Rio Texas Conference UMC — Board of Pensions Audited Financial Statements

December 31, 2024 (comparative 2023) · audited · all figures in US dollars

Where the Board of Pensions' assets are

$24.6M total net assets
$23.0M total investments
$1.2M cash
Investment holding (2024)Amount% of total
Wespath — U.S. Equity Fund7,592,24533.0%
Wespath — International Equity Fund6,015,71326.2%
Wespath — Fixed Income Fund5,102,98522.2%
Wespath — Inflation Protection Fund1,929,1778.4%
Wespath — Short Term Investment Fund1,917,4088.3%
Texas Methodist Foundation — Methodist Loan Fund220,0001.0%
Wespath — Cash103,7190.5%
Texas Methodist Foundation — Balanced Fund97,8450.4%
Other — Spencer Gift8460.0%
Other — Mineral Rights3000.0%

About 99% of the Board's assets sit with Wespath (the denomination's investment manager); the rest is at the Texas Methodist Foundation. The largest restricted fund is the RGC Pension Legacy Fund ($8.81M, for clergy benefits of former Rio Grande Conference churches). See Note 12 for the full fund breakdown.

Statement of Activities

Revenue, expenses, and net-asset change (2024 totals; 2023 comparative)

Line item20242023
OPERATING SUPPORT AND REVENUE
Participant Contributions - Insurance2,943,9973,744,386
Participant Contributions - Pension2,226,9082,764,807
Church Apportionments - Pension and Insurance232,554322,262
Other Income9,46010,198
Net Assets Released from Restriction
Total Operating Support and Revenue5,412,9196,841,653
OPERATING EXPENSES
Program5,833,6596,976,638
General and Administrative181,458179,557
Total Operating Expenses6,015,1177,156,195
Operating Loss(602,198)(314,542)
OTHER INCOME (EXPENSE)
Pre-82 Pension Changes in Benefit Obligations5,397,2681,209,774
Investment Income1,545,5012,291,923
Retiree Health Changes in Retirement Account Obligations18,13448,212
Pre-82 Pension Income - Actuarial(5,916,102)802,885
Total Other Income (Expense)1,044,8014,352,794
Change in Net Assets442,6034,038,252
Net Assets, Beginning of Year24,131,70620,093,454
Net Assets, End of Year24,574,30924,131,706

Statement of Functional Expenses

What the Board spent, by category (2024 total; 2023 comparative)

Line item20242023
Health Insurance Premiums3,525,3903,985,248
Pension Payments - DB (defined benefit)826,7161,200,247
Pension Payments - UMPIP736,918848,291
Pension Payments - CPP (comprehensive protection)364,422451,501
Pension Payments - DC (defined contribution)349,239436,281
Legal and Accounting124,829127,495
Insurance29,48033,482
Life Insurance Premiums17,79225,252
Travel and Meeting Expenses13,2583,347
Office Expenses11,7479,787
Grants and Other Benefits Paid8,16027,094
Miscellaneous5,7506,723
Supplies1,320963
Maintenance Expenses96484
Total Operating Expenses6,015,1177,156,195

Statement of Cash Flows

Where cash moved during the year

Line item20242023
OPERATING ACTIVITIES
Change in Net Assets442,6034,038,252
Gain on Investments(1,520,928)(2,269,843)
Change in Value of Pre-82 Pension Asset1,345,550(2,012,659)
Change in Value of Retiree Health Retirement Account(18,134)(48,212)
Change in Accounts Receivable20,018(22,258)
Change in Accounts Payable26,799(2,557)
Deferred Pension Liability - Disaffiliation249,8493,592,210
Net Cash Provided by Operating Activities545,7573,274,933
INVESTING ACTIVITIES
Pension Account Deposits(5,417,113)(10,165,858)
Pension Account Disbursements4,967,4496,914,497
Purchases of Investments(24,573)(22,080)
Net Cash Used by Investing Activities(474,237)(3,273,441)
Net Change in Cash Flows71,5201,492
Cash and Cash Equivalents, Beginning of Year1,156,3151,154,823
Cash and Cash Equivalents, End of Year1,227,8351,156,315

Notes 5 & 15 — Investments (Fair Value)

The Board's $22.98M investment portfolio, fund by fund

Line item20242023
Wespath — Short Term Investment Fund1,917,408879,831
Wespath — U.S. Equity Fund7,592,2457,202,195
Wespath — International Equity Fund6,015,7135,797,372
Wespath — Fixed Income Fund5,102,9854,709,128
Wespath — Inflation Protection Fund1,929,1771,899,480
Wespath — Cash103,719178,076
Texas Methodist Foundation — Methodist Loan Fund220,000220,000
Texas Methodist Foundation — Balanced Fund97,84597,845
Other — Mineral Rights300300
Other — Spencer Gift846846
Total Investments22,980,23820,985,073

