Decision Number 389

Petition from the Eastern Pennsylvania Annual Conference for a Declaratory Decision as to Whether the Conference Board of Pensions Is Following the Discipline and the Plan and Basis of Union in Their Method of Calculating Applicable Annuity Rates for Ministers, Widows, and Children as a Result of Changes in Borders Effected as of January 1, 1970.

Digest

The responsibility for ministerial pensions for service approved for pension credit rests with the Annual Conference in which the service was rendered or its legal successor,

Statement of Facts

Effective January 1, 1970, the Central Pennsylvania (M) and the Philadelphia (M) Conferences voted an exchange of charges between the two conferences. The exchange involved two segments of territory. A group of approximately 20 charges in Dauphin County, Pennsylvania, moved from the Philadelphia (M) Conference to the Central Pennsylvania (M) Conference. Further, a group of approximately 20 charges around Shamokin, Mt. Carmel, and Hazelton, Pennsylvania moved from the Central Pennsylvania (M) to the Philadelphia (M) Conference.

The change in boundary lines was approved by the Northeastern Jurisdictional Conference held at Buchannon, West Virginia, July 24-27, 1968.

The effective date for the boundary change, with the transfer of charges, coincided with the merger of the Methodist Conferences, namely Central Pennsylvania (M) and Philadelphia (M) with the Evangelical United Brethren Conferences of Eastern (EUB) and Susquehanna (EUB), into what is now Central Pennsylvania and Eastern Pennsylvania Conferences of The United Methodist Church.

In preparation for the 1970 merger of the Evangelical United Brethren and Methodist Conferences, a Joint Distributing Committee, representing the Distributing Committee of the merging conferences, met in Harrisburg, Pennsylvania, on September 12, 1969, in accordance with the authority granted in Paragraph 1383 of the 1968 Discipline.

The Joint Distributing Committee at the September 12, 1969 meeting accepted the suggestion of the General Board of Pensions, and after discussion, adopted the following principle:
a. All approved service to pastoral charges shall be allocated to the successor conference within whose geographical boundaries the charge is located. (emphasis added)

The principle for merger was adopted by the majority over vigorous protests of the three Philadelphia (M) representatives. The objection raised by the Philadelphia representatives was that while this formula may be acceptable for establishing pension responsibility for the Evangelical United Brethren ministers involved in the merger, the application of this principle to the ministers of The Methodist Church would work an unfair hardship on the Methodist ministers in Dauphin County, and establish an unwarranted benefit upon those Methodist ministers leaving the Central Pennsylvania (M) Conference and being transferred by change of territory to the Philadelphia (M) Conference.

The Philadelphia (M) and Eastern (E U B) Conferences, in preparation for merger on January 1, 1970, adopted a document entitled Plan and Basis of Union. This document was the basis for the merger forming the Eastern Pennsylvania Conference of The United Methodist Church.

It was agreed in the Plan and Basis of Union under the section of pensions that no retiree of either former conference would receive less retirement income than he or she had received in the past.

As time passed after the trade of charges, the successor conferences accepted the pension responsibility associated with the merger and the boundary changes. The Eastern Pennsylvania Conference Board of Pensions, however, began paying a Dauphin County supplement to the annuity credit of those ministers under appointment or retired who had served in Dauphin County who were formerly members of the Philadelphia (M) Conference, but since merger and the boundary change of January 1, 1970, are the responsibility of the Central Pennsylvania (UM) Conference.

The reason for the supplement was the lower annuity rate of the Central Pennsylvania (M) Conference compared to annuity rate of the Philadelphia (M) Conference. By the action of the Joint Distributing Committee, all approved service to pastoral charges (including Dauphin County) shall be allocated to the successor conference within whose geographical boundaries the charge is located. There was concern by some members of the Philadelphia (M) Conference for the years of service in Dauphin County charges, which now, because of boundary changes, would be paid, on retirement, at the lower annuity rate of the Central Pennsylvania (UM) Conference.

Some of the former Philadelphia (M) Conference ministers, both active and retired, who had some service in churches which were moved to Central Pennsylvania (UM), believed they should be receiving, when retired, the annuity rate of the Eastern Pennsylvania (UM) Conference for all their years of service in the Philadelphia (M) Conference.

After discussion the Eastern Pennsylvania (UM) Conference voted:

That all pastors active and retired having served churches in Dauphin County in the former Philadelphia Conference and all others affected, thereby accruing approved years of service for pension credit during those years, shall receive the current Eastern Pennsylvania Conference pension rate to be paid by our Conference Board of Pensions for said approved years of service.

