Church Pension GroupMeeting Clergy’s Financial Needs June 26, 2018 News Twenty Minutes with Mary Kate Wold Mary Kate Wold is the CEO and president of the Church Pension Group, a financial services organization that serves the Episcopal Church. A former finance and corporate executive and law-firm partner, she now draws on her fiduciary, legal, and finance experience, as well as her love of the church, to help clergy and lay employees enjoy the financial security in retirement. In the weeks before General Convention, Wold spoke with TLC about her work and her faith. How would you sum up, for readers unfamiliar with the Church Pension Group, the mission of CPG? What does it do, and why does it exist? CPG Releases Reports The Church Pension Group has released a Report to General Convention to answer questions it has received in recent months. The report, which was emailed with the latest issue of Perspective and is available on CPG’s website, features videos of various officers and clients, including the Very Rev. George Werner, dean emeritus of Trinity Cathedral in Pittsburgh, former trustee of the Church Pension Fund, and 31st president of the House of Deputies. “We decided to replace our typical Report to General Convention with a series of videos that tell the story of who we are, how we think, and how we serve,” said Patricia Favreau, chief communications officer of CPG. “We truly enjoy interacting with colleagues around the church, but it’s hard to meet with everyone face-to-face. Videos close the gap. We hope people will watch them and learn more about the values and commitments that guide our work.” The report also includes CPG’s Report on the Costs of Pension Benefits in Foreign Dioceses, which was developed in response to General Convention Resolution 2015-A181. “We published preliminary findings in our Blue Book Report, but we want to make sure people have the full report before General Convention,” said Frank Armstrong, chief operating officer of CPG. “Our findings have been shared with the dioceses that participated in the study and we look forward to sharing them with the wider church.” Our mission is to serve the clergy and lay employees of the church in their calling to spread the gospel. I care deeply about helping the church grow and thrive, and I believe one of the best ways to do that is to ensure that its leaders are supported. The Church Pension Group contributes to the welfare of clergy and lay employees by providing them the highest possible level of financial security in retirement, by providing access to healthcare while they are working, by educating them about their finances, and by supporting them with wellness-related resources. The Church Pension Group was founded by Bishop William Lawrence more than a century ago. Recognizing that many Episcopal clergy were retiring into poverty or could not afford to retire at all, Bishop Lawrence set out to create a mandatory and financially sustainable pension fund. His initial goal was to raise $5 million in seed money — and he ended up raising $8.5 million from over 47,000 Episcopalians who saw the wisdom of his inspired vision. In 1917, our pension fund sent out its first pension check. Over the years, our offerings have expanded to include additional products and services and to cover lay employees. The continued evolution of the Episcopal Church is always a hot topic and certainly will be in Austin. In addition to expanded offerings, how is the Church Pension Group keeping up with those changes? Over the past several years we’ve been conducting listening events around the church — in the U.S. and abroad — to help us better understand the needs of different groups of clergy and lay employees so we can continuously improve the many ways in which we serve them. Two recent General Convention resolutions (2015-A177 and 2015-A181) affirmed our efforts to respond to different forms of ministry in the U.S. and to understand the unique needs of clergy and lay employees in the non-domestic dioceses of the Episcopal Church. What are some of your challenges? Our number one concern is the performance of the financial markets. While we have invested extremely well over the past hundred years, we have also gone through periods of incredible financial stress in the markets, and we know that those periods will recur. We realize that we cannot rest on our laurels and that our past financial success does not guarantee that we will be successful in the future. For this reason, we spend a great deal of time honing our investment practices, analyzing the markets, projecting into the future, and ensuring that we are well-prepared for financial risks on the horizon and beyond. Another big challenge, which was also an opportunity, was updating our defined benefit pension plans. When I assumed my role seven years ago, it was already clear that the church was changing, that ministries were evolving, and that a pension fund that had been around for nearly a century probably needed to change too. As I considered the possibility of leading CPG, I went through my own discernment process. That included extensive conversations with people around the church, both lay and clergy. Although I didn’t necessarily see the trends in my parishes, those conversations revealed especially the rise in the numbers of part time, bi-vocational, and non-stipendiary clergy. I knew then that these and other evolving models of ministry would have to be a focus of our work. We had to figure out how to simplify pension benefits and make them more flexible and sensitive to emerging needs without compromising the overall value of our pension program or the financial strength of the pension fund. It was a tall order. Let me give you a few examples. First, the formula for calculating pensions made it difficult for clergy to take breaks from higher-paying positions to do more missional work without adversely affecting their future pensions. We changed the formula to add more flexibility. Another example: we found for various reasons clergy were taking longer breaks from service — taking more time between jobs. To enable them to continue their involvement in the pension plan, we doubled the period during which they could make personal payments when not employed and continue to earn credit