1. What is the Pension Boards’ mission?
Covenantally and constitutionally, the Pension Boards is charged with administering pension, health, and other benefits plans for ministers and lay workers of the United Church of Christ. This is reflected in our new mission statement, adopted in 2015:
“Operating at the intersection of faith and finance, we are caring professionals partnering with those engaged in the life of the Church to provide valued services leading to greater financial security and wellness.”
2. What is “faith and finance”?
"Faith and finance” is a key concept and core principle of PBUCC’s identity and mission. Operating at the intersection of faith and finance is what differentiates the products and services that PBUCC provides from retirement and benefits plans available in the commercial financial services marketplace.
3. How does faith and finance differentiate PBUCC from other financial services providers?
We are not differentiated by faith or finance, nor will we be. We are differentiated by what we do with faith and finance. The word for “doing” in theological terms is “witness.” Therefore, we will be differentiated by our witness of faith. We have defined that witness as “sustainable investment.” That investment is two-fold: financial investment in securities that reflect our values and concerns, and investment in people – specifically authorized ministers, lay church workers, and congregations.
4. What does faith and finance mean for the way our pensions are invested?
We propose that the witness of PBUCC at the intersection of faith and finance is sustainable investment, defined as “the double bottom line” objective of “doing good” for creation and humankind as measured by ESG criteria, and “doing well” with financial performance, measured by accepted benchmarks, for our members, stakeholders, and faith communities.
5. What is ESG?
ESG is an acronym for “environmental, social, and governance” factors. The factors assess the quality of an investment by how it impacts the environment, human rights, and good governance of publicly-traded companies.
6. What steps has PBUCC taken to implement its faith and finance initiative?
In 2014, PBUCC adopted a new investment policy that includes Socially Responsible Investment Guidelines that state, in part, “We (PBUCC) advocate an incorporation of ESG factors into our investment policy and proxy voting guidelines based upon the sole purpose of the financial best interest of plan participants.” The new faith and finance initiative relates these guidelines to our theological, biblical, and moral responsibility in the light of our witness at the intersection of faith and finance.
Programmatically, this has resulted in renewed efforts to incorporate ESG into our corporate engagement, proxy voting, and investment analysis. Examples include new investments in renewable energy, and the elimination of oil sands and thermal coal companies from our portfolio of separately-managed (non-commingled) investments. And, we have begun offering to members in the accumulation phase of the annuity plan a new investment option in the Global Sustainability Index Fund (GSIF), which bases investments on best in class performance in ESG factors.
7. How will my investment returns be affected by the application of ESG / faith and finance factors?
The Investment Policy states, “a company that considers ESG an integral part of its operations and strategy is more likely to perform well over the long term, because it reduces risk and cost while increasing efficiency and competitiveness.” In keeping with PBUCC’s duty of loyalty to Annuity Plan members, an existing investment cannot be eliminated in favor of a new investment with better ESG impact unless there is the same or better prospect for financial performance.
8. Who is helping the Pension Boards in its faith and finance efforts?
The overall strategic planning process which set in motion the faith and finance initiative included stakeholders from across the Church, including Conference Ministers, leaders from the other UCC financial institutions, members of our plans, PBUCC Trustees and staff, and ecumenical partners. Implementation will include these stakeholders, as well as new collaborations with the UCC Center for Analytics, Research and Data (CARD); Sustainalytics, an ESG data provider; and our investment consultant and investment managers.
9. What is your timeline for implementing faith and finance guidelines and filters?
Implementation will be ongoing. There are specific dates for the completion of specific objectives, but the first year is crucial for testing many of the ideas and processes of the policy. A number of events will be held throughout the Church to highlight our efforts in the months leading up to General Synod in 2017.
10. How will you communicate your progress to us?
Progress will be diligently tracked internally at PBUCC, and communicated to our members and to the wider Church in many dynamic ways – through the UCC News, News & Views quarterly newsletters, on our website and through videos, in personal visits and contacts, and through our new Speakers Bureau. Please invite us to come speak with you and your group about our progress.
11. How does the recent Department of Labor (DOL) decision affect PBUCC’s faith and finance efforts?
A recent Department of Labor guidance, Interpretive Bulletin 2015-01, provides clarity on the fiduciary concerns that may have prevented pension plans governed by ERISA from considering investments that meet certain ESG standards. While the Annuity Plan is not subject to ERISA, the new DOL guidance is nevertheless helpful and instructive.
When selecting investments, in part because of ESG considerations, fiduciaries need to observe a prudence standard to ensure that any selected investment is reasonably expected to perform as well as other available alternatives within an industry or category with similar risk. As long as this and other guidance in the Bulletin is observed, fiduciaries may consider ESG factors in investment choices in a way that preserves fiduciary integrity.