Contributions

Employer’s Base Contribution

• Your employer typically contributes an amount equal to at least 5% of your annual compensation. Employers are allowed to contribute more than 5%, but total contributions cannot exceed IRS limits.

Your Contribution and Your Employer’s Match

• Your employer matches your contribution – typically up to 4% of your compensation.
• Some employers may match more than 4%.
• The employer match is essentially free money for your retirement account, so you should consider contributing at least enough to receive the full match.

Increasing your contribution rate by as little as 1% may increase your retirement security. Remember: Your employer matches your contribution dollar for dollar, up to at least 4% of your compensation.

Your Eligible Compensation

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.

Compensation* includes:

• 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 Employer Contributions to the RSVP and Lay DC Plan – Compensation used to calculate employer contributions to the defined contribution plans is the sum of the following four components:
  • Base salary (excluding housing) and scheduled taxable cash payments
  • Cash housing allowance and/or utilities
  • Employer-provided housing
  • One-time payments
• For Employee Contributions to the RSVP and Lay DC Plan – Compensation used to calculate employee contributions to the defined contribution plans is the sum of the following (note that these definitions are different than the definitions provided above):
  • Base salary (excluding housing): 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).
  • Other taxable cash payments (excluding utilities and severance): Includes Social Security tax reimbursements, employer-paid tuition for dependents (if taxable), other scheduled taxable income, and one-time cash payments, such as bonuses or overtime, that are taxable. Utilities (even if they are taxable) and any form of severance (including pay continuation following a termination of employment) should be excluded in all cases.

Pensions Disclaimer