $70 for prior years rendered in the Texas Annual Conference, and these respective rates for prior service shall be increased or decreased by the Successor Annual Conference in equal percentages." "23. The annuity rate for prior service of full time Lay Pastors of the former Gulf Coast Annual Conference shall be the rate applicable to full time ministerial members of the former Gulf Coast Annual Conference for prior service. The annuity rate of the former Texas Annual Conference Lay Pastors for prior service shall be 75% of the annuity rate for prior service in the former Texas Annual Conference." Concurrent with its approval of the plan of merger, the Gulf Coast Annual Conference directed that a petition be submitted to the Judicial Council for a declaratory decision as to the legality of the foregoing pension provisions in the light of Paragraphs 662.7 and 1379.9 of the 1968 Discipline. We have had the benefit of informative briefs and able arguments by representatives of the Annual Conferences directly concerned, and also the South Carolina Annual Conference of the former Southeastern Jurisdiction of The Methodist Church and the Commission on Religion and Race. Representatives of the General Board of Pensions and the Council on World Service and Finance were also present at oral argument and were most helpful in response to questions. Responsibility for ministerial pensions rests with the Annual Conference in which the service was rendered or its legal successor: Paragraph 1379.9, 1968Discipline. This responsibility is subject to the guidelines laid down by the General Conference in Paragraphs 1379-1383. Likewise in the adoption of rules and regulations, Annual Conferences are limited to those which are not in conflict with the Discipline: Paragraph 662.1. The petitioner asserts that the General Conference has imposed two legislative restrictions which prevent the merging Annual Conferences from establishing a pension rate in recognition for past service in one of the conferences which differs from the rate established for application to past service in the other conference, the difference reflecting the disparity in rates in effect in the two conferences at the date of merger. The first restriction is said to be found in Paragraph 662.7 of the 1968 Discipline which directs: "Whenever a ministerial member, whether on trial or in full connection, is transferred to another Annual Conference, either in connection with a transfer of the pastoral charge to which e is appointed or by reason of the dissolution or merger of his Annual Conference, he shall have the same rights and obligations as the other members of the conference to which he is transferred." (Emphasis added) It is urged upon us that if the ministerial members coming into the new conference from the Gulf Coast Annual Conference are to enjoy "the same rights and obligations" as ministerial members coming from the Texas Annual Conference, their pension payments for such past service must be at the same annuity rate. In answer to this argument, we are told that Paragraph 662.7 was intended to protect ministerial status but not to apply to money matters such as salaries or pensions. The language being general and capable of either interpretation, resort could be had to the legislative history of the paragraph, which had its origin in the Report of the Commission on Interjurisdictional Relations to the 1964 General Conference, and specifically recommendation 2A. See also 1964 Journal, pages 1818, 1850; 1964 DCA pages 146, 223, 225-226. A second restriction on the proposed pension treatment of past service is said to be found in the 1968 Discipline, Paragraph 1379.7, reading: "The annuity rate for approved service of conference members shall be determined each year by the Annual Conference without restriction, but it is recommended that such rate be not less than 1 percent of the average salary of the conference as computed by the General Board of Pensions. The annuity rate for approved service of lay pastors and (former) approved supply pastors shall also be determined by the conference each year and may be the same as the rate for service of conference members, but it shall be no less than 75 percent of that rate." (Emphasis added) It is urged upon us that the quoted paragraph authorizes only a single annuity rate. The opposing construction is that a rate is directed to be determined annually for prospective application and that rates established in earlier years may be left unaffected. It is not disputed by the parties, and it is clear to us that the General Conference has not had called to its attention the applicability of either Paragraph 662.7 or 1379.7 or other laws of the church applicable to the right of merging Annual Conferences to adopt differing pension rates for past ministerial service as such rates may have existed in the separate conferences at the date of merger. It is for the General Conference to determine the basic policy of the church on this pension matter. It may mandate uniformity, or it may encourage an approach to uniformity by an expansion of the Temporary General Aid Fund, or it may make explicit the authority of the Annual Conferences to resolve the issue, or it may do nothing at all and leave the record as it is. Forewarned that the equality-of-pension issue is involved in several of the remaining Annual Conference mergers, the concerned Annual Conferences can prepare to document their needs if equality is to be mandated; the Commission on Religion and Race can present the case for equality and its recommendations for appropriate church-wide aid; the Board of Pensions can recommend programs and procedures; and, the Council on World Service and Finance can evaluate the financial consequences of the various courses of action open to the General Conference. Far better, an informed legislative judgment by the 1970 session of the Genera] Conference than a decision by us at this time on a single aspect of a larger problem. We therefore conclude that a decision by the Judicial Council at this time would not be helpful in advance of these further studies, possible action on the matter by the 1970 General Conference, and clarification of the record. November 1, 1969

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