A provision was added that allows clergy appointed to less than full-time service and student local pastors to elect not to participate in MPP.
A provision was added clarifying that the MPP contribution rate is 12% of the DAC for persons on disability leave who have not been approved for benefits from the Comprehensive Protection Plan. The amount of these contributions will increase annually by 3%.
All references to clergy contributions and accounts have been removed except for some references in Supplement One pertaining to conference that require use of pre-1982 personal contributions to fund the formula benefit.
A provision was added that, in the event of a participant's divorce, would void any beneficiary designation made prior to the divorce in favor of the spouse. The spouse would be treated as if he/she had predeceased the participant.
Distinctions have been made between the Board as administrator and the Board as trustee.
A provision was added that allows the Board to pay a participant a single sum payment in lieu of an annuity if the amount of the annuity payment is less than a minimum amount determined by the Board.
The section dealing with benefits at termination of employment was changed to clarify that persons with vested Supplement One benefits cannot have a lump sum distribution of the balance in their account even if the balance is less than one-fourth of the DAC.
A provision was added that allows disabled participants to withdraw up to 25% of their account balance as a lump sum or as a period certain annuity.
A refusal of benefit provision was added that allows a beneficiary to refuse all of the payment to which he/she might otherwise be entitled. In the event of a refusal, benefits will be paid as if this beneficiary had predeceased the participant.
A provision was added to permit the Board will be to pay a relative, friend or legal representative of an individual who is entitled to receive a benefit but is incapable of handling his/her own financial affairs. The payment is to be used exclusively for the benefit of the incapacitated individual.
A provision was added that explains what will happen to unclaimed benefit payments if at the time of the required beginning date for payment there is no current mailing address on file with the Board.
A provision was added that outlines the duties and responsibilities of Plan Sponsors.
A provision was added that allows the administrator to charge users directly for non-routine services provided to participants or Plan Sponsors.
The plan clarifies the provisions of the plan are to be construed under Illinois law, unless preempted by federal law.
A provision was added that requires disputes between a Plan Sponsor and the Board to be settled through the use of a mediation/binding arbitration process.
The provision relating to Adoption Agreements completed by conferences and general agencies was changed so that if a Plan Sponsor fails to complete a new Adoption Agreement at least thirty days prior to the beginning of the next Plan Year, the old Adoption Agreement will continue in force for the next Plan Year.
The pension credit provisions of Discipline paragraph 1606 were added to Supplement One.
The retirement benefit provisions of Supplement One were revised to clarify that the spouse of a participant at retirement (provided the marriage took place prior to the cessation of service Under Episcopal Appointment) is the contingent annuitant of the pre-1982 benefit. In the event of divorce after retirement, this will assure the former spouse of receiving continued benefits if the participant predeceases the former spouse.
The vesting provisions found in Discipline paragraph 1606 were added to Supplement One.
All references related to automatic increases in the pension rate have been removed from Supplement One.
The Supplement One reference to the Adoption Agreement clarifies that a conference cannot execute a new Adoption Agreement that would reduce either the pension rate or the percentage payable to surviving spouses.
The Supplement One definition of "Pension Rate" was changed so that conferences will no longer be able to elect a lower pension rate for its local pastors than it provides for its conference clergy members.
Ministerial Pension Plan
Article I The Plan
1.01 The Plan. The General Conference of The United Methodist Church had previously authorized the establishment of the Ministerial Pension Plan, effective January 1, 1982. Effective as of January 1, 1998, the General Conference hereby amends and restates the Ministerial Pension Plan (hereinafter referred to as the "Plan") for the exclusive benefit of the Eligible Clergy and their Beneficiaries in accordance with the terms and conditions set forth in the Plan. In addition, retirement benefits based on service prior to January 1, 1982, if any, shall be set forth in Supplement One to the Plan and shall be provided by this Plan.
1.02 Applicability. The provisions of this Plan are applicable only to those persons associated with a Jurisdictional Conference or the Puerto Rico Methodist Church who meet the requirements for participation on or after January 1, 1982.
1.03 Type of Plan. The Plan is intended to meet the requirements of a "church plan" as that term is defined in section 414(e) of the Internal Revenue Code of 1986, as amended, and be administered pursuant to the retirement income account provisions of section 403(b)(9) of the Internal Revenue Code of 1986, as amended.
Article II Identification and Definitions
Whenever used in the Plan, the following terms shall have the respective meanings set forth below, unless otherwise expressly provided herein. When the defined meaning is intended, the term is capitalized.
2.01 "Account" shall mean the account maintained for each Participant in the books and records of the Plan for the purpose of recording contributions made to the Plan by the Plan Sponsor or Salary-Paying Unit on behalf of a Participant pursuant to Section 4.01, adjusted for earnings and losses allocated thereto.
2.02 "Act" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
2.03 "Administrator" shall mean The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Illinois and any successors.
2.04 "Adoption Agreement" shall mean the agreement adopted by a Plan Sponsor in accordance with the provisions set forth in Article IX.
2.05 "Annuity Starting Date" shall mean the first day of the month for which an amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity, the first day of the month coinciding with or following the completion of all events which entitle the Participant to such benefit. In the case of a deferred annuity, the Annuity Starting Date shall be the date on which the annuity payments are scheduled to commence.
2.06 "Beneficiary" shall mean the person(s) (natural or otherwise), other than a Contingent Annuitant, designated as set forth in Section 5.02d, who is receiving, or entitled to receive, a deceased Participant's (or annuity- certain payee's) residual interest in this Plan which is nonforfeitable upon, and payable in the event of, such Participant's or payee's death.
2.07 "Book of Discipline" shall mean the body of church law as established by the General Conference of The United Methodist Church, as amended from time to time.
2.08 "Break in Service" shall mean a continuous period in excess of five months during which the individual is a Terminated Participant.
2.09 "Clergy" or "Clergyperson" shall mean a person described in Section 3.01(a)(1)-(5).
2.10 "Code" shall mean the Internal Revenue Code of 1986, as amended or replaced from time to time.
2.11 "Compensation" shall mean, in a Plan Year, for a Participant who has not retired under the provisions of the Book of Discipline, the sum of the following:
a. taxable cash salary received from Plan Sponsor-related sources, but not including severance pay and the cash value of taxable fringe benefits;
b. housing allowance; or when a parsonage is provided, 25% of the cash salary plus any salary reduction in Section 2.11c below as the approximate value of that parsonage; and
c. contributions made pursuant to a salary-reduction agreement with respect to employment with the Plan Sponsor: (i) to a plan qualified under section 125 of the Code; or (ii) to a tax-sheltered annuity described in section 403(b) of the Code.
Cash salary from Plan Sponsor-related sources in excess of $150,000 shall be disregarded. Such amount shall be adjusted at the same time and in such manner as permitted under Code section 415(d).
2.12 "Comprehensive Protection Plan" shall mean the plan of the same name administered for the benefit of United Methodist clergy by the Administrator.
2.13 "Conference" shall include Annual Conferences, Provisional Conferences and Missionary Conferences which are described in the Book of Discipline and which are located in Jurisdictional Conferences and the Puerto Rico Methodist Church.
2.14 "Conference Average Compensation" shall mean the average annual compensation of Participants related to a specific Conference, which average shall be determined in accordance with procedures established by the Administrator.
2.15 "Contingent Annuitant" shall mean the person who, with a Participant, is the one upon the continuation of whose life the amount and/or duration of the pension benefit under this Plan depends.
2.16 "Contingent Annuity" shall mean an annuity for the life of the Participant with a survivor annuity for the life of his/her Contingent Annuitant which is not less than one- half, or greater than, the amount of the annuity payable during the joint lives of the Participant and his/her Contingent Annuitant. The Contingent Annuity will be the amount of benefit which can be purchased with the Participant's account balance. Unless elected otherwise by the Participant with spousal consent, the percentage of the Contingent Annuity will be 70%.
2.17 "Contribution Base" shall mean one of the following elected by the Plan Sponsor in its Adoption Agreement:
a. a Participant's Compensation not to exceed the Denominational Average Compensation;
b. a Participant's Compensation not to exceed 150% of the Denominational Average Compensation; or
c. a Participant's Compensation.
2.18 "Denominational Average Compensation" shall mean the average annual compensation of Participants determined in accordance with procedures established by the Administrator.
2.19 "Disabled or Disability" shall mean the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. The permanence and degree of such impairment shall be supported by medical evidence.
2.20 "Early Retirement Date" shall mean the first day of the month (prior to Normal Retirement Date) coinciding with or following the date on which a Participant or Former Participant attains the Early Retirement Age. Said Early Retirement Age shall be determined in accordance with Paragraph 452.2b of the Book of Discipline. However, if a person retires in accordance with Paragraph 452.2a or Paragraph 452.3 or is a Terminated Participant, said Early Retirement Age shall be age 62.
2.21 "Effective Date" shall mean January 1, 1998.
2.22 "Eligible Clergy or Eligible Clergyperson" shall mean a Clergyperson who meets the requirements of Article III for participation in the Plan.
2.23 "Entry Date" shall mean the date upon which an Eligible Clergyperson becomes a Participant, and initially shall be the Effective Date and subsequently shall be determined in accordance with Section 3.03 herein.
2.24 "Former Participant" shall mean a person who has been a Participant, but who has ceased to be a Participant for any reason.
2.25 "415 Compensation" shall mean compensation as determined by Code section 415 and the Regulations promulgated thereunder.
2.26 "Late Retirement Date" shall mean the first day of the month coinciding with or next following a Participant's actual retirement date after having reached his/her Normal Retirement Date.
2.27 "Normal Retirement Date" shall mean the first day of the month coinciding with the date specified in Paragraph 452.2c of the Book of Discipline.
2.28 "Participant" shall mean an Eligible Clergyperson who has become a participating Clergyperson as provided in Article III of this Plan.
2.29 "Plan" shall mean this instrument, including all amendments thereto.
2.30 "Plan Sponsor" shall mean an entity described below:
a. the General Council on Finance and Administration if the Participant is a bishop;
b. the Conference if the Participant is a local pastor or a clergy member, except if the person is appointed in accordance with paragraphs 443.1a(2), (3) or (4), 443.1b, or 443.1d of the Book of Discipline;
c. the General Council on Finance and Administration if the Participant is appointed to serve a general agency which has a voting representative on the Committee on Personnel Policies and Practices which is a committee of the General Council on Finance and Administration; or
d. the Salary-Paying Unit if the Participant is classified in a category not described above.
2.31 "Plan Year" shall mean the calendar year.
2.32 "Regulation" shall mean the Income Tax Regulations as promulgated by the Secretary of the Treasury or his/her delegate, and as amended from time to time.
2.33 "Salary-Paying Unit" shall mean one of the following units associated with The United Methodist Church:
a. the General Conference;
b. a general agency of The United Methodist Church;
c. a Jurisdictional Conference;
d. a Conference;
e. a Conference board, agency, or commission;
f. a local church located in a Conference;
g. any other organization located in a Jurisdictional Conference which is eligible to participate in a church plan in accordance with applicable federal law; or
h. any other entity to which a Clergyperson Under Episcopal Appointment is appointed.
2.34 "Terminated Participant" shall mean a person who has been a Participant, but whose Conference relationship has been severed by such means as honorable location, withdrawal to unite with another denomination, surrender of ministerial credentials, or surrender of the local pastor license.
2.35 "Trustee" shall mean The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Missouri and any successors.
2.36 "Under Episcopal Appointment" shall mean an appointment made by a bishop pursuant to Sections V and VI of Chapter 3 of the Book of Discipline or pursuant to rules of the Puerto Rico Methodist Church.
2.37 "Vested" shall mean the portion of a Participant's benefits under the Plan that are nonforfeitable.
