At the time of retirement, an individual's basic annual pension benefit is calculated based on length of credited service (CS) and highest average compensation (HAC).
Credited Service (CS) is the period of years and months for which full assessments have been paid on full-time compensation.
Highest average compensation (HAC) is the average of the highest-paid seven out of eight consecutive 12-month periods in ministry.
Normal Retirement
| 2.75 x CS x HAC up to $10,0001 | |
| + | 1.6% x CS x HAC over $10,000 |
| ------------------------------------- | |
| = | Basic Annual Pension |
1Or your highest average compensation, if it is below $10,000.
Early Retirement
- Clergy may retire as early as age 60 if they have at least five years of credited service. Since they can expect to receive payments for longer than if they had retired at 65, the pension is reduced in proportion.
- If an individual's credited service is less than 30 years, the benefit is calculated by the same formula as for a Normal Retirement, then reduced by 2/10 of one percent for each month the Early Retirement date is short of Normal Retirement.
- If credited service is 30 years or more, the pension is not reduced.
30-Year Early Retirement
- Once a cleric has earned 30 years of credited service, he or she may retire as early as age 55. The pension benefit is based on actual years of credited service and is not reduced for Early Retirement.
- Before age 62, those who take 30-year Early Retirement receive a monthly "bridge benefit" of $15 for each year of credited service.
- Between ages 62 and 65, this supplement is $7.50 per year of credited service and ends completely at age 65.
Retirement at age 72
Clergy are required by Canon law to retire at age 72 and resign their present positions. Any further church work they perform must have a bishop's approval. It is not assessed and cannot be used to earn additional credited service.
Minimum Pension
Whatever the calculation by formula may be, CPF provides a minimum pension based on years of credited service, regardless of compensation.Those who serve the church in low-paying positions for many years and retire with assessments fully paid receive at least the minimum pension in proportion to years of service. The longer the credited service, the higher the minimum. The minimum pension may also be available to an eligible surviving spouse.Minimum pensions apply only to clergy who serve at least 80% of their compensated ministry in the United States. The benefit differs slightly for those retiring with less than 20 years of credited service after a period of non-participation in the clergy pension plan.