If you are considering retiring in 2017 or 2018, please contact CPG at (866) 802-6333 to schedule a retirement discussion regarding how the Clergy Pension Plan revisions could impact your retirement benefits.
Please note that in order to receive retirement benefits under the new Clergy Pension Plan, you must earn Credited Service in 2018, and retire after January 1, 2018 with a vested benefit. In addition, any assessments due with respect to this Credited Service must be paid in full prior to your retirement. If you retire on or before January 1, 2018 with a vested benefit, you will receive retirement benefits under the existing Clergy Pension Plan.
The Clergy Pension Plan (the Plan) provides different retirement options to fit your life plans.
- You are eligible for a retirement benefit if you are vested under the plan.
- At retirement, you will need to choose a survivor benefit.
Your retirement benefit is determined using your Highest Average Compensation (HAC) and Credited Service (CS).
- The formula to calculate the annual normal retirement benefit is:
Step 1: HAC x 1.6% x CS
Step 2: First $10,000 of HAC x 1.15% x CS
Total Basic Annual Benefit = Step 1 + Step 2
- The formula to calculate the annual early retirement benefit is:
Step 1: HAC x 1.6% x CS
Step 2: First $10,000 of HAC x 1.15% x CS
Total Basic Annual Benefit = (Step 1 + Step 2)
Step 3: Reduction = Total Basic Benefit x 0.4167% for each month prior to age 65
Annual Benefit = Total Basic Benefit - Reduction
- Clergy who are age 55 or older as of December 31, 2017 will be allowed to retire early under the old or new formula, depending on their age at retirement. See I plan to retire early for details.
Benefits available to you at retirement in addition to your pension benefit include:
Other benefits (if eligible)
- Unsubsidized access to Medicare Supplement Health Plans or a Medicare Supplement Health Plan subsidy for both you and your eligible spouse. For information, see Medicare Supplement Health Plan and CS.
- Group life insurance calculated at six times your HAC, up to a maximum of $50,000. You must be Active immediately prior to your retirement in order to receive this benefit. For more information, see life insurance.
- Resettlement benefit equal to 12 times your monthly pension benefit, with a minimum of $2,000 and a maximum of $20,000. You must be Active immediately prior to your retirement in order to receive this benefit. For information, see resettlement benefit.
- Christmas benefit calculated at $25 times your years of CS for you and, if applicable, your survivor beneficiary and eligible children. For more information, see Christmas benefit.
I plan to work after retirement
You may work in retirement for an Episcopal institution that participates in the Plan under the Working While Pensioned (WWP) rules while receiving your pension benefit if you meet the following two criteria:
- You will not be working for the same Church employer from which you retired; and
- Your compensation for a 12-month period is below 50% of the U.S. median compensation for full-time clergy ($37,700 in 2017, $38,250 in 2018). See Housing below for details on when a housing allowance will be included toward your compensation limit.
These restrictions do not apply to clergy age 72 or older or to clergy who work for an employer that is not participating in the Clergy Pension Plan.
If you receive temporary housing (i.e., expected to last for one year or less), whether a cash housing allowance or an employer-provided residence, it will not be included toward the compensation limit. However, housing that is not temporary (i.e., expected to last for more than one year) will be included as compensation as of the date the housing is first provided.
- Employer-provided housing and cash housing allowance that is not used toward housing owned or rented by you prior to your work after retirement, will not be counted toward the compensation limit until January 1, 2019. If you are receiving housing starting January 1, 2019, and you are expected to receive it for more than 12 months, it needs to be included as compensation as of January 1, 2019.
Working While Pensioned Exception
If your compensation is above the limit or you return to work for the same Church employer, you are eligible to apply for an exception for up to two years in your lifetime. (Exceptions granted for work performed prior to January 1, 2018 will not count toward this limit.) To apply for an exception:
- You must submit an application for the exception executed by your bishop;
- If you return to the same Church employer, you must serve in a capacity with limited scope and compensation;
- If you are 65 or older, your employer must comply with the Medicare Secondary Payer rules.
- If you are under age 65 and you return to the same employer, you must demonstrate that a bona fide severance has occurred pursuant to IRS requirements; and
If you are receiving Social Security, your Social Security payments may be impacted if you receive more than a certain amount of compensation set by the IRS. Speak to a financial or tax advisor to learn how this may impact your Social Security benefit.
Download information on Working While Pensioned.
I want to financially plan for my survivors
The Clergy Pension Plan offers survivor benefits for your spouse and children, both pre- and post-retirement, if they are eligible. A group life insurance benefit is also available.
Participants who are Active in the Plan (either at the time of a preretirement death or at the time of retirement) are eligible for a life insurance benefit.
- Eligible Active Clergy – the benefit is calculated at six times your TAC with a maximum benefit of $150,000
- Eligible Retired Clergy – the benefit is calculated at six times your HAC with a maximum benefit of $50,000
Download information on survivor benefits.
I wonder about healthcare coverage in retirement
All clergy who are vested in the Clergy Pension Plan and their eligible spouses have unsubsidized access to the Medicare Supplement Health Plans offered by The Episcopal Church Medical Trust. If you have 10 or more years of CS with assessments paid at or above the HMC level, you and your eligible spouse will be eligible for a Medicare Supplement Health Plan subsidy.
Download information on Credited Service.
Health benefits are offered through plans maintained by Church Pension Group Services Corporation (doing business as The Episcopal Church Medical Trust), 19 East 34th Street, New York, NY 10016.
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