Article III Eligibility for Participation
3.01 Conditions of Eligibility.
a. A person who meets the enrollment requirements of Section 3.02 below shall be a Participant in this Plan on January 1, 1982, if on such date the person is eligible to participate in a "church plan" and is:
(1) a bishop of The United Methodist Church elected by a Jurisdictional Conference;
(2) a bishop of the Puerto Rico Methodist Church;
(3) a clergy member in full connection, probationary member, or associate member of a Conference Under Episcopal Appointment;
(4) a local pastor of a Conference Under Episcopal Appointment and who has been previously approved by the Board of Ordained Ministry and classified as eligible for appointment as full-time, part-time, or student;
(5) a clergyperson of another denomination who is Under Episcopal Appointment within a Conference provided such person is not participating in a pension program of the denomination to which such person belongs.
b. After January 1, 1982, a person who meets one of the conditions of Section 3.01a above shall become a Participant in the Plan on the effective date of participation described in Section 3.03.
c. A person shall become a Former Participant on the date on which said person no longer has an assignment or appointment that meets one of the conditions of Section 3.01a above. This Section 3.01c shall not apply to those Participants who are granted a disability leave pursuant to the Book of Discipline, provided that either the Comprehensive Protection Plan makes the required contribution to the Account or the Plan Sponsor makes the required contribution to the Account.
3.02 Enrollment by Plan Sponsor.
a. Required Participation. A Plan Sponsor described in Section 2.30a, b, or c herein shall be required to enroll each of its Eligible Clergy described in Section 3.01 above effective on the Entry Date described in Section 3.03 below.
b. Elective Participation. A Plan Sponsor described in Section 2.30d herein may elect to enroll its Eligible Clergy by (1) completing an Adoption Agreement in accordance with the provisions of Article IX and (2) enrolling them in such form as may be required by the Administrator.
c. Effect of Enrollment. An Eligible Clergyperson who is enrolled in the Plan shall be deemed to have agreed to be bound by the terms and conditions of the Plan and all amendments thereto.
3.03 Effective Date of Participation.
a. Required Participation. An Eligible Clergyperson serving a Plan Sponsor described in Section 2.30a, b or c shall become a Participant in the Plan effective as of the date on which he/she was elected as a bishop or the date on which he/she began Under Episcopal Appointment.
b. Elective Participation. An Eligible Clergyperson serving a Plan Sponsor described in Section 2.30d shall become a Participant in the Plan effective as of the later of the effective date of the Adoption Agreement or the date of enrollment by the Plan Sponsor.
3.04 Determination of Eligibility. Upon receipt of enrollment information from the Plan Sponsor, the Administrator shall accept such information as evidence of eligibility for participation in the Plan. However, the Administrator may from time to time audit such information or obtain additional information which might result in a determination of ineligibility for any particular participant. The Administrator shall have final authority to determine the eligibility of any Clergyperson and such determination shall be conclusive and binding upon all persons, as long as the determination is made pursuant to the provisions of the Plan and the Adoption Agreement.
3.05 Omission of Eligible Clergyperson. If, in any Plan Year, any Clergyperson who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by his/her Plan Sponsor for the year has been made, the Plan Sponsor shall make a subsequent contribution subject to the Annual Account Addition limits of Sections 4.03 and 4.04 with respect to the omitted Clergyperson in the amount which the said Plan Sponsor would have contributed with respect to him/her had he/she not been omitted.
3.06 Inclusion of Ineligible Clergyperson. If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the amount contributed with respect to the ineligible person shall constitute a mistake of fact for the Plan Year in which the discovery is made.
3.07 Election Not to Participate. A Clergyperson who is an ordained member who is appointed to less than full-time service or a Clergyperson who is a part-time or student local pastor may, subject to the approval of the Plan Sponsor, voluntarily elect not to participate in the Plan by written notice to the Plan Sponsor and the Administrator in such form as required by the Administrator.
Article IV Contributions
4.01 Contributions.
a. The Salary-Paying Unit shall contribute, for each Plan Year, 12% of each Participant's Contribution Base with the following exceptions.
(1) If the Plan Sponsor is a Conference, the Salary-Paying Unit shall contribute 11% if the then current Pension Rate (as defined in the Supplement One hereto) is less than 0.9% of the Conference Average Compensation.
(2) A Conference may annually elect, after consultation with the Administrator, to have a contribution rate of 11%.
(3) Notwithstanding the provisions of Section 4.01a(1) and 4.01a(2), if the Conference elects to enroll Clergy on disability leave who are not approved for benefits from the Comprehensive Protection Plan, the Conference shall contribute, for each Plan Year, 12% of the Denominational Average Compensation in effect on the date the Participant was placed on disability leave. The amount of the contribution shall be increased by 3% annually thereafter on the anniversary of the date the disability leave began.
b. For Participants enrolled in the Plan in accordance with Section 3.01a(3), in addition to the contribution required in Section 4.01a, a Conference may elect to contribute a build-up to the Account of Participants who are appointed less than full time. The amount of such contribution shall be equal to a percentage of the Denominational Average Compensation, multiplied by the Conference contribution rate, less the required contribution in accordance with Section 4.01a. The percentage of the Denominational Average Compensation shall be in 25% increments which correspond with the percentage of full-time service indicated by the Participant's appointed service.
c. For Participants who do not receive a contribution pursuant to Section 4.01j(4), serving full-time appointments and who are receiving Compensation at least equivalent to 60% of the applicable Conference Average Compensation or 60% of the Denominational Average Compensation, whichever is less, in the Puerto Rico Methodist Church, in addition to the contribution required in Section 4.01a, the Puerto Rico Methodist Church shall contribute a build-up to the Account of such Participants in an amount equal to the Denominational Average Compensation, multiplied by the contribution rate of the Puerto Rico Methodist Church, less the required contribution in accordance with Section 4.01a above.
d. Upon the enrollment of each Participant pursuant to Article III, it shall be the responsibility of the Salary-Paying Unit to make contributions from the effective date of participation as determined in accordance with Section 3.03.
e. The annual contribution shall be payable to the Plan in at least monthly installments.
f. All contributions for the Plan Year must be deposited with the Plan no later than June 15 of the following Plan Year.
g. The Administrator shall establish and maintain an Account in the name of each Participant to which the Administrator shall credit all amounts allocated to each such Participant as set forth herein.
h. The Plan Sponsor and/or the Salary-Paying Unit shall provide the Administrator with all information required by the Administrator to make a proper allocation of the contribution to the Account for each Plan Year.
i. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution to each Participant's Account in accordance with this Section 4.01.
j. The obligation to make the contribution on behalf of a Participant shall fall upon, and be restricted to, the applicable Salary-Paying Unit to which the Participant is appointed, except for the following circumstances:
(1) The applicable Conference shall be obligated if the Participant is appointed to a sabbatical leave or to attend school after having served under appointment as a Clergyperson in full connection or as an associate member in a Conference, other than under appointment to attend school, provided such Conference elects to make such required contribution based on the Participant's annualized Compensation immediately prior to such leave;
(2) The applicable Conference may elect to make such required contribution for a Participant who is granted disability leave, but who is not approved for disability benefits under the Comprehensive Protection Plan.
(3) The Comprehensive Protection Plan shall be obligated to make the required contribution at the applicable rate times the Denominational Average Compensation if the Participant has been approved for disability benefits from the Comprehensive Protection Plan in accordance with the following:
(A) In the event such a Participant becomes disabled prior to age 60 years and disability continues, and such person is receiving disability benefits in the Conference year in which such person attains age 65 years, then such contributions may be continued through June 30 next following such person's 65th birthday anniversary (if the final day of the regular session of such person's Conference falls in the month of May or June, otherwise to the end of the month in which the closing day of such Conference session occurs);
(B) In the event such a Participant becomes disabled on or after his/her 60th birthday anniversary and disability continues, then such contributions may be continued until the earlier of (i) June 30 next following the end of a five-year period from the date of the first payment of the disability payment (if the final day of the regular session of such person's Conference falls in the month of May or June, otherwise to the end of the month in which the closing day of such Conference session occurs); or (ii) June 30 next following such person's 70th birthday anniversary (if the final day of the regular session of such person's Conference falls in the month of May or June, otherwise to the end of the month in which the closing day of such Conference session occurs).
(C) Such disabled person shall be deemed to retire at the end of the period set forth in (A) or (B) above, as applicable, if at the end of such period the Participant is still disabled.
(4) The Plan shall accept contributions from the Comprehensive Protection Plan for credit to the Accounts of Participants whose Compensation is less than the Denominational Average Compensation. The amount of such contributions shall be determined in accordance with the provisions of the Comprehensive Protection Plan.
k. A Conference may elect annually to have the contributions under the provisions of Section 4.01a contributed monthly to the Plan through such Conference pursuant to a system of collection determined by the Conference. The amount so required for each Participant shall be credited to such Participant's Account monthly and the Conference charged accordingly.
l. All amounts which are contributed by the Plan Sponsor or the Salary-Paying Unit to the Plan shall be irrevocable contributions to the Plan except that any contribution made by the Plan Sponsor or the Salary-Paying Unit because of a mistake of fact, shall be returned to the Plan Sponsor or Salary-Paying Unit within one year after the Plan Sponsor or Salary-Paying Unit has reported and documented such mistake to the Administrator.
4.02 Vesting. Contributions credited to a Participant's Account shall be fully Vested.
4.03 Annual Account Addition. Notwithstanding the foregoing, the maximum Annual Account Addition which may be credited to a Participant's accounts for any "limitation year" shall be equal to or less than the amount determined in accordance with Section 4.04 below.
a. For purposes of applying the limitations of Section 4.04, Annual Account Addition means the sum credited to a Participant's accounts for any "limitation year" of:
(1) contributions made by the Plan Sponsor or Salary-Paying Unit to this Plan and to any other pension program; and
(2) contributions made to the Personal Account pursuant to the provisions of the Personal Investment Plan administered by the Administrator for limitation years beginning after December 31, 1986.
b. For purposes of applying the limitations of Section 4.04, Annual Account Addition does not include rollover contributions made pursuant to the provisions of the Personal Investment Plan administered by the Administrator.
c. For purposes of applying the limitations of Section 4.04, the "limitation year" shall be the Plan Year.
d. For purposes of applying the limitations of Section 4.04, if a Participant participates in more than one plan maintained by the Plan Sponsor, this Plan shall be considered the primary plan of the Plan Sponsor in determining the Annual Account Addition.
4.04 Maximum Annual Account Addition.
a. General Limitation. Notwithstanding any provision herein to the contrary (other than Sections 4.04c and 4.04d) for any Plan Year the Annual Account Addition with respect to a Participant shall not exceed the lesser of:
(1) $30,000 or if greater, one- quarter of the dollar limitation in effect under Code section 415(b)(1)(A); or
(2) 25% of the Participant's 415 Compensation for such Plan Year.
b. Exclusion Allowance. The amounts contributed by the Plan Sponsor on behalf of a Participant shall be excluded from the gross income of the Participant for the Plan Year to the extent that the aggregate of such amounts does not exceed the Exclusion Allowance for such Plan Year.
(1) The Exclusion Allowance for any Participant for the Plan Year is an amount equal to the excess, if any of:
(A) the amount determined by multiplying 20% of the Participant's includable compensation by the number of years of service, less
(B) the aggregate of the amounts contributed by the Salary- Paying Unit on behalf of the Participant and excludable from the gross income of the Participant for any prior Plan Year.
(2) In the case of a Participant who makes an election under Section 4.04c below to have the provisions of Section 4.04c(3) apply, the Exclusion Allowance for any such Participant for the taxable year is the amount which could be contributed under Section 4.04a by his/her Salary- Paying Unit.
