NAD Year-end Meeting:
Pension and Salary Turmoil
LETTER FROM A CONFERENCE PRESIDENT
On October 23, 2000, Jim Brauer, president of the Rocky Mountain Conference, sent a letter to "pastors and friends" of the conference. This letter, apparently not sent to many people, included these two paragraphs:
That was, indeed, a remarkable statement. What is it all about? Our readers will recall that we have written several tracts on the pension fund crisis in the North American Division (NAD). These studies include: General Conference Retirement Fund in Trouble [WM500], Our Church Retirement Fund Crisis [WM668-669], and Changes in the Church's Pension Funds [WM838].
BACKGROUND OF THE PROBLEM
For decades, the leaders have followed the example of the U.S. federal government and used part of the retirement funds for other needs. Just as Congress found it convenient to spend Social Security funds for other things, the Adventist denomination has done the same thing. In both cases, it was felt that, since the population was growing, new additions paying into the pension fund would care for those retiring.
However, in the mid-1980s, membership in the denomination did not continue as it should and, in response to the growing laxity in standards and adherence to the original teachings of Adventism, tithes and offerings began falling off. The placated liberals believed neither in standards nor tithing, and the conservatives were rather consistently rebuked when they pled for a return to historic principles. Both sides increasingly voted with their wallets.
The result was an increasing reduction in the number of pastors who were hired. This produced a lopsided situation in which more workers were retiring than were being added to the workforce.
The earlier "defined benefit" retirement plan, which only had a pension fund equal to three times the funding for a single year, was "frozen" as of December 21, 1999. In its place, a "defined contributions plan" was started. Under it, each employing church entity makes a smaller basic, monthly tax-deferred contribution for each eligible employee, with an additional matching amount for those employees who choose to make voluntary contributions of their own through payroll deduction. No longer does the church manage the funds; instead, the individual workers do.
But the old plan still had to be kept in place for the 14,500 workers already retired and the many more who will retire under that plan in the future. This meant that, beginning in 2000, the conferences have to make contributions for both plans.
REGIONAL CONFERENCES OBJECTED
But eight of the nine regional conferences, which have a majority of black members, did not like the new plan, because their workers would henceforth have to pay more. So, prior to the changeover date, they developed a separate plan. As part of it, they now no longer contribute their 9% of tithe to support the old plan! This means that the NAD is providing retirement payments to black workers, without being reimbursed by eight former regional conferences which employs them.
Those eight conferences maintain that, in the past, they have contributed far more to the funding of the old plan than the benefits received by retired workers in those conferences. This is partly due to the fact that the amount of tithe received by those conferences is more than the number of black workers throughout the division.
Feeling that their workers were being unjustly treated, the black conferences even threatened to pull out of the pension plan entirely, and there has actually been talk of their forming a separate organizational structure! This may not occur; for such talk was primarily intended to prompt NAD leadership into effecting radical changes in the pension program which would be more favorable to the regional conferences. Crucial to the problem is whether workers should pay an increased amount into the retirement fund. This, of course, would reduce their monthly salaries. (One other predominantly black regional conference has, so far, not joined the eight in their "pension rebellion.")
That, in brief, is an overview of the pension problem. This is what the officers attending the fall 2000 year-end meeting were confronted with.
THE 2000 NAD YEAR-END MEETING
The North American Division executive committees year-end meeting convened from Sunday, October 29 through Monday, November 1.
Early in the meetings, the presidents of the eight regional conferences announced the groups intention to totally pull out of the NAD retirement program. This led to a special meeting, chaired by a General Conference NAD president (Don Schneider); during this time, everybody had a chance to air his opinions, feelings, and concerns.
Since the changeover began (January 2000), the eight regionals have withheld $7 million from the new plan. A Lake Region officer said that, in 1999, it paid in $900,000 while its retirees drew out less than $300,000. In the same period, Central States said it paid in $300,000 while its retirees drew out only $60,000.
Actually, all conferences pay more than the actual costs to fund their own retired employees. The excess helps pay benefits for overseas and institutional employees, when they retire.
But, as already noted, the regionals also object to the new plan of having current employees help pay for their own retirement. Regional officials felt that their workers, who essentially receive the same amount of pay as the non-regional conferences and entities, could not afford to make those payments.
Ultimately, no action was voted on the retirement problem, either in that special meeting or in the main session. So the matter remains unsettled. It is still hanging, and there is the possibility that the regional conferences may yet bolt from the denomination. Although that is not likely to happen, they probably will continue with their separate retirement program.
THE SALARY PROBLEM
Many wage-related challenges confront local conferences and educational institutions in North America. A number of our college and university faculty members are quitting in order to obtain better paying jobs elsewhere, and conferences are having a difficult time getting enough money to pay pastors salaries.
Some of our medical institutions, colleges and universities, Adventist Risk Management (the General Conference insurance department), and one of our publishing houses have abandoned the official church pay scales and are now paying higher salaries.
Discussion over this ongoing problem continues, but there seems to be no solution in sight. As with the retirement fund problem, no definite decisions were made, at the 2000 year-end meeting, which would solve the salary problem. The same problems had been discussed at the previous year-end meeting, also without resolution. One of the officers attending this years session said to those in attendance: "The problem I see is that there seems to be no sunset on when these discussions will end . . Is there any indication as to when the discussions will end so a decision can be made and both can move forward?"
THE IMPACT OF ALL THIS
Gradually, it seems, the denomination is falling apart. As long as we adhered to our historic standards and teachings, we were safe and united. But, since the 1950s, our denomination has encountered one problem after another.
Whether it be financial, doctrinal, standards, or whatever, the organization is gradually headed downhill. When we departed from strict obedience to our Bible-Spirit of Prophecy principles, we started to unravel.
The more we chased after Celebrationism, ecumenism, worldly standards, and the new theology, the more the Lord left us to our own ways. As it was in the days of the Judges, so it is today in our denomination. Everyone is doing what is right in his own eyes instead of what the Lord commands in the inspired Scriptures and we are suffering for it. As Moses predicted in Deuteronomy 28, the other nations are becoming the head and we are becoming the tail.
Regarding the retirement and salary problems, what will happen is that even fewer pastors will eventually be employed by the conferences, and each will shuttle back and forth between more churches. Ministers will spend even more time managing committee meetings instead of winning souls.
The publishing houses will charge even more for their books. This is unfortunate; for we had hoped that they would lower their prices on Great Controversy, etc., to match those of independent ministries.
Our academies, colleges, and universities will charge even higher rates of tuition.
Smaller amounts of money will be sent overseas for mission work, and even more will be sunk into paying local bills at home. vf