Other factors affecting your pension benefit

In addition to accrued credits, retirement age, marital status, and which payment option you choose, there are other factors that may affect your pension benefit.

Tax considerations and resources

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 IRS on Form 1099R.

The Church & Clergy Tax Guide, by Richard R. Hammar, is available for purchase through Christianity Today International.

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 and your pension benefit

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.

Divorce or dissolution

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-PRESPLAN (800-773-7752) (TTY: 711). You can also view 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.

Ministers Bridge Coverage

Ministers Bridge Coverage is available for ministers of the Word and Sacrament enrolled in the Congregational Pastors Package, Transitional Pastor’s Participation, or the Covenant Package who leave active service and are seeking a new call. Through Ministers Bridge Coverage, you may continue enrollment in all or some of your benefits for up to 24 months at your own cost.

You may only continue the coverage you had immediately prior to your change in employment status. 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 Ministers Bridge Coverage.

Your Ministers Bridge 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 serving in an installed position).

Leave of absence

You may remit dues for Ministers Bridge Coverage if you: 

• are enrolled in the Congregational Pastors Package, Transitional Pastor’s Participation, or the Covenant Package
  
• have not been permanently terminated 
• take a leave of absence from Church employment and return later to your same employer

You may only continue the coverage you had in effect for the year before you left service.

Military duty

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.

Disability

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% of the greater of either:

• your effective salary on which your pension dues were being paid when your disability occurred, but no more than the IRS annual compensation limit, or
• the median salary as determined by the Board
  

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 the disability benefit is reduced at age 65 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.