Petition Text: 21115-FA-NonDis-O

Understanding Petition Numbers

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The General Council on Finance and Administration presents to the 1996 General Conference the following recommendations concerning items in the Episcopal Fund budget for the 1997- 2000 quadrennium, to become effective at the adjournment of this General Conference.

I. Bishops Elected by Jurisdictional Conferences

A. Salary

1. Amount of Salary. The salary of a bishop newly elected in 1996 shall begin on September 1, 1996, when the assignment of the newly elected bishop becomes effective, at the annual rate established for 1996 by the General Council on Finance and Administration in keeping with the formula approved by the 1992 General Conference.

During the last two quadrennia increases in bishops' salaries have been related to the percentage increase in the Denominational Average Compensation (DAC). That formula yielded the following salary amounts: $72,654 for 1993, $75,379 for 1994, $78,771 for 1995, and $80,740 for 1996. The salary increases for the years 1997 through 2000 shall be set by the General Council on Finance and Administration at the percentage increase in the Denominational Average Compensation (DAC) figure available each year, as calculated by the General Board of Pension and Health Benefits.

The General Council on Finance and Administration will notify each newly elected bishop's salary-paying unit of the date on which payment of salary from the Episcopal Fund will begin.

2. Salary Continuance for a Surviving Spouse. The surviving spouse of a bishop who dies while in the active relationship shall receive the full salary of the bishop for the three months immediately following the month when death occurred, after which the pension of the surviving spouse (as set forth in Section I,E,5 of this report) shall take effect.

B. Episcopal Residence

1. The annual conference or conferences constituting the episcopal area shall be responsible for providing an episcopal residence in which the bishop shall reside.

2. The cost of providing the episcopal residence shall be shared proportionately between the Episcopal Fund and each episcopal area, with 67% of the cost, up to $19,000 annually, coming from the Episcopal Fund and 33% from the episcopal area.

Expenditures in excess of funds generated by this formula shall be borne by the episcopal area. The annual cost of the episcopal residence includes mortgage or lease payments, utilities, taxes, insurance, and other costs of maintaining the residence. In addition, a reserve fund of up to 10% of the value of the residence for maintenance and/or replacement, may be accumulated. To the extent that the reserve is less than 10% of residence value, a provision to fund the reserve can be made in the annual budget. In any given year, if there are unspent Episcopal Fund monies and the reserve fund is at 10%, those unspent monies shall be returned to the Episcopal Fund.

3. Each area shall organize an Episcopal Residence Committee as provided in ¶736.2- .3 (Book of Discipline).

4. The Episcopal Residence Committee shall forward annually to the General Council on Finance and Administration, observing deadlines set by the council, the projected itemized annual cost of the episcopal residence for the following calendar year. One- twelfth of the General Council on Finance and Administration- approved share for the episcopal residence shall be paid monthly from the Episcopal Fund to the person or office designated by the Episcopal Residence Committee to receive the housing payment. The council shall require an annual accounting of actual expenditures.

5. It is the intent of this policy that all bishops shall use housing provided by the area.

C. Office Expense

1. Each active bishop shall receive a grant towards office expenses in the following maximum amounts:

1997 $53,500

1998 $54,000

1999 $54,500

2000 $55,000

2. The office expense budget of each bishop shall consist of the following items of expense:

Support Staff salary

Employee benefits

Occupancy expense (rent, utilities, etc.)

Office supplies

Printing and copying

Equipment maintenance

Professional entertainment and courtesies

Financial audit or review

Postage

Miscellaneous items related to the operation

of the episcopal office

3. Budgets of episcopal office expense shall be subject to the approval of the General Council on Finance and Administration annually and shall be submitted on forms provided by the council.

4. An annual financial statement, prepared on at least a review basis by a certified public accountant or a public accountant in accordance with generally accepted accounting principles, shall be done annually for each calendar year. An audit by a certified public accountant is preferred. The financial statement shall be provided to the General Council on Finance and Administration by July 31 of the following year.

