LAKELAND — With the Florida Conference struggling to deal with 1999’s $1 million budget deficit and the possibility that 2000’s budget will also generate a substantial shortfall, conference finance is likely to be a hot topic at the Dare to Share Jesus 2000 Florida Annual Conference Event May 30-June 2 in Lakeland.

A large portion of that discussion will focus on how the conference will pay for health benefits of its retired clergy in the future, according to the Rev. David Dodge, executive director of the conference’s Division of Ministry.

Dodge said the conference’s General Conference May 2-12 in Cleveland, Ohio, considered legislation to require all annual conferences to evaluate their health insurance funding plans. Currently, the General Board of Pensions has studied the funding provisions for the 18 conferences in the HealthFlex program, of which the Florida Conference is a part. That study identified the Florida Conference’s projected liability and the degree to which it is unfunded, Dodge said.

"We are obligated under the current standing rules to provide health insurance and to make sure that it’s funded at a certain level," Dodge said. "We have been doing ‘pay as you go’—this year’s needs paid for with this year’s funds."

The problem, Dodge said, is the conference’s future obligations are not funded. Although the conference has forecasted the cost of benefits for current and future retirees, "we do not have the resources available to us to take care of those future obligations," he said.

"When the study was presented in September 1998, we had a $54.3 million unfunded liability," he said. "An update of the study done in November 1999 shows the unfunded liability increased to nearly $59 million."

One reason for the increase is that health care for people 65 and older is the fastest inflating sector of health care, according to Dodge. Currently, that industry is experiencing double-digit cost increases, he said.

To address the issue, the Insurance and Pension Committee of the Division of Ministry is proposing a three-point initiative to delegates at the annual conference event. Although the proposal does include some additional costs to retirees and local churches, Dodge said the conference has a choice to "pay now or pay later."

"We can pay smaller amounts now or pretty soon, in two or three years, we’re looking at making some really hard choices about adding significant funds to the budget for retiree health insurance benefits, or significant premium increases to retirees, or no funding for retiree health insurance and retirees paying for it on their own," he said.

The Florida Conference is in a much better position to deal with this liability than most of the other 18 conference’s in the HealthFlex program because of a decision made at the 1978 Florida Annual Conference Event. At that time, the conference was facing an unfunded liability in its deferred benefit pension plan. The annual conference initiated a capital funds campaign to help fund the Ministers Reserve Pension Fund (MRPF).

The initiative raised almost $6 million through local church giving for the MRPF connectional giving (apportionment) line item. Interest earned on that money through the strength of the equity and stock markets over the past several years has funded the liability and given the conference a little more than $18 million in undesignated earnings.

The Insurance and Pension Committee is asking that attendees at this year’s annual conference event approve using some of that $18 million to help fund the conference’s future retiree health benefits liability. Although the money is undesignated, the General Board of Pensions says annual conference must approve the use of the funds for this purpose. The plan is to use $600,000 in 2001 and increase the amount 7.9 percent each year afterward.

The second part of the plan is to allocate a $10 monthly premium to each qualified retiree enrolled in the plan and an additional $10 monthly premium for each retiree spouse enrolled. The premiums would begin Jan. 1, 2000.

The third part of the plan is to move the health insurance supplement payment out of the Conference Services and Administration (CSA) budget into a newly titled apportionment for pension and benefits programs. Dodge said this move would help both the health benefits and the rest of the conference’s budget.

"When CSA collects at 82 to 84 percent, and that one item—the largest—must be paid at 100 percent, it erodes what can be spent on soft things like the programmatic ministries of the conference," Dodge said.

In addition to changing the category under which health benefits are collected, Dodge said the committee is also recommending a new line item be added under the apportionment for pension and benefits programs and an old one be removed.

The new $120,000 line item would be added specifically to fund the unfunded liability. At the same time, the MRPF, which totaled $56,014 in 1999, would be taken out, since it no longer needs to be funded, Dodge said. The net would be an approximately $64,000 increase annually in the conference’s connectional giving.

Dodge said the committee has been working on this plan since last annual conference and its quick implementation is important to its success.