The Annuity Crisis is not the only existential threat facing African Methodism!  Declining membership; new, emerging paradigms of “church;” and different standards of commitment and accountability to both church and charity; all are omens of a need to reassess mission, values and operations.  Sadly, the Annuity Crisis may force us to do what we have avoided for decades:  face the fiscal skeleton.

Barring an extraordinary financial commitment by responsible parties in the Annuity Crisis, the $2m/year set aside is pathetic.  While we may claim to be unable to do better, there could be an Austerity Budget in our near future.

Here is a kind version.  While I do not agree with those who argue there is a lot of fat in the General Budget, there are areas where we will have to cut in an environment of austerity.  Before you are consumed by anger or fear, watch for the next blog posts where I propose how we deal with an austere budget.

In an Austere Budget:

1. Salaries and Expenses for bishops and general officers are frozen.
2. Global Development Funding Cut 100% (currently $280,182)
3. Lay Organization reduced to $60k (currently $194,962)
4. Women’s Missionary Society reduced to $60k (currently $314,065)
5. Colleges (Districts 1-13) no allocation. No change to seminaries (reduction of $1,841,196)
6. Extended Budget in Education (Districts 1-13) no allocation (reduction of $112,479)
7. Episcopal District Projects cut 100% (currently $130,537) 

Savings:  $2,873,421/year

GOING DEEPER

1. SADA reduce by 50% ( net reduction $280,667)
2. Global Witness – eliminate office, stipend distribution in Finance Office (net reduction $163, 682)
3. Reduce Bishops’ travel 25% (net reduction $110,365)
4. Reduce General Officer travel 25% (net reduction $33,075)

Additional Savings:  $587,789/year

Subtotal Savings:  $3,461,210

STILL NOT ENOUGH?

1. Reduce salaries by 25% net about $425k/year
2. Miscellaneous additional 25% reductions could net $113,790

Total Annual Savings:  $4 million

FOR THE DREAMERS

1. Allow one bishop to serve two smaller contiguous districts – Savings $200-300k per year
2. Assign Ecumenical Office to a bishop with a district – Savings $20k per year
3. Assign Chaplain Endorser to a bishop with a district – Savings $20k per year
4. Do a General Program Audit to determine if there is fat in the Budget.
5. Make investment income an Income Line Item to balance the Budget.

How do we deal with Austerity? What was the rationale for the cuts? What is our Future in Funding/Program? What was the criteria for these proposed cuts?  How much increase to the Budget can we survive, and how will it be allocated?

Stay tuned!

This is the manuscript version. There are videos of the worship on various Facebook pages.

Thanks to all for their interest and prayers.

Lord, in your MERCY, hear our prayers!

Our Pension/Annuity programs were never perfect. While we were patient with tweaking and micro-improvements, there were always those who harbored suspicion, distrust, and low confidence in the system to monitor and protect assets.

Strict enforcement of the 12% Rule caused many to put ALL their church could afford for retirement in the system. They were not allowed to contribute only $312 twice a year. They could not put the difference between $624 and 12% into a private plan. Moreover, few were in comfortable enough pastoral situations to pay 12% on housing allowance or annual parsonage rental value. In short, most full time servants of the church began the process under-capitalized.

This makes the notion that “we” should wait on the proper investment of “our” remaining annuity funds outrageous! The faithful should not be penalized, or further victimized, because they followed the rules, and they served an institution unable to adequately provide fair, sufficient retirement benefits.

I have heard the arguments that the annuity funds are “the Church’s” to manage until participants separate. There are a few responses to this assertion, which I will hold for another time and expert commentary. The moral/ethical/practical question is why would the Church attempt to profit from, and withhold, Legacy Funds until the time of separation. Use your managerial authority to empower the participants!

Although we have not yet been informed of our individual statistics associated with a reasonable “expectation” of earnings on our annuity contributions over the last 20 years, there are some things which are quite clear:

1. The AME Church could have entered an arrangement, like our current one with Wespath, a long time ago.

2. When we transitioned from “pension” to “annuity” in the retirement presentation, we also should have been responsive to the cry for individually diverse investment options. This plea has been sounded for over 40 years. Had we been better informed, and less loyal, there would have been legal actions decades ago!

