Pension Plans

• 2010 Pastoral Compensation Form

The Central Conference Pension Initiative
The Central Conference Pension Initiative (CCPI) is a long-term solution that provides retirement financial security for dedicated church leaders and surviving spouses who would otherwise have little or nothing. Learn more about the Central Conference Pension Initiative ...

• Questions and Answers about United Methodist Church Pension Programs

  Is there more than one UMC Pension Program for clergy?

  Yes!  There are actually three pension programs for clergy.

  The Pre-82 program provides a “defined benefit” only for those pastors (and surviving spouses) who have service years prior to 1982. Each year the Annual Conference approves the “Past Service Rate” per Year of Service prior to 1982. The goal of the Conference Board of Pensions is to keep the PSR at 1 percent of the Conference Average Compensation.  The PSR is $425 in 2006 and meets the goal of 1 percent of the CAC.  The Pre-82 Plan is currently fully-funded.

  On Jan. 1, 1982, all active pastors became participants in the Ministerial Pension Plan (MPP).  It is a tax-deferred plan based on a “defined contribution” by the local church (or Charge) of 12 percent of the pastor’s salary plus housing (actual housing allowance or 25 percent of the salary if living in a parsonage.) This figure is called the “pension base.” The local church contribution is collected by the Conference and sent to the General Board of Pensions in the pastor’s name. These contributions plus interest earning become the base for an annuity at the time of retirement.  This plan is fully-funded and there will be no new enrollments after Dec. 31, 2006..

  Beginning Jan. 1, 2007, all active pastors will become participants in the Clergy Retirement Security Plan (CRSP). It is a combination of a “defined benefit” and a “define contribution” pension program.  To read more about CRSP check the website of The General Board of Pensions and/or for implications for Troy Conference read the Connection article.

  Some pastors who started ministry in Troy Conference prior to 1982 and who will not retire until mid-2007 or later will have retirement benefits from all three programs.

  Who is eligible to participate?

  All persons appointed by the Bishop must enroll in the Ministerial Pension Plan (MPP) or after Jan. 1, 2007, in the new Clergy Retirement Security Plan (CRSP). A wavier of participation may be granted to part- time local pastors. Lay employees of the Conference and local churches may participate in UMC pension plan for laity.

  Is there a death benefit and/or disability benefits?

  Yes, all full-time pastors and pastors appointed “less-than-full-time” must participate in CPP (Comprehensive Protection Plan) which provides funding for both the death and disability benefits. Part-time local pastors do not participate and therefore do not have these benefits. Beginning 1/1/2007 local churches will contribute 3 percent of the “pension base” to this plan for the pastor who is eligible for CPP.

  The Death Benefit is non-taxable income. The Death Benefit for active clergy serving full time is $50,000.  The Death Benefit for retired pastors who are eligible is 30 percent of the DAC (Denominational Average Compensation) in the year of the death. (In 2007, the benefit is $16, 224.) The death benefit of a Spouse (20 percent of the DAC), of a Surviving Spouse (15 percent of the DAC).

  Application for Incapacity Leave begins with notification to the District Superintendent by a pastor who feels they are no longer able to continue in active ministry because of a health issue.  Incapacity Leave must be approved by the Bishop, Cabinet, the Joint Committee on Incapacity Leave and then recommended by the Conference Board of Ordained Ministry to the Executive Session. There are interim provisions. Incapacity Leave however does not automatically mean disability benefits will be paid by the General Board. The application process includes a medical review and consultations with the pastor’s doctor(s).  For more information on disability benefits, contact Bill Lasher, your Pension Officer.

  What happens when a pastor, or pastor’s spouse, or pastor’s child under 18 dies?

  he Pension Officer should be notified as soon as possible. He will notify the General Board of Pensions and that will begin the processing of a Death Benefit to be paid to the survivor(s). The Death Benefit is available to all full-time pastors and those who retired from full-time ministry. It usually takes three to four 4 weeks for a check to be sent.

  How often should I update by “Designation of Beneficiary” Form?

  If you are not sure of what is on record at the General Board of Pensions, you should get a new form from Bill Lasher and send it to the General Board.  Note: one’s “Will” or “Trust” agreement does not replace the GBOPHB form.  If there are changes in your martial status, family, etc. a revised form should be completed.

  Can I make additional contributions to my pension plan?

  Yes, if you are enrolled in MPP or CRSP after Jan. 1, 2007, you may enter into an agreement with your church to withhold an amount of your salary each month to be sent directly to the General Board of Pensions. This plan is called UMPIP (United Methodist Personal Investment Plan). It may be a tax-deferred plan. IRS sets an upper limited as to how much can be tax-deferred each year (currently about $1,000 per month). You control the investment choices in UMPIP.  

