By Ron Matthews

THE RECENT WAVE of corporate scandals and subsequent devaluing of employee pension plans contributed to a downturn in the economy and major losses in the assets of most Americans. Behind the financial crisis is a crisis of confidence in management.

I believe we will realize improvements in fiscal policy and accounting practices, but in the meantime we live with lingering distrust and many concerns about our national and personal financial status.

I receive questions from folks who are concerned about the General Board of Pensions. People wonder how secure our program is and how they should invest their retirement monies in today's market. I am pleased to provide the following information and reassurance concerning the pension funds related to the members and participants of Holston Conference.

Pre-1982 pensions

As celebrated at the 2002 Annual Conference, the Legacy of Commitment pensions campaign was a success. We exceeded our goal of $7.8 million with a total commitment of $8.1 million. As of this date, the conference pension office has received $5.2 million in cash toward this goal. The remaining $2.9 million will be paid over the next four years. It is vitally important that persons who have made pledges honor their commitments. The outstanding balance for this fund will be the primary source to provide funding for future increases in the pre-1982 past service rate.

The conference Board of Pensions (BOP) meets each spring to set the recommended rates for past service years (pre-1982). The Pension Trust Fund for pre-1982 claimants is invested in the Diversified Investment Plan with the General Board of Pensions. With this plan now fully funded, the BOP hopes to be able to provide much deserved increases in the rates in the next few years. Obviously, this is influenced by the economy and the receipt of the campaign pledges. There is no guarantee that raises will be possible each year. The good news is that all those persons with pre-1982 years of service have a fully funded plan and the assurance that they will receive a pension.

Post-1982 pensions

The General Board of Pensions (GBOP) has an exemplary performance record. Pension funds on deposit with the GBOP are secure. There are no greedy CEOs or CFOs funneling our assets into their personal accounts!

As most of our participants realize, the Ministerial Pension Plan – the part paid by each church for their pastor or pastors as well as the Laity Pension funds – is invested in the Diversified Investment Fund (DIF). The Personal Investment Plan for clergy and lay employees has many investment choices available to the individual. Many folks choose to mix their personal funds across those various areas.

For example, Special Fund II is concentrated in the stock market. The potential for greater returns should be considered in light of the risk for market downturns.

Generally, the closer one is to retirement the more conservative their investment choice should be. My rule of thumb: If you are uncomfortable with risk, stay with DIF. The GBOP has set a minimum return of 3 percent for this fund. This is not a guaranteed rate, but is one they continue to honor and believe will be maintained. In the past, special distributions have been made to the participants in the DIF. The historical performance of DIF over the past 25 years is 11.5 percent.

Check out the GBOP website at www.gbophb.org for more detailed information. You can also access your personal account balances and make changes online. So, what's in your pension plan? That depends on how much you have personally contributed and your personal investment choices.

Our participants can be confident in the management and investment policies of the GBOP. Our pension program is as sound and secure as any fund can be. Having said that, I am keenly aware that the future is filled with uncertainty and so, I try to follow the practical advice given me many years ago: "Plan as though you are going to live. Live as though you are going to die." This approach – coupled with the sage advice of John Wesley, who said, "Make all you can. Save all you can. Give all you can."– continues to guide my path.

The Rev. Matthews is Holston Conference director of finance services and stewardship.

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