- Your employer contributes an amount equal to 9% of your annual eligible compensation.
- Contributions begin on the first day of the month on or after the date you become eligible to participate, and are enrolled, in the Lay DB Plan.
To create additional retirement income, you may wish to participate in the Retirement Savings Plan.
Compensation is used to determine Total Assessable Compensation, which is the basis for determining the amount paid by employers in assessments for the defined benefit pension plans (Lay DB and Clergy Pension Plan) and/or the compensation used to calculate employer and employee contributions to the defined contribution plans (Lay DC and RSVP). Note that the definition of compensation for a defined benefit plan versus a defined contribution plan is different.
- Base salary (excluding housing) and scheduled taxable cash payments: Includes base salary (excluding the amount designated as a housing allowance in accordance with the U.S. tax code or a similar law of a local jurisdiction), Social Security tax reimbursements, employer-paid tuition for dependents (if taxable), and other scheduled taxable income.
- Cash housing allowance and/or utilities: Includes cash payments that are paid on a regular basis and are excludible from an employee’s gross income for income tax purposes under the U.S. tax code or a similar law of a local jurisdiction. (For example, the amount of a cleric’s base salary that has been designated as a housing allowance.) Also includes amounts paid by the employer to cover the cost of utility bills, including but not limited to fuel, gas and electricity, or amounts paid on the employee’s behalf.
- Employer-provided housing:
- Employer-provided housing is considered compensation even if no cash compensation is paid.
- If a home is owned or rented directly by the employee, it should not be reported as employer-provided housing regardless of whether (1) the employer pays the mortgage or rent directly to the mortgage holder or landlord or (2) the employer reimburses the employee for the full amount of the mortgage or rent payments. (In this case, report the amount of the mortgage or rent as (1) a cash housing allowance, if excludible from the employee’s gross income for income tax purposes, or (2) as scheduled taxable cash payments, if includible in the employee’s gross income for income tax purposes.)
- Employer contributions to a qualified or non-qualified plan: Includes employer contributions to a qualified defined contribution plan, such as a 403(b) or 401(k), and/or to a non-qualified deferred compensation plan or arrangement (whether funded or not). Does not include assessments paid to CPF. (May have been previously known as a Housing Equity Allowance.)
- One-time payments: Includes one-time cash payments, such as bonuses or overtime, that are taxable. Also includes one-time cash payments that are excludible from an employee’s gross income for income tax purposes under the U.S. tax code or a similar law of a local jurisdiction. (For example, the portion of a cleric’s bonus that has been designated as a housing allowance.)
* Corrections to compensation and/or employment records will only be accepted for two years immediately preceding the current calendar year unless interest is paid on any assessment that becomes payable to The Church Pension Fund as a result of a correction.
Any form of severance (including pay continuation following a termination of employment) should be excluded in all cases.
How Compensation Is Calculated
- For Assessments to the Clergy Pension Plan and Lay DB Plan – Compensation used to calculate assessment payments to The Church Pension Fund for participants in the defined benefit plans is the sum of the following five components:
- Base salary (excluding housing) and scheduled taxable cash payments
- Cash housing allowance and/or utilities
- Value of Employer-provided housing
- Employer contributions to a qualified or non-qualified plan
- One-time payments
The Lay Defined Benefit Plan requires that assessments be paid promptly in order for employees to receive proper credit for their service and compensation earned. If assessments are not paid in a timely manner, the employee can lose certain benefits and will not receive credit for service or compensation earned after two years of non-payment, unless interest is paid in accordance with the Lay DB Plan rules.
- CPF will allow you to get credit for service and compensation earned for assessments that are paid more than two years after they are billed. The late assessments must be paid in full, with interest.
- Interest will be charged beginning 90 days after the assessment was billed. The interest rate will be equal to the Lay DB Plan’s discount rate for the period from 90 days after the assessment was billed until the assessment is paid in full.
- CPF reserves the right to refuse late payment of assessments after more than two years if we feel the late payment is exploitative.
For details, please refer to A Guide To Benefits Under the Lay Defined Benefit Plan
The Lay Defined Benefit Plan is a qualified plan under Section 401(a) of the Internal Revenue Code, but as a church plan, it is not subject to ERISA. The plan's financial condition is disclosed in the Church Pension Group Annual Report.
The Church Pension Fund, as sponsor of this plan, continues to monitor the funding status closely. Like many defined benefit plans, the Lay Defined Benefit Plan currently is not fully funded. The Church Pension Fund retains the right to amend, terminate or modify the terms of the Lay Defined Benefit Plan, including the employer assessment rate, without notice and for any reason.