  Should I make additional contributions through UMPIP?

  A pastor’s retirement income has often been referred to as a “three-legged stool.” One leg is your church pension (Pre-82, MPP, and CRSP), another is Social Security, the third is personal savings (assets, investments, property, etc.) Your Pension and Social Security are designed to provide about 70 percent of your income at the time of retirement. You will need additional income, especially if you have to provide housing and health insurance in retirement. UMPIP offers an excellent investment/savings option. Even if the monthly amount is small, the “miracle of compounding interest” can provide that additional measure of security in your retirement years.

  How are these plans administered?

  By Jan. 1 of each year, pastors are expected to report their compensation to the Pension Officer (Rev. Bill Lasher)  Because the pension contribution is a tax-deferred, IRS requires that this be done before the pastor receives their first pay check! Thus the deadline is January 1st.  The General Board of Pensions makes the investment choices for these contributions.

  The Pension Officer reports the salary and housing data to the General Board of Pensions which bills the conference monthly for the MPP/CRSP & CPP payments. The Pension Officer also supplies the Conference Treasurer’s office with the same figures to be billed to each local church.

  The pastor’s administrative responsibility is to provide their compensation information in a timely and accurate manner.  It is also their responsibility (and in their own best interest) that their local church pays the monthly pension contribution to the annual conference and the UMPIP contribution to the GBOP in a timely way.  These amounts are the pastor’s “deferred compensation” and are not “optional” anymore than a paycheck!

  UMPIP is administered differently because it is an agreement between the pastor, local church and the General Board of Pensions. Once the GBOP receives a copy of the agreement, it bills the local church monthly and the local church withholds that amount from the pastor’s salary and sends it directly to the GBOP.

  The Pension Officers also handles enrollments, disability applications, death benefit distributions, and begins the process for retirement when notified of the “intent to retire.”

  How can I find out about my pension account(s)?

  Pastors receive a statement of their account quarterly. They can also access their account on OSASIS. Go to the General Board of Pensions and Health Benefits' web site for more information about the various plans, investment choices and earnings, your accounts (button called OSASIS) and there is even a pension projection calculator based on the pastor’s account.

  Bill Lasher, Conference Pension Officer, is also available to answer questions, provide forms, etc. 

  How do I know if my Service Record is correct?

  Even if you do not plan to retire for a number of years, you should make sure that your Service Record is correct.  You should agree with that what is recorded in the Conference Journal and on file at the General Board.  Bill Lasher can provide you with a copy of your Service Record from the General Board. He can also help you correct any misinformation but that often next several months.  Your Service Record is especially important for calculating your retirement benefits if you have Pre-82 years and in your years of service after Jan. 1, 2007.

  When can a pastor retire?

  For “full” benefits one must be at least 65 years old or have 40 years of approved service. (Mandatory Retirement at 70 years of age before July 1st of a given year.)  A “reduced” benefit is available for retirement at age 62 or 35 years of service.  There is also a 20-year provision for retirement but one doesn’t collect benefits until at least age 62.

  What is the process for retirement?

  The General Board of Pensions will send pastor’s a letter in the Fall who are eligible to retire because they will be at least 62 years of age by July 1st the following year. 

  The pastor must write a letter to the resident bishop requesting retirement at the next Session of the Annual Conference, effective July 1. Copies of this letter should be sent to the Board of Ordained Ministry, the District Superintendent, and the Pension Officer. It is the Pension Officer who notifies the General Board of Pensions on the pastor’s “intent” to retire.  The General Board will send a Retirement Packet and benefit projections and forms to those pastors.  Although the General Board has a March 1 deadline for pastor’s declaring their intent, the Troy Conference Cabinet requests notification by the first of the year because of the appointment process is beginning.

  How can I learn more about the pension program and retirement options?

  Visit the General Board’s website. Attend one of the annual Pre-Retirement Seminars held each year sponsored by the Conference Board of Pensions. Contact Bill Lasher, the Conference Pension Officer, for a one-on-one session.

  As a retired pastor with financial needs, how can I get some extra help?

  Each year (the second Sunday in February) local churches take a special offering for the Retired Pastor’s Emergency Grant Fund.”  This fund is administered by the Conference Board of Pensions although the names of pastors and/or surviving spouses of pastors receiving grants is limited to just three people (the board’s coordinator of emergency services (currently Rev. Roger Day), the Pension Officer, and the Conference Treasurer who just sends the check,)  There are eligibility requirements for an annual subsidy however special one-time emergencies are also considered.

  Contact Roger Day or Bill Lasher if you need assistance.