Medicare Supplement insurance is offered to Medicare-eligible employees who work 20 or more hours per week at a participating employer with fewer than 20 employees, as well as their Medicare-eligible spouses. This insurance is also available to Medicare-eligible retirees of a Church of the Brethren-affiliated employer, as well as their Medicare-eligible spouses, widows, or widowers. At the time the individual becomes eligible for Medicare, he or she must enroll in Medicare Part A and part B as his or her primary coverage and enroll in this plan within the six-month enrollment period that immediately follows that person's Medicare eligibility date.

Yes, through Medicare. The prescription drug plan is called Medicare Part D. Click here for further details on Medicare Part D.

For 2012, the Internal Revenue Service has established a maximum contribution limit of $3,100 for those with individual medical coverage and $6,250 for those with family (more than one person) medical coverage.

In March 2005, Brethren Benefit Trust convened a meeting of the Brethren Medical Plan Interim Advisory Panel. This group, which represented pastors, the denominational agencies, the Council of District Executives, and Annual Conference’s Pastoral Compensation and Benefits Advisory Committee, approved a recommendation that calls on every congregation, district, or other agency that offers a high-deductible plan to its employees to make a minimum contribution to their employees’ HSAs. The minimum recommended contribution for those with individual medical coverage is $500; it is $1,000 for those with family medical coverage. That recommendation was supported by the BBT Board at its April 2005 meeting.

Brethren Medical Plan offers 13 plan designs, including traditional Preferred Provider Organization, Exclusive Provider Organization, and high-deductible PPO plans, with varying deductibles; however, plans can be customized upon request.

In order to qualify for an HSA, you must be enrolled in a high-deductible health plan. 

For ministers group employees and retirees, enrollment materials will be mailed the last week of September to those who are currently enrolled in any of our plans. For agency group employees, check with your employer for your open enrollment period. 

If you are not currently enrolled in our plans, please contact the Brethren Insurance Services at 800-746-1505 to request an open enrollment packet.

For ministers group employees and retirees, open enrollment is held during the month of October every year. Check with your employer for your renewal date.

For additional information, please contact Brethren Insurance Services at insurance@cobbt.org or 800-746-1505.

In 2010 and 2011, Church of the Brethren Pension Plan offered resources to retired pastors who received notification from the Internal Revenue Service indicating they may owe additional taxes for years 2008 and 2009. These resources can be found below. If you receive notification from the IRS regarding your tax liability for years 2008 and 2009, please review this information thoroughly and direct questions to John Carroll, manager of Pension operations, at jcarroll@cobbt.org or 800-746-1505, ext. 383.

2009 tax return guidance -- housing allowance issues

2008 tax return guidance -- housing allowance issues

The Internal Revenue Service creates annual limitations on contributions made to qualified retirement plans like Brethren Pension Plan. Those limits can be reviewed here.

The sharp decline of the markets in 2008 had a huge impact on the RBF, reducing its ability to pay benefits at the previous assumption rate of 8 percent. After the last market correction, BBT attempted to maintain benefit levels for existing annuitants by lowering the assumption rate for new annuitants. However, this was not enough to offset the impact of the 2008 market collapse. Changing to a uniform 5 percent assumption rate was the only effective way to remedy the underfunded status of the RBF.

This question is difficult to answer. Assuming the markets continue to recover, the assets of the Retirement Benefits Fund will likewise recover, based on the implementation of this benefit reduction. We simply do not know how quickly this will happen. Our present goal is for the RBF to be 100 percent funded and able to meet all of its benefit obligations today and into the future. As of Dec. 31, 2010, the RBF was 82 percent funded. Returning the RBF to fully funded status while continuing to pay out monthly benefits will take many years. Our goal is to ensure the solvency and long-term viability of the RBF so that every participant receives his or her lifetime retirement income. Given the ongoing recovery of the RBF, we are not able to consider benefit increases at this time.

2010 saw the S&P 500 index finish the year at 1,258 points — up nearly 13 percent from 1,115 on Dec. 31, 2009. The total of all pension assets on Dec. 31, 2010, was $292,805,995 — up $26.2 million from our Jan. 1, 2010 balance of $266,603,737. Nevertheless, as of Dec. 31, 2010, the RBF was still only 82 percent funded. Currently, benefit payments of approximately $945,000 are disbursed to our annuitants every month. At this rate, even with the recent market returns flowing into the RBF, we have high confidence that the RBF will remain underfunded and could simply evaporate without this reduction in benefits. So, the answer to this question is, “Yes, this benefit reduction is still very much necessary.”

