I wrote in this space yesterday about the “Dues Plus” plan
proposed by the PC(USA) Board of Pensions (the BOP). Dues Plus is a plan to revise our medical
plan in an effort to find a solution to an increasing deficit problem common to
health plans.
That some
solution needs to be found can hardly be debated. Our benefits plan is not just a matter of
present needs, it is also an expression of promises made to pensioners and
future pensioners. The board has a
responsibility to wisely use the resources they receive from our congregations
through the BOP dues paid by each church.
In my post
yesterday, I said that I support the Dues Plus as a solution not because it is
ideal but because it is necessary. I
recognized that it will change to some measure the structure and the underlying
assumptions of the plan, however I do not believe that it fundamentally
violates the covenant shared by the BOP, its members and the churches who pay
the dues.
Based on the
responses I got yesterday (some made in public that were both helpful and
insightful and some sent under cover of email that were occasionally profane
and decidedly unhelpful), I am not persuaded to change my position on Dues Plus
as a solution to a very real problem. However,
I am persuaded that there is a need for more conversation in the church about
possible alternatives to this one specific plan.
For better
or worse, something needs to be done and it needs to be done sooner rather than
later.
These are
the facts as I understand them outlined in detail or implied by information in
the BOP communication to the church.[i]
- Dues income is not sufficient to cover annual costs. At the current rate of income/expense the medical reserve (this is not related to pension reserves) will be exhausted in 36-48 months.
- The medical plan must be self-sustaining in order to prevent disruption of the pension plan which is fully funded and able to meet all present and future obligations.
- In order to maintain current dues structure and close increasing deficits, member dues will necessarily increase above 25-27% of effective salary for medical only (36-39% for all benefits combined.)
- More than ½ of plan members are 50-64 and actuarially likely to consume an increasing rather than decreasing level of healthcare.
- The decreasing number of dues paying institution and the declining real dollars collected in dues exacerbates the rising costs and use of healthcare.
This is not an ideal situation. That is for sure. However, it is our shared reality and we have
to do something or risk the solvency of the plan.
Some commenters to me and in other
forums have made a point that the BOP has done a poor job of communicating the
issues and options to the larger church.
That is a fair criticism. The BOP
has done a poor public relations job throughout this process. (Calling for austerity last fall from Hilton Head
and this spring from the Ritz-Carlton in downtown Philadelphia does take
something away from the argument.)
The BOP’s poor communication aside,
the math does not change. Something has
to be done.
So what are the options?
Well, we know Dues Plus. It shifts part (only part) of the cost of
dependent coverage from regular dues to the medical plan to an additional
premium. Every member remains covered
100% and dependent coverage, while heavily subsidized, would require the
payment of a premium based on who is covered.
This has the advantage of solving the problem presented; however, it
does so by placing a burden on a particular group- clergy with children or
spouse in need of coverage. To be fair, despite the proposed 2% decrease in dues, Dues Plus still heavily subsidizes the cost of dependent coverage through the dues payed on pastors with no dependents.
What about just raising dues? That is certainly an option. It is what we have done for years. Simply raise dues to meet existing
needs. The BOP did consider that as
evidenced by the information they give in the Q&A published for the
church. Simply maintaining the status
quo would require dues to continue to rise from the current 21% to 27% and
beyond within five years. This too would
solve the problem presented; however, it too balances the budget on the back of
a particular group. I this case small
churches like one of mine would simply have to forego pastoral leadership. Dues are a stretch now and a significant increase
in dues is simply not possible.
What about farming out the plan and
no longer being self-insured? Just on a
lark, I called a couple of insurance folks today to find out how much it would cost
to move me and my secretary (who is in the affiliates program) to private
insurance. Let’s just say we would be
missing the days of 27% medical dues!
There is just no easy answer to this
problem. But it has to be solved.
I claim no special insights or ah-ha
moments on this. I wish I had a magic
wand to wave and make the problem go away.
Unfortunately, the only options presented so far are a) keep increasing
dues for everyone or b) Dues Plus. No
other options that I have seen solve the fundamental problem of the math.
One last note, I realize how
emotional an issue this is. However, I
hope that my colleagues and friends will take care when calling this unjust
because it puts the burden of the solution “on the backs of families.” For more than a generation the church has
been silent on the reality that the 16% of us who are single and have no
children have been overpaying for years. As I said yesterday on Facebook, I am fine with that. I am fine having my income lowered a bit to help ensure that my friends and colleagues coverage is not out of reach. That is how our plan does and should work.
Let’s not let this become a struggle
about who shoulders the most burdens.
Together, let’s try to find a solution that allows us to share and
shoulder it together.
[i] http://web.pensions.org/Publications/pensions/Home/Forms%20%26%20Publications/Booklets%20%26%20Brochures/MedicalDues-QandA.pdf
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