Working after Retirement
Working While Pensioned
If you are under age 72, retire under the Clergy Pension Plan, and receive compensation for work in the Episcopal Church, you may continue to receive your pension. However, the following Working While Pensioned rules must be met:
- The compensation that you receive during a 12-month period, including housing (except for temporary housing as explained below), cannot exceed a threshold amount equal to 50% of the U.S. median compensation for full-time clergy. The applicable 2018 threshold is $38,250 ($39,000 in 2019).
Temporary housing is housing that is (1) expected to be provided for 24 months or less and (2) is not your permanent residence, whether it is a cash housing allowance or an employer-provided residence. The value of temporary housing is excluded when determining whether your compensation is above the limit. (Housing that is not temporary should be included as compensation as of the date the housing is first provided. The value should be determined using the Total Assessable Compensation housing calculation.)
A special transition rule will apply for 2018. If you (1) live in employer-provided housing or (2) receive a cash housing allowance that is used for housing that was not rented or owned by you prior to the commencement of the work, such housing will continue to be excluded when determining whether your compensation is above the limit. As of January 1, 2019, however, you must include the value of the housing as part of your compensation if you remain in the same position, and the housing is expected to continue for more than 12 months (that is, not temporary housing).
- You cannot work for the same employer from which you retired, regardless of the amount of compensation that you will receive.
If you do not meet all of these rules, your pension benefits will be suspended, and you will be considered to have returned to active ministry. You may, however, apply for an exception to the rules so that you may continue to receive your pension while working in the Episcopal Church for pay after retirement. You must meet the following requirements in order to receive an exception.
- Before beginning work, you must obtain the approval of the bishop (or, in the bishop’s absence, the Ecclesiastical Authority) of the diocese where you will be working. The bishop (or the Ecclesiastical Authority) must certify that:
- If you will serve in the same location as just prior to receipt of your pension benefit, you will serve in a different position, with limited scope and remuneration;
- If you are age 65 or older, your Church employer will comply with the Medicare Secondary Payer rules;
- If you are under age 65 and working at the same location as just prior to receipt of your pension benefit, a bona fide severance occurred (pursuant to the applicable Internal Revenue Code rules) prior to your return to employment with the Church employer.
CPF must approve your exception request. The total exception period(s) cannot exceed two years. You may apply for one exception for two years, or you may apply for multiple exceptions for shorter periods, as long as the total period for exceptions is not more than two years over your lifetime. Exceptions granted prior to January 1, 2018 will not count toward this two-year limit. To request an exception, please contact our Client Services group.
There are no restrictions if you return to work outside the Episcopal Church. In addition, if you are age 72, which is the Mandatory Church Retirement Age, or older, there are no restrictions on returning to work in the Episcopal Church because you are not eligible to earn any additional Credited Service under the Clergy Pension Plan.
Working While Pensioned
If You Return to Active Ministry
If you return to active ministry before reaching age 72, your pension will be suspended, and your employer will be required to pay Assessments on your Total Assessable Compensation.
Any pension benefits that have been paid after you returned to active ministry, plus interest, must be repaid to the Clergy Pension Plan or deducted from future pension payments, at CPF’s sole discretion. If full Assessments are paid, you will earn additional Credited Service, and your total pension benefit may be higher.
When you end your active ministry again (or “re-retire” under the Clergy Pension Plan), a new pension benefit will be calculated, using:
- Your original pension benefit in the form of payment and the same beneficiary originally elected at your initial retirement, plus
- Any discretionary cost-of-living increases that may have been granted on your original pension benefit during your return to active ministry, plus
- Any additional pension benefit based on the Credited Service and compensation earned during your return to active ministry.
You may elect a separate form of payment and a different beneficiary for the additional earned pension benefit, subject to any required consent from your eligible spouse, as described above. If your additional pension benefit is $20,000 or less when you retire again, it will be paid to you in a single lump sum payment.