Board of Pensions Improves Benefits for Current & Future Retirees

2022 news 1The Board of Pensions of the Church of the Nazarene voted at its February 8, 2022 meeting to provide a “bonus” payment for persons currently receiving a supplemental pension from the Single Defined Benefit Plan (SDBP). This represents the first such benefit enhancement since 2006.

The board also authorized a study to develop strategies to increase contributions to the accounts of active employee participants of the 403(b) Retirement Savings Plan through incentives to participants and their church employers, according to Kevin P. Gilmore, executive director of Pensions and Benefits USA (P&B).

These results were made possible through stable support to the P&B Fund by districts and churches and strong market returns in recent years (see Annual Report Shows Positive Trends for Pensions and Benefits Programs).

The board action will provide an additional month’s supplemental pension benefit in 2022 for SDBP participants as soon as administratively possible. Gilmore said he expects retired ministers or surviving spouses will see the extra funds by the end of April.

For those who qualify, P&B already provides Annual Pension Supplements (APS) to the 403(b) accounts of ministers, in addition to making available a survivor benefit and long-term disability insurance. Gilmore said P&B is working on developing incentive-based strategies to contribute more to the accounts of those who start or increase their own level of contributions to the plan, including employer contributions.

“Our 403(b) plan is already in the bottom quartile when it comes to fees and costs, as verified in 2019 by a third-party review,” Gilmore said. “But the board also acted to eliminate the $39 annual fee assessed to 403(b) participants through Fidelity Investments. This is a benefit improvement for every participant in the plan.” This action becomes effective with the 2022 calendar year. (Note: fees paid from accounts on January 3, 2022, were for the final quarter of 2021).

In other action, P&B was authorized to coordinate with Fidelity Investments to add a Roth option to the 403(b) plan.

Gilmore said the board previously acted in October to preserve recent gains in funded status through a more conservative investment strategy for assets within the SDBP pension trust. This strategy will be implemented by the church’s Investment Committee over the course of the next year through approved changes.

“Supplemental pension benefits have not improved since 2006 as the board has prioritized its focus on increasing the funded status of the Single Defined Benefit Plan to secure these benefits for current and future retirees,” Gilmore said. “This is the first of what we hope will be future incremental steps to continually enhance these and other benefits for our ministers as giving to the P&B Fund remains strong and economic conditions allow.”