Defined Contribution Plan
The Episcopal Church Lay Employees' Defined Contribution Retirement Plan (DC) consists of two different plans - a 401(a) plan and a 403(b) plan.1 Both are administered by Fidelity Investments.
How Does the Plan Work?
- Your employer must adopt the plan by:
- Completing an Employer Adoption Agreement, and
- Returning it to The Church Pension Fund
- Your employer typically contributes a base contribution equal to at least 5% of your compensation.2
- You may contribute up to the limits set by the IRS.
- Your employer may match your contribution. This matching contribution, when added to the employer base contribution, typically should be equal to at least 9%.2
- Your pre-tax contribution reduces your current income for federal income tax purposes.
- You are not required to contribute. However, you will lose out on the employer match if you choose not to contribute.2
- You elect the amount you wish to defer to the plan.
- You choose the investment options for your account.
Impact on Retirement Benefits
- Your pre-tax contribution to the Defined Contribution Plan allows you to save more money for retirement.
- When you retire, your pension benefit is based on the value of your account.
- All growth in the account accrues to you.
- You have several Investment Options.
- Account growth is based on investment performance and may vary.
2020 Contribution Limits
- If you are under 50 years old, you may contribute up to $19,500 before taxes (up from $19,000 in 2019)
- If you are 50 and older, you may contribute $26,000 before taxes (up from $25,000 in 2019)
- The combined total that you and your employer contribute may not exceed 100% of your compensation or $57,000 if you are under 50 years old ($63,500 if you are 50 and older), whichever is less (up from $56,000 and $62,000, respectively, in 2019)
1 Your employer may have adopted only one or both plans.
2 Ask your employer what percentage its base contribution is, and its match, if any.