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Decision No. 577

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April 23 1987
In Re: Authority of General Board of Pensions to Offer a New Fund for Ministers' Contributions Between Sessions of the General Conference.

Digest of Case

Under existing legislation the General Board of Pensions does not have authority to establish a new fund for ministers' personal contributions.

Statement of Facts

The General Board of Pensions proposed a Ministerial Pension Plan to the 1980 General Conference. During the session, the General Conference asked the Judicial Council for a ruling on the constitutionality of the proposed plan. The Judicial Council rendered its ruling as Decision No. 481. The proposed pension plan was modified in certain respects to conform to that decision, and was adopted by the General Conference, to become effective January 1, 1982. In 1984, the General Conference approved a Ministerial Pension Plan essentially similar to the one approved in 1980. In each of these plans, certain types of funds are specified for the investment of ministers' contributions. The 1986 New York Annual Conference adopted a resolution which called upon the General Board of Pensions "to offer in 1987 a Social Witness Fund made up of securities not involved in South Africa, military contracting, environmental polution [sic], union busting, or race/gender discrimination." The conference requested a declaratory decision by the Judicial Council. JURISDICTION The Judicial Council has jurisdiction under Par. 2615 of the 1984 Discipline . ANALYSIS The Ministerial Pension Plan, as approved by the General Conference in 1980, established three funds, named and described in Section 5.2(a,b) of the Plan Document. It was these three funds, and these three alone, which the General Board of Pensions was authorized to establish under that plan. In 1984, the General Conference gave approval to a revised Ministerial Pension Plan which included a fourth fund, named and described in Section 5.2(a,b) of the Plan Document. This same document provided that "a Participant may elect . . . to invest the Personal Contribution Credits in the Diversified Fund or the Special Fund . . ." It also provided that "contributions on behalf of a Participant credited to the Special Fund shall be allocated to a Special Fund I Account, a Special Fund II Account, or a Special Fund III Account . . ." These explicit instructions relate directly to the funds approved by the General Conference, and could not be carried out in all cases if additional funds were created without further amendment of the Plan Document. The General Board of Pensions does not have authority to make such amendments between sessions of the General Conference. Our Decision No. 481 is controlling. There we said "only the General Conference has authority to create, establish, revise, amend, terminate or continue for such time and in such manner as it deems reasonably necessary the various pension plans of The United Methodist Church." Only the General Conference has the authority to change the contractual provisions of the Ministerial Pension Plan. This includes the establishment of any special funds to which contributions may be made by ministerial members. Decision No. 481 recognized that "changes in federal or state law may make some modifications highly desirable or even imperative in the four-year interval between General Conference sessions." No changes in law have been brought to the attention of the Judicial Council which would require the addition of a fifth fund in order for the Ministerial Pension Plan to be in compliance. The New York Annual Conference makes three arguments in support of its resolution. First, it claims Decision No. 481, because it failed to italicize the word "funds," somehow was holding the creation of additional "funds" was to be left to the discretion of the General Board of Pensions for revisions between General Conference even though revisions of the "plan" would be unconstitutional. We reject this argument. The establishment of new Special Funds is not within the purview of the General Board of Pensions; it requires specific action of the General Conference. Second, the New York Conference points to Par. 1604.3 of the Discipline which states: The board is encouraged to invest in institutions, companies, corporations, or funds which make a positive contribution toward the realization of the goals outlined in the Social Principles of our Church, subject to other provisions of the Discipline, and with due regard to any and all special contracts, agreements, and laws applicable thereto. While this language encourages the board to be responsive to the goals of the Social Principles, it neither requires nor authorizes the establishment of a special fund as contemplated by the New York Conference. Finally, the New York Conference suggests Decision No. 387 empowers the General Board of Pensions to set up the special fund. At issue in Decision No. 387 was whether the General Board of Church and Society through a vote of its members could support an organization whose program or action was designed to implement Christian social concerns expressed by the General Conference even though the General Conference issued no specific directive for such support. In that decision we upheld the authority of the General Board of Church and Society to take such action. There is a marked difference, however, between permitting a General Board to align itself with an organization which seeks to implement the principles of Christian social concerns adopted by the General Conference and the modification of the Ministerial Pension Plan Contract by adding a new Special Fund interest option. While the General Board of Pensions might establish a relationship with groups outside of the Church working for the goals of the Church in investor responsibility, it may not establish a new fund within its Ministerial Pension Plan Contract without specific authorization by the General Conference. Given the specific definitions and descriptions of the funds in the Ministerial Pension Plan Document, the fact that the General Conference did not delegate to the General Board of Pensions the authority to add funds, and the absence of any new law requiring the addition of such funds, the General Board of Pensions is prohibited from adding any funds to the Ministerial Pension Plan between sessions of the General Conference.

Decision

The Board of Pensions may not establish without authorization of the General Conference a special fund for the receipt of pension fund contributions.

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