How the Retirement Savings Plan works

The Retirement Savings Plan allows you to save a portion of your salary, on a tax-advantaged basis, up to the annual limit set by the IRS.

Contributions

The Retirement Savings Plan is an optional, voluntary plan, funded by employee and/or employer contributions. You may contribute a portion of your taxable salary, excluding housing allowance, subject to the IRS annual contribution limit. Contributions may be made on a pretax basis, Roth (after-tax) basis, or both.

  • Pretax contributions: Federal taxes on contributions and earnings are deferred until you receive distributions. That means savings could grow faster than if they were in a taxable account.
  • Roth (after-tax) contributions: Contributions are taxed as ordinary income. Earnings accrue on a tax-free basis.

Your employer may, but is not required to, contribute to the RSP on your behalf (even if you do not contribute). The total of your and your employer’s contributions cannot exceed the IRS annual contribution limit or 100% of cash salary, whichever is less. If your employer matches your contributions, the matching contributions are not included in your effective salary.

Catch-up contributions

If you are age 50 years or older and you have contributed the maximum allowable amount to the RSP and other defined contribution plans, you may make additional contributions. The total of your and your employer’s contributions cannot exceed the IRS annual contribution limit.

Starting in 2025, if you are age 60-63, the catch-up contribution limit increases to the greater of $10,000 or 150% of the regular age-50 catch-up contribution limit. You are eligible to make these higher catch-up contributions if turning age 60, 61, 62, or 63 during the calendar year. The increased amounts will be indexed for inflation after 2025.

In addition, if you have at least 15 years of service with a PC(USA) employer, including a congregation, mid council, agency, and/or an affiliate employer, and you have contributed the maximum allowable amount to the RSP and other defined contribution plans, you may contribute an additional amount (up to the IRS annual limit), subject to a lifetime maximum.

Refer to IRS publication 571 for details.

Rollover contributions

You may be able to roll over balances from other eligible employer-sponsored retirement plans [403(b), 401(k), etc.] into your Retirement Savings Plan account. Call Fidelity at 800-343-0860 for additional information.

Compound earnings

Your invested contributions have the potential to produce earnings, and those earnings are automatically reinvested in your account with the potential to produce additional earnings. When the earnings generate earnings, the result is compound earnings. The longer this process goes on, the greater your opportunity to build a substantial account.

Note: Investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

Fees

Fidelity deducts an administrative fee of $3.75 from your RSP account quarterly.

Vesting

Vesting refers to a non-forfeitable right to a benefit. You are always fully vested in your own contributions and related investment earnings. Unless otherwise specified in your organization’s Employer Agreement with the Board of Pensions, you are immediately fully vested in any employer contributions and/or matching contributions, and related investment earnings in your account.