(3) For purposes of this Section 4.04b, all years of service by a Participant as an "employee of a church" (as that term is defined in Code section 414(e)(3)(B)) shall be considered as years of service for one employer, and all amounts contributed hereunder by such organization during such years for the Participant shall be considered to have been contributed by one employer.
(4) The amount determined under Section 4.04b(1) shall not be less than the lesser of:
(A) $3,000; or
(B) the includable compensation of such Participant.
This paragraph shall not apply to a Participant in a Plan Year when such Participant has an adjusted gross income for such Plan Year which exceeds $17,000.
c. Annual Account Addition Election. A Participant may make an irrevocable election to have one of the following three Annual Account Addition elections apply to increase his/her Annual Account Addition. Not more than one election may be made under paragraph (1) below. A Participant who elects to have the provisions of paragraph (1), (2), or (3) of this subsection apply to him/her may not elect to have any other paragraph of this subsection apply to him/her. Such election shall be made in accordance with the provisions of Regulations prescribed by the Secretary of the Treasury.
(1) In the case of amounts contributed for the year in which occurs a Participant's separation from the service, at the election of the Participant there is substituted for the amount specified in Section 4.04a(2) the amount of the Exclusion Allowance which would be determined under Code section 403(b)(2) (without regard to this section) for the Participant's taxable year in which such separation occurs if the Participant's years of service were computed only by taking into account his/her service for the employer (as determined for purposes of Section 4.04b) during the period of years (not exceeding ten) ending on the date of such separation.
(2) In the case of amounts contributed hereto, at the election of the Participant there is substituted for the amount specified in Section 4.04a(2) the least of:
(A) 25% of the Participant's includable compensation (as defined in Code section 403(b)(3)) plus $4,000;
(B) the amount of the Exclusion Allowance determined for the year under Section 4.04b(1); or
(C)$15,000.
(3) In the case of amounts contributed hereto, at the election of the Participant the provisions of Section 4.04a shall apply, instead of Section 4.04b.
d. Certain contributions by church plans not treated as exceeding limits.
(1) Alternative Exclusion Allowance. Any contribution or addition with respect to any Participant, when expressed as an Annual Account Addition, which is allocable pursuant to the application of Section 4.04b(4) above to such Participant for such year, shall be treated as not exceeding the limitations of Section 4.04a.
(2) Contributions not in excess of $40,000 ($10,000 per year).
(A) General. Notwithstanding any other provision of this Plan, at the election of a Participant, Annual Account Additions hereto with respect to such Participant, when expressed as an Annual Account Addition to such Participant's account, shall be treated as not exceeding the limitation of Section 4.04a if such Annual Account Addition is not in excess of $10,000.
(B) $40,000 aggregate limitation. The total amount of additions with respect to any Participant which may be taken into account for purposes of this paragraph for all years may not exceed $40,000.
(C) No election if Section 4.04c(1) election made. No election may be made under this subparagraph for any year if an election is made under Section 4.04c(1) for such year.
Article V Determination and Distribution of Benefits
5.01 Determination of Benefits Upon Retirement. Every Participant may retire for the purposes hereof on his/her Normal Retirement Date or Early Retirement Date.
a. Upon such Normal Retirement Date or Early Retirement Date, all amounts credited to such Participant's Account shall become distributable.
b. However, a Participant may postpone his/her retirement to a later date, in which event the participation of such Participant in the Plan, including the right to receive allocations pursuant to Section 4.01, shall continue until the earlier of (1) the Late Retirement Date or (2) the date determined pursuant to Paragraph 452.1 of the Book of Discipline.
c. Upon a Participant's retirement date, or as soon thereafter as is practicable, the Administrator shall direct the Trustee to distribute all amounts credited to such Participant's Account in accordance with Section 5.05 and Section 5.08.
5.02 Determination of Benefits Upon Death.
a. Upon the death of a Participant before his/her retirement date or before a Participant's Annuity Starting Date, all amounts credited to such Participant's Account shall be distributed in accordance with the provisions of Section 5.06 and 5.08.
b. Upon the death of a Former Participant or Terminated Participant before his/her having received a benefit from the Plan, the Administrator shall direct the Trustee to distribute in accordance with the provisions of Section 5.06 and Section 5.08 any remaining amounts credited to the Account of the deceased Former or Terminated Participant to such Former or Terminated Participant's Beneficiary.
c. The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the Account of a deceased Participant or Former Participant or Terminated Participant as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclusive.
d. Unless otherwise elected in the manner described below, the Beneficiary of the death benefit shall be the Participant's spouse.
(1) Except, however, the Participant may designate a Beneficiary other than his/her spouse if:
(A) the spouse consents in writing, witnessed by a Plan Sponsor representative or notary public, to the designation of another Beneficiary; or
(B) the Participant is legally separated or has been abandoned (within the meaning of local law) and the Participant has a court order to such effect (and there is no "Qualified Domestic Relations Order" as defined in Code section 414(p) which provides otherwise); or
(C) the Participant has no spouse; or
(D) the spouse cannot be located.
(2) In such event, the designation of a Beneficiary shall be made in such form as is satisfactory to the Administrator and must be received by the Administrator during the Participant's lifetime.
(3) A Participant may at any time revoke his/her designation of Beneficiary or change his/her Beneficiary by filing written notice (in such form as may be required by the Administrator) of such revocation or change with the Administrator. However, the Participant's spouse must again consent in writing in accordance with the provisions of Section 5.02d(1)(A) to any change in Beneficiary unless the original consent expressly permits such changes by the Participant without the requirement of further consent by the spouse.
(4) A Participant's divorce shall revoke any Beneficiary designation in favor of the Participant's spouse made prior to the divorce. Until such time as a new designation of Beneficiary is filed with the Board in accordance with the provisions of this Section, benefits will be payable as if the former spouse had predeceased the Beneficiary.
(5) In the event no valid designation of Beneficiary exists at the time of the Participant's death and there is no surviving spouse, the death benefit shall be payable to his/her estate.
5.03 Determination of Benefits in the Event of Disability. In the event of a Participant's Disability, the Participant may elect to receive benefits in an amount not to exceed 25% of the value of his/her Account in accordance with the provisions of Section 5.07.
5.04 Determination of Benefits Upon Termination. In the event a Participant becomes a Terminated Participant, the Participant's Account shall be distributed as follows:
a. Distribution of the funds due to a Terminated Participant shall be made on the occurrence of the Participant's death, or Early, Normal or Late Retirement.
b. However, the Trustee shall cause the entire benefit to be paid to such Participant in a single lump sum after a Break in Service if the value of a Terminated Participant's benefit derived from the Account does not exceed $3,500 and has never exceeded $3,500 at the time of any prior distribution, or, with such Participant's consent if the amount is $3,500 or more, but less than one-fourth of the Denominational Average Compensation as of the date on which he/she becomes a Terminated Participant. If the Terminated Participant is vested in a Supplement One benefit, regardless of the balance in his/her Account, he/she shall not be eligible for a single lump sum distribution, but shall receive benefits from the Account in accordance with the provisions of Section 5.05b.
5.05 Distribution of Benefits For Any Reason Except Death or Disability.
a. (1) Unless otherwise elected as provided in Section 5.05a(3) below, a Participant who is married on the Annuity Starting Date and who does not die before the Annuity Starting Date shall receive the value of all of his/her benefits in the form of a Contingent Annuity with his/her spouse as Contingent Annuitant.
(A) Such Contingent Annuity benefits following the Participant's death shall continue to the spouse (determined as of the Annuity Starting Date) during the spouse's lifetime at a rate equal to 70% of the rate at which such benefits were payable to the Participant.
(B) This 70% Contingent Annuity shall be considered the designated qualified Contingent Annuity and automatic form of payment for the purposes of this Plan.
(2) Unless otherwise elected as provided below, a Participant who is not married on the Annuity Starting Date and who does not die before the Annuity Starting Date shall receive the value of his/her benefit in the form of a life annuity.
(A) Such unmarried Participant, however, may elect in writing to waive the life annuity and elect to receive his/her benefit in accordance with Section 5.05b below.
(B) The election must comply with the provisions of this Section as if it were an election to waive the Contingent Annuity by a married Participant, but without the spousal consent requirement.
(3) Any election to waive the Contingent Annuity must be made by the Participant in writing during the election period and be consented to by the Participant's spouse.
(A) If the spouse is legally incompetent to give consent, the spouse's legal guardian, even if such guardian is the Participant, may give consent.
(B) Such election shall designate a Beneficiary (or a form of benefits) that may not be changed without spousal consent (unless the consent of the spouse expressly permits designations by the Participant without the requirement of further consent by the spouse).
(C) Such spouse's consent shall be irrevocable and must acknowledge the effect of such election and be witnessed by a Plan Sponsor representative or a notary public.
(D) Such consent shall not be required if it is established to the satisfaction of the Administrator that the required consent cannot be obtained because there is no spouse, the spouse cannot be located or other circumstances that may be prescribed by Regulations.
(E) The election made by the Participant and consented to by his/her spouse may be revoked by the Participant in writing without the consent of the spouse at any time during the election period.
(i) The number of revocations shall not be limited.
(ii) Any new election must comply with the requirements of this paragraph.
(F) A former spouse's waiver shall not be binding on a new spouse.
(4) The election period to waive the Contingent Annuity shall be the 90-day period ending on the Annuity Starting Date.
(5) With regard to the election, the Administrator shall provide to the Participant no less than 30 days and no more than 90 days before the Annuity Starting Date a written explanation of:
(A) the terms and conditions of the Contingent Annuity;
(B) the Participant's right to make, and the effect of, an election to waive the Contingent Annuity;
(C) the right of the Participant's spouse to consent to any election to waive the Contingent Annuity; and
(D) the right of the Participant to revoke such election, and the effect of such revocation.
b. In the event a married Participant duly elects pursuant to Section 5.05a(3) above not to receive his/her benefit in the form of a Contingent Annuity, or if such Participant is not married, in the form of a life annuity, the Administrator, pursuant to the election of the Participant, shall direct the Trustee to distribute, on a date specified by the Participant (which date is in harmony with Section 5.05e below), to the Participant or to the Participant and his/her Contingent Annuitant any amount to which he/she is entitled under the Plan in one or more of the following methods determined and limited by rules and regulations of the Administrator:
(1) Purchase of or providing an annuity. However, such annuity may not be in any form that will provide for payments over a period extending beyond either the life of the Participant (or the lives of the Participant and his/her designated Contingent Annuitant) or the life expectancy of the Participant (or the life expectancy of the Participant and his/her designated Contingent Annuitant).
(2) A one-time lump-sum payment in an amount not to exceed 25% of the Participant's Account, or an annual or monthly annuity for a period of 5, 10, 15, or 20 years certain (but not for a period extending beyond the life expectancy of the Participant) based on an amount not to exceed 25% of the Account prior to annuitizing the remaining Account balance in accordance with other provisions of this Section.
c. If the Participant is married at the time he/she makes an election pursuant to Section 5.05b above, such election shall not be valid without the consent of the Participant's spouse given in accordance with the procedures stated in Section 5.05a(3).
d. If the present value of the Participant's Account is equal to or less than $3,500 and the Participant is not Vested in a Supplement One benefit, the Administrator may direct the Trustee to distribute the full amount to the Participant without the consent of the Participant or his/her spouse.
e. Notwithstanding any provision in the Plan to the contrary, the distribution of a Participant's benefits shall be made in accordance with the following requirements:
(1) The entire interest of a Participant shall be distributed:
(A) no later than the required beginning date described in Section 5.05e(2); or
(B) beginning no later than the required beginning date over:
(i) the life of the Participant;
(ii) the lives of the Participant and a designated Contingent Annuitant;
(iii) a period not extending beyond the life expectancy of the Participant; or
(iv) a period not extending beyond the life expectancies of the Participant and a designated Contingent Annuitant.