5. Purchase of office equipment and furnishings shall be a reimbursable expense. Requests for purchase shall be submitted for prior approval on forms provided by the council. Payment shall be made on submission of an invoice. A complete inventory of episcopal office equipment and furnishings shall be maintained and kept on file with the council.

6. Local and long distance telephone and telegraph expenses shall be reimbursable on submission of copies of bills or, if the telephone system is shared, vouchers from the conference or area office.

D. Moving Expense

Moving expenses of bishops, including retiring bishops, shall be paid upon the submission of an itemized statement of expenses with an accompanying copy of the freight bill, subject to the following restrictions:

1. After August 31, in the year of election or reassignment, no payment shall be made for a bishop's travel expenses arising from the failure of the bishop to move to a newly assigned area. Exception to this policy may be considered by the council.

2. The Episcopal Fund shall be responsible for the payment of only one moving expense incident to the reassignment of a bishop, the assignment of a newly elected bishop, or the relocation of a retired bishop to a permanent retirement residence.

3. Storage expense is not a reimbursable item.

4. If a bishop, upon retirement, accepts an assignment of churchwide responsibility with direct relationship and accountability to the Council of Bishops (¶509.1c,[1]), and if the assignment is such as to require residence at a specific location, the Episcopal Fund will be responsible for the payment of moving expenses to that location. In such case a bishop remains eligible for payment of moving expenses by the Episcopal Fund to a permanent retirement residence, if that move occurs within three years of the time the assignment ends.

5. If a bishop, upon retirement, accepts an assignment of churchwide responsibility with a general agency or United Methodist Church- related institution of higher education (¶509.1c,[2]), moving expenses related to such an assignment are the responsibility of the agency or institution, unless the location of the assignment is also the bishop's permanent retirement residence, in which case the Episcopal Fund will be responsible for the moving expense. A bishop whose moving expenses to such an assignment are paid by the agency or institution will remain eligible for payment of moving expenses from the Episcopal Fund to a permanent retirement residence, if that move occurs within three years of the time the assignment ends. If the Episcopal

Fund pays for moving expenses related to an assignment to a general agency or

institution, the Fund will not be responsible for any expenses related to any subsequent move to a permanent retirement residence.

E. Pension

1. Initial Pension. The initial pension of a retiring bishop shall be determined by the following guidelines and paid on this basis from the date of retirement through December 31 in the year of retirement.

a. For each year of active episcopal service up to 20 years prior to January 1, 1982, a retiring bishop elected by a jurisdictional conference shall receive pension at the annual rate of 1/20th of 40 percent of the 1996 cash salary of an active bishop ($80,740).

b. For service years as a participant in the Ministerial Pension Plan, pension benefits shall be as set forth in the applicable provisions of that plan.

c. For service years prior to 1982 for which an annual conference or conferences have pension responsibility, pension benefits shall be at the respective conference pension rate(s) prevailing at the time of retirement. Responsibility for the funding of pension benefits earned prior to election to the episcopacy, including any post- retirement adjustments, shall remain with the annual conference(s), except that, for bishops elected in 1976 or earlier, the funding of such benefits shall be the responsibility of the Episcopal Fund.

d. For service years prior to election to the episcopacy for which there is no annual conference responsibility, but for which the retiring bishop was a participant in a pension plan administered by the General Board of Pension and Health Benefits other than the Ministerial Pension Plan, pension benefits shall be as set forth in the applicable provisions of that plan. Responsibility for the funding of those benefits shall likewise be as provided in that plan, except that for bishops elected in 1976 or earlier, the responsibility for the funding of such benefits shall be the responsibility of the Episcopal Fund.

e. For service years prior to election to the episcopacy during which the retiring bishop was not a participant in any plan administered by the General Board of Pension and Health Benefits, pension benefits and the responsibility for their funding shall be as provided by the agency, institution, or other salary- paying unit to which he or she was appointed.