3. Although individual choices would have yielded varied earnings, many would have fared better with personal investment choices. All would have no one to blame for poor returns but themselves. We need more control over our funds NOW!

4. Why would anyone think it appropriate to bring the horse back to a renovated old corral, when we know the benefits and advantages of running the expanse of a free range?

5. Some of the same people who now watch over the funds have been in “watching” places for over a decade. Are they doing “better” when they are not vigorously leading the effort to rollover our funds?

Eventually, we must forgive and move on from the tragedy of the Annuity Crisis. Anger and lament need a final chapter. We do not deserve a prolonged reminder of our loss with every statement of under-earning and feeble restitution.

Here is the relevant question. Will our leaders do the right thing by rolling over our share of available funds, or will we spend additional hundreds of thousands of dollars in new litigation? Reasonableness or Receivership? Don’t penalize/victimize the faithful!

Do you remember when we would not talk or move during the prayer in worship? Even ushers were still, except when others had to be called to order during prayer! What happened? Are we lacking in faith or understanding? Do we believe that prayer, even in church worship, is our real communication with the real God?

Perhaps we do not understand that during the communion liturgy we are PRAYING. We Pray the General Confession. We Pray for Pardon, Humility and in Adoration. We Pray the Consecration. Do we even recognize PRAYER as part of our liturgical experience? What do clergy and lay think or focus on when we PRAY? Are they words on a page, or are they sentiments of our hearts?

It disturbs me when I see bishops, pastors, and stewardesses moving about, or engaged in conversation, during prayer. It may be difficult when we are trying to tweak logistics, but what good is smooth execution if we have dishonored the sacred moment with motion and talk…even seemingly important talk.

It is also disheartening when I hear clergy and lay rattle off prayers as though the words have no meaning. You have heard them “recite” the Lord’s Prayer. If you are “reciting,” are you “praying?”

We need liturgical reform! We must raise up a new generation of worshippers who go to the sanctuary to pray, for real. Clergy and laity must respect moments of prayer with focus and reverence. What if we are not truly praying when we sound the call, “Let us pray!“? What if God listens with the same nonchalant attitude with which we often pray?

Let’s get more disciplined about prayer, especially in our congregational worship! There are blessings missed because we are absent in spirit while present in body in the sanctuary.

Reform efforts range from simple to complex and from quick to slow.  Acting on reform issues with an appropriate understanding its nature can both energize from the easy accomplishments (and their benefits) and prepare for the longer, complex processes of the more difficult goals.  Consider:

The Common Sense Actions.  These are simple, direct improvements which can make a tremendous difference for both morale and administration.  Examples are: Publishing an Accurate Membership statistic (the data is mostly in hand); Making Connectional Budget Income Allocations Equitable (with membership data, it is straight forward, though difficult for some to swallow); Updates on the Annuity Crisis; Updates on Changes with Retirement Services; Reporting from AME, Inc. & AME Future Fund; and A Statement on Conflict of Interest/Self-dealing.  The key:  Just Do It!

Constitutional/Legislative Actions.  These are policy/program processes which should not be rushed or mere reaction motivated.  They require research, expert consultation, 360 degree consideration, refinement, and plans for implementation.  Just putting it in the Discipline is not implementation! Examples are: re-writing the Retirement Service section of the Discipline; revising the relationship of AME, Inc. to AMEC; revising General Board structure and Commissions; defining judicial processes (including appeals); and re-structuring the Budget.  We limp between two extremes. Either we do nothing because the hill seems steep, or we hide the details and deliberations until the last minute, which causes us to adopt flawed concepts and procedures.

Radical Personal/Systemic Change. This takes the most time and effort. Examples: eliminating/modifying personal entitlements and autocratic methodology; changing the way bishops, general officers, and presiding elders are financially supported; reviewing the support given to higher education; allowing one bishop to lead two contiguous districts (without merging); and eliminating, restructuring or creating connectional departments.  Foundational revisions to “the way we have been doing it” take research and analysis prior to proposal formation and convincing the Church of the necessity and benefits of change.

