My real issue ....

The previous chart on the last blog showed all cash and investments and their value over time.

This chart shows the primary contributor to that increase in the value of our cash and investments:  Health Plan Funding.

We have gone over the last sixteen years from a little under $42,000 in this account to over $4,300,000.  That is a change of 10,000+ percent.  

The vast majority of this money is targeted against our unfunded liability in the area of retiree health.  According to the report by the Conference Council of Pensions and Health Benefits (CP&HB) our obligation in this area given our current policy and population is a little under $10,000,000 (report here, page 3).  Given our current policy, last discussed extensively in 2008, we have an unfunded liability here of at least $4.4M and probably more like $5.6M (my conclusions from reading the provided report.)  

Those are very real numbers, and the type of numbers that cause accountants to flinch.  Justifiably.  

But my issue is not the realness of the unfunded liability, which I will discuss at a different time, my issue is the growth in this account.  How did it happen?  

Real money invested right now is making some real returns on that investment.  As I type this, the Dow Jones Index is over 20,000.  

Where did the real money come from that was invested?  

Two primary means, and both of them start at the local church.  

• First, the collections in 2012-2013 for active health insurance in the conference yielded $400,000+ income above expenses, and that overage was invested in retiree health.  
• Second, rebates were sent back to the conference by the national church in 2012, 2014, and 2016.  All of these rebates, with money that started off at the local church, was, consistent with the Book of Discipline authority.  I do not know the precise number of these rebates but I suspect they are over $2M.  

A third possible point that is in theory an option, is not forecast ed to happen in 2018 but our Comprehensive Protection Plan (CPP) obligation to the national church is zero.  This is sometimes called a "holiday."  But CPP will be billed and that billing will be used for other (and right now, non-retiree) unfunded liabilities.  (Read the report linked above). 

My advocacy for several years on this has included the concept of "sharing" of this bounty with the source, i.e. the local church, and if not, at least explicitly share the information with the local churches why this strategy of lowering unfunded liabilities is beneficial in the long term.

The information is available that this is going on if we look at and read the reports.  The information has not been shared in any kind of targeted, intentional, explicit, manner so that congregational buy-in is acquired.

Selah, Dennis Shaw

The next blog is HERE.