For nearly four years Adventist leaders in North America have grappled with these two questions. At the 1999 year-end meeting, members of the North American Division (NAD) Executive Committee began hearing reports from various study groups on remuneration for pastors and teachers, and each subsequent year the subject has taken center stage on the committee's agenda. Last year the committee voted a change in the basic wage percentages on which ministerial and education salaries are paid.* At its last year-end meeting (November 3-6), the NAD committee returned to the issue.--Editors
Introducing major policy items dealing with remuneration and significant developments regarding retirement benefits, North American Division president Don C. Schneider outlined the situation this way. "During our time this year we will be talking about money. I will try and give you an idea of what is coming, so you can sort things out at one time. Insurance is costing more--you will be paying more. Healthcare benefits--the dollar amount is getting higher all the time. Additionally, a recommendation is also coming to put more money into the old retirement fund--an additional one quarter of one percent of tithe, for both this year and next year. As you think about the salary issues, you must also think how to balance the budget, knowing these things are there."
Schneider then explained the current salary composition and underlying dilemma church leaders find themselves in. "Remuneration is in three pieces. 1. Adventist church wage factor. 2. Percentage of the wage factor. 3. Cost of living. Several task forces on remuneration have said we should pay our employees more money. None have said this is where the money is coming from."
This is worked out, explained Prestol, by taking 48 points off the 150 percent, while a full 50 points will be deducted from higher salary points, thus setting the rates, for example, for NAD president at 115 percent, union presidents 112 percent, and conference presidents 108 percent.
Previously, the church had six cost-of-living wage factors (categories A-F) to serve various areas of the United States and Canada. Under the new plan, there will only be one remuneration factor for the United States. However, to that wage factor will be added a cost-of-living adjustment as determined by the Economic Research Institute (for the U.S.) or Statistics Canada (for Canada).
The ensuing discussion raised many points of interest and concern. GC Education director-elect Garland Dulan spoke of "some troubling aspects" of the proposed new policy, and suggested it is "sometimes helpful to use actual dollars and cents figures, which are easier to understand."
Tom Staples, treasurer the for South-Eastern California Conference, asked the reason for the move from 150 percent to the 100 percent as a general concept.
The committee also voted new wage rates (or percentages) for all division, union, and local conference personnel, including those of the Adventist Media Center and many colleges and universities in the division.
Once the revised wage rates were voted, a new remuneration factor was then proposed by the NAD treasurer: $3,505 ( representing a 1.1 percent increase from the current wage factor of $3,468), effective July 1, 2003 in the U.S., while Canada would receive a 1.3 percent rise, effective September 1, 2003.
Monte Sahlin of the Columbia Union questioned if research had been done in the estimated costs of the new salaries, to which Prestol responded that yes, much time had been spent on such matters over the last year since the previous year-end meeting. "The most significant aspect is an additional 2 percent for pastors and teachers. Impact studies have been done by union and conference treasurers. The intent of the proposal is not to cost the local conference additional dollars, except the 102 percent versus the 100 percent. Conferences are to manage this raise as they see fit."
The impact will be very significant as some observed in the discussion--one figure mentioned was a $2 million increase to the Southern California Conference, and that this would be impossible to accomplish in one year. Leon Thomassian, treasurer of the Atlantic Union Conference, commented that some conferences might be able to implement the plan in one year, but for others it could be 3-4 years, and still others, 7-10 years.
Chesapeake Conference president Neville Harcombe voiced concern over the plan's potential impact. "If we vote the complete package it is going to have a tremendous impact on those conferences in high cost areas. It is not fair to create these differences, for when we call pastors from one area--we are all competing--we will be at a disadvantage because of the different levels of remuneration. Another problem is that it's going to affect our small church schools which are already struggling. I am for pastors and teachers getting higher salaries, but where is the money coming from? Conferences will be left to go to constituents to explain this vote. Constituents want more pastors and teachers and we will be telling them that we may have to cut. Some members may use tithe to hire personnel. I believe we should study the tithe the local conference sends on to other [highers] organizations and look to retain 1-3 percent of local tithe so we can fund this package."
