How do I access my Defined Contribution Plan (Lay DC) account, or my Retirement Savings Plan (RSVP) account?
Defined Contribution Plan: You are eligible to participate upon your date of hire. However, you must satisfy certain eligibility rules set up by your employer before receiving employer contributions.
Defined Benefit Plan: You are eligible to participate upon your reaching 21 years of age, working 1,000 hours, and completing 12 months of service, provided your employer has adopted the plan. Your employer may adopt less restrictive requirements.
You should contact your employer for additional information.
Defined Contribution Plan: You may contribute up to 100% of your annual compensation, minus any required withholdings, provided the total amount you contribute in a given year does not exceed Internal Revenue Code limits for contributions.
Defined Benefit Plan: Only your employer contributes to your plan. You may not contribute. You may wish to consider the Retirement Savings Plan (RSVP) as an additional way to save for your retirement.
In a defined contribution plan, vesting occurs when a participating employee receives complete ownership of contributions made into his or her account including the earnings on those contributions. In a defined benefit plan, vesting is when a participating employee has a right to the benefit accrued under the plan.
Defined Contribution Plan: Employee and employer contributions are always 100% vested.
Defined Benefit Plan: You are vested in the defined benefit pension plan when you complete five years of service or reach age 55 while employed by the Church, whichever comes first. If your job ends before you are vested, you forfeit your benefits unless you return to work at another participating employer within 30 years. However, if you leave after five years of service or after you have attained age 55, you are entitled to a benefit when you retire. All assessments must be paid in full.
The CPF Board has determined there will not be a cost-of-living increase (COLA) for beneficiaries of The Episcopal Church Lay Employees’ Retirement Plan (Lay DB Plan) in 2018.
Letter mailed to all Lay DB beneficiaries December 11, 2017
We are writing on behalf of The Church Pension Fund Board of Trustees (CPF Board) with respect to its 2018 cost-of-living adjustment (COLA) decision. Unfortunately, as in recent years, there will be no COLA for participants and beneficiaries of The Episcopal Church Lay Employees’ Retirement Plan (Lay DB Plan) for 2018.
As in prior years, the CPF Board referred to its current COLA policy to only consider granting a COLA when a defined benefit pension plan is fully funded. As of September 30, 2017, the Lay DB Plan was not fully funded. We hope you understand that the decision not to grant a COLA for 2018 protects the long-term viability of the Lay DB Plan and the continuity of pension payments participants and beneficiaries receive.
We know this decision not to grant a COLA is disappointing, but we hope this letter offers a clearer understanding of the thought process behind the CPF Board’s decision. As always, if you have any questions or comments, please do not hesitate to call us at (866) 802-6333, Monday – Friday, 8:30AM – 8:00PM ET, excluding holidays.
We wish you a blessed Advent season.
The Church Pension Fund Board of Trustees
CEO and President
The Church Pension Fund
What We Consider When Determining COLA
Although not required by plan rules, the CPF Board has granted a COLA to beneficiaries of our defined benefit plans in years when the financial condition of the plans allowed for it. While we make our own decisions as to these increases, we have historically looked to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) as a benchmark to guide our thinking – a standard that many organizations, such as the Social Security Administration, look to when making decisions about cost of living increases.
The board also considers the funding status of each plan before making its annual COLA decision to ensure that the COLA decision is made in a manner that protects the long term stability of the plans.
If you believe that you have been denied a benefit that you are due under the Lay Defined Benefit Plan, the Lay Defined Contribution Plan or RSVP, you have the option to file an appeal. Download information on the claims and appeals process.
More Questions: Defined Contribution Plan
The Episcopal Church Lay Employees' Defined Contribution Retirement Plan was established for employees of participating employers of The Episcopal Church to save for their retirement on a tax-deferred basis. The plan is comprised of two components: a 401(a) component for employer contributions and a 403(b) component for employee contributions. Each employee has his or her own account and directs how the vested portion is invested by choosing among a range of investment options. The amount available at retirement depends on the amount invested and the performance of the investment over time.
The retirement benefit provided under a defined benefit plan is determined by a formula; generally, a specific percentage applied to years of credited service in a plan multiplied by average compensation. The retirement benefit provided under a defined contribution plan is based on the retiree's vested account balance at his or her retirement date. Also, employees can contribute to their own retirement account with a defined contribution plan; they do not generally contribute to their own retirement benefit under a defined benefit plan.
