Decision Number 250
Petition of the North Carolina Annual Conference for a Ruling Concerning the Legality of Filing Liens Against a Minister's Pension Annuity to Cover Unpaid Balances in Apportionments for the Conference Pension Fund and of Levying Interest Upon Such Unpaid Balances
Paragraphs 1624 and 1634 of the Discipline which provide for the filing of a lien by an Annual Conference against the annuity of a minister who is a conference claimant to cover unpaid balances in apportionments for a Conference Pension Fund, the withholding of annuity payments to cover such lien, and the levying of interest upon such lien are constitutional and lawful.
Statement of Facts
the 1966 session of the North Carolina Annual Conference, Item 5 of Report I of the Conference Board of Pensions contained this sentence, "Beginning with the Conference year 1966-67, those ministers failing to make payment in full toward the Conference Claimants Fund shall have a lien filed against their pension: see Paragraph 1624.3, 4, 5 and 1634."
At the 1967 session of the North Carolina Annual Conference, Item 3 of Report I of the Conference Board of Pensions read, "We remind the ministers of this Conference that the Board of Pensions is enforcing Paragraph 1634 and 1624. 3, 4, 5; which states that any Charge which does not make payment of its apportionment in full, a lien will be filed against that minister's pension annuity, and the proportionate part of this unpaid balance will be withheld from his pension at the time of his retirement."
A motion was made to delete this Item of the report and a substitute motion was adopted which read as follows:
"I move that the provision for the filing of liens against the minister's pension annuity to cover the unpaid balance of the Church's apportionment for the Conference Pension Fund, and the provision for levying interest against said unpaid balance be referred to the Judicial Council with the request that it rule upon their legality, and that enforcement of these provisions by the Conference Board of Pensions be delayed until ruling has been made."
This request for a ruling constitutes a petition for a declaratory decision under Paragraph 914 of the Discipline and the Judicial Council has jurisdiction.
Analysis and Rationale
The first question in the petition concerns the legality of liens against a minister's pension annuity to cover unpaid balances of apportionments from Charges in the years in which he has been the appointed pastor.
Paragraph 1624, section 1, of the Discipline on "Proportional Payment" reads:
"When the apportionment to the pastoral charges for the support of conference claimants and for the Ministers Reserve Pension Fund has been determined... payments made thereon by each pastoral charge shall be exactly proportionate to payments made on the salary or salaries of the minister or ministers serving it."
Section 3 of this same Paragraph reads:
"The treasurer of the pastoral charge shall be primarily responsible for the application of l of this paragraph; but in the event of his failure to apply it, the pastor shall adjust his cash salary and the payment according to the proper ratio, as provided above, before he enters the respective amounts in his statistical report to the Annual Conference. . . ."
Section 4 of this same Paragraph reads:
"The Conference Board of Pensions shall render a statement annually to all ministers of the Conference who have failed to observe the provisions of this paragraph, indicating the amounts in default for that and all preceding years. Copies thereof shall be sent to the clearinghouse of the general board, and the information contained thereon shall be recorded upon the service records of the individual ministers concerned."
It is clear that these provisions of the Discipline consider unpaid balances of charge apportionments for conference claimants which are due to defaults in proportional payment to be an indebtedness against the appointed pastor of the charge, to be noted by the Conference Board of Pensions and recorded on his service record in the clearinghouse of the general board, and even pressed upon him when he transfers to another Conference (Paragraph 1634.2a).
Paragraph 1624, section 3, of the Discipline which was quoted above as it related to a minister's duty to obey the rule of proportional payment, adds this sentence:
"And, on retirement, amounts in default shall be deducted from his annuity as provided in Paragraph 1634.1."
This seems to make mandatory the withholding of annuity payments to cover an indebtedness against a minister resulting from failures in proportional payments to conference claimant apportionments. It refers, however, to the provisions of Paragraph 1634.
Paragraph 1634, section 1, entitled "Liens on Annuities," reads as follows:
"Whenever a conference claimant shall be in debt to the Conference or any of its organizations on account of unpaid assessments, obligations, or pledges for the benefit of conference claimants, such debt shall constitute a lien on the annuity of the person involved, and the conference shall have power to appropriate and apply his or her annuity, or any part thereof, to the payment of such debt; provided, however, that not more than one quarter of the annuity payable by the conference in which the debt was incurred, or one quarter of the total indebtedness, whichever is greater, shall be appropriated in any year for such purpose, and provided, furthermore, that such power shall not be interpreted as applying to the settlement of other debts of a conference claimant."
This paragraph refers to a minister who is a conference claimant. It states that any indebtedness which may have accumulated against him for default in proportional payments on conference claimants apportionments constitutes a lien against his annuity at the time of his retirement.
Whether or not such a lien is exercised against the conference claimant and his annuity or part of it appropriated to be applied to cover such indebtedness, is clearly a decision for the Annual Conference to make. An Annual Conference "shall have power" to take this action. It is not mandatory but it is certainly legal. The non-vested and noncontractual nature of pension claims of the character here under consideration, and the right and discretion of the Annual Conference to grant or withhold, in whole or in part, benefits to conference claimants has long been recognized. (See Judicial Council Decision No. 81.)
Such power of an Annual Conference would certainly provide authority to levy interest on unpaid balances of conference claimants apportionments which are recorded as an indebtedness against a minister. Such authority is assumed by the Discipline in Paragraph 1634.3b where it is stipulated that such interest if charged shall be computed only at simple interest.
It is the decision of the Judicial Council that Paragraphs 1624 and 1634 of the Discipline concerning the personal responsibility of a minister in the matter of the proportional payment on conference claimants apportionments, the recording of unpaid balances on such apportionments as an indebtedness against him personally, the enforcement of liens against his annuity, and the levying of interest against such unpaid balances, are constitutional and lawful.