(2) The term "required beginning date" is defined for the purposes of this subsection as the later of:
(A) the April 1 of the calendar year following the calendar year in which the Participant reaches age 70- 1/2; or
(B) the April 1 of the calendar year following the calendar year in which the Participant retires.
(3) The provisions of this subsection shall not apply to the value of a Participant's Account as of December 31, 1986, exclusive of subsequent earnings.
5.06 Distribution of Benefits upon Death.
a. In the event of the death of a Participant prior to the Annuity Starting Date, his/her Account shall be paid to the Participant's Beneficiary, subject to the requirements of Section 5.06b below.
b. Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant shall be made in accordance with the following requirements and shall otherwise comply with Code section 401(a)(9) and the Regulations thereunder.
(1) If the Participant's surviving spouse is the Beneficiary, the Account shall be paid according to one of the distribution options described in Section 5.05b as elected by the surviving spouse, but in no case shall any distribution provide for payments over a period extending beyond either the life of the surviving spouse or the life expectancy of the surviving spouse.
(A) Distributions to the surviving spouse Beneficiary must commence on or before the later of:
(i) December 31 of the calendar year immediately following the calendar year in which the Participant died; or
(ii) December 31 of the calendar year in which the Participant would have attained age 70-1/2.
(B) If no election is made prior to the required beginning date described in Section 5.06b(1)(A), the benefit shall be paid in the form of a single life annuity.
(2) If the Participant's Beneficiary is not the surviving spouse, the Participant's Account shall be distributed to his/her Beneficiary:
(A) by December 31 of the calendar year in which the fifth anniversary of the Participant's date of death occurs; or
(B) over the life of such designated Beneficiary (or over a period not extending beyond the life expectancy of such designated Beneficiary) provided such distribution begins not later than December 31 of the calendar year immediately following the calendar year in which the Participant died.
(i) For purposes of Section 5.06b(2), the election by a designated Beneficiary to be excepted from the 5- year distribution requirement must be made no later than December 31 of the calendar year following the calendar year of the Participant's death.
(ii) An election by a designated Beneficiary must be in writing and shall be irrevocable as of the last day of the election period stated herein.
(iii) In the absence of an election by the Participant or a designated Beneficiary, the 5- year distribution requirement shall apply.
(3) Notwithstanding the provisions of Section 5.06b(1) or Section 5.06b(2), if the present value of a deceased Participant's Account, including the value of any Supplement One benefit that may be payable, is equal to or less than $3,500 at the time of his/her death, the Administrator may direct the Trustee to distribute the full amount to the Participant's Beneficiary without the consent of the Beneficiary.
(4) If the distribution of a Participant's interest had begun and the Participant dies before his/her entire interest has been distributed to him/her, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution selected pursuant to Section 5.05 as of his/her date of death.
5.07 Distribution of Benefits in the Event of Disability.
a. A Disabled Participant may elect to receive one of the following benefits from his/her Account:
(1) a one-time lump-sum payment in an amount not to exceed 25% of the Participant's Account; or
(2) an annual or monthly annuity for a period of 5, 10, 15, or 20 years certain (but not for a period extending beyond the life expectancy of the Participant) based on an amount not to exceed 25% of the Account.
b. If the Participant is married at the time he/she makes an election pursuant to Section 5.07a above, such election shall not be valid without the consent of the Participant's spouse given in accordance with the procedures stated in Section 5.05a(3).
5.08 Benefit Increases. The amount of any monthly annuity benefit payable under Sections 5.05 or 5.06 shall be determined actuarially on the basis of the account value such that the amount shall be increased by 2%, or remain the same or be increased by 3% or 4% or 5%, if so elected by the Participant at the time of application, or the Beneficiary at the time benefits commence, as applicable, under Sections 5.05 and 5.06. These increases shall occur on each anniversary of the Annuity Starting Date.
5.09 Single Sum Payment of Benefits.
a. Notwithstanding any provision of this Plan to the contrary, if the amount payable as a monthly annuity to the Participant or Beneficiary from all plans administered by the Administrator is less than the minimum amount established by the Trustee from time to time, the Administrator may, in its absolute discretion, require the Vested amounts in the Participant's Account to be paid to the Participant or Beneficiary in a single sum. A single sum payment provided for under this subsection may be made to the Participant at any time following termination of employment and prior to the commencement of payment of benefits under another form of payment.
b. If benefits are payable to an individual's estate or to another non-person, benefits shall be paid in a single sum.
5.10 Direct Rollover.
a. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a "distributee" may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an "eligible rollover distribution" paid directly to an "eligible retirement plan" specified by the distributee in a "direct rollover."
b. For purposes of this Section the following definitions shall apply:
(1) An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9); and the portion of any distribution that is not includible in gross income.
(2) An "eligible retirement plan" is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), or an annuity arrangement described in Code section 403(b), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.
(3) A "distributee" includes a Participant or Terminated Participant. In addition, the Participant's or Terminated Participant's surviving spouse and the Participant's or Terminated Participant's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code section 414(p), are distributees with regard to the interest of the spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the eligible retirement plan specified by the distributee.
5.11 Relinquishment of Benefits. A Participant or Beneficiary who is receiving benefit payments from this Plan may relinquish all or a portion of the benefits payable after the relinquishment is made. Unless the relinquishment by its terms was made irrevocable, he/she may revoke such relinquishment with respect to benefits that become payable after the revocation of the relinquishment. Amounts not used to pay benefits because of the relinquishment shall remain in the appropriate fund for payment of benefits generally.
5.12 Refusal of Benefit. The Beneficiary has the right to refuse or disclaim a benefit which he/she is otherwise entitled to receive. The refusal must be of the entire benefit. The effect of such refusal is to treat the Beneficiary as if he/she had predeceased the Participant.
5.13 Distribution for Minor Beneficiary. In the event a distribution is to be made to a minor, the Administrator may direct that such distribution be paid to the legal guardian, or if none, to a parent of such Beneficiary or a responsible adult with whom the Beneficiary maintains his/her residence, or to the custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor Beneficiary shall fully discharge the Administrator, Trustee, Plan Sponsor, and Plan from further liability on account thereof.
5.14 Facility of Payment. Whenever in the Administrator's opinion a person entitled to receive any payment of a benefit under the Plan is under a legal disability or is incapacitated in any way so as to be unable to manage such person's financial affairs, the Administrator may direct the Trustee to make payments directly to the person, to the person's legal representative, or to a relative or friend of the person to be used exclusively for such person's benefit, or apply any such payment for the benefit of the person in such manner as the Administrator deems advisable. The decision of the Administrator, in each case, shall be final, binding, and conclusive upon all persons ever interested hereunder. The Administrator shall not be obligated to see to the proper application or expenditure of any payment so made. Any benefit payment (or installment thereof) made in accordance with the provisions of this subsection shall completely discharge the obligation for making such payment under the Plan.
5.15 Notification of Mailing Address. Each Participant and other person entitled to benefits hereunder shall from time to time file with the Administrator, in a form acceptable to the Administrator, such person's mailing address and change of mailing address. Any check representing any payment due hereunder, and any communication forwarded to a Participant or Beneficiary at the last known address as indicated by the records of the Administrator shall constitute adequate payment to such person and be binding on such person for all purposes of the Plan. The Administrator shall not be under any obligation to search for or ascertain the whereabouts of any such person.
5.16 Application for Benefits. The benefits payable hereunder to Participants and Beneficiaries shall not become payable until such individuals have made application to the Administrator for such benefits. However, notwithstanding this provision, a Participant or alternate payee shall be deemed to have made application for benefits on the "required beginning date" as described in Section 5.05e(2) if on that date the current mailing address of the Participant or alternate payee is on file with the Administrator. A Participant's Beneficiary shall be deemed to have made application for benefits on the date benefit payments are required to commence in accordance with Section 5.06b(1) and Section 5.06b(2) if on that date the current mailing address of the Beneficiary is on file with the Administrator.
5.17 Unclaimed Benefit.
a. If a Participant fails to properly claim a benefit due hereunder prior to the "required beginning date," as defined in Section 5.05e(2) and there is no current mailing address on file with the Administrator, the Administrator shall send a certified letter to the last known address of the Participant indicating that the Participant has 60 days to claim such benefit. If the Participant fails to claim the benefit within the 60-day period, the Participant shall be deemed, in accordance with rules and regulations adopted by the Administrator, to have relinquished any benefit that may be payable to the Participant.
b. The failure of a Beneficiary to properly claim a benefit due hereunder during the stated time period, or if no time period is stated, then within two years of being eligible to receive the benefit, shall cause the benefit to be considered to have been refused and forfeited and shall cause the benefit to be paid to the secondary Beneficiary or default Beneficiary in accordance with the Plan. If the last default Beneficiary does not claim the benefit within a two-year period commencing with the date on which he/she became eligible to receive the benefit, the benefit shall be considered to be refused and forfeited by said Beneficiary. After the last two-year period has expired, the Administrator shall send a certified letter to the last known address of the last default Beneficiary indicating that the Beneficiary has 60 days to claim such benefit. Failure to claim the benefit within the 60-day time period shall cause the benefit to be forfeited. Such forfeited amounts shall be added to the reserves of the Plan. However, any such forfeited amount will be reinstated and become payable if a claim is made by the estate of the Participant or Beneficiary. The Administrator shall prescribe uniform and nondiscriminatory rules for carrying out this provision.
5.18 Limitations of Benefits and Distributions. All rights and benefits, including elections, provided to a Participant in this Plan shall be subject to the rights afforded to any "alternate payee" under a "qualified domestic relations order." Furthermore, a distribution to an "alternate payee" shall be permitted if such distribution is authorized by a "qualified domestic relations order," even if the affected Participant has not reached the "earliest retirement age" under the Plan. For the purposes of this Section, the terms "alternate payee," "qualified domestic relations order," and "earliest retirement age" shall have the meaning set forth under Code section 414(p).
Article VI Trustee
6.01 Responsibilities of the Trustee. The Trustee shall have the following categories of responsibilities in addition to those responsibilities set out in Section VII:
a. To invest, manage and control the Plan assets;
b. At the direction of the Administrator, to pay benefits required under the Plan to be paid to Participants, or, in the event of their death, to their Beneficiaries;
c. To maintain records of receipts and disbursements and furnish to the Administrator for each Plan Year a written annual report;
d. To invest the assets of the trust for the exclusive purpose of providing benefits to Participants and Beneficiaries and defraying reasonable expenses of the Plan. Such investing shall be done in accordance with investment policies that reflect the Social Principles of The United Methodist Church.
6.02 Investment Powers and Duties of the Trustee.
a. The Trustee shall invest and reinvest the assets of the Plan to keep the assets of the Plan invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Trustee shall deem advisable, including, but not limited to, stocks, common or preferred, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. The Trustee shall at all times in making investments of the assets of the Plan consider, among other factors, the short and long- term financial needs of the Plan on the basis of information furnished by the Plan Sponsor. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code or the Act.
b. The Trustee may employ a bank or trust company pursuant to the terms of its usual and customary bank agency agreement, under which the duties of such bank or trust company shall be of a custodial, clerical and record- keeping nature.
c. The Trustee may create a trust to hold and invest all or any part of the assets of the Plan. The Trustee shall have the right to determine the form and substance of each trust agreement under which any part of the assets of the Plan is held, subject only to the requirement that they are not inconsistent with the terms of the Plan.