We are continuously striving to maintain our database of contact information so that duplicate mailings are eliminated. Sometimes we miss our objective. Please give us a call when you receive a duplicate mailing and let us know. We appreciate your assistance and your patience.

No. To change the survivor benefit election would distort your benefit calculation in a negative way. It is possible that recalculating an annuity benefit with a different survivor benefit election could result in a benefit amount that is less than what it should be.

In order to provide each annuitant with the appropriate and accurate new benefit amount (based on the 5 percent assumption rate), we must use the same values as those in the original calculation, with the exception of the assumption rate.

Yes. BBT has already increased and decreased benefits and/or assumption rates in the past as market conditions required. While the Plan is designed to keep benefit amounts level (not guaranteed), it also allows the Board to take whatever action is necessary to protect the Retirement Benefits Fund. We will continue to respond to market realities and adjust benefits as necessary.

Over its 60-plus year history, Brethren Pension Plan has provided generous benefits while maintaining financial stability. This has included several percentage increases as well as numerous "13th checks" during those times when the markets have made favorable returns. Unfortunately, it is possible for annuity payments to be reduced due to adverse market conditions.

However, be assured that the desire and goal of the Board and staff have been, and continue to be, offering the most generous benefits possible while maintaining fiscal responsibility. The RBF must be able to meet its current and future obligations. Our commitment is that annuitants will receive a benefit for life.

In an effort to assist those who are most vulnerable to the annuity benefit reduction, BBT has appropriated non-Pension Plan assets from its operating reserves to provide special assistance — up to the amount of the benefit reduction. The reserves represent the income and investment accumulations of more than 20 years of service to the denomination. It is seed money to start new projects and gives the organization adequate cash flow. While there are not enough assets in this Fund to fix the Pension Plan, there are enough to help ease the initial pain of a lowered monthly payment for those who qualify. The Board will review and evaluate the grant program each year to see if and how it can be continued. Please click here to download the grant program application.

At its April 2011 meeting, the BBT Board voted to begin phasing out the grant program, with an end date of Sept. 30, 2014. The amount of the payments in 2011 will not change. But in 2012, the payout for the grant program cannot exceed 75 percent of what an annuitant's income was reduced by the lowering of the assumption rate to 5 percent. In 2013, the amount cannot exceed 50 percent, and in 2014 it cannot exceed 25 percent. The program will then end on Sept. 30, 2014.

Reverting to a single assumption rate is the most appropriate intervention to the RBF underfunding crisis because —

1. There is a justice issue. With multiple assumption rates, those who annuitize later are subsidizing the higher benefits of those who annuitized earlier. In moving to one assumption rate, we are essentially leveling the playing field for all annuitants.
2. Using multiple assumption rates has left some participants with the impression that our annuity is a “fixed amount for life” product, and that the Plan does not allow for interventions to the RBF. The Plan has always allowed for the Board to take any necessary action to preserve the RBF.

An “assumption rate” is the annualized rate of return that BBT expects to earn on the assets invested in the Retirement Benefits Fund — the pool of money that pays out monthly annuity benefits. It is also a key value used in calculating an annuity benefit amount.

If your organization is not a “steeple” church, it is important to determine whether it is a non-qualified church-controlled organization or a qualified church-controlled organization. The requirements under the final regulations are more extensive for non-QCCOs. The term “Non-Qualified Church-Controlled Organization” means an organization described in Code section 3121(w)(B) and Treasury regulations thereunder.

QCCO generally refers to a church-controlled 501(c)(3) tax-exempt organization that:

1. Does not generally offer goods, services, or facilities for sale to the general public; or
2. Receives less than 25 percent of its financial support from government grants or receipts from goods and services in related activities or business.

Examples of QCCOs are Church of the Brethren Annual Conference, Brethren agencies and entities, and seminaries. Churches and church-related primary and secondary schools, though not technically QCCOs, have to follow the same rules as QCCOs.

