There are several factors that may affect your pension credit, including tax considerations, disability status, military service, and more. In addition, if you return to Church employment after you retire, certain rules apply to your pension benefit.
In addition to accrued credits, retirement age, marital status, and payment option you choose, there are other factors that may affect your pension benefit.
If you are a minister of the Word and Sacrament, you may exclude all or part of your pension from taxable income as a housing allowance, subject to the requirements of the tax laws. All recipients of periodic payments must complete a withholding election form and may have tax withheld for federal income taxes. Once your pension begins, the benefit is taxable under federal and some state tax laws. Your pension payments are reported to the Internal Revenue Service (IRS) on Form 1099R.
The Board produces the Tax Guide for Ministers, tailored to the Pension Plan, for all ministers enrolled in the Benefits Plan.
The Church & Clergy Tax Guide, by Richard R. Hammar, is available through the Christianity Today International website, or calling 800-222-1840.
You can call the IRS at 800-829-3676 for publications including IRS Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers — or access forms from the IRS website.
Social Security is a government program that provides one source of retirement income. Benefits are funded by contributions from you and your employer while you are working.
The Benefits Plan assumes participation in Social Security, which provides you with retirement or disability income based on your Social Security covered earnings each year. The Church strongly supports participation in the Social Security program. During your retirement or disability, your pension benefits may not be adequate income without Social Security benefits.
Your spouse and dependents may be entitled to receive Social Security benefits upon your death. They must apply in writing directly to the Social Security Administration.
If you separate from or divorce your spouse, or dissolve your marriage, a domestic relations order (DRO) could require all or part of your plan benefit be paid to someone else — your former spouse, for example. In that case, the plan pays benefits directly to someone named in the order, provided it meets the requirements of a DRO.
As soon as you become aware of any court proceedings that may affect your benefits, call the Board of Pensions at 800-773-7752 (800-PRESPLAN). You can request a copy of The Benefits Plan and Divorce, which contains a sample court order that could help you and your attorney understand and facilitate the process of the assignment of benefits to a former spouse or dependent children.
If you are enrolled in Pastor’s Participation at the time your Benefits Plan membership ends, and are actively seeking a position within the Presbyterian Church (U.S.A.), you are eligible to enroll in and pay dues for transitional participation coverage. You may only continue the coverage you had in effect when you left service. If you had pension coverage, you accrue pension credits based on the salary on which you elect to pay dues (the last effective salary or applicable median).
If you choose not to pay dues for pension coverage, but to do so for medical only, you do not accrue additional pension credits for the time you are enrolled in transitional participation coverage.
Your transitional participation coverage must be verified by the presbytery (if you are an installed pastor) or your employer (if you are a minister of the Word and Sacrament who is not installed).
If you are enrolled in Pastor’s Participation, have not been permanently terminated, and take a leave of absence from Church employment and return later to your same employer, you may remit dues for transitional participation coverage. You may only continue the coverage you had in effect for the year before you left service.
The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) and Heroes Earning Assistance and Relief Tax Act of 2008 (HEART) provide various rights to employees called to military duty in the uniformed services, including the right to the continuation of pension and other benefits during military leave.
If you qualify for a disability benefit under the disability provisions of the Benefits Plan and you are covered under the pension provisions, you continue to earn pension credits while younger than age 65, equal to 1.25 percent of the greater of either
If you qualify for a disability benefit under the plan, you also receive, if granted, experience apportionments on your pension credits.
Generally, disability benefits under the plan end at age 65, unless you become disabled after age 62 in which case disability benefits can last longer.
You can elect to stop disability payments and begin receiving your retirement pension, including any pension credits earned during disability, at age 55 or later. However, if disability benefits begin after age 62, then at age 65, the disability benefit is reduced by the amount of the retirement pension benefit and continues only until you reach your pre-determined maximum duration as defined in the Benefits Plan.