If your employer adopts the Lay DC Plan, you are generally eligible to make salary deferrals to the Plan as soon as possible following your date of hire, provided you are scheduled for and work at least 1,000 compensated hours annually.
Enrollment is easy. You will need to complete an Employee Application for Membership form and decide the percentage of compensation you would like to contribute. Please note that if you do not complete the employee contribution section of the form, you will automatically be enrolled at a 4% pretax payroll deduction. Upon enrolling in the Plan, you will receive a Welcome Kit from Fidelity that will indicate that you are now enrolled and will allow you to make investment selections and change your payroll deduction if you wish to do so. The Welcome Kit will also include your Beneficiary Designation Form. Please complete the form and return it to The Church Pension Fund.
The IRS annual limit on pretax salary deferral contributions is $18,500 for 2018. If you will attain age 50 or older during the calendar year and contribute up to the IRS pretax contribution limit, you are eligible to make additional pretax catch-up contributions of up to $6,000 in 2018. In addition, there is a combined annual limit for total plan contributions (employee pretax or after-tax contributions and employer contributions), which is 100% of your Form W-2 compensation or $55,000 (or $61,000 including catch-up contributions) for 2018, whichever is less.
Yes, you can change or stop your payroll deductions at any time. However, if you change your contributions, the employer's matching contribution may also change.
Your contributions reduce your gross income for federal and most state and local taxes. Federal taxes apply when benefits are paid to you, generally at retirement.
Yes. Generally the Plan will accept rollover funds from an eligible retirement plan (e.g. 403(b) plan, 401(k) plan, individual retirement annuity).
They include a variety of funds ranging from a money market fund to growth-focused stock funds and the Stable Value Option. The Fidelity Freedom Funds are also included. View investment options. In the event you do not make an investment election, both employee and employer contributions will be invested in the Fidelity Freedom Fund with the target retirement date closest to the year you might retire, based on your current age and a retirement age of 65, at the direction of The Church Pension Fund. Please note that if we do not have a date of birth or an invalid date of birth, the contributions will be invested in the Fidelity Freedom Income Fund.
The Stable Value Option Fund is a stable value investment option in the Episcopal Church Lay Employees' Defined Contribution Plan (DC Plan) and the Episcopal Church Retirement Savings Plan (RSVP). It is funded by a group annuity contract issue by Church Life Insurance Corporation to The Church Pension Fund. The stable value investment option offers relatively stable, tax-deferred growth at an interest rate based on financial conditions. View investment options.
Can I allocate my contributions between the variety of investment options and the Freedom Fund investment options?
Yes, you can. It is your decision. You can allocate all of your contributions among the variety of investment options, ranging from a money market fund to growth-focused stock funds and a stable value investment option, or you can allocate some or all of your contributions to the Fidelity Freedom Funds® investment options.
You can transfer your full account balance, or any portion of it, between investment options daily.
We encourage you to take an active role in the Plan and choose investment options that best suit your goals, time horizon, and risk tolerance. If you do not select specific investment options in the Plan, your contributions will be invested in the Fidelity Freedom Fund with the target retirement date closest to the year you might retire, based on your current age and assuming a retirement age of 65, at the direction of The Church Pension Fund. If no date of birth or an invalid date of birth is on file at Fidelity, your contributions may be invested in the Fidelity Freedom Income Fund®. See information about your investment options.
Yes, subject to Internal Revenue Service limitations. In general, you may borrow 50% of the vested balance of your account up to a maximum of $50,000. No more than two loans may be outstanding at any one time. The minimum principal amount of any loan is $500. The maximum loan repayment period is five years, unless the purpose of the loan is to acquire a principal residence, in which case a repayment period of up to 15 years is permitted. Loans are repaid by Automatic Clearing House (ACH) debit against your bank.