Nothing is impossible with God!  It is time for us to pray and reason together.  A stronger, more faithful church awaits us.

I was privileged to witness the grassroots effort to secure the Minister’s Bill of Rights and The Ministerial Retirement Program. Let us save the Bill of Rights for another time. My present concern is for the allocation of Ministerial Retirement funds for the support of Wespath fees.

There are a few still alive who were part of the early years when these funds were designated in the budget and went through different administrative changes. More recently, active pastors were allocated a share of the annual sum according to a formula of tenure. Although I entered the pension system between 1979-1981, I do not remember ever receiving more than a hundred dollars or so in any given year. (If you ever got more, please confirm on your statement and let me know when.)

A driving theme among some of the departed advocates (Dr. OU Ifill, Dr. John G. Ragin, & Dr. AD Tyson, Jr) was that the connectional church made a “pension” allocation for bishops. Other salaried clergy were deserving of the same consideration. Keep in mind, this is before bishops and general officers were put into an annuity arrangement. Bishops and general officers elected prior to 2000 receive half salary (about $30,000) per year. The last person grandfathered will retire in 2024. Essentially, there will be 8 bishops and less than 10 general officers eligible for half salary pensions after 2024.

Until our connectional church is positioned to make significant contributions toward clergy retirement, the use of these funds for the Wespath administration fee would be an equitable reallocation in the spirit consistent with the founding of the fund. The current Wespath fee is about $114/year/person. That, times 4,000, would come under the amount currently budgeted (>$500k). Paying the Wespath fee for the AME participants would be a fair way to benefit all clergy equally. The $114/year of value represents more than most have/will receive. The savings to the participants will add to their annuity account. We will truly see a benefit!

I heard gossip that one of our Commissions wanted to do exactly what is outlined above. While I agree such a move should not be accomplished by the fiat of a Commission, the intent would be consistent with the original goal: the connectional church providing retirement benefits for clergy as it provides for bishops and general officers. We no longer have a continuing pension program for bishops and general officers. The program comes closer to extinction with each transition. It is time to realign our thinking on the Ministerial Retirement Program. This is an equitable alternative.

Also, it would be interesting to know how much Wespath life insurance would run.

As a result of the Annuity Crisis, about $37m was available through Symetra to support about $129m of “statement supported value” as of June 2021. The “value” of individual accounts was reduced to about 30% by the end of 2021/beginning of 2022. Still, no current statements!

Last year, an effort was made to issue a “promissory note” from the AME Church to the Department. This was an accounting ploy that would have enabled the Department to use the hard cash to make payments while those of us who are not retired would trust the church to repay the funds as needed. Shame on those who supported such legitimate, legal trickery! The General Board squashed that plan by a narrow margin. In the meantime, there has been no indication that the Department is moving toward a rollover of the Legacy assets into the New Life Plan, even though that carrot was part of the discussions last year.

In fact, it looks like we need to brace for another attempt to hold on to the Legacy pot of money as part of the restitution program. No negotiated settlement for our annuity crisis should include use of the existing Legacy Funds for any purpose other than the immediate rollover to participant accounts in Wespath or another designated fund.

The incentives to hold on to the Legacy Fund pot of money are great and misguided. The Legacy/Symetra relationship generates substantial income for the Department of Retirement Services. It is not clear the Commission on Retirement Services has a grasp on the amount and allocation of these funds. Certain leaders still operate with the old “pension” mentality where they think the “pot” belongs to The Church. Will we have to go to a civil court on a separate matter: To explain that when the church transitioned to an individual annuity structure, the funds are (should be) a holding of the vested participants? Are the players even listening to the lawyers “they” hired?

Consider the Unanswered questions. Why do we still not have statements? If Symetra is at fault, as suggested by the church filing suit against Symetra, why are our funds still invested with them? How much interest does Symetra actually pay? How much interest has been applied to participant accounts? Is the Legacy Plan IRS qualified? Why don’t we have a copy of the “rules” of the Wespath relationship? Did the full Commission even have access to the Wespath contract, forensic audit or the latest actuarial report?

