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Decision No. 506

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October 22 1981
In Re: Requirement for All Clergy to Contribute Personally 3% of Their Support to the Pension Plan Adopted by the 1980 General Conference.

Digest of Case

All clergy who are Active Participants in the Ministerial Pension Plan for whom a local church contributes 9-12% of the support base, are required personally to contribute an amount up to 3% of their support to the Ministerial Pension Plan.

Statement of Facts

At the session of the Oregon-Idaho Annual Conference, June 2-6, 1981, a motion was passed: That a declaratory decision be requested of the Judicial Council as to whether Paragraph 1706 (1704.12, 13) requires all clergy to contribute an amount up to 3% of the minister's or local pastor's support. This action followed one which stated, That each participating minister in the Ministerial Pension Plan (MPP) be reminded that he/she is to contribute 3% of his/her planned compensation to a personal account by direct billing from the General Board of Pensions. (Seconded and Carried). The petitioners further stated that their request for declaratory decision has "to do with what force if any this alleged mandate has and what are the expectations placed on the Annual Conference in cases of disobedience." JURISDICTION The Judicial Council has jurisdiction under Par. 2615.2(i) of the 1980 Discipline. ANALYSIS The General Conference authorized the Board of Pensions to "continue the operation, management, and administration of the following pension and benefit funds, plans, and programs, not to be restricted to: The Ministerial PensionPlan; the Basic Protection Plan; . . . " (Par. 1704.12) The mandatory nature of contributions from churches is stated in the Plan Documents, Ministerial Pension Plan and Comprehensive Protection Plan, published by the Board of Pensions containing information, procedures and requirements of the plans as adopted by the 1980 General Conference. Section 4, Page 4, Par. 4.1 "Church Contributions", states: (a) Except as provided in paragraph (b)below, the Church shall, for each Plan Year, contribute 12% of each Active Participant's Contribution Base." The exceptions in (b) have to do with a gradual increase of the rate from 9% to 12% over an eight year period. The same document in Section 2, "Definitions", defines a "Participant" as "any person who meets the eligibility requirements of the Plan as set forth in Section 3 hereof, to be and become covered by the Plan, and includes the terms "Active Participant" and "Vested Former Participant." An Active Participant is defined as "a Participant other than a Retired Participant and Vested Former Participant." [Par. 2.i(h)(2)] Further, the Plan provides: "A person shall be a Participant in this Plan onJanuary 1, 1982, if on such date the person is eligible to participate in a 'church plan' as defined in the Employee Retirement Income Security Act of 1974, as amended from time to time." The three categories of bishop, ministerial member of an Annual Conference and a local pastor under appointment are listed. More specific to this request is Section 5 of the Plan Document entitled "Personal Contributions and Benefits." Par. 5.1(a) reads: An Active Participant shall make personal contributions to the Plan equal to 3% of the Contribution Base per year ... An Active Participant may make additional voluntary personal contributions to the Plan for credit to the Active Participant's Personal Account in such amounts and at such times as is determined by the Active Participant ... (Emphasis added) The petitioners questioned the authority of the statements in the Plan Documents since the detailed outline of requirements and qualifications does not specifically appear in the 1980 Discipline. However, in Par. 1704.12 (cited above) the General Board of Pensions is authorized to supervise the Ministerial Pension Plan and Comprehensive Protection Plan, and in Par. 1704.13 it is asked to publish such a Plan: The board is authorized to prepare and publish a pension manual related to the funds, plans, and programs administered by the General Board of Pensions, and such other materials not inconsistent with the Discipline as may be deemed reasonably necessary by the board to its efficient operation. While the 3% personal contribution requirement is not stipulated in the Discipline, it is clearly required by the Ministerial Pension Plan to which Par. 1706 refers. The Plan was presented to the General Conference in writing and adopted. The Plan leaves no doubt since it states that any Active Participant "shall make personal contributions to the Plan." In the same paragraph the Plan indicates the elective nature of personal contributions beyond the 3% level with the words "may" and "voluntary" and "as determined by the Active Participant." The use of "shall" in such documents does not imply any element of permissiveness, and when coupled with the contrasting provision for "voluntary contributions" it becomes clear that any clergy who are Active Participants in the Ministerial Pension Plan are required to contribute 3% in personal contributions annually. Neither the Ministerial Pension Plan nor the Discipline imposes any penalty for failure to pay the mandatory 3% personal contribution, other than the obvious one that if an Active Participant makes no personal contributions he/she shall not be entitled to any of the investment, conversion, or withdrawal options or any other benefits provided in Section 5 of the Plan. Benefits are paid only in proportion to contributions. Since only the General Conference has authority to amend or alter the Plan in any way, neither the General Board of Pensions nor any Annual Conference may impose any additional penalty. Neither the Plan nor the Discipline gives the General Board of Pensions or the Annual Conference the power to charge or assess any other funds or assets in which an Active Participant may have any interest as a means of compelling payment of Personal Contributions. Therefore, under the Discipline and the Plan as adopted, payment of 3% of the Plan compensation is required of each Active Participant. Penalty for failure to comply is the loss of benefits the personal contributions would have provided.

Decision

All clergy who are Active Participants in the Ministerial Pension Plan for whom a local church contributes 9-12% of the support base, are required personally to contribute an amount up to 3% of their support to the Ministerial Pension Plan.

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