f. If the total pension amount for a retired bishop for both episcopal service years and for service years under appointment, as determined under subsection 1 a) - e) above, is less than minimum amounts established by the General Conference in the schedule which follows, the Episcopal Fund will supplement the bishop's pension in the amount needed to reach the minimum. The minimum amount for a bishop whose pension is not actuarially reduced due to early retirement is $20,395 in 1996. This amount shall be increased in increments as adopted in Section E,2 of this report for the ensuing years in the quadrennium.

g. If the bishop elects to retire before age 65 or 40 years of full- time service, and elects to receive pension payments before age 65, pension for service years rendered prior to January 1, 1982, shall be actuarially reduced by the lesser of (i) one-half of 1% per month or fraction of a month of age less than 65 years attained on the date the benefit is to commence or (ii) one-half of 1% per month for each month of difference between the assumed date at which 40 years of service under appointment would have been completed and the actual date the benefit is to commence.

If the bishop qualifies for the minimum pension under section 1 f) above, the actuarial reduction determined under the provisions of this section shall be subtracted from the minimum pension amount.

h. If a bishop, upon retirement, accepts an assignment of churchwide responsibility which has been approved by the Council of Bishops, up to 95% of the cash salary of an active bishop (as determined in section I,A of this report) may be paid for salary and housing, subject to provisions for payments as designated in (¶509.1c). The maximum annual amount paid a bishop accepting such an assignment would therefore be $76,703 in 1996.

2. Cost of Living Increase. All retired bishops shall receive a 3% annual cost- of- living increase for years of service as a bishop prior to January 1, 1982, based on the pension amount of the preceding year.

3. Housing Allowance Exclusion. Housing allowance exclusion for retired bishops shall be certified by the General Council on Finance and Administration. An amount equal to 100% of the pension payments received by a retired bishop, or 100% of the disability benefit payments received by a disabled bishop, shall be certified as a rental/housing allowance respectively for each retired or disabled bishop of The United Methodist Church at the time of his or her disability or retirement. This certification shall be made annually by the General Council on Finance and Administration.

4. Pension Continuance for the Surviving Spouse. The surviving spouse of a retired bishop shall receive the full pension of the bishop for the three months immediately following the month when death occurred, after which the pension of the surviving spouse shall take effect as stipulated hereunder.

5. Pension for the Surviving Spouse.

a. Benefits payable from the Episcopal Fund. To receive any benefits as a surviving spouse, the marriage must have taken place prior to the bishop's retirement.

(i) The pension benefits to the surviving spouse of a retired bishop shall initially be 70% of the pension benefits of the retired bishop attributable to service years prior to January 1, 1982, for which the Episcopal Fund has responsibility. Thereafter, there shall be a 3% cost of living increase in the benefit payable for the bishop's years of episcopal service prior to January 1, 1982.

(ii) The pension benefits to the surviving spouse of an active bishop shall initially be 70% of the benefits to which the bishop would have been entitled for episcopal service years prior to January 1, 1982, for which the Episcopal Fund has responsibility. Thereafter, there shall be a 3% annual cost of living increase in the benefit payable for the bishop's years of episcopal service prior to January 1, 1982.

b. Benefits payable for service covered by any other plan. Any surviving spouse benefits for the bishop's years of service covered by any other plan will be payable in accordance with the provisions of those plans.

6. Children of Deceased Bishops. The General Council on Finance and Administration shall determine the support of minor- aged children and dependent children with handicapping conditions who are unable to provide for their own support.

II. Bishops Elected by the Central Conferences

A. Episcopal Area Budgets and Audit Reports

1. In compliance with ¶638.4 of The Book of Discipline, the General Council on Finance and Administration shall receive from each Central Conference, on forms

furnished by the council, an annual budget of estimated receipts on apportionment of the Episcopal Fund and expenses for each episcopal office. The budget shall include salaries, housing allowances, and office expense, as recommended by the respective central conference or its committee on episcopacy.