1974 Journal, Eastern Pennsylvania Conference United Methodist Church, Volume 2, p. 414

What is now being called into question with this appeal is the legality of these provisions of the Plan and Basis of Union with regard to pensions:

2. That no retired minister, minister's widow, or dependent child who is receiving financial benefits at the time of union, or is eligible to receive them through conference agencies in either of the two said Conferences shall receive less retirement income from these sources than he or she has received in the past.

4. Service Annuity credits granted by the respective conferences involved up to January 1, 1970 shall be recognized by the successor conference.

Philadelphia Conference 1969 Journal, p. 610

The action of the Joint Distributing Committee at Harrisburg, Pennsylvania, September 12 , 1969 was that:

1. All approved service to pastoral charges shall be allocated to the successor conference within whose geographical boundaries the charge is located. (emphasis added)

Is this action, as far as the Dauphin County pastors are concerned, contrary to Paragraph 1379, Article 9, of the 1968 Discipline:
The responsibility for pension for service approved for pension credit shall rest with the annual conference in which the service was rendered or its legal successor.

The Eastern Pennsylvania Annual (UM) Conference voted to petition the Judicial Council for a declaratory decision:
As to whether or not the Conference Board of Pensions is following the Discipline and the Plan and Basis of Union in their method of calculating applicable annuity rates for ministers, widows and children as a result of changes in borders effected as of January 1, 1970 between the former Philadelphia Conference (M) and the former Central Pennsylvania Conference (M) coincidentally with the establishment of the Central Pennsylvania (U) and the Eastern Pennsylvania (U) Conferences.

Eastern Pennsylvania Journal 1974. Vol. 1, p. 93, and Vol. 2, p. 414

Jurisdiction

The Judicial Council has jurisdiction under Paragraph 1515 of the 1972 Discipline.

Analysis and Rationale

The basic question asked of the Judicial Council by the petitioner, is: Isthe Eastern Pennsylvania Conference Board of Pensions following the Discipline in their method of calculating applicable annuity rates for ministers, widows, and children. as a result of changes in borders effected as of January 1, 1970 between the former Philadelphia (M) Conference and the former Central Pennsylvania (M) Conference?

The authority for fixing the annuity rate for ministers is clearly the responsibility of the Annual Conference, without restriction.

Paragraph 1379.7 of the 1968 Discipline and Paragraph 1259.7 of the 1972 Discipline state:

The annuity rate for approved service of conference members shall be determined each year by the Annual Conference without restriction, but it is recommended that such rate be not less than 1 percent of the average salary of the conference as computed by the General Board of Pensions . . .

The 1968 and the 1972 Disciplines explicity state that:

The responsibility for pensions for service approved for pension credits shall rest with the Annual Conference in which the service was rendered or its legal successor. (Par. 1379.9 of the 1968 Discipline)

The 1972 Discipline statement is the same except that at the conclusion of the 1968 statement these words are added: . . . according to the principle ofdivided pension responsibility. (Par. 1259.9 of the 1972 Discipline)

It is evident from informal discussion with and memo extracts from the staff members of the General Board of Pensions who were present, and from members of the Distributing Committee who represented the Philadelphia (M) Conference, that the principle of merger suggested by the General Board of Pensions and adopted by the Joint Distributing Committee was:1. All approved services to pastoral charges shall be allocated to the successor conference within whose geographical boundaries the charge is located. (emphasis added)

This is in direct conflict with Paragraph 1379.9 of the 1968 Discipline:

9. The responsibility for pension for service approved for pension credit shall rest with the Annual Conference in which the service was rendered or its legal successor.

as it relates to the boundary and charge exchanges between the Philadelphia (M) and Central Pennsylvania (M) Conferences.

The principle used by the Joint Distributing Committee is declared invalid, as the responsibility for pensions rests with the Annual Conference in which the service was rendered, or its legal successor, not where the charge is located geographically, after merger.

The Eastern Pennsylvania Conference of The United Methodist Church is responsible for the pension credit and payment of all members active and retired of the Philadelphia (M) Conference including those who had years of service in Dauphin County prior to January 1, 1970. Years of service on January 1, 1970 and after in the exchanged area are the pension responsibility of the Central Pennsylvania (UM) Conference.

Decision

The responsibility for ministerial pensions for service approved for pension credit rests with the Annual Conference in which the service was rendered or its legal successor. The successor conference to the Philadelphia (M) Conference is the Eastern Pennsylvania (UM) Conference. Any action of the Joint Distributing Committee or a plan and basis of union for merging of Annual Conferences which is in conflict with this principle is null and void.

(EUB) denotes Evangelical United Brethren (M) denotes Methodist (UM) denotes United Methodist