Facing limited options, synod delegates today approved increasing the normal retirement age for Christian Reformed pastors from 65 to 66, decreasing benefits available for early retirement, changing the cost of spousal benefits, and increasing the contributions churches must make to the Ministers’ Pension Fund.
The changes come as pension trustees grapple with Canadian regulatory changes. In addition, significant losses from the 2008-2009 market crash, coupled with decisions of earlier synods that increased retirement benefits, together pose more problems for trustees.
Changes in regulatory oversight north of the border forced the most dramatic changes to the pension plans. Rather than allowing underfunded liabilities of the plan to be met over a 15-year horizon, regulators now demand that the plan be fully funded within five years. Delegates heard that a viable strategy was required by July 1, 2011, or the plan would be dissolved by Canadian regulators.
The funded status of the plans was impacted in large part by the market downturn of 2008-2009, as well as the significant benefit improvements granted by synods in 1999 and 2001. Those synods significantly increased total payment levels and early retirement benefits, and made the increases retroactive to 1985. These were, as synod heard today from the CRC’s director of finance, “huge benefit improvements done in those two years.”
In addition to the benefit adjustments, churches across the denomination must now add 15 percent to their pension contributions. Short-term borrowing will cover the rest of the shortfall. It is anticipated that the plan will be deemed solvent in 2015, at which time the pension trustees and synod will review the situation. None of this synod’s changes affect current pension recipients, only those who retire after June 30, 2011.
One elder delegate, Walter Neutel from Eastern Canada, proposed a fundraising campaign for the Ministers’ Pension Fund. “To put all the burden on ministers and their spouses is not entirely fair. I hope we look at these as interim measures,” he said.
For more coverage while synod is in session, including webcast, photos, discussion forum, reports, and more, visit the Synod 2011 website.