In order to appropriately discern how the Indiana Conference will continue to fulfill its covenant to care for clergy during their retired years, it is wise to step back for a broad view in order to determine whether or not our assumptions are accurate and whether or not our comparisons are accounting for the inherent differences between that which is being compared.
It is also critical that we go forward with a common assumption that, as sisters and brothers in Christ, every single one of us, regardless of methodology or bias, is concerned that we care especially for our retired clergy that demonstrate the greatest need. When we prayerfully assimilate information and humbly dialogue with such an understanding, we realize that while approaching the issue differently, we all share that common goal of caring for those with greatest need in order that all are treated more equitably.
Let’s begin by looking at some data that reveals the complexity of our task. Three decades ago in 1982, the Federal Poverty Level for a family of four was $9,300. By comparison, the Indiana Conferences’ minimum compensation (salary plus 25% housing) packages for full elders serving full-time were $12,850 and $14,000, or 138% and 150%, respectively, of the poverty level for a family of four. Similarly, these Indiana Conferences’ minimums were 64% and 69%, respectively, of the Median Household Income of $20,171 in 1982.
By 1992, the same poverty level had increased to $13,950, the median household income had risen to $30,636, and the minimum compensation for the Indiana Conferences had reached $22,531 and $22,500, or 161% of the poverty rate and 73.5% of the median household income. By 2002, the respective income figures were $18,100, $42,409, and $32,200/$34,868, which translate to the minimum Indiana U.M. clergy compensation having increased to 178% and 193% of the poverty level and to 76% and 82% of the median household income.
The most recent year for which we have actual (not estimated) comparison data is 2012, at which time the poverty level for a family of four had reached $23,050 and the federal median household income had surpassed the $50,000 level at $51,404. At the same time, the new conference’s minimum compensation had climbed to $47,086, or 204% of the poverty rate and 92% of the median household income.
This data indicates that in the thirty years from 1982 to 2012, our full-time elder minimum compensation had grown from a proportion of 138% and 150% over the U.S. poverty rate for a family of four in 1982 to 204% over the corresponding poverty rate in 2012. In the same three decades, the clergy’s minimum compensation’s percentage increase with respect to the median household income was from 1982’s 64% and 69% to 2012’s 92%. The bottom line is that clergy compensation has out-paced not only these indicators, but the general population represented by these government figures as well.
If we were to compare the Denominational Average Compensation (instead of the conferences’ minimum compensation) to the Federal Poverty Level and Federal Median Household Income figures above, we would see correspondingly sizable percentage increases. Actually, these increases are even more dramatic, especially in the last decade. During the same thirty-year period, the DAC grew from $16,776 in 1982 to $62,781 in 2012, representing a growth from 180% to 272% of the Federal Poverty Level and from 83% to 122% of the Federal Median Household Income. The significance of the DAC is that it represents the average compensation of all clergy throughout the denomination.
Furthermore, in the early 1990’s, both predecessor conferences had intentionally increased their respective minimum salaries to be at or above the average minimum salaries of the conferences within the North Central Jurisdiction. Those decisions had the consequence of increasing our respective Conference Average Compensations (CAC’s) over time. The result today is that during the five years of the Indiana Conference, our CAC (Conference) has actually been about $2,000 greater than the DAC (Denomination-wide), which means that Indiana clergy compensation is even higher than the denominational average. Therefore, the percentage comparisons with respect to the poverty level and median household income are still more dramatic.
Both the Bishop’s Retiree Medicare Supplement Subsidy Study Team and the Board of Pensions and Health Insurance have been aware of this data in their discussions of need. Both teams have concluded that it is informative and essential information to consider, along with the various other facets of this complex issue. What the information reveals is that there is a stark difference in how we define “need” for clergy serving prior to 1982 in comparison to those serving prior to 2002 and to those serving today.
As alluded to, “other facets of this complex issue” include, but are not limited to:
- How do we compare pension benefits from different eras?
- How do we compare insurance benefits from different eras?
- How do we compare insurance costs from different eras?
- How do we factor in one-income and two-income households from different eras?
- How do we factor in the cost of higher education and seminary from different eras?
- How do we define “need” in order that we care for those with greatest need?
- How do we care for those with greatest need?
- What are some of the spoken and unspoken covenants that exist?
- How will we balance covenants that have competing goals?
These questions are among the many with which the Bishop’s Study Team and the Board have been wrestling with in the past two years. Actually, the Board and its predecessor boards have been wrestling with these issues for several years.
This insert will address many of these questions with background information. The Bishop’s Study Team had not yet developed its proposal at the time of this publication’s writing (Aug. thru Oct., 2013), so there are no specific proposals provided herein. Such a proposal (proposals?) will be forthcoming; however, the purpose of this insert is to provide broader background information, against the backdrop of which the conference can discern the viability of the team’s proposal(s) as it becomes published in the next couple of months and is subsequently brought before the 2014 Annual Conference.
During the five years of the Indiana Conference, our CAC (Conference) has actually been about $2,000 greater than the DAC (Denomination-wide).
This chart demonstrates that clergy salary growth has outpaced the growth of both the Federal Median Household Income and the Federal Poverty Level in both real dollars AND AS A PERCENTAGE/RATIO COMPARISON.
For example, the minimum full-time Elder compensation has increased from 138% of the Federal Poverty Level in 1982 to 203% in 2013.
Similarly, the minimum full-time Elder compensation has increased from 64% of the Federal Median Household Income in 1982 to 92% in 2012.
These percentage increases reflect the clergy’s income only (i.e., no spousal income is reflected) during a period when the number of two-income households in the U.S. increased dramatically.
Note: The CAC for Indiana and both predecessor conferences have consistently been even higher than the DAC (by approximately $2,000 in recent years).
– U.S. Dept. of Commerce