2. After reviewing the recommended budget of estimated receipts and expenses, the council shall establish the budget and determine what amounts from the Episcopal Fund are required for the support of the episcopacy in each central conference and shall send such remittances to the bishops and/or to the treasurers administering the funds of the episcopal offices.

3. An annual financial statement, prepared on at least a review basis by a certified public accountant or a public accountant in accordance with generally accepted accounting principles, shall be done annually for each calendar year. An audit by a certified public accountant or comparable professional is preferred. The financial statement, accompanied by an English translation, shall be provided to the General Council on Finance and Administration by July 31 of the following year.

B. Salary and Housing Allowance

The salary and housing allowance of each bishop shall be recommended by the respective central conference or its committee on episcopacy and included in the episcopal area budget (Section II, A above) in accordance with ¶638.4 of The Book of Discipline.

An amount equal to at least 3% of the cash salary plus housing shall be deducted from the salary of each bishop elected by a Central Conference and credited to the bishop's personal account in the Bishop's Reserve Pension Fund. A bishop may choose to increase this percentage.

C. Office Expense

1. The office expense budget of each bishop shall include the cost of the items listed in Section I,C,2 of this report plus the estimated cost of telephone and telegraph service. The amount of such expenses shall be included in the episcopal area budget (Section II,A above), in accordance with ¶638.4 of The Book of Discipline.

2. Purchase of office equipment and furnishings shall be a reimbursable expense, and request for purchase shall be submitted for prior approval on forms provided by the council. Payment shall be made on submission of an invoice. A complete inventory of episcopal office equipment and furnishings purchased through the Episcopal Fund shall be maintained and kept on file with the council.

D. Emergency Contingency Fund

The General Council on Finance and Administration shall provide assistance for the replacement or repair of episcopal residences and episcopal offices destroyed or damaged by conditions of war or civil unrest in the Central Conferences. In consultation with the staff of the General Board of Global Ministries, priorities will be determined to respond to needs which may include some funding through that board.

E. Pensions

1. The General Council on Finance and Administration shall determine the sum to be paid for the support of an ordained minister who, having been elected by a central conference to serve as a bishop for one or more terms or for life, shall have reached the time of retirement. Where term episcopacy has been established, the pension provided shall be paid only after a minister elected as a bishop by a central conference shall have reached the age of retirement as set by the respective central conference for its bishops or shall have been retired for physical disability.

2. If the bishop is retired before age 65 or 40 years of full- time service and elects to receive pension payments before age 65, pension for service years rendered prior

to January 1, 1982, shall be actuarially reduced by the lesser of (i) 1/2 of 1% per month or fraction of a month of age less than 65 years attained on the date the benefit is to commence, or (ii) 1/2 of 1% per month for each month of difference between the assumed date at which 40 years of service under appointment would have been completed and the actual date the benefit is to commence. If the bishop elects to receive an actuarially reduced pension under this section, the General Council on Finance and Administration shall determine the sum which would have been paid to a bishop under similar circumstances who had reached the age of 65, and the actuarial reductions specified in §2(i) or §2(ii) above shall be applied to that amount.

3. The General Council on Finance and Administration shall determine the sum to be paid the surviving spouse of a deceased central conference bishop who had served as a bishop for one or more terms or for life.

4. To receive benefits as a surviving spouse, the marriage must have taken place prior to the bishop's retirement.

5. A review of pensions of retired central conference bishops and surviving spouses of central conference bishops shall be made annually.

III. Travel Expense

1. The cost of each active bishop's official travel, in accordance with episcopal travel policy guidelines, shall be paid upon the presentation of an itemized monthly expense statement filed on a form provided by the council. The supporting data required by the General Council on Finance and Administration are the customer's copy(ies) of the airline ticket, car rental bill(s), and receipted hotel/motel bill(s). Receipts or daily logs are acceptable documentation for meals and minor miscellaneous expenses. Central conference bishops may request an advance for area travel to be reimbursed by submission of monthly travel expense vouchers.