If creating a capitalized fund is essential to curing the Annuity Crisis, how about treating the Participants like human beings. Look us in the eye and reason with us. Tell us how much you need, and why. Offer us something more than 1.5% per year to “use OUR money.” Tell us how the funds will be invested. Show us that you will fully, truthfully, regularly communicate to ALL who have an interest. If the Church is so sure of its commitment and ability to pay/re-pay every penny finally agreed upon, Show Us! Formally put the Washington, DC and the Nashville, TN properties up as collateral. Make the Department, or a newly created entity, the sole beneficiary of the AME Future Fund and the AMEC Reserve Funds until all claims are paid. You want us to trust You, but do You trust Yourself? Put the assets where your mouth is!

A majority of the bishops, Retirement Services Commission, and General Board continue to be relegated to an archaic position as “children.” They are not invited to the room when the grown folk (privileged few) talk (and decide) on critical strategic decisions.

We need independent assessments of :

1. The process used to assign value to individual annuity accounts.
2. Are there free funds (funds not allocated to a particular individual) in the Symetra balance? If so, how much?
3. What are individuals earning in interest from the Symetra investment?
4. If the participants are not credited with all of the earned interest, how are the other funds used? Where in the accounting?
5. What are the perks to the life insurance arrangement which make changing the plan so difficult?

The list could go on. The deafening silence of the Department & Church Leadership is frustrating and causing much anxiety within our ranks, especially among those close to retirement age. A first priority for the church should be to move the Legacy Funds into the control of participants, NOW. We can no longer allow the control of our collective investments to be handled the AME Way! The Only “Safe” Place is Out of the Direct Control of AME entities!

The other day I learned of a local church pastor whose annual salary exceeded $500k. Some ask, “if a pastor of a single, large church earns $500k – $1m+, why shouldn’t a bishop be paid $500k or more.” 

Summary: The power of appointment creates an imbalance far beyond that of pastor/parishioner. Bishops must not be allowed unfettered control in exacting (allocating) offerings/assessments. Whether in parish or executive office, we must look at the big picture of the allocation of resources..

Key Words in the Analysis:  Process, Voluntary, Livelihood, Volume

Pastoral Concern:  Just because you could, as a non-profit, should you?   

Process:  Most pastoral salaries are set by a committee (stewards, deacons, pastoral relations, etc.).  In most instances these persons are not employed by or in a financially beneficial relationship with the pastor.  Whatever they determine as fair, affordable and in the best interest of the congregation, should be done without conflict of interest.  Often, foolish commitments will be revealed in the congregation’s light.  Not so with the financial benefits accrued to most bishops in our Zion.  No committee to consider the fair, affordable “gift” to supplement an embarrassingly low “official salary.”  No strong process to hinder selfish abuse of resources.  Hired, appointed, conflicted persons under undue influence to obey or impress facilitate a process which lacks regulation and transparency.

Voluntary:  In a local congregation giving is mostly voluntary.  If one does not want to show off and wave a large bill while walking down the aisle, it is their choice. You may lose a friend; you may have to find a different fellowship; you may miss a cheer from the crowd; maybe they will not let you sing a solo or serve as an officer.  Although pastors hold a psychological advantage in most instances, the stakes are not a high and the dynamic is nuanced. One can survive all of this.  Being man enough to give $10 instead of $100 at the pastor’s appeal is not as challenging as being woman enough to give $10 instead of $100 when a bishop says “Come on down!”  More than pride or psycho-spiritual concerns ride on giving beyond a local congregation.  For many, generations of connection and extensive professional commitment empowers involuntary obligation over freewill.

Livelihood:  Even the bi-vocational pastor cannot ignore the leverage of the bishop.  Fear of losing the “extra” salary, convenience of appointment, stature in church/community, and pride among colleagues can drive one to give more than can be practically afforded.  When you think about your family, or the possibility that your beloved congregation will be appointed an ungifted pastor, you look to ways to comply and impress. O, yes, you also want to honor the servant of God and please God through service.