6.03 Other Powers of the Trustee. The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of the Plan, shall have the following powers and authorities, to be exercised in the Trustee's sole discretion:
a. To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained;
b. To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement;
c. To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;
d. To cause any securities or other property to be registered in the Trustee's own name or in the name of one or more of the Trustee's nominees, and to hold any investments in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the assets of the Plan;
e. To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the assets of the Plan; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing;
f. To keep such portion of the assets of the Plan in cash or cash balances as the Trustee may, from time to time, deem to be in the best interests of the Plan, without liability for interest thereon;
g. To accept and retain for such time as the Trustee may deem advisable any securities or other property received or acquired as trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder;
h. To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;
i. To settle, compromise, or submit to arbitration any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings;
j. To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel may or may not be agent or counsel for the Plan Sponsor;
k. To invest in Treasury Bills and other forms of United States government obligations;
l. To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange;
m. To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations;
n. To pool all or any of the assets of the Plan, from time to time, with assets belonging to any other employee benefit plan created by a unit of The United Methodist Church or an affiliated unit of The United Methodist Church, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests.
o. To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan.
6.04 Valuation. Participants' Accounts shall be credited with interest at a rate to be determined by the Trustee. Any excess of the actual investment experience, including unrealized appreciation over the interest credited to accounts in a Plan Year, shall be credited to an investment reserve account from which the Trustee may withdraw funds in succeeding years in order to stabilize the rate of interest credited to Accounts from year to year.
6.05 Funding Through Insurance Contracts. The Trustee may, in lieu of paying benefits to a Participant or a Participant's Beneficiary from assets held by the Trustee, enter into a contract (or contracts) or an agreement (or agreements) with one or more insurance companies for the purchase (from such assets) of one or more insurance contracts which provide benefits which are substantially the actuarial equivalent of those provided for such Participant or Beneficiary under the Plan.
6.06 Services. Nothing herein shall prevent the Trustee from contracting for services with another entity, including one that is, with the Trustee, part of a controlled group.
Article VII Administration
7.01 Powers and Duties of the Administrator. The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and to determine all questions arising in connection with the administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of the Plan, shall have the following powers and authorities, to be exercised in the Administrator's sole discretion:
a. To establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan;
b. To determine all questions relating to the eligibility of Clergypersons to participate or remain a Participant hereunder and to receive benefits under the Plan;
c. To compute, certify, and direct the Trustee with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder;
d. In its sole discretion, to construe and interpret the Plan and make administrative rules in accordance therewith, and to resolve or otherwise decide matters not specifically covered by the terms and provisions of the Plan;
e. To maintain all necessary records for the administration of the Plan;
f. To interpret the provisions of the Plan and make and publish such rules for regulation of the Plan as are consistent with the terms hereof;
g. to file, or cause to be filed, all such annual reports, returns, schedules, descriptions, financial statements and other statements as may be required by any federal or state statute, agency, or authority;
h. to obtain from the Plan Sponsors and Clergypersons such information as shall be necessary to the proper administration of the Plan;
i. To specify actuarial assumptions and methods for use in determining contributions and benefits under the Plan.
j. To assist any Participant regarding his/her rights, benefits or elections available under the Plan.
7.02 Records and Reports. The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to appropriate government entities, Participants, Beneficiaries and others as required by law.
7.03 Duties of the Plan Sponsor. The Plan Sponsor shall assume the following duties with respect to the Plan:
a. To enroll Clergypersons, as applicable;
b. To maintain records of a Participant's service;
c. To maintain records of a Participant's Compensation;
d. To provide the Administrator with the statistical data and other statistical information satisfactory to the Administrator within a reasonable time after a request by the Administrator sufficient to enable the Administrator to discharge its duties under the Plan;
e. To register with and report to government agencies, as appropriate;
f. To properly notify Clergypersons of their rights and obligations under the Plan.
7.04 Fees and Expenses. All expenses incurred by the Administrator and Trustee in connection with the administration of this Plan shall be paid by the Plan.
a. The Trustee has the authority to determine administrative and expense charges and the methods for applying such charges.
b. The Trustee is authorized to deduct from the Plan's reserves, funds, contributions, and/or earnings thereon, the expenses and fees necessary or appropriate to the administration of the Plan, including an allocable share of the Administrator's operating expenses.
c. The Administrator is authorized to determine a reasonable charge for providing non-routine reports and services for Plan Sponsors and Participants and to require the Plan Sponsor or Participant to pay for such non-routine reports and service.
7.05 Attorney Fees and Costs. The Trustee may assess, to the extent permitted by law, against the assets it manages for any Participant, reasonable attorney fees and charges to reimburse the Administrator or Trustee for expenses incurred by the Administrator or Trustee, through no fault of its (their) own, in responding to pleadings, retaining counsel, entering an appearance or defending any case in any action in civil law, in the event the Administrator or Trustee is served with a levy, subpoena, summons or other similar pleading by the Internal Revenue Service or by any other party, including the parties to marital litigation, in litigation or legal proceedings in which the Administrator or Trustee is not a party, or is a party only by virtue of its (their) role as a fiduciary in administering assets on behalf of a Participant.
7.06 Delegation of Authority. The Administrator may authorize one or more of its number, or any agent, to carry out its administrative duties, and may employ such counsel, auditors, and other specialists and such clerical, actuarial and other services as it may require in carrying out the provisions of this Plan. The Administrator may rely on any certificate, notice or direction, oral or written, purporting to have been signed or communicated on behalf of the Plan Sponsor, Participant, or others which the Administrator believes to have been signed or communicated by persons authorized to act on behalf of the Plan Sponsor, Participant or others, as applicable. The Administrator may request instructions in writing from the Plan Sponsor, Participant or others, as applicable, on other matters, and may rely and act thereon. The Administrator may not be held responsible for any loss caused by its acting upon any notice, direction or certification of the Plan Sponsor, Participant or others, which the Administrator reasonably believes to be genuine and communicated by an authorized person.
7.07 Submission of Claims. Claims for benefits under the Plan shall be filed with the Administrator on forms supplied by the Administrator. Written notice of the disposition of a claim shall be furnished to the Plan Sponsor and to the claimant within 45 days after all required forms and materials related to the application therefor are filed.
7.08 Denial of Claims. If any claim for benefits under the Plan is wholly or partially denied, the claimant shall be given notice in writing, within a reasonable period of time after receipt of the claim by the Plan, written in a manner calculated to be understood by the claimant, setting forth the following information:
a. the specific reasons for such denial;
b. specific reference to pertinent Plan provisions on which the denial is based;
c. a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
d. an explanation of the Plan's appeals procedures.
A "reasonable time" for such notice shall not exceed 45 days after the filing of the original claim or 45 days after the request for or submission of any additional data or documents requested by the Administrator, or, if special circumstances require an extension of time, written notice of the extension shall be furnished to the claimant and an additional 90 days will be considered reasonable.
7.09. Appeals from Denial of Claims. If a Participant is denied benefits hereunder, the Participant shall have the right to appeal the decision in accordance with the following procedures:
a. Intermediary Appeal Procedure. The Administrator shall establish an intermediary appeals procedure containing no more than a three- level process.
b. Final Procedure.
(1) There shall be an Appeals Committee of the Administrator nominated by its President and elected by the Administrator which shall hear and decide appeals after the intermediary appeal procedure has been followed.
(2) The Appeals Committee decision shall be final and not subject to action of the Administrator.
(3) After the final intermediary process has been completed and if the Participant's claim is still fully or partially denied, the claimant shall be advised that he/she may, in writing, request a review by the Appeals Committee of the decision denying the claim by filing with the Appeals Committee, on forms supplied by it, within 90 days after such notice has been received by the claimant.
(A) The Notice of Appeal shall be executed by the claimant.
(B) After filing the Notice of Appeal, the claimant may submit issues and comments and other relevant, supporting documents to the Appeals Committee for its consideration.
(C) If such Notice of Appeal is timely filed, the appeal will be heard by the Appeals Committee at its next meeting, unless special circumstances require an extension of time for processing, in which case the claimant shall be so notified and the appeal will be heard at the subsequent meeting of the Appeals Committee.
(D) To allow sufficient time for handling and processing, all Notices of Appeal and supporting documents must be filed with the Appeals Committee at least 30 days prior to the next meeting of the Appeals Committee, and no documents submitted to the Appeals Committee after that time can or will be considered by the Appeals Committee except by its leave and discretion.
(E) The claimant, his or her duly authorized representative, or a representative of the Plan Sponsor, may request permission to appear personally before the Appeals Committee to present evidence with respect to the claim, subject to conditions and time limitations set by the Appeals Committee, but the expense for any such personal appearance must be borne by the claimant or the Plan Sponsor.
(F) The claimant shall be given written notice of the decision resulting from an appeal. Such notice shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision is based, and such written notice shall be mailed to the claimant by the staff of the Administrator within 15 days following the action by the Appeals Committee.
7.10 Appeal a Condition Precedent to Civil Action. No cause of action in civil law with respect to any alleged violation of the terms and conditions of this contract shall be commenced or maintained by any Participant unless and until such Participant shall have initiated and completed the process of an Appeal as set forth in Sections 7.07 to 7.09 of this Plan.
7.11 Basis of Determination of Amount of Benefit. The amount of any monthly benefit provided for under Article V which is to be based upon the Participant's Account in the Plan shall be the actuarial equivalent of such Account, determined on the basis of the mortality table and rate of interest adopted by the Administrator for such purpose. Upon the Account being converted to an annuity, the Account shall be closed and the annuity shall become an obligation of the appropriate fund.
7.12 Limitation of Liability. All benefits hereunder are contingent upon, and payable solely from, such contributions as shall be received by the Trustee and investment results of the Trustee. No financial obligations, other than those which can be met by the contribution actually received and the investment results, shall be assumed by the Administrator or the Trustee. To the extent assets of the Plan attributable to a Participant's accounts have been transferred to a trust as provided in Section 6.02c, all benefits to which the Participant is entitled under this Plan shall be provided only out of such trust and only to the extent the trust is adequate therefor. The members of the Administrator shall not personally be responsible or otherwise liable for the payment of any benefits hereunder.
Article VIII Amendment and Termination
8.01 Amendment of the Plan. The General Conference may amend any or all provisions of this Plan at any time by written instrument identified as an amendment of the Plan effective as of a specified date. However, the Administrator is authorized to amend any or all provisions of this Plan at any time by such written instrument in order to conform the Plan to any applicable law and/or regulations promulgated thereunder.
8.02 Termination of the Plan. The General Conference shall have the right to terminate the Plan at any time in a manner and to the extent not inconsistent with the Book of Discipline. Upon termination of the Plan, the accounts of Participants shall be nonforfeitable and either distributed outright or held for distribution in accordance with the terms of the Plan. The assets remaining in the Plan after all obligations of the Plan have been satisfied shall be distributed pursuant to action by the General Conference.
Article IX Adoption Agreement
9.01 A Plan Sponsor shall annually complete an Adoption Agreement in which the Plan Sponsor shall indicate the various elections which it is required to make pursuant to the provisions of the Plan.
9.02 The Adoption Agreement shall be in a form prescribed by the Administrator.
9.03 The Adoption Agreement shall not become effective until it is accepted by the Administrator.
9.04 If a Plan Sponsor fails to complete a new Adoption Agreement for the next Plan Year at least thirty days prior to the beginning of the next Plan Year, and:
a. if the Plan Sponsor is one described in Section 2.30a, b, or c herein, the current Adoption Agreement will remain in force for the next Plan Year.
b. if the Plan Sponsor is one described in Section 2.30d herein, the current Adoption Agreement would remain in force until sixty days after such time as a new Adoption Agreement is accepted by the Administrator.
