The purpose of the Plan is to help missionaries, church employees, ministry staff, and those serving nonprofit organizations associated with Christian Churches and Churches of Christ to have adequate financial income after age 65.
All ministers and other employees of Christian Churches and Churches of Christ, colleges, seminaries, and related nonprofit organizations or institutions who have not attained age 64 may be enrolled.
Application must be made by elders or authorized spokespersons for congregations or by duly authorized officers of any college, seminary, or nonprofit institution within the fellowship.
A member may retire at any time after one year of credited service. Benefits from this Plan will not, however, be paid until shortly after the member’s 65th birthday.
No. The purpose of the Plan is to provide a retirement income; hence, all contributions are deposited into the Trust fund and cannot be withdrawn except as retirement benefits. The Plan neither makes “roll-overs” nor receives “roll-overs.”
The amount of monthly benefits received by a retired member from the time of his or her 65th birthday through his or her lifetime will be determined according to the rate per month for each unit for each year of credited service within the fellowship, as described in the Plan.
Yes. Approximately 90 days prior to his or her 65th birthday each member can choose the “Partial Lump Sum Payment Option.” This option provides the retiree a lower monthly benefit in return for a lump sum of money when his or her pension begins. If a member elects this option, he or she must specify the percentage by which he or she wishes the pension reduced—the maximum percentage reduction is 10%. The amount the pension is reduced will then be translated into an actuarial equivalent number of dollars as determined by the Pension Plan’s actuaries.
For example: If a member at age 65 is entitled to a pension benefit of $500.00 monthly, he or she may have the pension reduced to $450.00 under the lump sum payment option. In return for the reduction in the lifetime monthly pension payment, on reaching 65 he or she will receive a check from the Pension Plan for $5,000.00, which is the actuarial equivalent of the reduction of the pension benefit by $50.00 per month. The retiree will then receive regular monthly checks of $450.00 as long as he or she lives.
Pension payments, in general, are taxable income. However, amounts distributed to a member from the Plan may or may not be taxable as income. Two examples of pension payments being non-taxable are amounts which are rolled over to an Individual Retirement Account and amounts which constitute a “parsonage allowance.”
When the contribution is made by the institution served, taxes are deferred until retirement. Ordained persons will have 60% of the amount they receive at retirement treated as parsonage allowance; only 40% of the pension will be reported on Form 1099R as taxable. Additional amounts of the pension for parsonage allowance (up to 100%) may be requested of the Board of Governors. It is understood that the individual will keep accurate records of the use of this allowance for the provision of the home. The minister—not the Board of Governors or Trustee—is responsible for records for the IRS.
Upon a participant’s death, the participant’s spouse is eligible to receive 1/2 of the participant’s monthly retirement benefit for the spouse’s lifetime.
Yes. If a retiree dies before he or she has received 120 monthly pension payments, his or her monthly pension amount will continued to be paid to his or her beneficiary until 120 such payments have been made, including payments to both the retiree and the beneficiary. This 120-payment plan is known as the Ten-Year Certain Plan.
A member may designate any person as the beneficiary of his or her death benefits under the Plan. A beneficiary designation must be in writing but need not be in any particular form. In order to be valid, however, the beneficiary designation must be delivered to the Plan Administrator before the member’s death. In the event that a member does not designate a beneficiary, the Plan will pay the member’s death benefits to his or her estate.
The Plan is designed to give an enrolled member the full benefit for all service within the fellowship. The transferring member’s eventual benefit after age 65 will be the same as if he or she had continued to work for his or her original organization.
No. However, benefits will be paid at age 65, in accordance with the funds invested for him or her.
The Plan was determined to be actuarially sound in a recent study conducted by USI Consulting Group.
The Board of Governors reserves the right to amend or terminate the Plan, including the amount of benefits paid thereunder, at any time. However, no amendment can reduce the vested amount of the benefits to which a member is already entitled.
This website summarizes some of the more important provisions of the Plan. It is, however, only a summary and omits many details in the Basic Plan Document, which could be important in a given situation. If there is a conflict between this summary and the terms of the Plan Document, the Plan Document will control. If you have any questions or wish to obtain a copy of the Plan Document, please contact the Plan Administrator.
No. Membership in the Plan is strictly voluntary. The Plan is qualified under IRC 401(a) which gives employers (congregations, mission works, ministries, and faith-based non-profit organizations for the purposes of the Plan) flexibility for specific employee categories. However, many congregations, colleges, and ministries have concluded that the Plan is an ideal retirement benefit to provide to all their employees and ministry personnel.