2. Air travel is normally by the most economical coach fare available. For international travel involving a one- way trip in excess of 3,000 miles, the most economical business class or excursion fare may be used.

3. The travel expense of bishops to meetings of the Council of Bishops, the College of Bishops, and authorized committee meetings of the Council of Bishops shall be paid.

4. Travel expense to annual, semiannual, or executive committee meetings of United Methodist general agencies to which the bishop is assigned by the Council of Bishops or the General Conference shall be charged to the Episcopal Fund. Expenses of travel to committee or task force meetings of a general agency or for other agency- related purposes shall be charged to that agency.

5. Travel expenses for international travel or global visitation as authorized by the Council of Bishops are paid from the Episcopal Fund on the submission of an expense report accompanied by required supporting documents. After it has determined the travel schedule of its members on international travel or global visitation, the Council of Bishops shall certify such authorized travel to the General Council on Finance and Administration to qualify incurred expenses for payment from the Episcopal Fund.

6. If, in connection with travel paid from the Episcopal Fund, a bishop wishes to travel elsewhere for work for which expenses are not chargeable to the Episcopal Fund under provisions of this report, arrangements for reimbursements for expenses related to the extended stay or additional travel should be made with the agencies involved.

7. Authorized travel of bishops to meetings of the National Council of the Churches of Christ in the USA, the World Council of Churches, and the Consultation on Church Union shall be charged to the travel fund of the Interdenominational Cooperation Fund.

8. Travel expenses of bishops who are members of the executive committee of the World Methodist Council may be charged to the Episcopal Fund to attend meetings of the executive committee.

9. For bishops elected by jurisdictional conferences, travel expenses to jurisdictional meetings of committees, commissions, or task forces to which the bishop is assigned by the Jurisdictional Conference or the College of Bishops may be charged to the Episcopal Fund. For bishops elected by central conferences, travel expenses to central conference meetings of committees, commissions, or task forces to which the bishop is assigned by the Central Conference or the College of Bishops may be charged to the Episcopal Fund.

10. Expenses of travel to seminaries within continental boundaries to counsel with students from within the area or for recruitment purposes shall be charged to the Episcopal Fund as area travel.

11. Travel to boards of trustees or directors' meetings of United Methodist- related colleges, seminaries, or institutions may be charged to the Episcopal Fund only when membership in such bodies is effected by action of the General Conference, Jurisdictional Conference, Council of Bishops, College of Bishops, or an annual conference or conferences of the episcopal area. Expenses of travel to meetings of such boards of trustees or directors in which membership is by virtue of election by the board of trustees or directors of the institution are not to be charged to the Episcopal Fund.

12. Travel expenses for addresses and lectures for which an honorarium is received are not to be charged to the Episcopal Fund.

13. Mileage rates or other reimbursement for the costs of travel by car shall be determined by the General Council on Finance and Administration. When the round trip distance outside the episcopal area exceeds 1,000 miles for any one round trip, the cost of transportation shall be paid either on the actual mileage or at the most economical air fare available, whichever is the lesser amount.

14. In the case of the death of a bishop, a bishop's spouse, or a widow or widower of a bishop, the following persons shall be eligible to attend the memorial service at the expense of the Episcopal Fund:

a. All members of the College of Bishops, active or retired, to which the bishop belonged.

b. The president of the Council of Bishops, or a representative designated by the president.

c. Bishops who are participants in the memorial service.

d. A bishop who is officially designated by a College of Bishops to represent it.

15. The surviving spouse of a bishop shall be entitled to the payment of expenses to attend the bishop's memorial service held at the Council of Bishops' meeting.