toward their pensions. We also made it easier for clergy at the lowest compensation levels qualify for participation in the plan and earn full years of service for their work. How did you get there? We embarked upon a multi-year undertaking to seek input from those who would have a stake in the changes we were contemplating, including part-time and bi-vocational clergy, clergy with breaks in service, clergy who had been ordained later in life, seminarians, lay employees, vestry wardens and treasurers, and diocesan and parish administrators. We met with hundreds of people in the process. Once we came up with a list of possible changes, I thought, “Okay, I think we know what the issues are and the best ways to solve them. But what if we don’t get it right? How can we be sure that we will do no harm?” We devised a second phase of iterative conversations during which we ultimately reviewed our proposals with more than 1,500 clergy and lay leaders. After initial feedback, we went back to the drawing board, made tweaks to our proposals, and went out again and again to retest them until we were convinced that we had it right. By the time we launched the new Church Pension Fund Clergy Pension Plan on January 1, we had a real sense of confidence that we had done our job, that we had truly listened to the church, and that we had created a modern pension plan that was responsive to the changing needs of the church and was financially sustainable. How is CPG working to determine the needs of retirees as the church and economy change, such as lay people retiring later, or clergy staying in active or near-active service for longer? Our Research & Data group is constantly mining data at our disposal as the Recorder of Ordinations and benefits provider for the Episcopal Church. We regularly conduct surveys and focus groups to understand and quantify the needs of our clients. In fact, we recently completed a survey that examines how well prepared lay employees of the church are for retirement. We also sponsor educational gatherings for our retired clergy and a Chaplains to the Retired program that underwrites pastoral care resources in each diocese to work with retirees and connect them with CPG. We learn a lot about the needs of retirees from our Chaplains to the Retired. How would you say that your work is aligned with the values of the Episcopal Church? Everything we do is designed to help fortify the clergy and lay employees of the Church so that they are free to pursue their work with less worry about their financial futures. The way we manage our investment portfolio plays a critical part in how we are able to accomplish this. Our portfolio is the financial engine that fuels all the benefits we provide. As fiduciaries of the pension plans we administer, we pursue the highest level of risk-adjusted returns to ensure that we are able to pay benefits for as long as they need to be paid. At the same time, we put a tremendous emphasis on socially responsible investing, which includes three powerful and effective strategies: positive-impact investing, shareholder engagement, and thought leadership. First, we invest whenever possible in projects that have social and environmental benefits and still deliver returns that are consistent with our investment goals. Second, we work closely with the church, and particularly with the Committee on Corporate Social Responsibility, to be involved in shareholder engagement. We engage companies in our mutual portfolios to discuss issues that are relevant to the church and to encourage those companies to align their business practices with the values of the Episcopal Church. Our current areas of focus in shareholder engagement are human rights, environmental concerns, and diversity issues in corporate governance. Third, we use our leadership position in socially responsible investing to connect and convene other institutions, encouraging and inspiring them to get involved in socially responsible investing. We’ve posted some great stories about our work on our website. I encourage everyone to view our videos at cpg.org/srivideos. You are the CEO and president of an Episcopal organization but you are also an Episcopalian. When did you enter the faith? My faith and membership in the Christian community has always been of paramount importance to me. I had an ecumenical path in my earlier years. I was raised a Methodist in a small town on the Canadian border in North Dakota, where church was at the center of everyone’s lives. During summers of my college years, I “joined the majority” in my community of Scandinavian immigrants and worked as a counselor at a Lutheran church camp. Then, just after starting law school, a friend introduced me to the Episcopal Church. What captured my heart immediately was the beauty of the liturgy. I have never looked back and have been an Episcopalian ever since. During my adult life I have very much enjoyed being involved in the church at the parish level. I am now on my third vestry, at Trinity Wall Street, where I also serve on the investment committee. I served for many years on the vestry and as chancellor of St. Bartholomew’s in New York City and served for several years on the vestry of Christ Church in Hudson, New York. My three children all attended preschool at St. Bartholomew’s, and all served as acolytes at our Hudson church. In fact, at the age of nine, my daughter was Christ Church’s youngest acolyte and was a petite but proud crucifer by the age of 10. As the 79th General Convention approaches, what would you like people to know about you and your work? I am immensely honored and gratified to be part of an organization that has served the church loyally and responsibly for the past 100 years. In fact, it was by a General Convention resolution that we were first established, and we are passionate in pursuing our mandate to serve the clergy and lay employees of the church. I hope you’ll visit our special website, cpg.org/GC2018, before, during, and afterward, and that you’ll follow us on (ChurchPension) Facebook (ChurchPension) and Twitter (@ChurchPension). If you will be in Austin, please plan to stop by our booth to learn more about our efforts to keep the Episcopal Church strong by serving the people and other institutions that serve it.