Tom Staples, treasurer for South-Eastern California Conference, spoke in support of the proposal but noted that "it will have varied impact in different areas. We could implement this in one year if we did not have the additional 2% and the extra percentage for the retirement fund."
Northern California Conference treasurer John Rasmussen spoke of serious concerns. He said that in his situation, the conference would find it extremely difficult to implement--for example, the additional cost to one junior academy would be $350,000, he said.
In conversation after the meeting, one conference president smilingly commented that his organization would have to implement the proposal over the next 144,000 years. At the reconvened meeting, Pacific Union Conference pastor Orley Curtis expressed his concern that "the cost to the work [of the proposed policy] would be enormous, but we don't know what the effect will be." Additionally, even though there would be flexibility given for the phase-in period, those organizations that could not immediately operate the proposed changes would be "out of compliance," creating difficulties when pastors and teachers moved from one organization to another.
The unruffled Prestol re-emphasized the point that if organizations are not able to pay the cost of living adjustments, then they were free to decide how much they could pay. "This is no different to situation now where in some places workers should be paid at the Category E rate yet are receiving Category C. This new method provides a more equitable way of compensating workers in high cost areas."
Lay representative Marylou Toop (above right) from Canada expressed her concern over "the philosophical problem of multiplying the Cost of Living by the salary percentage," asking that this be re-visited in the future.
Northern Californian Conference president Ricardo Graham wondered whether it was wise to base the new policy on house ownership, over against rental, explaining the very high house prices in some areas in his conference. Arnold Trujillo of the Hawaiian Conference affirmed the house ownership principle, but acknowledged problems in implementation. He commented on long-serving employees in Hawaii who had to move to the mainland simply because they could not afford to live there at retirement.
With much similar debate, the proposal was voted, along with another vote that gave NAD administrative committee powers to adjudicate in areas of application and accommodation of the new policy.
The challenges with the defined benefit retirement plan (now "frozen" and followed by the defined contribution plan) were presented by NAD retirement plan coordinator Del Johnson. He explained that the defined benefit plan had been impacted by market performance.
"Between 1995 and 1999 we saw a $141 million increase in the plan. But from 2000 to the present there has been a $73 million loss. We are still "ahead" by $68 million, but we need to take action to protect the plan's assets."
The problem, he explained, was that after recent market losses the plan "goes negative" by 2018--there will be no funds to make retirement payments at that time. Consequently the recommendation was being introduced that in both 2003 and 2004 one quarter of one percent additional payment on tithe/payroll would be made into the plan. He anticipated that this would bring the plan back to previous levels. "It is the prudent thing to put in place these corrections, or face having to make more drastic actions in the future," he commented.
After some debate over the exact needs and the timing of the additional funding required, the recommendation was adopted by the executive committee members.
* Previously, the wage rate (or remuneration percentage) for ordained ministers was 150 percent, with a remuneration factor of $2,312. The 2001 vote set the baseline wage rate at 100 percent, with a remuneration factor of $3,468. Administrators, department personnel at local conferences, unions, division, and institutions, receive slightly higher percentages. To calculate a pastor's annual salary, multiply the remuneration factor by the remuneration percentage by 12 months ($3,468 x 100 % x 12 = $41,616). The 2002 committee raised the remuneration factor by 1.1 percent to $3,505 and designated 102 percent as the baseline percentage for ordained pastors, effective July 1, 2003.
_________________________
By Jonathan Gallagher, United Nations liaison director for the General Conference.
hat is a fair salary for Adventist pastors and teachers in North America? Can the church afford it?
NAD treasurer Juan Prestol (left) led the executive committee members through the extensive program and accompanying policies, noting that the proposed increase in the wage factor to be implemented July 1, 2003 is 1.1 percent. As recommended by the previous Year-end meeting, the current "150 percent" which is the baseline pastor's salary is to be translated into a new 100 percent. The proposal however is that the standard salary rate for pastors and teachers be placed at 102 percent.
Exclude PDF Files