Non-QCCO generally refers to any church-controlled, tax-exempt organization described in Code section 501(c)(3) that:

1. Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public, other than goods, services, or facilities that are sold at a nominal charge that is substantially less than the cost of providing such goods, services, or facilities; or
2. Normally receives more than 25 percent of its support from either (a) governmental sources or (b) receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities which are not unrelated trades or businesses, or both.

Examples of non-QCCOs are church-affiliated hospitals, universities, children’s homes, and retirement community facilities.

Non-QCCOs, like QCCOs and churches, are eligible to participate in church plans. However, non-QCCOs must comply with the nondiscrimination testing, universal availability, and certain other requirements under the final regulations that are not applicable to churches and QCCOs.

This information should not be considered tax or legal advice. Brethren Benefit Trust Inc. stands ready to assist your organization as you work with your legal and tax advisers by providing resource information that you and your adviser may find beneficial.

Source: Anderson, Janet M.; Levy, Donald R.; and Seymon-Hirsch, Barbara N. 403(b) Answer Book, Seventh Edition. Aspen Publishers, 2008.

Prior to 2008, Brethren Benefit Trust requested that retired ministers receiving an annuity benefit from the Brethren Pension Plan submit a housing allowance amount to the Pension office, for use in processing 1099-R forms. By reflecting this amount on 1099-R forms, BBT was inadvertently limiting the amount of housing allowance pastors could claim if they received annuity income from multiple sources.

It is now the pastor’s responsibility to calculate and report the portion of the pension income that is designated housing allowance. The BBT Board makes an annual decision to allow up to 100 percent of a pastor’s Pension annuity income to be designated as housing allowance. BBT’s current practice of not reflecting housing allowance on the 1099-R form does not put pastors at any more risk of an audit by the Internal Revenue Service than the previous method.

Once vested, members do not lose their pension benefits if they leave their jobs prior to retirement. The employer portion of their pension account remains in the Plan to fund an annuity for them at a later date. Personal contributions and the related investment return may remain or an amount can be withdrawn one time each calendar year after a member leaves the job.

Yes. Although there are never guarantees regarding investment returns, Pension Plan investments are managed by eight professional fund managers that have extensive experience in handling church pension assets. The managers work under strict performance and social responsibility guidelines and are monitored by BBT's chief financial officer and the Board's Investment Committee.

Annuity benefits are calculated on the assumption that they will be paid out over the lifetime of each annuitant. The RBF pools the assets and mortality experience of all those participating in the annuity benefit. This assures that each annuitant will likely receive benefits for life.

Yes. At retirement, members have four choices:

• Single life option
• 50 percent spouse option
• 75 percent spouse option
• 100 percent spouse option

Survivor beneficiary options provide a benefit for the Plan member and spouse as long as they each live.

While you are working for an employer who is sponsoring the Brethren Pension Plan, and contributions are made to your account, you decide how those contributions are invested. There are 16 fund choices:

• Short-Term Fund
• Bond Fund
• Treasury-Free Bond Fund
• Treasury Inflation-Protected Securities Fund
• High-Yield Bond Fund
• Balanced Fund
• Common Stock Fund
• Domestic Stock Core Fund
• Domestic Stock Value Fund
• Domestic Stock Growth Fund
• Small Cap Fund
• International Stock Core Fund
• Emerging Markets Stock Fund
• Public Real Estate Fund
• Commodities-Based Fund
• Community Development Investment Fund

Employers have the opportunity to choose which of the 16 funds will be made available to their employees. Plan members then have the choice of allocating contributions among all of the available funds in any combination. Contributions may be shifted as often as once a month. You may download the Fund Selection/Fund Transfer form here.

You may also learn more by clicking here to download a brief guide to Brethren Pension Plan’s investment offerings.

The performance of a participant’s account will vary depending on contribution allocations, the participant’s investment time horizon, the number and timing of transfers, and the performance of the markets.

Yes, making additional contributions into your Plan account will likely increase your retirement benefit. Of course, time horizon, contribution amounts and market performance will all impact account balances which ultimately determine the annuity benefit a participant will receive.

No. All contributions into your Plan account accumulate on a tax deferred basis until you take a distribution. Brethren clergy receiving an annuity benefit from the Plan may be able to reduce their federal tax liability by the amount of their qualified housing costs.

No. Benefits are administered directly by Brethren Benefit Trust. BBT staff members are people of faith who share the values upheld by the Church of the Brethren. They know many Plan members by name and are responsive to client concerns.