MINNEAPOLIS (ELCA) -- At an Aug. 2-4 meeting here, trustees of the Evangelical Lutheran Church in America (ELCA) Board of Pensions approved an overall increase of 18.6 percent for 2001 in the revenue collected from congregations and sponsoring employers for the health care benefits plan. "This is the amount of increase we need in income to meet the projected level of member health claims payouts," said David Adams, vice president for research and design.
To ease the overall increase, trustees voted to suspend the survivor benefit plan contribution rate for 2001, citing sufficient funds to cover expected survivor payments. With this suspension, the average increase for all benefits, excluding pensions, will be about 9 percent.
The 2001 rate plan approved by trustees is broken down into six rate classes based on geographical differences in health care cost as well as on the level of salaries paid. Each of the ELCA's 65 synods will be assigned to one of the rate classes so that cost-sharing will be done by congregations within a given synod rather than across the ELCA. Some rates will decrease, and some will increase.
Some trustees raised concerns that, even though the increase will be high for some congregations, other rate forecasts are much higher in the health care industry. They worried that the amount wouldn't be high enough to cover claims.
Others agreed but expressed concern for congregations whose rates would increase. "I think we're already beyond rate shock," said Lisa A. Stump, Des Moines, Iowa. "I don't think we should go beyond the 16 percent average [the original figure proposed]. Already there'll be lots of angry congregations."
"The 16 percent is irrelevant. It's confusing," said board chair Earl Mummert, Harrisburg, Pa. He referred to the fact that each congregation will pay a different percentage based on the rate class it's in.
Those who felt the 16 percent was insufficient wondered about a mid-year adjustment. "Maybe it's better to take our medicine once and do it now than to start at 16 percent and jump to 18 percent in mid-year," said Stump, reversing her earlier comment.
The pension board said its goal is to break even while covering the cost of benefits provided. The ELCA plan differs from those in the marketplace in four ways, Adams said:
+ The average member age is 10 years older than the national average.
+ Rates are based on salary, not per member as in the industry. This avoids age-related pricing.
+ Rates incorporate a sharing concept with some congregations subsidizing more vulnerable ones.
+ The plan includes dental coverage.
"It will be a challenge for us to communicate this increase," said John G. Kapanke, ELCA Board of Pensions president. "We need to communicate that this is still a good plan and congregations need to stay in it for the good of all."
Retirement options
Trustees also discussed a pension strategy to be implemented in 2003. The plan has several components:
+ consolidation of the regular and optional pension plans;
+ expanded investment options;
+ flexible distribution options;
+ comprehensive education and communication program.
"We have competing values here," said the Rev. Lowell G. Almen, ELCA secretary. "Plan members want options. But, we need to keep in mind the church's overall desire to provide plan members an income in retirement."
"Plan members need to get some flexibility, but the plan also needs some stability," said trustee Jon Christianson, Arden Hills, Minn.
The trustees expressed concern over the possibility of offering unlimited withdrawals from pension accounts and over how to provide adequate education regarding any changes made to the plan at future meetings. Trustees did vote to remove the requirement to annuitize by age 70-1/2, retroactive to Aug. 1, 2000, pending ELCA Church Council approval in November. They also approved the addition of two new U.S.-only funds, with a socially screened counterpart, effective April 1, 2001, pending Church Council approval in November. The trustees will consider other recommendations in November.
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[Specific information on 2001 contribution rates can be found on the Web
at www.elcabop.org.]
*Sonia C. Solomonson is managing editor for The Lutheran, the magazine
of the ELCA.
For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html
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About the Evangelical Lutheran Church in America:
The ELCA is one of the largest Christian denominations in the United States, with 2.8 million members in more than 8,500 worshiping communities across the 50 states and in the Caribbean region. Known as the church of "God's work. Our hands.," the ELCA emphasizes the saving grace of God through faith in Jesus Christ, unity among Christians and service in the world. The ELCA's roots are in the writings of the German church reformer Martin Luther.
For information contact:
Candice Hill Buchbinder
Public Relations Manager
Candice.HillBuchbinder@ELCA.org
