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Decision No. 766

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October 26 1995
In Re: Legality of the Age Factor Used by the General Board of Pension and Health Benefits in Determining Premium Amounts.

Digest of Case

The General Board of Pension and Health Benefits does not have the authority to amend the definition of "Age" adopted by the 1992 General Conference for use with the Death Benefits Option of the Basic Protection Plan.

Statement of Facts

During the 1995 session, the Texas Annual Conference, by two-thirds (2/3) vote of members present and voting, petitioned the Judicial Council for a decision as to legality of the age factor used by the General Board of Pension and Health Benefits in determining premium amounts. The Texas Annual Conference contends that the General Board of Pension and Health Benefits in 1993, following the 1992 General Conference, amended the provisions of the Death Benefits Option of the Basic Protection Plan (BPP) in a way that effectively redefined the word "age" so that, in the amendment, the word "age" no longer had the same meaning and application as it had when adopted by the 1992 General Conference. The 1993 amendment adopted by General Board of Pension and Health Benefits and identified as 4.01 reads as follows: Premium amounts will be based on the participant's age as of January of the plan year with the addition of one year for those born between January 1 through June 30. The Texas Annual Conference holds that, through the adoption and application of this amendment, the General Board of Pension and Health Benefits has, in effect, redefined the word "age" to mean "age at the nearest birthday," which is different from the definition of "age at the last birthday" as adopted by the 1992 General Conference. During the 1993 session, the Texas Annual Conference voted to become a Plan Sponsor of the Basic Protection Plan and enroll all eligible clergy in the Death Benefit portion for a $ 10,000 death benefit as of January 1, 1994. The conference enrolled participants according to the Death Benefits Premium Rates Sheet as distributed by General Board of Pension and Health Benefits beginning as of January 1, 1994. The conference was relying on the definition of "age" as adopted by the 1992 General Conference at Paragraph 2.02 of Article II of BPP that reads: "Age. Theage at the last birthday." The General Board of Pension and Health Benefits, however, in submitting the 1994 BPP invoice to the Texas Annual Conference computed the BPP premium costs based on "the age at the nearest birthday" or by adding one year to the age of participants whose birthdays were between January 1 and June 30. JURISDICTION The Judicial Council has jurisdiction under Par. 2612 of the 1992 Discipline . ANALYSIS The General Board of Pension and Health Benefits in establishing procedure for premium increases shall not contravene any provisions adopted by the General Conference. In Decision 481 the Council stated: Only the General Conference has the 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. This statement on the authority of General Conference in Decision 481 applies to the action of General Board of Pension and Health Benefits in using a definition of age other than that adopted by the 1992 General Conference.

Decision

The General Board of Pension and Health Benefits does not have the authority to amend the definition of "Age" adopted by the 1992 General Conference for use with the Death Benefits Option of the Basic Protection Plan. This copy subject to final editing and correction.

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