Note 12 — Net Assets / Fund Balances

The Board's designated and donor-restricted funds

Line item20242023
Board-Designated
Disaffiliation Benefit Fund4,351,1703,820,262
Josephine Burns Forman Fund537,000537,000
Wespath Dividend888,101949,465
Total Designated5,776,2715,306,727
Purpose Restricted
Boelsche Fund Interest33,46930,834
Edinburg Parsonage Fund49,83945,743
RGC Pension Legacy Fund8,808,5168,528,670
RGC Pension Legacy Fund SEF26,63226,632
Superannuate Endowment Fund201,656187,876
Thompson Fund61,31060,464
Total Purpose Restricted9,181,4228,880,219
Perpetually Restricted
Boelsche Fund97,84597,845
Raeke Fund580,572580,572
Seiler Fund9,6979,697
Skinner Fund258,000258,000
Total Perpetually Restricted946,114946,114
Undesignated net assets (derived; balance sheet not provided)8,670,5028,998,646
Total Net Assets (per Statement of Activities)24,574,30924,131,706

Note 17 — Liquidity and Availability

Financial assets available to meet cash needs within one year

Line item20242023
Financial Assets
Cash and Cash Equivalents1,227,8351,156,315
Investments22,980,23820,985,073
Accounts Receivable27,09547,113
Total Financial Assets24,235,16822,188,501
Less: Board Designations(5,776,271)(5,306,727)
Less: Donor Restrictions(10,127,536)(9,826,333)
Financial Assets Available to Meet Cash Needs Within One Year8,331,3617,055,441

Notes to the Financial Statements

Independent Auditor's Report

Calvetti Ferguson (San Antonio, Texas) audited the FY2024 statements and issued an unmodified ('clean') opinion that the statements present fairly, in all material respects, the Board's financial position, changes in net assets, and cash flows under U.S. GAAP. Dated August 27, 2025. The FY2023 statements were audited by Randy Walker and Company (acquired by Calvetti Ferguson on August 1, 2025), which also issued an unmodified opinion.

Note 1 — Organization and Purpose

The UM Rio Texas Conference Board of Pensions is a Texas 501(c)(3) nonprofit that began operations January 1, 2015, on the unification of the Boards of Pensions of the predecessor Southwest Texas and Rio Grande Conferences. Its purpose is to report to the Annual Conference the retired ministers and the widows/children of deceased ministers entitled to annuities, pensions, or special relief, and the appropriations needed to meet those charges. The Board does not administer the pension program itself — that is Wespath's role; the Board collects and remits pension funds and administers other funds for pension and health benefits. About 99% (2024) / 98% (2023) of the Board's investment assets are placed with Wespath.

Note 2 — Summary of Significant Accounting Policies

Accrual basis with fund accounting and two net-asset classes (with/without donor restrictions). Cash equivalents are investments maturing in three months or less. Investments are carried at market with gains/losses in the statement of activities; no investment fees were incurred. Property and equipment are capitalized above $2,500 and depreciated straight-line over five years; a retiree's house donated in 2015 (transferred to the Board in 2017, used by a retired minister per the donor) is depreciated over 15 years and was fully depreciated by Dec 31, 2020. The Board is tax-exempt under IRC 501(c)(3).

Note 3 — Description of Plans

The Board administers Conference-provided plans: the Clergy Retirement Security Program (CRSP, effective Jan 1, 2007, restated 2017) — funded by a 3% Board contribution to the CRSP Defined Contribution plan plus a Board-funded CRSP Defined Benefit contribution (the DB contribution actuarially determined; CRSP payments were $826,716 (2024) / $1,200,247 (2023)); a Defined Contribution Pension Plan for post-1982 service (fully funded annually by church and employee deposits to Wespath); a Defined Benefit Pension Plan for pre-1982 service (funded each year by the local churches through the Board); and a Health Insurance Plan for regular full-time clergy and lay employees (min. 30 hours/week). Retired pastors' health coverage from the predecessor SWTX board was discontinued March 31, 2014 and transitioned to a third-party plan (Towers Watson). Plans are 'church plans' under IRC 414(e)/403(b)(9).

Note 4 — Concentration of Credit Risk

Cash and investments are held at various institutions; the FDIC insures cash up to $250,000 per bank and SIPC insures investment accounts up to $500,000, but the Board also holds uninsured accounts. Uninsured cash balances were $1,304,939 (2024) / $968,845 (2023); uninsured investment balances were $22,979,092 / $20,983,927.

Note 6 — Accounts Receivable

Amounts due from churches and individuals for pension and health insurance billings, considered fully collectible (no allowance needed): $27,095 (2024) / $47,113 (2023).

