Benefits agency changed name, but kept mission in 2016

Part of a series on how the church works

The name of the former United Methodist Board of Pensions and Health Benefits may have changed, but its mission to provide investment services to clergy and lay workers is still the same.

While continuing to manage around $21 billion in church assets in a manner that honors the principles of United Methodism, the newly named Wespath Benefits and Investments also “does good” through programs like microfinancing in developing nations.

In response to questions from United Methodist News Service, executive staff of the commission discussed the agency’s role and accomplishments in the past year.

What were the top goals of your agency in 2016 and how were those achieved?

Doing good while achieving competitive rates of return is an important aspect of our diversified, prudent, sustainable investment philosophy. We seek to achieve our Ministry with the Poor objectives primarily through Positive Social Purpose Lending. 

1. Global Positive Social Purpose Lending Program and Shareholder Engagement

• Social purpose investments achieve competitive returns—social purpose lending is prudent investing
• Over $2 billion invested in the U.S. since inception—social purpose lending provides affordable housing and community development for underserved neighborhoods
• Creation or preservation of over 51,000 affordable rental units for families, seniors and populations with special needs
• Investment in community facilities providing health and educational services to low and moderate income people:
• 23 charter schools serving over 8,000 students
• 10 community facilities: homeless shelters, health centers and substance abuse facilities

• Over 1 million low-income borrowers in developing countries—support for those who have little/no access to traditional financing

• Microfinance—$53 million invested over 10 years in Latin America, Eastern Europe, Africa and Southeast Asia
• Clean Energy Access—finalizing new $30 million investment to scale-up the supply of off-grid solar energy in India, Rwanda and Nicaragua—needed access to energy providing communities with basic services (e.g., residential lighting and mobile phone charging)
• Shareholder Engagement—encouraging companies to operate in ways that promote and protect human rights, strengthen local communities and support core labor standards—using our “seat at the table” to impact the world’s most vulnerable
• Bangladesh factory standards—engaged Walmart, Nike, Adidas, Inditex to enhance monitoring of factory safety practices and working conditions
• Cocoa farming—with United Methodist Women, engaged Hershey’s Company in sourcing fair-trade cocoa and avoiding child labor in West Africa, improving the lives of farmers
• Indigenous rights—engaged ConocoPhillips, EOG Resources, Occidental Petroleum, Total, Anglo American, Newmont Mining, Rio Tinto, Vedanta Resources, and Energy Transfer Partners, encouraging them to improve consultation with local communities and respect indigenous rights

• Public Policy Engagement—collaborating with fellow United Methodist agencies (UMW, Global Ministries, Church and Society) and other global investors to support just regulatory systems, and to address climate change

2. Central Conference Pensions (CCP)

• Provides retirement income for food, shelter and necessities—an initial collaboration with Global Ministries and several other United Methodist agencies to support retired clergy, spouses, and surviving spouses in central conference countries (especially Africa)
• Surpassed the $25 million goal in 2013—

• more than $25.7 million received from worldwide donors to date
• more than 95 percent of all pledges realized
• donations invested by Wespath’s Investment Management division
• investment earnings cover the accrued pre-2013 central conference pension liabilities, making possible the initial payments that 2,922 retirees and surviving spouses currently receive

• $6.3 million in pension payments disbursed—from inception through year-end 2015, providing a financial foundation while central conferences build their own self-sustainable contribution base for future retirees from their churches and active pastors contributions (they remain in consultation with Wespath)

3. Center for Health

In addition to our disability and death programs serving clergy and lay employees and families:

• HealthFlex Plan—serves 30 plan sponsors covering approximately 17,000 lives in 27 annual conferences and three non-annual conference plan sponsors

• UMC Health Ministry Network— formed in partnership with the former UMCOR Health unit of Global Ministries— is now led largely by the missions agency through its “Healthy Congregations, Healthy Communities” initiative. The program connects individuals, congregations and conferences across the U.S. with interest or involvement in congregational and community health ministries, including several hundred parish nurses
• Communications—resources include a newsletter for annual conferences, faith community nurses and seminary contacts; news and information about health and well-being; and key health topic worship bulletins
   

4. Financial Education and Sustainability

• Lilly Endowment grant recipient—“National Initiative to Address Economic Challenges Facing Pastoral Leaders”—jointly with Higher Education and Ministry and several conference foundations
• Financial Advisory Consulting Team engagements—conducted jointly with the General Council on Finance and Administration and staff from Discipleship Ministries—help conferences self-assess areas for improved vitality and financial sustainability, including congregational vitality and financial strength; developing plans to pursue improvements in those areas 

What was your budget for 2016? How much of that budget was put toward each goal?

The goals are incorporated in our annual operating budget, funded by a fractional percentage of the investment earnings on the assets Wespath manages.

Please give a specific example of how one of your programs benefited a United Methodist, a church or a specific community.

Wespath’s Positive Social Purpose Lending Program has improved the lives and communities of hundreds of thousands around the globe. As a prudent investor, PSP lending achieves competitive rates of return in addition to serving a social purpose.

Investments have been made in all 50 U.S. states and the U.S. Virgin Islands. Through the international microfinance program, Wespath has made investments in South Africa, South America, Eastern Europe and Southeast Asia that have benefited individuals, families and underserved communities benefit from new or redeveloped assets, social services and job opportunities. Wespath plan participants benefit from the positive financial returns.

What challenges did the agency face in accomplishing these goals?

The challenges we face are many and varied, based on the area of focus—they range from company resistance to engagement; calls for forced divestment which undermines our effectiveness; or seeking and identifying new partnership opportunities with other general agencies and external organizations.

If the goals are ongoing, what do you plan to accomplish in 2017?

The goals above are active components of Wespath’s plans and programs and will continue into the future. All are multiple-year goals but the Lilly Grant is a unique opportunity.

Lilly Endowment—Grant Recipient

This goal is an excellent example of a partnership that brings the expertise and missions of Wespath Benefits and Investments together with the Board of Higher Education and Ministry and several conference foundations to achieve financial education goals in order to meet future financial needs of pastors and their congregations. As grant recipients of the Lilly Endowment’s “National Initiative to Address Economic Challenges Facing Pastoral Leaders,” we are working to:

• Develop programs to provide training for clergy on personal and local church financial management, scholarship support and financial counseling for seminarians
• Implement strategies to resolve excessive student debt, addressing Clergy Survey Statistics:

• 46 percent currently making student loan payments
• Average student debt (undergraduate and graduate, including spouse) $53,668
• About 10 percent (9.98 percent) opted out of social security
• 36 percent agreed or strongly agreed “the amount of debt I owe is a consistent source of anxiety”
• 22 percent agreed or strongly agreed “they received adequate financial planning instruction prior to obtaining their student debt”
• 9 percent said student debt caused them not to make pension contributions
• 5 percent said student debt caused them to purchase less family health insurance
• 18 percent said student debt caused them to reduce generosity to their church
• 21 percent said student debt caused them to increase credit card debt