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Understanding Pension Liabilities—For Local Churches Considering Disaffiliation

Watch this video for easy-to-understand answers to complex questions related to pension plan funding and the withdrawal liability payment required for local churches that disaffiliate from the UMC.

This 18-minute video addresses these and other questions:

  • Are the United Methodist clergy pension plans “fully funded”?
  • What does fully funded mean when it comes to “pension liabilities”?
  • What are the differences between market interest rates and funding interest rates?
  • How can the plans be fully funded on a funding basis but not fully funded on a market basis?
  • Why is a disaffiliating church required to make the withdrawal liability payment to the annual conference it is leaving?
  • Is the withdrawal liability payment an arbitrary or punitive obstacle to disaffiliation?

A podcast version of the same information is also available.


Wespath continues to focus on continuity of benefits for those who serve and the impact of disaffiliations on pensions, benefits and liabilities funding. These FAQs are updated periodically.

Please direct any questions to [email protected].

In May 2022, the Council of Bishops requested a declaratory decision (Docket 0522-02) from the Judicial Council regarding the use of ¶2548.2 of The Book of Discipline as an independent path for local church disaffiliation. On June 22, 2022, Wespath submitted an amicus brief to assist the Judicial Council in addressing certain questions in the Council of Bishops’ request related to pension obligations. Read Wespath’s amicus brief.

In early March 2022, the Council of Bishops requested a declaratory decision (Docket 1021-23) from the Judicial Council regarding whether an annual conference may separate from the UMC under The Book of Discipline. On April 12, 2022, Wespath submitted an amicus brief to assist the Judicial Council in addressing certain questions in the Council of Bishops’ request related to the maintenance of retirement benefits in the event of the separation of an annual conference. Read Wespath’s amicus brief.

Additional Resources

Additional Resource


Benefit Plan Opportunities for Churches that Disaffiliate from The United Methodist Church

 

Submit a Question

Do you have an additional question for Wespath Benefits and Investments on how outcomes of General Conference 2019 impact clergy benefits, as well as related effects on local churches, annual conferences or institutional investors? Please submit your question to Wespath.