• Employers must contribute an amount equal to at least 5% of the employee's compensation.
• Employees may contribute to their accounts, but are not required to do so.
• An employer's matching contribution, when added to the 5% base contribution, must equal at least 9%.¹
• Employers may choose to make a larger base contribution, as long as the combination of the base and the match equals at least 9%.

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: Indicate whether physical housing, either owned or rented directly by the employer, is provided to the employee.
  • 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.

Contribution Limits

The IRS limits the amount an employee can contribute to his or her account, as well as the total amount an employer and employee together can contribute.

¹ This combination is consistent with the requirements of General Convention Resolution A138.