Note 7 — Pre-82 Pension Asset

The Wespath pension plan was changed effective Jan 1, 1982. Separate pension assets available were $4,495,669 (2024) / $5,841,219 (2023), adequate to fully fund the past-service liability, with a projected surplus of $4,593,767 / $5,047,533. There were no past-service funding deposits in 2024 or 2023. The fair value of the plan assets was $567,653 / $535,087.

Note 8 — Pre-82 Post-Retirement Pension Benefits

The post-retirement benefit obligation is the actuarial present value of estimated future benefits for service rendered before Jan 1, 1982, covering currently retired employees and spouses and active employees/spouses after retirement. Wespath's actuary uses the Pri-2012 Top Quartile mortality tables with Scale MP-2020 projection; a 5.5% interest credit rate (2024 and 2023); surviving spouses receive 70% of the ministerial pension rate; retirement assumed between ages 55 and 72; expected benefit increases 2.00%. The Pre-82 funding plan is under review by Wespath's actuarial department.

Note 9 — Pension Participant Contributions and Payments

The Board is plan sponsor for several Wespath qualified plans: CRSP-DC, CRSP-DB, the Comprehensive Protection Plan (CPP), and the UM Personal Investment Plan (UMPIP). The Board invoices local churches monthly and remits a single payment to Wespath (monthly or annually depending on plan design).

Note 10 — Post-Retirement Health Benefits

A closed plan limited to participants from the former Southwest Texas and Rio Grande Conference plans; no new participants. The annual benefit is fixed at the December 2014 annualized amount and provided via a health reimbursement account (HRA) through Towers Watson, funded by apportionments (participants make no contributions). The actuarial present value of the obligation was $287,152 (2024) / $305,286 (2023). Expected future payments: $38,812 (2025), $35,142 (2026), $31,718 (2027), $181,480 thereafter — total $287,152.

Note 11 — Legacy Funds

On January 1, 2015, the former Rio Grande Conference's pension assets of $6,922,748 were transferred to the Board, restricted (per the Rio Texas Unification Plan) to fund clergy benefits of legacy Rio Grande Conference churches. In 2024 the Board awarded $339,227 in grants to legacy churches and earned investment gains of $619,073, ending at a legacy fund balance of $8,808,516. In 2023 it awarded $375,683 in grants with gains of $1,052,141, ending at $8,528,670.

Note 13 — Related Party Transactions

The Board is located in the Conference-owned building, and the Conference's accounting department performs some of the Board's accounting; office-related expense allocations were $45,107 (2024) / $46,507 (2023). The Board also assisted the Conference with legal expenses related to disaffiliating churches — $100,601 (2024) / $94,540 (2023) — incurred to collect unfunded pension liabilities.

Note 14 — Disaffiliation

Beginning in FY2023, churches disaffiliated from the UMC over reasons of conscience related to human sexuality, following the Discipline ¶2553 process (2/3 professing-member vote). Each church paid its unfunded pension liability (calculated by Wespath at market value per ¶1504.23) along with apportionments. FY2024: 10 churches completed — $249,849 collected and forwarded to the Board for unfunded pension liability (recorded as deferred pension liability - disaffiliation; see Note 16). FY2023: 84 churches — $3,592,210 collected. In May 2023 the Conference sued 28 churches that intended to disaffiliate without following the Discipline; the Board contributed $100,601 (2024) / $94,540 (2023) toward that legal effort to collect unfunded pension liabilities.

Note 16 — Deferred Pension Liability - Disaffiliation

Pension liabilities exist for the Pre-82 Plan, MPP (1982–2006), and CRSP (2006–present), covering clergy service in the former Southwest Texas, Rio Grande, and Rio Texas Conferences. Separating/disaffiliating churches must pay their fair share of aggregate unfunded pension obligations, transferring their pension responsibility to the Conference Board of Pensions and the remaining churches. Disaffiliation pension contributions in 2024 and 2023 were placed in a new Rio Texas Conference Board of Pensions account at Wespath for future pension liabilities. The CRSP plan will end effective December 31, 2025, and pension liabilities are estimated for an additional 70+ years until the last eligible beneficiary ceases to be eligible. The statement of financial position reflects deferred pension liability - disaffiliation of $3,842,059 (2024) / $3,592,210 (2023), exclusive of the 28 churches in litigation that have not paid their unfunded pension liabilities.

Note 18 — Subsequent Events

As a result of recent disaffiliations, in 2025 the Conference plans to consolidate its seven districts into three geographical districts (North, Central, South), anticipated to start in summer 2025 and complete by year-end. In 2024 the Annual Conference voted to retire the current CRSP, MPP, and Pre-82 Defined Benefit plans in 2025 and replace them with a Compass 403B Plan effective January 1, 2026; the overall impact is undeterminable. The Board evaluated subsequent events through August 27, 2025, the date the statements were available to be issued, finding no additional events requiring disclosure.