In June, a group of members from the Board of Trustees, Joint Board on Pensions, Health Insurance and Equitable Compensation (Joint Board) and the Council on Finance and Administration met to begin the process of drafting an agreement for Wisconsin United Methodist Churches to follow if they desire to disaffiliate from the Annual Conference based the issue of human sexuality. This is response to action taken at the February 2019 Special General Conference.

This Task Force has considered multiple potential implications if a church disaffiliates, including church building and property, church records, financial obligations to the Annual Conference as well as future unfunded pension liabilities. Unfunded pension liability defines the amount an Annual Conference needs to fulfill commitments made to clergy so they will receive the defined benefit (DB) portion of their pension payments in retirement. 

The Joint Board has been committed to making sure funds are available for future liabilities. Annually, the Joint Board obtains an actuarial valuation of future liabilities from Wespath, who oversees and helps administer Annual Conference’s pension funds. This valuation predicts future pension and retiree health insurance premium liabilities and compares this with available resources. Historically, Wisconsin has been within the Wespath funding guidelines and has been overfunded. After the 2019 Special General Conference, Wespath established new guidelines for determining future unfunded pension liability. Wespath increased the unfunded liability to 110%. Wespath used this higher valuation for several reasons. First, if churches disaffiliate from the United Methodist Church, there could potentially be fewer churches paying into pension liabilities. Yet, defined benefit liabilities will continue for several decades into the future. Wespath also used the higher valuation because of increased risk. Finally, Wespath   factored in the possibility of a third‐party vendor assuming responsibility for administering the pension liabilities and program.

After the Special General Conference, the Joint Board received an initial unfunded liability amount of $54 million for Wisconsin. When Wespath provided this initial post‐General Conference unfunded liability, they expressed the amount provided is only considered a valid representation of unfunded status until 7/31/2019. It is possible that the unfunded liability amount will fluctuate in the future.

The Wisconsin Annual Conference Disaffiliation Agreement remains in draft stage in light of recent news from General Conference regarding improper voting held during the Special General Conference. Wisconsin’s Disaffiliation Agreement will not be finalized until it is determined how this affects the Disaffiliation Process. The Task Force feels clarification on this is necessary before moving forward with Wisconsin’s process.  Read UM News here.

The agreement being drafted pertains only to churches who wish to disaffiliate based on the issue of human sexuality. Should a church choose to disaffiliate based on anything other than the issue of human sexuality, the churches would be required to follow the process identified in Book of Discipline and the paragraphs relating to a closed or abandoned church.