Article X Miscellaneous
10.01 Rules and Forms. The Administrator shall have the authority and responsibility to:
a. adopt rules, regulations and policies for the administration of this Plan, in all matters not specifically covered by General Conference legislation or by reasonable implication; and
b. prescribe such forms and records as are needed for the administration of the Plan.
10.02 Non- alienation of Benefits. No benefits payable at any time under the Plan shall be subject in any manner to alienation, sale, transfer, pledge, attachment, garnishment, or encumbrance of any kind. Any attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber such benefit, whether presently or thereafter payable, shall be void. Except as provided in Section 10.04 hereof, no benefit nor any fund under the Plan shall in any manner be liable for, or subject to, the debts or liabilities of any Participant or other person entitled to any benefit.
10.03 Non- reversion. The Plan Sponsor shall have no right, title, or interest in the contributions made to the funds under the Plan, and no part of the funds shall revert to the Plan Sponsor, except that:
a. upon termination of the Plan and the allocation and distribution of the funds as provided in Articles IV and V hereof, any monies remaining because of an erroneous actuarial computation after the satisfaction of all fixed and contingent liabilities under the Plan may revert to the applicable Plan Sponsor; and
b. if a contribution is made to the Plan by the participating Plan Sponsor or Salary-Paying Unit by a mistake of fact, then such contribution shall be returned to the participating Plan Sponsor or Salary-Paying Unit upon request within one year after the Plan Sponsor or Salary-Paying Unit has reported and documented such mistake to the Administrator.
10.04 Qualified Domestic Relations Order. The provisions of Section 10.02 notwithstanding, all or part of a Participant's Vested benefits arising under this Plan, including Supplement One, may be transferred to one or more "alternate payees" on the basis of a "qualified domestic relations order," as those terms are defined in Code section 414(p), provided that (1) the Participant makes an assignment of benefits pursuant to the order, and the alternate payee accepts said assignment, on the forms provided by the Administrator; (2) said order was issued by a court having jurisdiction over the Administrator; or (3) said order was entered by any other court if the Administrator, in its sole discretion, determines that the order is likely to be entered by a court having jurisdiction over the Administrator.
a. When appropriate, the Administrator shall provide a Participant involved in marital litigation with information regarding the nature and value of the Participant's benefits and shall assist the Participant and the court in interpreting that information.
b. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Such procedure shall provide that during the period in which a determination is being made with respect to the qualified status of an order received by the Administrator and for thirty days thereafter, (1) the Administrator will direct the Trustee to segregate and separately account for any sums payable to the Participant which the order requires to be paid to the alternate payee; and (2) the Participant will be prohibited from electing to set up an annuity or to receive any other distribution which would compromise the rights granted to the alternate payee by the order, without the alternate payee's written consent.
c. Neither the alternate payee nor any person claiming through the alternate payee shall have the right (1) to transfer benefits to another alternate payee; (2) to receive a surviving spouse benefit arising from the Participant's pre-1982 service; or (3) to receive benefits in the form of a joint and survivor annuity with respect to the alternate payee and any subsequent spouse.
(1) In all other respects, the benefits transferred pursuant to a qualified domestic relations order shall be administered in accordance with the provisions of this Plan, and the alternate payee shall have all the rights and duties of a fully Vested Terminated Participant with respect thereto.
(2) With respect to benefits transferred to an alternate payee pursuant to this section, the alternate payee shall have all of the rights of a Terminated Participant, to the exclusion of any claim thereto on the part of the Participant.
d. A subpoena or other instrument of judicial process (1) which is directed to the Administrator, its constituent corporations, or its officers or employees, (2) which appears on its face to be issued in the course of marital litigation to which a Participant is a party, and (3) which seeks information regarding the nature or value of the Participant's pension benefits, may be honored by the Administrator, in its sole discretion, without interposing any defense on the grounds of technical or jurisdictional defect.
e. Costs incurred by the Administrator in the process which culminates in the transfer of benefits pursuant to a qualified domestic relations order, including but not limited to attorney's fees, litigation expenses, and a reasonable charge for services provided by the Administrator, shall be charged against the benefits of the Participant and the alternate payee in equal shares unless a different division of said costs is provided in the order.
10.05 Reemployment. In the event a Former Participant is made effective and placed Under Episcopal Appointment, the payment of pension benefits then being paid hereunder shall be suspended, the annuity or annuities reconverted to account balances on an actuarially equivalent basis, and the Former Participant reinstated as a Participant. In the event a Former Participant is under an appointment but not in the effective relation, the pension benefits then being paid hereunder shall continue and the Former Participant shall not be reinstated as a Participant.
10.06 Construction. The Plan and each of its provisions shall be construed and their validity determined by the laws of the State of Illinois, other than its laws respecting choice of law, to the extent such laws are not preempted by any federal law.
10.07 Indemnification. To the extent permitted by law, the Plan Sponsor shall indemnify and hold harmless the Administrator, Trustee, Participants, any employee, and any other person or persons to whom the Plan Sponsor, Trustee or Administrator has delegated fiduciary or other duties under the Plan, against any and all claims, losses, damages, expenses, and liabilities arising from any act or failure to act that constitutes or is alleged to constitute a breach of such person's responsibilities in connection with the Plan under any applicable law, unless the same is determined to be due to gross negligence, willful misconduct, or willful failure to act.
10.08 Alternative Dispute Resolution. If a dispute arises out of or related to the relationship between the Plan Sponsor and the Administrator or Trustee, the parties agree first to try in good faith to settle the dispute by mediation through the American Arbitration Association, or another mediation/arbitration service mutually agreed upon by the parties, before resorting to arbitration. Thereafter, any remaining unresolved controversy or claim arising out of or relating to the relationship between the Plan Sponsor and the Administrator or Trustee shall be settled by binding arbitration through the American Arbitration Association, or the other mediation/arbitration service which had been mutually agreed upon by the parties.
a. The site of the mediation and/or arbitration shall be in a city mutually agreed to by the parties which is not located within the boundaries of the Plan Sponsor.
b. The laws of the State of Illinois shall apply in situations where federal law is not applicable. The applicable rules of the selected service shall apply. If the service allows the parties to choose the number of arbitrators, unless another number is mutually agreed to, any arbitration hereunder shall be before at least three arbitrators, and the award of the arbitrators, or a majority of them, shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.
c. The fees and costs for mediation shall be borne equally by the parties. The fees and costs of arbitration shall be allocated to the parties by the arbitrators.
10.09 Titles and Headings. The titles and headings of the Articles and Sections of this instrument are placed herein for convenience of reference only, and in the case of any conflicts, the text of this instrument, rather than the titles or headings, shall control.
10.10 Number. Wherever used herein, the singular shall include the plural and the plural shall include the singular, except where the context requires otherwise.
Supplement One to the Ministerial Pension Plan
Article A
A.01 Prior Plans. Effective January 1, 1982, the Ministers Reserve Pension Fund, the Partial Reserve Pension Fund, the Local Pastors Reserve Pension Fund, the Senior Plan, the Ministers Reserve Pension Plan, or the Current Income Distribution Pension Plan (hereinafter collectively referred to as the "Prior Plans") were merged into the Ministerial Pension Plan. The benefits payable under the Prior Plans shall be paid in accordance with the provisions of the Ministerial Pension Plan, as supplemented by this Supplement One thereto, and shall benefit members of the Participating Group No. 1 (See Article C.01 below).
A.02 Use of Assets of Prior Plan. The assets of the Prior Plans (other than those in the Disability and Survivor Benefit Fund) are designated as a part of this Plan for the purpose of funding the past service benefits under this Supplement for such persons. Said assets shall be collectively referred to as the Reserve Pension Fund and shall be accounted for separate and apart from the other funds under the Plan. The assets of the Prior Plans in the Disability and Survivor Benefit Fund shall be transferred to the Comprehensive Protection Plan, which shall supersede and replace the provisions of the Prior Plans related to the Disability and Survivor Benefit Fund.
A.03 Adoption Agreement. Each Conference having Participants in Participating Group No. 1 shall execute a separate Adoption Agreement hereto setting forth the Pension Rate applicable to such Participants, the contribution rate, and any other provisions specifically applicable to such Conference. A Conference shall have the right to periodically execute a new Adoption Agreement applicable to it. However, in no case may any new Adoption Agreement reduce the Pension Rate or the percentage which is payable to surviving spouses in accordance with Section E.02. In addition, no Adoption Agreement shall provide for a Pension Rate which is less than eight-tenths of one percent of the Conference Average Compensation as computed by the Administrator.
Article B Definitions
The following terms shall have the respective meanings set forth below for purposes of this Supplement, and when the defined meaning is intended the term is capitalized:
B.01 "Approved Service" means a Participant's or retired Participant's years and fractions of years of service rendered prior to January 1, 1982, with pension credit on a Conference, as evidenced by the Participant's service record maintained by the Administrator. A Participant's service record shall be subject to correction in accordance with the provisions of the Book of Discipline.
B.02 "Formula Benefit" means an annual benefit which shall be the sum of:
(a) the products of a Participant's Approved Service as Clergy and the applicable Clergy Pension Rate and
(b) the product of such Participant's Approved Service as a local pastor and the applicable local pastor's Pension Rate, 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.
B.03 "Pension Rate" means the sum payable for each year of Approved Service, as determined by the Conference, and set forth in the applicable Adoption Agreement and funded in accordance with Article D herein. The recommended Pension Rate is 1% of the Conference Average Compensation.
B.04 "Personal Contributions Accumulation" means the sum of the amount standing to the credit of a Participant as of December 31, 1981, in such Participant's individual account under the Prior Plan, based on contributions made by such Participant and interest credited thereon prior to January 1, 1982, and the amount of interest credited thereon after December 31, 1981, by the Trustee.
B.05 "Personal Contributions Annuity" means an annuity during life, payable in monthly installments in advance, on the basis of the actuarial equivalent of the Personal Contributions Accumulation.
B.06 "Service Annuity Accumulation" means the sum of the amount standing to the credit of a Participant as of December 31, 1981, in such Participant's reserve account under the Prior Plans, based on contributions made by the applicable Conference or Salary-Paying Unit on behalf of the Participant and interest credited thereon prior to January 1, 1982, and the amount of interest credited thereon after December 31, 1981, by the Trustee.
B.07 "Service Annuity" means an annuity during life, payable in monthly installments in advance, on the basis of the actuarial equivalent of the Service Annuity Accumulation. The annuity shall be determined actuarially such that it shall increase annually in accordance with the percentage increase, if any, elected by the applicable Conference and set forth in the Addendum.
Article C Eligibility
C.01 Description of Participating Group No. 1. All Participants in the Plan on January 1, 1982, who on December 31, 1981, were covered by the Prior Plans and all other persons who on December 31, 1981, were receiving pension benefits or were entitled to receive deferred Vested pension benefits from the Prior Plans are members of Participating Group No. 1 and are eligible to receive benefits pursuant to the provisions of this Supplement One.
Article D Funding of Benefits
D.01 Conference Liability. Except as otherwise specifically provided in this Supplement, the past service benefits provided under Article E shall be funded by the applicable Conference by making annual past service contributions through the Trustee in accordance with the schedule for such contributions determined by the Administrator on the basis of periodic actuarial valuations. The responsibility for providing pension on account of service rendered prior to January 1, 1982, in a Missionary Conference, Provisional Annual Conference, or former Mission within the United States or Puerto Rico, which has been approved for pension credit, shall rest jointly with (a) the Missionary Conference, Provisional Annual Conference, or former Mission concerned, (b) the General Board of Pension and Health Benefits with funds provided by the General Council on Finance and Administration, and (c) the National Division of the General Board of Global Ministries. The revenue for pension purposes covering such service in a Missionary Conference, Provisional Annual Conference, or former Mission with the United States or Puerto Rico shall be provided by the aforesaid parties in accordance with such plan or plans as may be mutually agreed to by them.