16. Expenses of travel to meetings of learned and fraternal societies, commuting expenses between residence and office, and gifts are not to be charged to the Episcopal Fund.

17. The travel expense of the spouse of a bishop shall not be charged to the Episcopal Fund except as specified above. In emergency situations, the travel expense of a spouse and minor children may be charged to the Episcopal Fund when approved by the president or secretary of the Council of Bishops and the general secretary of the General Council on Finance and Administration.

IV. Renewal Leave

The Book of Discipline provides that every bishop in the active relationship shall take periodic leaves from the regular responsibilities of the episcopacy for purposes of reflection, study, and self- renewal (¶511.1).

1. A renewal leave of a bishop shall first be approved by the College of Bishops and reported to the Council of Bishops. The secretary of the Council of Bishops will certify to the General Council on Finance and Administration the approved list of bishops to be on renewal leave.

2. During the period of a renewal leave, the following financial arrangements shall be in effect:

a. Cash salary will continue.

b. Reimbursable episcopal travel expenses will not be paid during renewal leave unless authorized by the Council of Bishops and approved by the general secretary of the General Council on Finance and Administration.

c. Reimbursement from the Episcopal Fund, supported by necessary documentation, shall be:

(1) Up to $3,000 for transportation, tuition, and housing for bishops elected by jurisdictional conferences.

(2) For central conference bishops, the total transportation cost to and from the site of the renewal leave will be reimbursed within the usual guidelines for episcopal expense and up to $2,000 may be paid for actual expenses of tuition and housing.

d. Meals during renewal leave are not considered a reimbursable expense.

e. Compensation or honoraria received for any activity during renewal leave shall be deducted from (1) or (2) above.

f. Expenses incurred in providing temporary episcopal supervision by a bishop from a nearby episcopal area during the absence of a bishop on renewal leave shall be reimbursed.

3. It is recommended that renewal leave not be taken in the same year as the bishop's scheduled global visitation.

V. Budget for the Secretary of the Council of Bishops

The General Council on Finance and Administration may authorize, upon certification of need by the Council of Bishops, a budget to provide for secretarial assistance and other expenses incurred by the Secretary of the Council of Bishops in the performance of the duties of this office. Such budget is subject to the approval of the General Council on Finance and Administration.

VI. Increase or Decrease During Quadrennium

If, in the judgment of the General Council on Finance and Administration, economic conditions are such as to require increasing or decreasing the amounts authorized in this report, the council is authorized to make such adjustments by a three- fourths majority of its total voting membership.

VII. Apportionment for the Episcopal Fund

The annual apportionment for the Episcopal Fund during the 1997-2000 quadrennium shall be equal to an amount not less than 2.0% nor more than 3.5% of the total cash salaries paid pastors and associate pastors serving pastoral charges in jurisdictional and central conferences in the most recent complete year as reported to the annual conference (The Book of Discipline, ¶925).

The apportionment for calendar 1997 shall be at a rate of 2.44% of such salaries as reported for calendar 1994. For subsequent years in the quadrennium, the General Council on Finance and Administration is authorized to increase or decrease the rate of apportionment as may become necessary or advisable, providing that the rate shall not be increased above 3.5%. The 1997-2000 Episcopal Fund recommendations are based on the current number of episcopal areas. If additional episcopal areas are created, the General Council on Finance and Administration may need to increase the apportioned amounts in 1998 and subsequent years.

VIII. Provisions of The Book of Discipline

All paragraph references to The Book of Discipline as contained in this report are to the 1992 edition. It is understood that, during the 1997-2000 quadrennium, these

will be considered as references to paragraphs of comparable content in the 1996 Book of Discipline. The General Council on Finance and Administration is directed to alter the provisions of this report to conform to any changes in The Book of Discipline or other relevant legislation that may be adopted by the 1996 General Conference.

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Petition Text: 21115-FA-NonDis-O
1996 United Methodist General Conference