Volume:  Local pastors and bishops, or presiding elders, are best supported when their remuneration is proportionate to the constituent body.  A congregation of 10,000 members giving the pastor $1m/year averages $2 per member per week ($100 per year).  The numbers do not work the same when it comes to a bishop.  Very few districts can assemble 10,000 donors of $100.  Instead, we press the same few units to repeatedly give $100. (I am sure it is not necessary for me to establish a list.)  Ultimately, it is a matter of volume…collecting less (less often) to accumulate a larger sum. Even if the faithful paid their pastor $2, $5, $10/member/week it may not rise to an acceptable level when there are less than 100 contributing members.  I would find it difficult supporting a local congregation with a $1m a year pastor with repeated intense appeals for money. Compensation must fit the program and a balanced approach to faithful stewardship.

Perhaps bishops should be compensated based on membership without the authority to assess.  That may still yield $500k+ for a few bishops. Most important, how do you get it?  Transparent process? Genuinely voluntary? Without threat to livelihood of clergy or congregations? Based on reasonable volume, not an arbitrary construct of greed?  

To put this discussion in context, the General Budget assessment is about $20 per member/year.  Most of the churches over which I presided paid $35-$70 per member/year just for General Budget!  If most congregations find this to be a strain, they cannot/will not support bishops and presiding elders at the same level of commitment as they support their pastor and other missional/structural necessities.  We need a serious conversation on compensation and economic perspective.

God knows, I’m so glad God knows, just how much we can bear!

One of the darkest days in AME history (for me) was when the General Conference rejected one of the most solid rulings of the Judicial Council. The church witnessed a unified episcopacy. (My apology for not researching the exact year/decision. It was in the 1990’s. Hopefully, an informed reader will supply the citation.) Many of the bishops strong armed annual conferences to reject the ruling before we even got to the General Conference for the final blow. The looming issues: mandatory vs voluntary assessments, the power to assess, and how to limit assessments. Without question, the existing legislation (then and now) was flawed and inadequate. The Judicial Council decided there was no proper authorization. The bishops argued (with some merit) we must have funds to administer the work. The people failed to use the opportunity to establish definitions, process, and the limitation of clearly abused power. Instead, the church affirmed, through inaction, the current state of oppression.

What constitutes mandatory versus voluntary? The Discipline unequivocally establishes the payment of general (connectional) budget as mandatory, along with the 12% annuity contribution for the pastor. There is good support for the required payment of the basic presiding elder support package. The bishops had a point on funds for administration of the episcopal district. Whether or not mandated by law, it made sense. A challenge: the interpretation of “administration” and the implementation of “assessment.”

Budgets. The first step toward a more just, transparent administration of church affairs is the requirement of administrative budgets for both episcopal districts and annual conferences. It costs money to run an office and support common expenditures to maintain leadership (such as housing, transportation, healthcare). These budgets must be written, publicly presented, and approved by secret vote in each annual conference. Even the episcopal district budget must be approved by the annual conference as it is the only equitably established forum. This is the vision, not the reality.

Mandatory. General Budget, Annuity Contributions, Presiding Elder Support, Episcopal District Administrative Support, Annual Conference (and Midyear, Planning Session AS BUDGETED) should be mandatory.

Voluntary. All other requests (under the current legislation) should be considered VOLUNTARY. This is where the disagreement begins. Districts/annual conferences which sponsor schools want to “assess” support. Additional life insurances are being “assessed.” Special projects often come with “assessments,” not to mention “events” like retreats, and various component conventions. “Offerings,” “roll call,” and the long list of items we put forward, should be voluntary if not part of the approved budget program of an entity. This is the “ought,” not the “is.”

Process. No assessment should be levied without a secret ballot vote of the general conference or the annual conference! Bishops, presiding elders, pastors and component leaders should not be authorized (de facto or de jure) to merely decree an assessment. Moreover, it is disturbing when a church official changes assessed values among churches without the knowledge and consent of the original body. In other words, a presiding elder should not be able to change the amount required for general budget after the close of an annual conference. If a church is in trouble, the presiding elder should make an appeal for the “voluntary” assistance of other churches on the district. More flies are caught with honey than vinegar.