Withdrawals from the Plan are permitted when you have a distributable event. These events include: termination of employment, retirement, attaining age 59½, becoming disabled, financial hardship or death. The taxable portion of your withdrawal that is eligible for rollover into an individual retirement annuity (IRA) or another employer's retirement plan is subject to 20% mandatory federal income tax withholding, unless it is directly rolled over to an IRA or another employer's retirement plan. (You may owe more or less tax when you file your income taxes.) If you are under age 59½, the taxable portion of your withdrawal is also subject to a 10% early withdrawal penalty unless you qualify for an exception to this rule (e.g., a distribution following termination of employment after age 55). Be sure you understand the tax consequences and the Plan rules for distributions before you initiate a distribution. The Plan document and current tax laws and regulations will govern in case of a discrepancy. You should consult your tax advisor about your situation. Contact The Church Pension Fund at (866) 802-6333 for more information or to request a withdrawal.
Withdrawing funds is taking money out of the Defined Contribution Plan. Transferring funds is moving funds from one investment option to another within the Defined Contribution Plan.
No, you do not have to take a distribution of your entire retirement account if you terminate employment. You have several options. You can maintain your retirement savings in the Plan until you retire or until the April 1st following the year in which you attain age 70½, when you may need to satisfy IRS minimum distribution requirements. You can also take partial or full withdrawals from your account, annuitize all or a portion of your account, or roll over distributions into an IRA or another employer's retirement plan.
- Administrative fees are currently fixed at 0.05% per quarter and are charged at the beginning of each quarter based on the market value of the account at the end of the previous quarter. There are no management or administrative fees charged on the Stable Value Option (SVO).
- As with all mutual fund investments, there are some underlying fees and expenses, which will vary by fund and are netted against the fund’s earnings.
- Fidelity charges a $35.00 processing fee for new loans and a $4.75 quarterly recordkeeping fee for each outstanding loan.
- There is no fee for processing a distribution from an account.
The Plan offers several options to select from. These options are called "Distribution Options." These options include guaranteed lifetime income that offers you the stability of equal monthly payments, a specified payment, partial withdrawal or a lump sum payment. When you are ready to discuss your options, call us toll-free at (877) 208-0092 and request a complementary discussion with a Church Pension Fund planning representative.
The vested balance is payable to the designated beneficiary indicated on your completed Beneficiary Designation Form; or if you did not designate a beneficiary, to your spouse; or if you do not have a spouse, to your estate.
Simply complete the Beneficiary Designation Form and return it to The Church Pension Fund. You may change your beneficiary designation at any time by completing a new Beneficiary Designation Form and returning it to The Church Pension Fund.
Once you have enrolled, you can access your account by calling (877) 208-0092 or online at Fidelity NetBenefits. You also have the option of receiving your quarterly statements by e-mail.
Your employer has appointed Fidelity to provide additional information on the investment options available through the plan. Also, you may request a statement of your account by calling (877) 208-0092, or you may review your account online at Fidelity NetBenefits®.
More Questions: Defined Benefit Plan
Unlike a 401(k), 403(b) and other defined contribution plans, in a defined benefit plan:
- Your benefits are assured,1 even if financial markets decline. Retirement benefits are determined when you retire and may increase if cost of living adjustments are made.
- Contributions are pooled. The assessments your employer pays are invested in a general fund of pooled contributions from employers of all paid clergy in the Episcopal Church.
- Benefits are comprehensive. By pooling investments, the fund can provide life insurance, disability benefits and other financial security throughout your active ministry. As long as assessments are paid, you benefit from your coverage from the time assessments begin all the way through retirement.
- Benefits are portable within the Church. Wherever you work within the Episcopal Church, you carry your pension and other benefits with you.
1The 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. An independent audit of 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, as like many defined benefit plans, currently it is not fully funded.
No. After you choose a beneficiary when you retire, you cannot choose another.
Can I elect another beneficiary if I elected the 10- or 15-year certain & continuous option and my designated beneficiary has died?
No. The Church Pension Fund Board of Trustees grants cost-of-living increases at its discretion. This decision is made annually and communicated to all plan participants by mid-December.
If I receive a very small monthly benefit from the defined benefit plan, can I cash it out and receive a lump sum payment?
You can elect to receive a lump sum payment if:
- Your monthly benefit is greater than $50 but less than $100.
- Your monthly benefit is less than $50 and the present value of your total benefit is greater than $1,000. If you are married, you need your spouse's consent to make this election.
You must receive a lump sum payment if:
- Your monthly benefit is less than $50 and the present value of your total benefit is $1,000 or less.
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.