Changes in the PC(USA) dues structure
As common sense dictates, an insurance company needs a good percentage of healthy people in order to do well. When healthy people pay into the plan but do not need to use it often, then the company makes money.
Overall, people who are older tend to have more health problems than those who are younger. As Americans, we are living longer, but not always healthier, lives. We need more medical attention for more years. For clergy, years of eating mayonnaise salads at the potluck, lethargic sermon prep, and drinking to alleviate stress mean that our bodies are not in super shape as we reach a certain age. We’re a bit better at our boundaries, but we’re still working over 50 hours a week.
Compound the additional years with the rising costs of medical care, and we can see how much that can strain an insurance plan.
Sadly, the insurance plan of the Presbyterian Church (USA) does not have a young membership. Look closely. This is from a few years ago, but if we go by these numbers, we can see that a mere 14% of our clergy is under 45, and a whopping 70% is over 50. These are active clergy, so I’m sure the number of retired clergy that the plan is supporting is overwhelming.
The Board of Pensions (BOP) has $6.8 billion. We’ve been informed by the BOP that we’ve got a serious $28.6 million deficit problem looming and they are trying to figure out what to do about it. We need good jobs for young clergy. But I fear that what the BOP plans is going to exacerbate the problem, because it will force more young clergy out of the system.
Why do I say “more” young clergy out of the system? Because the BOP gives major incentives to clergy to stay until they are 70. Each year that clergy stay past the age of 65, allows the member to get more Social Security benefits and more BOP benefits upon retirement. So pastors stay in those prime, end-of-the-career callings longer. With the stock market crash, many pastors need to do this, but giving perks to those who work past retirement age bottlenecks the system so that younger clergy cannot get calls.
Now, not only does the BOP plan to give retirement age clergy incentives to work longer, but they also have a proposal for a new dues structure called “Dues Plus.”
•Member dues for health insurance will be 19% of effective salary (this goes down from 21% for those who do not have dependents).
•Mandatory dues would cover 65% of dependent coverage.
•Members choose what kind of coverage that they want: members plus partners, members plus children, member plus family.
Why is this Dues Plus plan bad for younger clergy?
First, many young pastors can’t handle another expense.
I don’t know if you’ve talked many young clergy lately, but they are not faring well in our system. It’s no wonder that 41% of clergy dropout in the first 10 years of professional ministry. They have educational debts that have piled up, even as our seminaries have hoarded more endowment money and poured millions into their building projects.
Even after earning a Master’s and passing all of their Ordination Exams, they often have to spend months or years doing additional unpaid internships, while some preparation committees have no consideration for how costly it is for them to go so long without work.
When housing was booming, many churches got rid of their manses and left those entering the market to figure out how to pay for jumbo mortgages on minimum salaries.
Now young clergy will have to pay for 35% of their dependents’ coverage. Our denomination already has the greatest salary inequities than any other church. We just might make it worse by making those who are starting with families pay more.
Second, this will discourage young pastors from getting jobs.
Young pastors are often turned down for positions because a retirement age minister wants the job. When a church is struggling to pay for a pastor, they can hire a pastor who is already retired, so they don’t have all the financial obligations that they would with a full-time, installed minister.
If we incentivize retirement age clergy to stay in the pastorate longer while making it cost more for those with children, we will make our young clergy crisis worse and there will be less young pastors in the system.
And so, my friends who work with the BOP ask, “What would we suggest for a solution?”
1) Don’t make your announcement from Hilton Head. I know it would only be a symbolic move. I know it’s petty. But you’re asking clergy with families to pay way more for coverage. When you ask people who work at minimum salaries, employ food stamps to feed their kids, and have gone into debt to serve the church to figure out how they’re going to cover the cost of health care for their family, the news feels a lot nastier when it’s coming from older white people at a cushy resort town.
There’s a lovely place called Stony Point. They have great food. That’s where we go for our educational events. I highly recommend it for your next meeting.
2) Keep the medical dues at 21% across the board (or raise them, if needed). Why should pastors with families pay more so that everyone else can pay a lesser percentage? Why would those with the greatest debt and the least salaries pay more so that cuts can be made across the board?
