Decision Number 471

SUBJECT TO FINAL EDITING

October 26, 1979

The Meaning and Application of Pars. 734.4 and 1701.1, Including a Reduction of Pension of the Pastor Serving a Church Which Fails to Pay its Apportionment for the Minister's Share of the Health Insurance Plan of the Annual Conference.

Digest

An Annual Conference has the authority to develop a pension and benefit program requiring proportional payment in keeping with Par. 734.4 including a provision that the pastor's pension shall be subject to reduction if proportional payment is not made.

Statement of Facts

The North Alabama Annual Conference, in its annual session on June 3-7, 1979, directed a request for a declaratory decision on the validity of its action stating:
In compliance with Paragraphs 734.4 and 1707.l of the 1976 Book of Discipline, a lien will be placed against the 1979-80 pension credit of the pastor serving a church which fails to pay any portion of the above apportionment included in either Section A of the Conference Unified budget, or the special apportionment for the minister's share of the health insurance plan.

The Secretary of the North Alabama Conference in his communication explained the references of the paragraph of the Board of Pensions report by saying:

The 'portion of the above' refers to a specific dollar amount and 'Section A' refers to the unified budget ministerial support section. The Conference Board of Pensions is thus saying that the health insurance program is a pension benefit, and this is the matter under question.

Jurisdiction

The Judicial Council has jurisdiction under Par. 2515 of the Discipline.

Analysis and Rationale

The question raised by this request is whether the insurance program of the North Alabama Annual Conference is a "Pension and Benefit" program within the meaning of the Discipline.

A second question is raised. May a lien be placed, within the authority of the Discipline, against the 1979-80 pension credit of a pastor serving a church which fails to pay any portion of the "Ministerial Support Items" of the Conference Budget, and/or the special apportionment for the church's share of the health insurance plan?

The conference intended that the program was to be a "Pension and Benefit" program within the meaning of the Discipline. Evidence of this is the sponsorship of the program by the Board of Pensions of the North Alabama Annual Conference and the special insurance apportionment approved by the Annual Conference to pay for the plan.

The 1976 Discipline authorizes the financing of an insurance benefit program:

Par. 1707.2 The conference Council on Finance and Administration shall include in its recommendations to the Annual Conference the amounts computed by the board which are required to meet the needs of the pension, benefit, and relief programs of the conference.

The North Alabama Conference authorized financing by a special insurance apportionment, which was in keeping with the requirements of the Discipline. Par. 1707 states:
The Annual Conference shall be responsible for annually providing moneys in the amount necessary to meet the requirements of the pension and benefit funds, plans, and programs of the conference.

Par. 1707.1 states the responsibility of the Annual Conference Board of Pensions in financing the pension and benefit programs:

The board shall compute the amount to be apportioned annually to meet requirements of the pension and benefit programs of the conference.

The Judicial Council concludes that the Health Insurance plan is a "Pension and Benefit" program, authorized by the Discipline, and adopted by the North Alabama Annual Conference.

The other questions remain: (1) that of proportional payment and (2)whether, within the authority of the Discipline, a lien may properly be placed (a) against the pension credit of a pastor serving a church which fails to pay any portion of its Ministerial Support Items "Section A Ministerial Support" of the Conference Budget, and/or (b) the special apportionment for the church's share of the health insurance plan.

Par. 734.4 of the 1976 Discipline which was Par. 1260.6 a-f of the 1972 Discipline makes mandatory the responsibilities of the Conference Board of Pensions relating to the pension and benefit programs.

The Judicial Council ruled in Decision No. 390 that Par. 1260.6 a-f of the 1972 Discipline was constitutional. This decision applies to Par. 734.4 a-f of the 1976 Discipline.

The Conference Board of Pensions shall keep the records of default of ministers who have failed to observe proportional payments, as it relates to the pension and benefit programs. The board shall render annually to each minister who is in default a statement of the amounts in default for that year and preceding years.

According to Par. 734.4(d), on retirement, the amount that a pastor is in default "shall be subject to deduction from the pastor's pension, in accordance with rules and regulations of the specific program or programs under which the pension is provided". (Emphasis added)

Thus deduction from a pastor's pension for failure to observe the principle of "proportionate payment" is disciplinary as it relates to the pension and benefit programs of the conference.

The Judicial Council holds that the North Alabama Annual Conference acted within its constitutional and legislative authority in adopting a pension and benefit program, including the special apportionment for financing the health insurance plan, and in determining that Par. 734.4 does apply against the pension credit of a pastor serving a church which fails to pay any portion o the pension and benefit programs adopted by the Annual Conference . If the pastor pays proportionally, then the pastor is exempt from the default provision of Par. 734.4(d) and (e).