Decision Number 481

SUBJECT TO FINAL EDITING

April 21, 1980

Constitutionality of the Ministerial Pension Plan, the Comprehensive Protection Plan and Related Legislation.

Digest

The proposed Ministerial Pension Plan and Comprehensive Protection Plan are constitutionally valid though some of the present wording and some of the related proposed legislation involve unconstitutional delegation of the legislative authority of the General Conference.

Statement of Facts

On April 18, 1980 the General Conference requested the Judicial Council to determine by declaratory decision the constitutionality of proposed legislation as follows:

1. Is the legislation proposed to the 1980 General Conference by the General Board of Pensions, and the provisions of the new language for Pars. 1704.12, 1706.2(c) and 1706.17 in particular, within the scope of authority granted to the General Conference under Par. 15 of The Book of Discipline?

2. Does the legislation proposed to the 1980 General Conference by the General Board of Pensions, and the provisions of new language for Pars. 1704.12, 1706.2(c), and 1706.17 in particular, violate the authority granted to the annual conferences under Par. 10 and 37 of The Book of Discipline?

An open hearing was held on April 18 at which two members of the legislative committee on Financial Administration and two representatives of the General Board of Pensions submitted oral and written arguments.

At the time of the original request for declaratory decision, and at the time of the open hearing, we had before us only the legislation proposed by the Board of Pensions as set forth at pages F193-198 of the Advance Edition of the DCA. On April 21 the legislative committee distributed to the General Conference a 55 page document entitled Ministerial Pension Plan (effective as of January 1, 1982), which also contains the proposed Comprehensive Protection Plan. The General Conference then broadened the scope of its request for decision to include that document and also an additional amendment to Par. 1704.12 proposed by the legislative committee which would add at the end thereof:

The General Board of Pensions shall report to the General Conference, pension and benefit funds, plans, and programs to the proposed or any revisions made between General Conferences to funds, plans, and programs then in force for the General Conference to receive, review, adopt, approve or otherwise act upon this report.

Jurisdiction

he Judicial Council has jurisdiction under Par. 2507 of the Discipline.

Analysis and Rationale

We have been asked about all of the proposed legislation, not just the 55 page document and the three subparagraphs of the Discipline particularized in the original request, one of which would be further amended by the subsequent recommendation of the legislative committee. In doing so we must consider not only the proposed changes but the validity of the involved paragraphs of the Discipline as they would read after such amendments.

Par. 15 of the Constitution gives the General Conference full legislative power over all matters distinctively connectional. The enactment of provisions relating to pensions which apply uniformly to all ministers, or to lay employees of constituent units of The United Methodist Church, is a distinctively connectional matter. Such General Conference legislation has repeatedly been held binding upon the Annual Conferences. See, for example, Decisions No. 304 and 360.

The General Conference has the constitutional authority to adopt the proposed plans. In present form, however, the plans and some of the related proposed legislation, involve unconstitutional delegation of the legislative authority of the General Conference.

The legislative power is granted by the Constitution only to the General Conference and may not be validly delegated by it to a General Board. Decision No. 364 relates to another board and reads in part:
The General Conference of The United Methodist Church is the highest legislative body. The Church Constitution empowers this conference alone with certain legislative functions and responsibilities. Such legislative powers may not be delegated.

Similarly, we have repeatedly held that the General Conference may not delegate its constitutional legislative power even to the Annual Conferences which are defined in the Constitution as the fundamental and basic bodies of the Church (Par. 10 and 37). To this effect are Decisions No. 339 and 409.

If the proposed legislation were adopted as presently worded, this constitutional principle would be violated in the following respects:

1. Par 1704 in subparagraph 2 would purport to authorize the General Board of Pensions to ". . . revise, continue, discontinue, create and consolidate pension and benefit plans . . ."

2. Par. 1704.12 would purport to authorize the General Board of Pensions to administer pension plans " . . . for such time and in such manner as may be deemed by the board to be reasonably necessary to fulfill the purposes thereof . . . " The last sentence of that same paragraph would speak of "revisions made [by the General Board of Pensions] between General Conferences to funds, plans, and programs then in force. 3. Sec on 1.1 of the proposed Ministerial Pension Plan would state that the General Board of Pensions " . . . hereby establishes a pension plan." The same statement would be found in Section 1.1 of the proposed Comprehensive Protection Plan.

4. Section 9.l of the former plan and 8.l of the latter would state that ". . . the General Board shall have the right to amend this plan at any time."

5. Section 9.2 of the former and 8.2 of the latter would purport to reserve to the General Board the right to terminate the plans at any time.

Only the General Conference has authority to create, establish, revise, amend, terminate or continue for such time and in such manner as it deems reasonably necessary the various pension plans of The United Methodist Church.

There is considerable analogy between the pension plans of The United Methodist Church and the federal taxation system of the United States. Only Congress may enact and revise the Internal Revenue Code though its administration is entrusted to the Treasury Department and the Internal Revenue Service. The Treasury Department may adopt detailed regulations and administrative procedures, valid so long as they are in conformity with the Code. If provisions of the Code are to be added, deleted or revised, however, it must be by Congressional action.

We note that the Constitution reserves to the Annual Conference specific rights relating to its ministerial members and ". . . such other rights as have not been delegated to the General Conference . . ." Historically pension legislation has reserved to the Annual Conference the right to determine the level and method of participation in pension plans and to determine how the Conference will provide and manage funds to underwrite its pension payments to its own members and their families. The Annual Conference is the basic employer unit for the ministers in its membership. The proposed plans recognize this principle. They preserve for the Annual Conference broad powers. Among these are:
1. Determination of admissibility and validity of service years and the payments, disallowances and deductions thereunder. (Par. 1706.1)

2. Approval for pension credit, eligibility for pension and allocation of responsibility. (Par. 1706.4)

3. The power to revise, correct or adjust a minister's record of pension credit. (Par. 1706.6)

4. The responsibility for Pensions for service rendered shall rest with the Annual Conference. (Par. 1706.9)

5. Authority to establish, incorporate, maintain investment funds for support of pension program through the Conference Board of Pensions and to make disbursements therefrom. (Par. 1706.12(a) and (b))

We do not find the constitutional rights of the Annual Conference infringed by the proposed plans or legislation.

With respect to the delegation of authority to the General Board of Pensions, we are not unmindful of difficult practical problems. We recognize that changes in federal or state law may make some modifications highly desirable or even imperative in the four year interval between General Conference sessions. There is precedent for delegation of specifically limited power to modify to the extent necessary to conform to requirements of secular law. See, for example, Pars. 2424, 2428, and 2430.

There is another practical problem. In addition to the "Ministerial Pension Plan" and the "Comprehensive Protection Plan" which we understand this General Conference will be asked to adopt, the proposed legislation also refers to a "Lay Pension Plan" and a "Basic Protection Plan". We are advised that it has not yet been possible to prepare the detailed provisions of these plans but they are to be essentially identical with the other two except for definition of the persons to be covered. We are told that it is also essential that these plans be submitted for Internal Revenue approval and become effective January 1, 1982. Only the General Conference can adopt such plans, but the General Conference might see fit to adopt them now with the provision that they are to be substantially identical to the others but with appropriate wording changes to reflect the differences in persons covered and with the Board of Pensions having authority to make technical modifications needed for conformity with secular law or necessary for Internal Revenue qualification, any such changes to be reported to the next General Conference for its action.