How Your Pension Benefit is Calculated

At Early Retirement With Less Than 30 Years of Credited Service

If you retire at or after the early retirement age of 55 with less than 30 years of Credited Service, your annual pension benefit is subject to reduction and calculated as follows:

Highest Average Compensation x 1.6% x Credited Service
Plus
Up to the first $10,000 of Highest Average Compensation x 1.15% x Credited Service
= Your Total Annual Normal Retirement Benefit
Less
5% x each year (approximately 0.4167% per month) your early retirement date is short of age 65
= Your Total Annual Early Retirement Benefit with Less Than 30 Years of Credited Service

Special Transition Rule for Grandfathered Participants: If you are age 55 or older as of December 31, 2017, and you retire at or after age 60 and prior to age 65, your pension benefit will be reduced by 0.2% for each month that your early retirement date precedes age 65. If you retire before age 60, however, the reduction of 5% per year (approximately 0.4167% per month) will apply.

At Early Retirement With 30 or More Years of Credited Service

If you retire at or after the early retirement age of 55 with 30 or more years of Credited Service, you will receive the normal retirement benefit (unreduced for early commencement). Your annual pension benefit is calculated as follows:

Highest Average Compensation x 1.6% x Credited Service
Plus
Up to the first $10,000 of Highest Average Compensation x 1.15% x Credited Service
= Your Total Annual Early Retirement Benefit with 30 or More Years of Credited Service

In addition, you will receive a monthly bridge benefit until you reach age 65. The monthly bridge benefit is provided to help you with the cost of healthcare and ends when you reach age 65. It is payable only to you (not to your spouse, surviving spouse, or other survivor beneficiary) and is calculated as follows:

$17.50 x Credited Service

Early Retirement -30 Years CS

At Normal Retirement

Here is how your annual pension benefit is calculated if you retire at or after the normal retirement age of 65:

Highest Average Compensation x 1.6% x Credited Service
Plus
Up to the first $10,000 of Highest Average Compensation x 1.15% x Credited Service
= Your Total Annual Normal Retirement Benefit

At Normal Retirement

Minimum Pension

As long as you are vested and eligible to retire, the Clergy Pension Plan provides a minimum pension benefit based on your Credited Service. Your status at retirement (Active/Inactive) does not impact the amount of the minimum pension.

If you work a full career in the Church (that is, you have earned 25 years of Credited Service), the minimum pension equals the two-person Federal Poverty Level (for the 48 contiguous states and the District of Columbia) in effect in the year before the year in which you retire.

The minimum pension is prorated up or down if you have earned more or less than 25 years of Credited Service and is subject to the early retirement reduction. In addition, the annual amount is capped at your Highest Average Compensation. CPF will automatically determine if you are entitled to a minimum pension at the time your retirement package is prepared.

The Clergy Pension Plan also provides a minimum pension benefit for an eligible spouse. The minimum spousal pension is set at 80% of your minimum pension, unless you elect an optional form of payment at retirement. CPF will automatically determine if your eligible spouse is entitled to a minimum spousal pension.

Minimum Pension

At Mandatory Church Retirement Age

The Mandatory Church Retirement Age is 72. If this applies to you, your annual pension benefit is calculated using the same formula that is used for normal retirement.

If you are actively working in the Church and meet the eligibility requirements to participate in the Clergy Pension Plan, you may continue to earn Credited Service until age 72, assuming Assessments are fully paid. If you are still working in the Church after age 72, you will not earn Credited Service for your work, and employer Assessment payments will end.

At Mandatory Church Retirement Age

IRS Required Beginning Date

If you are vested and stop working in the Church prior to age 72 and have not yet retired under the Clergy Pension Plan, you will be required to begin receiving your pension by no later than April 1 of the year following the year in which you turn age 70½ (or, if later, by April 1 of the year following the year in which you stop working in the Church). This is what the Internal Revenue Service refers to as your required beginning date. Your annual pension benefit is calculated using the same formula that is used for normal retirement.

IRS Required Beginning Date