1. Guiding Benefits Design: Principles and Values Rev. Frank Clark Spencer, President

2. Goals 2 Fulfill Church’s covenant with teaching elders — retired, active, and yet to be ordained Serve more employees who serve the Church Provide employing organizations with flexibility and a competitive benefits package Help employing organizations be the best employers they can be Maintain financial strength

3. 3 Types of Benefits Plans Predominate in Today’s PC(USA) 3 BOP Locally Sourced Plan No Plan through Church 70% of active teaching elders Some number of teaching elders Balance of teaching elders Less than 10% of lay employees 60% of lay employees 30% of lay employees 75% of PC(USA) Employers pay for only one member.

4. Current Reality Call neutrality Community nature National portability Pension benefit from housing allowance Transitional coverage Local employment markets don’t need certain features Portability & flexibility make 403(b) plan the norm Results in 2-tiered plan serving few lay employees (number is shrinking) 4 Benefits Plan designed for ministers Lack of flexibility for other employees

5. Principles To Guide Redesign 5 The Board will continue to provide retirement and healthcare benefits to the Church’s teaching elders as mandated in the Book of Order Teaching elders have particular needs that a church agency can best fulfill, which do not exist in commercial alternatives

6. Principles To Guide Redesign 6 We are an employer-based benefit plan Board has no revenue source for healthcare other than employer contributions Employers must pay annual cost Board should provide ethical benefits that employers want, at a cost that is competitive in the marketplace Board should help employers be the best employing organizations they can be

7. Principles To Guide Redesign 7 Financial transparency is part of good stewardship Traditional percentage-based dues preserve important values for ministers Sharing cost information for other employees in dollars rather than percentages increases transparency and improves decision making for employing organizations Subsidies must be explicit to be fair

8. Principles To Guide Redesign 8 Decisions on compensation and the value of the benefits package for other employees should remain with the local employer Board should provide financial flexibility for employing organizations Unbundling of benefits – Menu based Discretion of employer contributions Employee choice of needed benefits within a range

9. Principles To Guide Redesign 9 Our goal should be to grow the number of members served Promotes relational nature of PC(USA) Models good stewardship by reducing per capita administrative costs Assess plan design for new forms of ministry

10. Our Commitment 10 Faithfulness: Keeping promises Flexibility: Meeting needs where possible Transparency: Sharing data and challenges openly Hopefulness: Expecting transformation