D.02 Amortization of Liability. The initial unfunded liability for such past service benefits, based on the Pension Rate in effect as of January 1, 1982, shall be funded by annual past service contributions at least equal to the greater of the amount required to amortize the unfunded accrued past service liability over a period not to exceed 40 years, or the amount of unfunded past service benefits paid out during the year.
D.03 Determination of Initial Unfunded Portion. In determining the initial unfunded portion of the accrued past service liability as of January 1, 1982, the following items shall be subtracted from the total accrued past service liability:
a. the funded past service liability, and
b. the sum of (i) the Service Annuity accumulations and (ii) any Personal Contributions accumulations that are required to be applied toward the payment of the Formula Benefit, to the extent that these amounts do not exceed the amount necessary to fund the Formula Benefit.
D.04 Pension Rate Increases. A Conference may elect at any time to increase its Pension Rate. The additional liability related to any increase in the Pension Rate shall be funded by annual contributions at least equal to the greater of the amount required to amortize the liability over a period not to exceed that ending on the earlier of 30 years from the effective date of the increase or December 31, 2021, or the amount of the unfunded increases paid out during the year.
D.05 Personal Account. The Trustee shall maintain a Personal Account for each Participant with service in a Conference that requires the Personal Contributions Annuity to apply toward the payment of the Participant's Formula Benefit. The Personal Contributions Accumulation shall be held in the Personal Account on behalf of the Participant and shall be invested by the Trustee in the same manner as described in Article VI.
Article E Past Service Benefits
A member of Participating Group No. 1, in addition to any benefits based on service on or after January 1, 1982, shall be entitled to benefits based on service prior to January 1, 1982, in accordance with the following provisions:
E.01 Pension Credit.
a. The Conference, on recommendation of the Conference Board of Pensions, shall determine the admissibility and validity of service approved for pension credit for service prior to January 1, 1982. The following years of Approved Service in a Conference shall be counted for pension credit:
(1) By a clergyperson who is a probationary member or who is in the effective relation as an associate member or a clergy member in full connection in the Conference:
(A) as pastor, associate or assistant pastor, or other clergyperson in a pastoral charge;
(B) as district superintendent, presiding elder, Conference president, Conference superintendent, or other full- time salaried official of the Conference;
(C) under appointment beyond the local church to an institution, organization, or agency which in the judgment of the Conference rendered to it some form of service, direct or indirect, sufficient to warrant pension credit, or to a community church, or as a Conference- approved evangelist; provided, however, that such institution, organization, agency, community church, or evangelist accepted and paid such apportionments as the Conference may have required;
(D) as a student appointed to attend school, but only if the clergyperson serves subsequently with pension credit in a Conference or Conferences for three or more years under appointment other than to attend school, such credit as a student not to exceed three years; provided, however, that all years for which pension credit was given under legislation in effect prior to the 1972 General Conference, on account of appointment to attend school, shall be counted in determining the pension claim thereon; and provided further, that, if a clergyperson is again appointed to attend school after having served under appointment for six consecutive years as a clergy member in full connection with pension credit in a Conference or Conferences other than under appointment to attend school, pension credit shall be given for up to but not more than three additional years under appointment to attend school if the clergyperson serves subsequently with pension credit in a Conference or Conferences for three or more additional years under appointment other than to attend school. Pension responsibility shall be allocated to the Conference or Conferences in which the clergyperson shall first thereafter render six years of service under appointment to a local church, to Conference staff, as a district superintendent, or to an appointment beyond the local church normally considered to be eligible for pension by the Conference. This allocation procedure shall continue through December 31, 1987, at which time any unallocated years shall be assigned on a pro rata basis to the Conference or Conferences in which service under appointment to a local church, to Conference staff, as a district superintendent, or to an appointment beyond the local church normally considered to be eligible for pension coverage by the Conference totalled less than six years; provided, however, that such allocation shall not apply in cases where pension payments were in effect prior to January 1, 1985, on the basis of the allocation of responsibility under previous legislation.
(E) on sabbatical leave, provided that not less than five of the ten years just preceding the granting of such leave were served with pension credit in the Conference which grants the sabbatical leave;
(F) on disability leave subsequent to the 1968 Uniting Conference, not to exceed fifteen years;
(G) as a chaplain on full- time duty prior to January 1, 1947, which previous legislation includes as eligible to be counted in determining the annuity claim on a Conference.
(2) By a clergy member in full connection, probationary member or associate member of a Conference, upon recommendation of the Conference Board of Pensions and by a three-fourths vote of those present and voting in the Conference, for full-time service previously rendered as an approved local pastor or approved supply pastor to an institution, organization, or agency, which in the judgment of the Conference rendered to it some form of service sufficient to warrant pension credit; provided, however, that such institution, organization, or agency accepted and paid such apportionment as the Conference required.
3) By a person classified by the Board of Ordained Ministry as eligible to be appointed as a full- time local pastor, and by an approved supply pastor prior to church union in 1968, as a pastor or assistant pastor of a pastoral charge in full- time service under appointment; provided, however, that such credit shall be conditional and subject to provisions stated in Section E.03. Service of a local pastor prior to 1982 may be approved for pension credit only by vote of the Conference, on recommendation of the Conference Board of Pensions, after consultation with the district superintendents.
(4) By an ordained minister from another Christian denomination who has not attained the age of mandatory retirement for a Conference clergy member, who has not retired from the denomination, and who is approved by the Conference on recommendation of the Board of Ordained Ministry as provided in Paragraph 426.2 of the Book of Discipline, who renders full- time service under appointment as a pastor or assistant pastor. Service of an ordained minister from another Christian denomination prior to 1982 may be approved for pension credit only by vote of the Conference, on recommendation of the Conference Board of Pensions, after consultation with the district superintendents.
b. In calculating fractions of years of service for pension credit earned prior to January 1, 1982, the following formula shall be used:
(1) Any period of up to and including forty- five days shall not be counted.
(2) Forty- six days up to and including one hundred thirty- six days shall be counted as one quarter of a year.
(3) One hundred thirty- seven days up to and including two hundred twenty- eight days shall be counted as one half of a year.
(4) Two hundred twenty- nine days up to and including three hundred nineteen days shall be counted as three quarters of a year.
(5) Three hundred twenty days up to and including three hundred sixty- five days shall be counted as one year.
c. Concerning the normal conditions for pension credit and pro rata pension credit, the following provisions shall apply for service rendered prior to January 1, 1982, in determining approval for pension credit, eligibility for pension, and allocation of responsibility:
(1) The normal conditions required of a clergyperson for full pension credit shall be:
(A) That full-time service is rendered by a person appointed to a field of labor under provisions of Paragraph 437.1 of the Book of Discipline;
(B) That this person not be attending school as a regular student except as provided in Section E.01a(1)(D);
(C) That this person not be on leave of absence;
(D) That this person not be substantially employed in work other than that to which he/she is appointed by the bishop;
(E) That this person receive not less cash support per annum from all church and/or Conference- related sources than that provided in the schedule of equitable salaries adopted by the Conference for those in this person's classification.
(2) Full pension credit may be granted for persons not meeting some or all of the above conditions by a three- fourths vote of those present and voting in the Conference on recommendation of the Conference Board of Pensions.
(3) Effective as of the closing day of the 1980 Conference session, pro rata pension credit may be granted to persons appointed to less than full- time service under the provisions of Paragraph 437.2 of the Book of Discipline by a three- fourths vote of those present and voting in the Conference session on recommendation of the Conference Board of Pensions. Such pension credit shall be in one- quarter year increments; provided, however, that no one individual receives in excess of one year of pension credit per annum.
d. The responsibility for pension for service approved for pension credit shall rest with the Conference in which the service was rendered; provided, however, that in the event of mergers, unions, boundary changes, or transfers of churches, such responsibility shall rest with the successor Conference within whose geographical boundaries the charge is located.
e. Notwithstanding the above provisions, pension credit for Terminated Participants shall be determined in accordance with the provisions of the Book of Discipline in effect at the time of termination.
E.02 Retirement Benefits.
a. All persons who as of December 31, 1981, were receiving pension benefits from the Prior Plans shall thereafter continue to receive such pension benefits in the same form and amount from this Plan.
b. On or after the Early Retirement Date, and upon application, a Participant shall receive a monthly retirement benefit equal to the sum of such Participant's Service Annuity and, if any, the Personal Contributions Annuity. If the Participant is married at the time of retirement and the marriage took place prior to the cessation of service rendered by the Participant while Under Episcopal Appointment, the form of the annuity shall be a life annuity with 70% (75% or 100% if elected by the applicable Conference and so set forth in the Adoption Agreement) payable to the Contingent Annuitant. The Participant shall be the primary annuitant and the spouse shall be the Contingent Annuitant. If the Participant is not married at the time of retirement or if the Participant's marriage took place after he/she ceased serving Under Episcopal Appointment, the form of the annuity shall be a single-life annuity.
(1) The first payment of the monthly retirement benefit shall be due as of the first day of the month following the month in which retirement occurs or application for the pension is made, whichever is later.
(2) Notwithstanding this provision, an Annual Conference may designate the date of first payment to be the first day of the month in which the retirement takes place.
c. If the Participant's Service Annuity, on an annual basis, is less than the Participant's Formula Benefit and if the applicable Conference does not stipulate that the Personal Contributions Annuity shall apply toward the payment of the Participant's Formula Benefit, a past service supplement shall be added so that the sum of the Service Annuity and the past service supplement is equal, on an annual basis, to the Participant's Formula Benefit.
d. If the applicable Conference stipulates that the Personal Contributions Annuity shall apply toward the payment of the Participant's Formula Benefit, and if the Participant's Service Annuity plus the Participant's Personal Contributions Annuity, on an annual basis, is less than the Participant's Formula Benefit, a past service supplement shall be added so that the sum of the Service Annuity, the Personal Contributions Annuity and the past service supplement is equal, on an annual basis, to the Participant's Formula Benefit.
e. Effective January 1, 1990, the spouse of a Clergyperson who is also a Clergyperson shall receive a formula benefit based on his/her own years of approved service, including concurrent years of approved service rendered by the Clergy couple.
(1) He/she shall, in addition, receive a surviving spouse benefit based upon the pre- 1982 years of approved service rendered by the deceased Clergyperson, including concurrent years of approved service rendered by the Clergy couple.
(2) Concurrent years of approved service are those years of approved service rendered by two persons during the same period of time while each was a Clergyperson, whether in the same or different Conferences and whether or not at the time the service was rendered they were married or single.
(3) It shall be at the discretion of the Annual Conference Board of Pensions to recommend to the Annual Conference that payment of this benefit be made retroactive to a date prior to January 1, 1990.
f. Notwithstanding the above provisions, the pension of a clergyperson whose membership was terminated prior to January 1, 1982, shall be determined in accordance with the provisions of the Book of Discipline, pension funds, plans, and programs in effect at the time of such termination.
