ELCA Board of Pensions Studies Low Clergy Salaries

MINNEAPOLIS (ELCA) -- In a sample of six of the 65 synods of the Evangelical Lutheran Church in America (ELCA), more than half the pastors were paid below synod compensation guidelines. These and other findings emerged during an ELCA Board of Pensions study done to prepare a report on pension equity. Board trustees approved the report at their Feb. 28-March 2 meeting here.
The 2001 Churchwide Assembly requested the report on pension equity. In approving the report, Board of Pensions trustees directed that the report go to the April 4-7 meeting of the ELCA Church Council in Chicago.
The study found that one of every five pastors earns a salary more than $10,000 below the guidelines. It also said, while low salaries are more prevalent in rural areas, they're quite common in other areas too.
The Board's pension unit acknowledged a serious concern about inadequate clergy compensation and pensions expressed at Churchwide Assembly and encouraged the ELCA to continue efforts to seek adequate levels of compensation for those on the church's rosters of clergy and lay leaders. The report suggested the best solution is to raise compensation levels since that would also raise pension levels.
"A far less effective solution would be to provide disproportionate pensions to narrow the inequities. However, this would not address the main issue of low compensation," the report said. "Instead, it could produce a pension program where low-salaried rostered leaders receive more income in retirement than they received while they were in active service."
During trustees' discussions, Bradley C. Engel, Walworth, Wis., said, "There are congregations that need to come to grips with the fact that they can't afford a pastor. I have some discomfort with moving forward with this report without saying that."
The report said the cost to the church would be very high to provide a minimum contribution for all sponsored members -- an estimated $4.4 million.
"We can't create money. The Board of Pensions is very good, but we aren't magicians," said T. Van Matthews, Greer, S.C.
The report noted how other churches have dealt with the issue. For example, the United Church of Christ receives a special offering each year -- as much as $1 million -- to provide relief for retired clergy and surviving spouses with extremely low incomes.
In addition to encouraging the ELCA to explore ways to meet synod compensation guidelines, the report also recommended building up the Special Needs Retirement Fund, which was created to supplement the pension of those who receive extremely low amounts. Although the fund has grown to about $2 million since its inception 10 years ago, the report said that is insufficient to provide a supplement to about 45 needy retirees and surviving spouses.
The ELCA contributed $500,000 from its 2001 budget, and the Board of Pensions added $250,000 of undesignated funds for the special fund. Other funding comes from a pension check-off from retired members and spouses.
Currently the fund provides pension supplements to 45 eligible pastors and surviving spouses for an average annual supplement of $2,570 a year, and it pays medical premiums for 12 retirees in the ELCA Medicare Supplement Plan.
In other business, board trustees discussed at length a delay and cost overruns on the enrollment and eligibility system, which will replace part of an outdated benefits administration system. "Our staff attempted to do too much with limited resources last year," explained John G. Kapanke, president, ELCA Board of Pensions.
The Board made a transition from internal record-keeping for the retirement plan to an outside vendor, a move that will allow plan members access to account information seven days a week through the Internet or an interactive voice response system.
The ELCA pension unit also finalized its transition from handling claims to an advocacy and personalized service role.
In the process, Kapanke said, the enrollment project relied too heavily on outside consultants.
"We made a mistake in trying to implement this project along with the other two projects," said Robert J. Procaccini, vice president of information systems, ELCA Board of Pensions.
Trustees approved Kapanke's suggestion to update the trustees on a revised project plan for the enrollment system by April 1. In addition, board management will bring to the trustees' August meeting a plan and policy on how projects will be planned, budgeted and monitored.
The trustees also: + Accepted, through their corporate social responsibility committee, the proxy voting guidelines to be used for companies in which the board owns shares. + Heard that the pension unit's health and wellness initiatives will be communicated to the church in several ways, including Web-based resources. + Approved amendments to the medical and dental benefits plan, including coverage for one colonoscopy every five years for plan members aged 40 or over. + Celebrated Kapanke's 30 years of ministry in the ELCA and a predecessor church body. it cou * Sonia C. Solomonson is managing editor for The Lutheran, the magazine of the ELCA.