Exceptions? Sure. Life is unpredictable. There will be unforeseen matters which require more than voluntary assistance. These should be few, infrequent, publicly discussed, and collaboratively addressed by both lay and clergy.

The current application of the power to assess is unjust, demeaning and choking the life out of the church. Until this blaze is extinguished, the house will continue to burn. Proposed legislation is on the way.

The credibility, dignity, trust and effectiveness of the future episcopacy rests with reformation which brings transparency, limitation and accountability to the matter of episcopal compensation. The goal is not to make bishops poor. It is to reclaim the office as a calling rather than a lottery prize winning. There are a few basic steps which may get us there. Admittedly, I have been turning ideas on this subject for quite a few years. Sharing strategies with friends, I realized there is no neat solution…certainly none to which a majority of bishops would subscribe. If there are better ideas, please comment. Even if imperfect, WE MUST DO SOMETHING! The 1956 reforms failed. Some bishops rejected moderation in favor of choking life out of the goose which yielded the golden eggs. It is time for change.

Transparency. The process and sum of compensation must be clear, visible, and the result of general consensus. No more winking and grinning. Whether it be by way of offerings, fundraisers, or budgeted assessments, we must stop camouflaging compensation. Moreover, it should not be “as much as I can get,” or “whatever is left after expenses.” Meetings should be planned, budgeted and administered with a projected outcome which is reasonable, broadly known, and generally accepted.

Limited. Some bishops (and PEs/pastors) dread the idea of separating their compensation from “offerings.” Some pastors have gotten in on this regressive notion with a misappropriation of the practice of “class dues.” The very act of an “offering” represents a process without limit. In order to reveal and limit episcopal compensation, it must be funneled to a central point. In practical terms, all annual conference “gifts,” honoraria received from meetings, churches, or components must be paid to a single point. Even Christmas, birthday, and other seemingly personal gifts of love must be deposited to a common account. (The IRS says all of those gifts are taxable when coming from those whom bishops supervise–look it up!)

Once income is sent through a common point, it can be documented and limited. While a bishop who currently presides over a small district (1-13) may realize $75-100k of income above the church budgeted $63k, the average bishop is receiving $150k-$250k of additional compensation. Those who know, don’t tell. The rest of us make “experienced” guesses. The best paid bishops receive from $350k to a sum no one can number.

Where do we draw the line and establish the limit? That is a struggle. Too high, and we will miss the point. Too low, and there is no chance of implementation. The correct figure is somewhere between $350k and $500k. The rationale. Major pastors of other denominations in New York City (for example) are known to receive packages of $425-450k. National religious leaders of nonprofits have documented salaries of $400k or so. Psychologically, anything above $500k would be frowned upon both within and from outside the denomination. The standard is not to reach par with the multi-million dollar per year mega, media preachers. If our bishops want that kind of money, because they command such gifts and appeal, they should resign their office and take to the airways/revival circuits.

Accountability. Bishops should receive 1099s/W-2s for all of their official income. This is possible and verifiable by directing all income through a single point. The people will know the extent of their generosity. The environment of service will change. Attitudes should improve. We will shatter the image that leadership takes everything. We can heal the blemish. We can rise above the distraction to engage in more excellent service.

An Example of how it would work: 1. You establish an Episcopal Compensation Account. 2. Annual Conference, meeting, event “gifts” are paid by check/electronic transfer into the account. 3. If the bishop preaches at a church (in district), or appears at a function where there is an honorarium, the funds are paid by check/transfer to the fund. 4. Christmas, birthday and personal milestone celebratory gifts from persons in the district (IRS essentially says these are more obligatory than love) are deposited to the Account. 5. Disbursements from the account to the bishop are by check/transfer with proper tax accounting. 6. Funds received which exceed the established ceiling are diverted to the Episcopal District to cover the costs of housing, travel, and benevolence on behalf of the bishop. 7. Any remaining funds above the limit revert to the Episcopal District for projects/programming.

I may add some comments on other models considered. This one, though, could be the most easily implemented and transparent. Let’s talk about it!