Recent moves by United Methodist bishops and Global Methodist leaders focus on annual conferences. Why?
The Protocol is dead. Long live…parts of it?
Back in 2020, right before the pandemic, the Protocol came out as a “gentleman’s agreement” by certain parties, claiming to represent a majority of United Methodism, which would allow local churches to leave to join the nascent Global Methodist Church, as well as fund it with $25 million dollars of United Methodist tithes and offerings. The COVID-19 pandemic happened, which either saved or smothered the Protocol depending on who you read, and ultimately the Protocol will not get a vote until the postponed General Conference now to be held in 2024.
But there was a critical component of the Protocol–and other legislation that would support its implementation–which would allow entire annual conferences (regional groups of United Methodist churches and other commonly-held properties) to leave The United Methodist Church and affiliate with the splinter denomination. You would think that would be on hold too, right?
But it isn’t, and both the UMC hierarchy and the GMC are fixated on it right now. Why?
Questions of Lawful Exodus
The United Methodist Council of Bishops requested a decision of law as to whether an annual conference can leave The United Methodist Church. That question is now in the hands of our Judicial Council (the Supreme Court of United Methodism), and a hearing is expected around the same time that annual conferences begin to meet in mid-May.
At the same time, there are various resolutions and annual conference actions being submitted for consideration by at least 3 annual conferences to disaffiliate from The United Methodist Church. The ones I’ve seen have similar language and doubtless would have the support of Global Methodist leadership. Bishop Scott Jones, a supporter of the WCA, recently named his own assistance in writing conference resolutions.
It’s a race against time: the UMC hierarchy wants clarity if an annual conference can leave, and the GMC leadership wants a quick decision by an annual conference to leave so it is a done deal for external courts to decide before our internal court would decide on it. Annual conferences should beware of fast decisions at the conference level as they could lead to a huge mess for everyone involved.
Bait and Switch
So let’s say an annual conference may vote to leave and become part of the Global Methodist Church. Local churches may be assuaged that they get to go along with the local institution that they know: change “United” to “Global” and we’ll keep on our merry way, right?
Wrong. That won’t be the endgame for a simple reason: money. There’s a huge financial cost to leave that would require an immediate infusion of cash, and that can only come from selling annual conference assets and common property.
WesPath has issued a memorandum that they cannot simply re-assign the unfunded pension liability to follow the annual conference that leaves (”re-assigning” would have the new entity keep funding it year-after-year like we normally do). Instead, the annual conference would have to pay for the unfunded pension liability just like a local church would. That’s well into the tens of millions of dollars, depending on the annual conference.
Without the Protocol’s $25 million dollars from the denomination as seed money, the GMC would be cash-strapped to pay that huge amount, but good for them, they suddenly have an entire annual conference worth of property and assets that is now affiliated with them. They could liquidate any assets an annual conference might have to pay the debt.
So, in this scenario, if an annual conference leaves, it ends up being part of a fire sale that consumes itself. All the trappings, common property, and investments would be up for consideration to sell in order to pay the withdrawal penalty on that conference’s disaffiliation—and perhaps other costs of the Global Methodist Church as well.
Case Study: Texas and South Georgia
Let’s run the numbers and imagine two random annual conferences…say Texas and South Georgia? Sure! The most recent denomination-wide report is from September 2021, so we’ll use those numbers, noting things have changed since then and these are estimates.
- Total denominational unfunded liability (1504.23 basis for the data nerds) is $3.25 billion.
- Texas is about 2.5% of that total. Their September 2021 estimated withdrawal liability is $79 million.
- South Georgia is about 1.6% of that total. Their September 2021 estimated withdrawal liability is about $47 million.
Those are big numbers! While you might think annual conferences have that kind of cash lying around, they don’t. At that time, Texas only had about $20 million in unrestricted assets (and $12 million in restricted – unsure if those are unable to use those). Texas is also perhaps the best-case scenario in that they have ~$47 million in their pension reserve…though wiping that out to pay their withdrawal liability and introducing incredible risk to their Texas pensioners would be a tough decision!
Global Methodist leadership is not being honest with their members about the huge cost of an annual conference exiting, because they would not have to pay it: the annual conference would have to hollow itself out and introduce incredible risk to their retirees and sell off things that they probably care about.
Make your Yes be Yes, and No be No.
Will this change in 2024? No. General Conference would have to vote to change the policy, and that would introduce incredible risk for our own retired clergy (as we recently saw the African Methodist Episcopal Church unable to pay their retired clergy). Given that retired clergy likely would not transfer their membership to the GMC in droves, UMC would still have their unfunded liability to pay, even if those retirees attend and tithe to a GMC church. So removing the withdrawal penalty is not likely.
Thus, the path with the least costs for churches that want to disaffiliate from The United Methodist Church continues to be individual churches that leave under the disaffiliation rules passed in 2019 (and supported by Traditionalists!) and that they start the process now, before their annual conference can tack on more costs at the 2022 Annual Conferences. If they wait until 2024, they will still have to pay 2 years of apportionments anyway.
Some of the biggest traditionalist churches have already left (or begun to leave) as their savvy business strategy can see it’s best to get out now (even as they have pushed smaller churches to stay in so they could get a group bargaining benefit–that’s gone now). The local leadership has woken up to this disparity against their national leadership though, as WCA folks like this Florida Man are holding informational sessions across the connection to encourage quick action to have the lowest cost for those churches.
If you want to get out, and you want to pay the least, get out now.
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(Update: WesPath released more current numbers literally YESTERDAY that reduced the unfunded pension obligation number to $2.20 billion. In our case study, that reduces Texas’s portion to $57 million. Still huge numbers but now we know they are more accurate)