Joint Statement of Metropolitan Council and Pension Board
On October 20, 2022, the Metropolitan Council of the Orthodox Church in America, meeting for its Regular 2022 Fall Session, received an extensive report from the Pension Board and engaged in a lengthy discussion about the current state of the Plan and measures to be taken moving forward to ensure its health and stability.
Following the recent 20th All-American Council, the two bodies initiated a closer collaboration fulfilling the resolution passed by the Council in Baltimore. In August, the Metropolitan Council appointed a liaison to the Pension Board, who attends the Pension Board meetings. Similarly, a representative from the Pension Board is welcome to attend meetings of the Metropolitan Council whenever the Pension Plan is discussed, and meetings of the Pension Committee.
Both bodies acknowledged the renewed and constructive spirit of collaboration and stressed that the shared goal is the well-being of the Plan for the benefit of clergy and church employees.
From the report received, the Pension Board noted that the Plan is currently solvent and continues to pay benefits regularly. Nonetheless, there was full agreement that measures must be undertaken urgently to guarantee its future. Presently, monthly contributions are less than the monthly benefits paid, which negatively affects the funding ratio. The increase in parish contributions, coupled with the increase in mandatory participation, will improve this negative situation. To ensure its funding level, the Metropolitan Council made several decisions upon the recommendation of the Pension Board.
The Metropolitan Council and Pension Board agreed that inconsistent compliance levels have had and continue to have detrimental effects on the Plan. Participation in the Pension Plan is a requirement for all eligible clergy and lay employees of the Orthodox Church in America, as mandated by the 4th All-American Council and then again confirmed by the Revised Statute of the Orthodox Church in America approved by the 19th All-American Council. Noting that the ultimate responsibility for enforcing compliance rests with each Diocesan Bishop, the Metropolitan Council approved the following resolution:
The Statute of the Orthodox Church in America provisions regarding the OCA Pension Plan and the mandates of the AACs require that all clergy, other employees, and parishes of the Church participate in the Plan;
There are issues with some required participants not participating,
The non-participation of required participants must be corrected but the Metropolitan Council does not have the ability to do so as this is within the province of the Holy Synod.
THEREFORE, IT IS RESOLVED AS FOLLOWS:
- The Holy Synod is requested to designate a joint committee with the Metropolitan Council to address the problems caused by the failure to comply with the mandate;
- If the Holy Synod will establish such a joint committee the Metropolitan Council shall appoint members to work with the Holy Synod to address the issue of the non-compliance with the mandate to participate in the Pension Plan;
- That the Holy Synod take action to enforce the mandate to participate in the Pension Plan by all eligible participants and parishes.
An essential part of compliance is to ensure that parishes participate in the plan even when no clergy is assigned or when the assigned clergy is not eligible, as provided in article 3.1 of the Pension Document. Ensuring compliance to this extent is critical for the well-being of the Plan.
The Pension Board has begun a review of its administrative costs and vendors to ensure that overall costs are kept to a minimum. To assist with the administrative costs of the Plan, the 2023 Budget approved by the Metropolitan Council includes a monthly contribution of $9,000 to share in the administrative costs.
The Metropolitan Council and Pension Board acknowledge that there are questions about the investment performance during the last ten to fifteen years. A review of the investment performance, strategies, and actuaries is being undertaken.
Further, upon recommendation of the Pension Board, and in line with the assessments and recommendations indicated in the report by the actuarial firm, Cheiron, Inc, which conducted a recent external review of the Plan, the Metropolitan Council approved the following:
a 2% increase of employer contributions for participants in the OCA Pension Plan effective January 1, 2023 (totaling 12%) and an additional 2% increase effective January 1, 2024 (totaling 14%), subject to review of parish compliance of participation in the OCA Pension Plan at the regular Fall 2023 Session of the Metropolitan Council.
The decision to increase the employer contribution level is in effect only upon the blessing of the Holy Synod, which is convening in the second week of November.
In fulfillment of provision 7 of the resolution approved by the 20th All-American Council, the Metropolitan Council and the Pension Board have agreed to meet for an in-person retreat in October 2023 for an extensive review and a comprehensive assessment of the Pension Plan.
Participating clergy and their employers are urged to make their monthly contributions timely and in the correct amounts, which exactly match the calculated amount in the OCA Pension MARC system. Contributions in lower amounts and missed contributions negatively impact the Plan. Employers and employees are also urged to ensure that the accounts from which checks are mailed have sufficient funds to clear the transactions. Checks that bounce impose bank fees on the Pension Plan. The Pension Administrator strongly suggests that, whenever possible, employer and employee contributions be sent in one check or, at a minimum, be sent together.
The OCA Pension Plan is a defined benefit plan. As such, pausing contributions, withdrawing from the Plan, and incorrect transactions, all negatively impact the entire Plan, that is, all other Plan participants.