E.03 Vesting.
a. A person described in Article C above shall at all times be fully Vested in such person's Personal Contributions Accumulation.
b. A person described in Article C above shall be fully Vested in the retirement benefits set forth in Section E.02 above at the time of retirement as described therein.
c. A person described in Article C above shall be fully Vested after December 31, 1981, in the retirement benefits set forth in Section E.02 above if such person has at least ten years of vesting service if a bishop or clergy member in full connection, probationary member or associate member of a Conference, or four consecutive years of vesting service if a local pastor or an ordained minister of another denomination.
d. For purposes of this Section E.03, vesting service for bishops or Clergy of a Conference means years of service under appointment in a Conference, including years served as a full-time local pastor with pension credit prior to having been admitted as an associate or probationary member or clergy member in full connection of a Conference. In addition, vesting service shall include periods of service in the ordained ministry of another denomination to the extent that such denomination grants pension rights in its plan for such service.
e. Vesting service for local pastors and ordained ministers of another denomination means service with pension credit prior to 1982 or with full participation in the Comprehensive Protection Plan since 1981, or a combination of both.
f. Where pension credit for service prior to 1982 is contingent upon full participation in the Comprehensive Protection Plan for years since 1981, "a year of full participation" shall mean that for a Plan Year during the period from January 1, 1982, through December 31, 1984, (i) the required Ministerial Pension Plan Church Contributions for the Participant at the contribution rate elected by the Annual Conference shall have been made, or (ii) a Pension Supplement was credited to the Ministerial Pension Plan Church Account (CPP subsection 5.05) of the Participant for a Plan Year. For Plan Years subsequent to 1984, "a year of full participation" shall mean the same as days of participation in the Comprehensive Protection Plan wherein the following formula shall be used in determining fractional years of participation:
(1) Any period of up to and including forty-five days shall not be counted;
(2) Forty-six days up to and including one hundred thirty-six days shall be counted as one-quarter of a year;
(3) One hundred thirty-seven days up to and including two hundred twenty-eight days shall be counted as one- half of a year;
(4) Two hundred twenty-nine days up to and including three hundred nineteen days shall be counted as three- quarters of a year;
(5) Three hundred twenty days up to and including three hundred sixty-five days shall be counted as one year.
Days of participation are days for which a Comprehensive Protection Plan Church Contribution was made on behalf of a Participant.
g. A former clergy member in full connection, probationary member or associate member of a Conference whose membership was terminated on or after January 1, 1973, and prior to January 1, 1982, after the completion of ten or more years of service with pension credit in a Conference or Conferences, shall retain the right to receive a pension beginning the first of any month following the date the former clergyperson attains age sixty- two, based on the years of service approved for pension credit. Such former clergyperson's pension shall be based on all years of service with pension credit if the former clergyperson had twenty or more such years. If less than twenty such years but at least ten years, the years used in the calculation of the benefit shall be a percentage of the approved service years; such percentage shall be determined by multiplying the credited whole years by 5 percent, resulting in 50 percent of such years for ten years of credited service and 100 percent for twenty years of such service. Effective at the close of the 1976 General Conference, former clergy members in full connection, probationary members or associate members of the Conference whose membership was terminated on or after such date shall have any vested pension benefits calculated at the annuity rate in effect on the date such person's membership is terminated.
h. The foregoing notwithstanding, a person described in Article C above who participated in the Ministers Reserve Pension Fund prior to January 1, 1973, and, upon termination, allows his/her Personal Contributions Accumulation to remain in the Plan until he/she attains age 60, shall be Vested fully in his/her Service Annuity, payable in the same form as provided in Section 5.05 of the Plan.
i. A clergy member in full connection, probationary member or associate member of a Conference who voluntarily withdraws from the ministry of The United Methodist Church to enter the ministry of another church or denomination, on the attainment of age sixty- two and on recommendation of the Conference Board of Pensions and a three- fourths vote of those present and voting in any Conference in which approved service was rendered prior to January 1, 1982, or the legal successor, may be recognized and granted pension on account of approved service rendered in that Conference.
j. A clergyperson who has been granted the retired relation in a Central Conference or an Affiliated Autonomous Church, shall be entitled to a pension from a Conference or Conferences for the years of approved service rendered therein upon attainment of the required age or the completion of the required years of approved service. Such clergyperson shall notify the General Board of Pension and Health Benefits upon his/her retirement. The General Board of Pension and Health Benefits shall certify the years of approved service to each Conference concerned. Payments due thereunder shall be collected from the Conference concerned and forwarded to the claimant by the General Board of Pension and Health Benefits in such manner as it may deem most expedient and economical. In the event of the death of such clergyperson prior to the annuity starting date, the spouse shall be eligible for a benefit equal to 70 percent (75 percent or 100 percent if elected by the applicable Conference) of the ordained minister's formula benefit. If no spouse survives, the Service Annuity Accumulation will be paid in accordance with Section 5.06.
E.04 Disability Benefits.
a. All persons who as of December 31, 1981, were receiving disability benefits under the Current Income Distribution Pension Plan, effective as of January 1, 1982, shall be entitled to an annual disability benefit, payable in monthly installments, equal to 40% of the Denominational Average Compensation in effect as of January 1, 1982. The benefit amount shall be increased by 2% on July 1 of each year beginning July 1, 1983, through July 1, 1988.
b. In addition, all such persons shall have credited to an Account established on their behalf under the Plan an annual amount equal to 12% of the Denominational Average Compensation in effect as of January 1, 1982.
(1) Such amount shall be credited, commencing January 1, 1982, in monthly installments.
(2) The applicable Conference shall be responsible for this monthly contribution as part of its current service contribution to the Plan.
(3) The amount shall be increased by 2% on July 1 of each year beginning July 1, 1983, through July 1, 1988.
c. Effective January 1, 1989, all persons who are receiving disability benefits under this provision shall have their benefits increased to 40% of the Denominational Average Compensation in effect for 1989 and the 12% contribution to the Account also shall be based upon the Denominational Average Compensation in effect for 1989. Effective January 1, 1990, these amounts shall each increase by 3% on the anniversary date of the first payment of disability benefits.
d. Payment of the disability benefits set forth in this Section E.04 shall be subject to the provisions of subsection 5.04(d), (e) and (f) of the Comprehensive Protection Plan.
E.05 Surviving Spouse Benefits.
a. All surviving spouses who, as of December 31, 1981, were receiving surviving spouse benefits from the Prior Plans shall thereafter continue to receive such benefits from this Plan, except such benefits that were formerly being paid from the Disability and Survivor Benefit Fund, which shall be continued under the Comprehensive Protection Plan.
b. The benefit payable hereunder to a surviving spouse who remarried prior to January 1, 1982, shall cease upon his/her remarriage. Upon the earlier of (i) the dissolution of the marriage, or (ii) the spouse attaining age 65, and after application to the Administrator, the benefit shall commence again with no consideration being given for the period during which no benefit was being paid.
c. Upon the death of a Participant on or after January 1, 1982, and prior to retirement, the following provisions shall apply:
(1) The surviving spouse shall receive a monthly benefit equal to the sum of such Participant's Service Annuity and Personal Contributions Annuity. If the Service Annuity, on an annual basis, is less than 70% (75% or 100% if elected by the applicable Conference and so set forth in the Adoption Agreement) of the Participant's Formula Benefit, and if the applicable Conference does not stipulate that the Personal Contributions Annuity shall apply toward the payment of the Participant's Formula Benefit, a past- service supplement shall be added so that the sum of the Service Annuity and the past- service supplement is equal, on an annual basis, to 70% (75% or 100% if elected by the applicable Conference and so set forth in the Adoption Agreement) of the Participant's Formula Benefit.
(2) The Surviving Spouse Benefit shall be based on all of the Participant's years of Approved Service, provided the marriage took place prior to the cessation of service rendered by the Participant while Under Episcopal Appointment.
(3) If the applicable Conference stipulates that the Personal Contributions Annuity shall apply toward the payment of the Participant's Formula Benefit, and if the Participant's Service Annuity plus the Participant's Personal Contributions Annuity, on an annual basis, is less than 70% (75% or 100% if elected by the applicable Conference) of the Participant's Formula Benefit, a past service supplement shall be added so that the sum of the Service Annuity, the Personal Contributions Annuity and the past service supplement is equal, on an annual basis, to 70% (75% or 100% if elected by the applicable Conference) of the Participant's Formula Benefit.
E.06 Surviving Children Benefits. All surviving children of deceased former Clergy members of a Conference covered by the Current Income Distribution Pension Plan, who, as of December 31, 1981, were receiving or could in the future receive surviving children benefits under said Pension Plan shall, effective as of January 1, 1982, be entitled to the following benefits from this Plan:
a. Any such surviving child under age 18 years shall receive, in monthly installments, an annual benefit in an amount equal to 25% of the deceased Clergy's Formula Benefit.
b. Any such surviving child age 18 years but under age 25 years shall receive an annual educational benefit in an amount equal to 25% of the deceased Clergy's Formula Benefit. Such benefit is payable for each year during attendance as a full- time student at a secondary school and, in addition, for each year (not to exceed four years), during attendance as a full- time student at a standard school or college beyond the secondary school level. The annual benefit shall be payable in monthly installments.
c. Satisfactory certificates of enrollment and attendance in school or college shall be provided periodically as may be required by the Administrator in order for an educational benefit to be paid.
E.07 Survivor Death Benefits. Effective at the close of the 1988 General Conference, upon the death of a Participant or retired Participant prior to the annuity starting date where no spouse survives or where the Participant's marriage took place after the cessation of service Under Episcopal Appointment, the Service Annuity Accumulation will be paid in accordance with Section 5.06.
E.08 Deferred Vested Benefits. All persons who, as of December 31, 1981, were entitled to receive deferred Vested pension benefits from the Prior Plans, shall receive such benefits from this Plan in the amount and form as determined to be payable under the Prior Plans in effect at the time of termination of service.
Article F Amendment and Termination
F.01 Amendment. To provide for contingencies which may require or make advisable the clarification, modification, or amendment of this Supplement, the General Conference reserves the right to amend this Supplement, at any time and from time to time, in whole or in part, by adopting such amendment in writing. However, the Administrator is authorized to amend any or all provisions of this Supplement at any time by such written instrument in order to conform the Supplement to any applicable law and/or regulations promulgated thereunder.
F.02 Termination. The General Conference reserves the right to terminate this Supplement at any time.
F.03 Nonreversion.
a. Except as provided in this Section F.03, the assets of this Supplement shall never inure to the benefit of a Plan Sponsor or Salary- Paying Unit; such assets shall be held for the exclusive purpose of providing benefits to members of the Participating Group No. 1 and their beneficiaries and for defraying the reasonable administrative expenses of this Supplement.
b. If a contribution by a Plan Sponsor or Salary- Paying Unit is made by virtue of a mistake of fact, this Section shall not prohibit the return of such contribution to the Plan Sponsor or Salary- Paying Unit upon request within one year after the Plan Sponsor or Salary-Paying Unit has reported and documented such mistake to the Administrator.
c. In the case of termination of this Supplement, any residual assets of the Supplement shall be distributed to the Plan Sponsors at the direction of the Administrator if all liabilities of the Supplement to the members of the Participating Group No. 1 and their beneficiaries have been satisfied and the distribution does not contravene any applicable provision of law. The certificate of an Enrolled Actuary engaged by the Administrator stating that there are residual assets of the Supplement after all liabilities have been satisfied shall be conclusive evidence of this fact.
Supplement Two to the Ministerial Pension Plan
Article G
G.01 Description of Participating Group No. 2. All Participants who prior to January 1, 1982, served an agency or institution under special appointment without pension credit on the Conference, if the agency or institution served by any such individual chose to contribute to the Prior Plans described in Supplement One, shall be a member of the Participating Group No. 2 and shall be entitled to a benefit based upon the contributions made by the agency or institution on behalf of each such Participant and interest credited thereon.
G.02 Eligibility to Receive Benefit. The Participant who is a member of the Participating Group No. 2 shall be eligible to receive benefits from this accumulation according to the provisions of Article V.
General Conference Webmaster: Susan Brumbaugh
PETS Creator: John Brawn
Petition Text: 21499-FA-NonDis-O
1996 United Methodist General Conference