Caring For Those Who Serve

Those New to MinistryMississippi Annual ConferenceAugust 16, 2010

Presented by:

Ron Coleman

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Overview

• Terms• Retirement Provisions • Retirement Plans • LifeStage Investment Management

Service (LifeStage)• Comprehensive Protection Plan

(CPP)• Ernst & Young Financial Planning

Services

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General Board of Pension and Health Benefits

• Not-for-profit organization

• Over $16 billion in assets

• Currently serving 74,000 participants

• Largest denominational pension fund

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Mandatory retirement• Age 72—effective

January 1, 2009

Provisions for RetirementThe Book of Discipline ¶358

Early Retirement• Age 62 or 30 years

of service—effective

January 1, 2009

Normal Retirement• Age 65 or 40 years

of service

20-Year Retirement

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Denominational Average Compensation (DAC)

• Average plan compensation of United Methodist clergy serving full-time appointments

• 2010: $60,341

• 2011: $61,716

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Conference Average Compensation (CAC)

• Average annual compensation of United Methodist clergy serving full-time appointments related to a specific conference

• 2010 = $59,379

• 2011 = $60,158

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Annuity

• A stream of payments

• Period certain (term) annuity = benefit paid over a guaranteed period

• Life annuity = benefit paid for life (if joint = two lives)

Reverend John

Smith1234 Nowhere

StreetChicago, Illinois

12345

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Clergy Retirement Security Program (CRSP)

2007+

CRSP1982-2006Ministerial

Pension Plan (MPP)

Pre-82 Plan(Ministerial

Reserve Pension Fund)

United Methodist Personal Investment Plan (UMPIP)

Retirement Plans

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Clergy Retirement Security Program (CRSP)

A new retirementplan, effective January 1, 2007 providing a core benefit at retirement with two components

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Clergy Retirement Security Program

Defined Benefit

(DB)

Defined Contribution

(DC)

+

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Defined Benefit ComponentMonthly payments, payable for life, calculated by multiplying the following and then dividing by 12:• 1.25%• DAC at time of retirement• Years of credited service from January 1,

2007Example for 2013 retirement

.0125 x $65,000 (hypothetical DAC) x 6.5 years

= $5,281 ÷ 12 = $440 per month

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Defined Benefit Advantages

A benefit for life

Secure regardless of market fluctuations

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Defined Contribution Component• Plan sponsor contribution of

3% of clergyperson’s plan compensation

• Account balance invested as directed by participant

• Available as cash distribution at retirement (or termination)

■ Full lump sum■ Partial lump sum■ Cash installment (e.g., monthly)

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Defined Contribution Advantages

Cash at retirement

Potential for investment

growth

Provides choice

and flexibility

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Clergy Retirement Security Program (CRSP)

2007+ CRSP

1982-2006Ministerial

Pension Plan (MPP)

Pre-82 Plan(Ministerial

Reserve Pension Fund)

United Methodist Personal Investment Plan (UMPIP)

General Board Retirement Plans

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UMPIP Sources

• Before-tax contributions• After-tax contributions• Rollovers

■ 401(a)■ 401(k)■ 403(b)■ IRA

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UMPIP Access

• In-service withdrawals■ Age 59½

• Hardship loans• Hardship withdrawals• Disability• Termination• Retirement

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• Benefit choices■ Full lump sum■ Partial lump sum once per quarter■ Cash Installments■ Leave on account

• Flexibility to make changes• May pass on to heirs

UMPIP

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Advantages of Investing Through the General Board• Socially responsible investing

• Competitive returns

• Low expense ratios

• Access to LifeStage Investment Management Service

• Uphold the values of The UnitedMethodist Church

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Investment Options

SVF

IPF

FIF

MAF

USEF

IEF

BSVPF• Stable Value Fund• Inflation Protection Fund• Fixed Income Fund• Multiple Asset Fund

• Balanced Social Value Plus Fund

• U.S. Equity Fund• International Equity Fund

Ris

k

Return Potential

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UMPIP Unitized FundsExpense Ratio Comparison

238Short-TermBond Funds

119Inflation

ProtectionFunds

1,151Short,

Intermediate,And Long-Term

Bond Funds

753 Funds with Balanced Objective

1,773Multi-AssetClass Funds

1,417Growth and

IncomeFunds

413Foreign Stock

Funds

0.370.49 0.49 0.42

0.700.80 0.87

0.00

0.50

1.00

1.50

2.00

2.50

3.00

SVF IPF FIF BSVP MAF USEF IEF

Source: Wilshire Compass and Lipper as of 03/31/09

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General Board Competitive ReturnsYear-to-date July 23, 2010

1.8% SVF

IPF

DBF

MAF

BSVPF

DSF

ISF

5.9%

2.0%

1.4%

1.4%

-1.6%

2.6%

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LifeStage Investment Management Service (LifeStage)

LifeStage Investment Management Service (LifeStage)—managed accounts

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LifeStage

• Creates a customized investment portfolio for you

• Reviews asset allocation annually

• Rebalances your account as needed

• Allows you to focus on other things

Benefits:

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LifeStage: Fund Selection Feature

Risk Tolerance

Age

GBOPHBAccount Balances

Value of Social

Security Benefits

Age at Retirement

Social Security Eligibility

▪Fixed Income Fund

▪ Inflation Protection Fund

▪U. S. Equity Fund

▪ International Equity Fund

▪Stable Value Fund

Target Fund Allocation

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LifeStage: Rebalancing Feature

Before Actual Fund Allocations

After Actual Fund Allocations

No participant intervention required

▪ Fixed Income Fund▪ Inflation Protection Fund▪ U. S. Equity Fund

▪ International Equity Fund▪ Stable Value Fund

13% 13%

34%14%

26%

14%

29%

17%

27%

13%

▪ Fixed Income Fund▪ Inflation Protection Fund▪ U. S. Equity Fund

▪ International Equity Fund▪ Stable Value Fund

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Comprehensive Protection Plan

Death and Disability

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Comprehensive Protection Plan

• Mandatory welfare plan

• Effective January 1, 1982

• Provides death, disability and survivor benefits for clergy

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CPP General Eligibility Requirements

• Under Episcopal appointment

• 60% of DAC or CAC (whicheveris less)

• Full-time

• PTLP and STLP not eligible

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CPP Contribution Rate

3% of compensation not to exceed 200%

of the DAC ($120,682)

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• Sabbatical * • Attending school *• Voluntary Leave (family, personal,

transitional) * • Incapacity Leave *• Involuntary Leave * • Less-than-full-time * • Compensation less than 60% *

CPP Special Arrangements

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CPP Death Benefits 2010Active: $50,000

Retired: 30% of DAC ($18,102)

Spouse: 20% of DAC ($12,068)

Surviving spouse: 15% of DAC ($ 9,051)

Child: 10% of DAC ($ 6,034)

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CPP Disability Benefits

• 70% of plan compensation; plan compensation capped at 200% of DAC ($120,682)

• Offset by Social Security disability benefits

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Ernst & Young Financial Planning Services

Financial Planning

1-800-360-2539

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Consultation Topics

• Creating a retirement plan• Choosing retirement plan

investments• Buying a home• Developing an estate plan• Managing debt• Funding children’s education• Evaluating insurance needs and

options

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Other Retirement Planning Resources

Web Site:www.gbophb.o

rgOnline Account

Services Information System

(OASIS)

Customer Service

Representatives:

1-800-851-2201

Interactive Voice Response

(IVR) System

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www.gbophb.org

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1-800-851-2201www.gbophb.org