Decision Number 614
SUBJECT TO FINAL EDITING
Custody and Management of Refund from the Medical Expense Program of the General Board of Pensions.
Digest
Employee benefits are not subject to the investment policies of the Conference Council on Finance and Administration.
Statement of Facts
The Insurance Committee and the Conference Council on Finance and Administration have received differing opinions as relates to whether funds paid by subscribers to the Health and Medical Expense Plan of the Conference are funds which fall under the purview of the Conference Council on Finance and Administration, and thus, subject to the investment policies of the Conference Council on Finance and Administration, or are employee benefits which would make them subject to the investment policies of the Board of Pensions, and thus, fall under the purview of the Conference Insurance Committee. The Conference voted to ask the Judicial Council for a declaratory Decision regarding same.
Appearing at an oral hearing on April 20, 1989 in Dallas, Texas were Dr. Fred Haustein, representing the Little Rock Conference Council on Finance and Administration, and the Rev. John F. Walker and Dr. F. Gladwin Connell, representing the Insurance Committee of the Little Rock Annual Conference.
Jurisdiction
The Judicial Council has jurisdiction under Par. 2615 of the Discipline.
Analysis and Rationale
The issue here is whether funds held by the Conference Insurance Committee are "Conference funds," and thus subject to the investment policies of the Conference Council on Finance and Administration, or whether they are employee benefits which would exclude them from subjection to the investment policies of the Conference Council on Finance and Administration.
Par. 709.13 of the Discipline states in reference to the duties of the Conference Council on Finance and Administration:
In cooperation with the General Council on Finance and Administration, related Annual Conference agencies and institutions, and local churches, to make recommendations to the Annual Conference regarding the development, promotion and review of a broad general program of insurance protection and risk management, except for employee benefit programs (emphasis added).
The funds in question have been held in trust by the Insurance Committee for forty-one years.
Sections 104 and 106 of the Internal Revenue Code of 1986 exclude from gross income compensation to employees received from health and accident insurance, thus implying that health and accident insurance coverage is an employee benefit. Generally, in business circles, accident and health insurance coverage is considered to be a benefit to the employee.
The Health and Medical Expense Program of the Little Rock Annual Conference is a program which provides an employee benefit. The monies held by the Insurance Committee of the Little Rock Annual Conference under Par. 709.13 of the Discipline are excluded from those funds made available to the Conference Council on Finance and Administration for investment purposes.
Decision
The funds currently held and invested by the Insurance Committee of the Little Rock Annual Conference are funds intended to be utilized as benefits to the employees. These funds, therefore, under the provision of Par. 709.13 of the Discipline are excluded from the purview of the Conference Council on Finance and Administration's investment policies.