3) The big-steeple churches can pay their fair share (see maximum participation basis). Our dues are presently 21% of our effective salary, unless you get paid a whole lot of money. Then, there’s a maximum dues level. The BOP kicks in and our salary inequities are made even greater by giving them a break on their percentage. They pay less. Why not charge them the same percentage as the rest of us? After all, they can afford it.
4) Keep the optional coverage in some cases. If a pastor is making 28k and his wife is a lawyer making 500K, and she has gold-plated insurance with dental, then it makes sense that the kids and the spouse would be covered on the law firm’s plan. But that’s a totally different than asking a family at a small church in a rural area to cough up that 35% when they’re being paid the minimum salary.
5) Research the financial impact of retirees entering our process. I hesitate to write this, because I do not want to perpetuate ageism against those who are retirement age. But when I was in seminary, I watched as people who had retired from other occupations graduate, receive calls, serve for a few years, and retire. What impact do these trends have on our insurance?
Are there other ideas? Surely we can be more creative about this.
I’m not in the insurance business, but it’s pretty clear that making things more difficult on younger clergy will not ensure the health of this plan in the long run.
Are you interested in other thoughts on the Board of Pensions' move? Here are other posts on the issue (I'll add more as I'm aware of them):
rebntx replied on Permalink
Dues and the PCUSA
Carol, I am saddened by the burdens put on younger clergy with families via the Board's announced plans re health insurance dues. I am a retired PCUSA pastor, received a good salary the last 25 years (after a pitiful salary my first 20 years), and receive now a good retirement income (pension and social security). What you highlight must be devastating to young clergy with families. I received a salary of $4800 my first three years and I, my wife and two children, barely made it. I paid all my social security and pension out of the $4800. But we made it. At that time medical care was not nearly the suffocating burden it is now on the vast majority of families. I appaude you and others for raising the issue and will write my letters and do what I can to assist in finding a way for young pastors and their families to 'make it'. But, it occurs to me that with the PCUSA rate of decline, there will be no PCUSA in 30 years, give or take a few years. What do those called to ministry do then...? Blessings.
Bob Henderson replied on Permalink
I've enjoyed your blog and appreciate your thoughts. In this case, however, I'd like to contribute an alternate voice. First, there is a growing disposition across the denomination that older clergy are somehow a problem, in the way of younger clergy making their way to respectable salaries and sized churches. Yet, my seminary graduation speaker suggested that one track for ministry is not to look for the church you want to serve, but to lead the one you presently serve into being the kind of church where you want to stay. I think we'll all be better off with that as our assumptive basis rather than hoping for the departure of those with refined skill and experience.
Secondly, I think it's a fallacy to assume that the new multi-level health insurance option serves to reduce clergy opportunity when in fact it might help it. If churchs don't have to pay a uniform rate (as they do now) they may be able to hire more first-call clergy because the complete compensation package is lower. For some this is not optimal, but for others it's ideal. Either way, lower costs lead to more opportunities. Clergy will then have to decide whether they want to take those opportunities and the lifestyles they afford.
Thirdly, you ask why Pastors with families should pay more. I think the answer is simple: because they are insuring more people. I have three children on the health plan while two other associates on our staff have none, and yet they pay the same rate. If anything is unfair about that, it's that I DON'T pay more. I have more people on the plan; I get more benefit from the plan; and I should pay more. As it stands now, my lower paid associates are actually subsidizing my health insurance, and that's definitely not fair.
Finally, you suggest that we keep the optional coverage in some cases and then cite a scenario where a spouse/partner provides coverage. As I understand the plan, churches can choose to pay the difference between the minimum and maximum plan already. It's essential that the choice be offered to all churches -- so as not to promote any kind of institutional discrimination.
Thanks for having the courage to write, and to call the question on Hilton Head. I agree. It's not helpful to have our board make an announcement from a place many of our members cannot afford. But, we also might remember that many are serving on the board as an expression of their own spiritual commitment and doing so at their own expense.
Grace and Peace.