Common Questions

Top Questions

What retirement plans are offered through The Church Pension Fund?

Clergy

Lay Employees

Is an annual cost–of–living increase guaranteed for the Clergy Pension Plan?

No. The 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. For information about cost-of-living increases for the current year, see COLA.

Was a cost-of-living adjustment (COLA) granted for 2017?

The CPF Board of Trustees has approved a 0.3% cost-of-living adjustment (COLA) to the monthly pension benefit for beneficiaries of The Church Pension Fund Clergy Pension Plan, effective January 1, 2017.

Letter mailed to all Clergy Pension Plan beneficiaries December 12, 2016

Dear Friend,

We are pleased to announce that The Church Pension Fund Board of Trustees (CPF Board) has approved a 0.3% cost-of-living adjustment (COLA) to your monthly pension benefit, effective January 1, 2017. (Please note, if you retired during 2016, the increase is prorated.)

Although not required by plan rules, the CPF Board has generally granted a COLA when inflation has justified it and the financial condition of The Church Pension Fund Clergy Pension Plan has allowed for it. While we make our own judgments regarding COLAs, it has been our practice to look to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) as a benchmark to guide our thinking on inflation. Many other organizations, such as the Social Security Administration (SSA), look to the CPI when making decisions about COLAs. In October, the SSA announced a COLA of 0.3%. We realize the SSA’s COLA decision is not a perfect proxy for retiree living expenses in every case, but it is the most well recognized and objective measure available so we continue to see value in referring to it when making our decision.

Also, to assist retired clergy with the rising cost of healthcare, the CPF Board recently approved a 2017 subsidy increase of $10 per eligible member/per month1 for the Medicare Supplement Health Plans available through The Episcopal Church Medical Trust. The full subsidy for 2017 is $340.

Medicare-eligible retired clergy with 20 or more years of Credited Service, as such term is defined under the Clergy Pension Plan (Credited Service), and their eligible spouses will receive the full subsidy. Those with 10-19 years of Credited Service will receive a partial subsidy. Please visit www.cpg.org/medicare_supplement for details. The Medical Trust notified eligible retired clergy and beneficiaries of this enhancement in October, but if you have any questions, please call us at (800) 480-9967, Monday – Friday, 8:30AM – 8:00PM ET, excluding holidays.

We are fortunate to serve those who serve the Church and are grateful to be able to enhance your benefits. We wish you a blessed Advent season.

Faithfully,

Barbara B. Creed, Esq.
Chair
The Church Pension Fund Board of Trustees
Mary Kate Wold
CEO and President
The Church Pension Fund

 

1 The Church Pension Fund plans to continue to provide the Medicare Supplement subsidy. However, given the rising cost of medical care coupled with the uncertainty regarding the structure of Medicare in the future, this should not be viewed as a guarantee of the Medicare Supplement subsidy in perpetuity.

 

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.

 

What is the pension assessment based on?

Clergy

The assessment is based on the cleric's total compensation, including cash salary, Social Security tax reimbursement, utilities, and housing allowance. The clergy pension assessment is 18% of total compensation.
View details

Lay Defined Benefit Plan

The assessment is 9% of the employee's compensation.

Lay Defined Contribution Plan

Employers may contribute a base contribution of 5% of employee compensation and match employee contributions up to 4%. Employees should consult with their employers on their funding levels.

What if Clergy Pension Plan assessment payments are late?

Assessments are billed in advance, monthly or quarterly, and are due when billed. Late payments may jeopardize a cleric’s benefits and may result in interest charges. Monthly reports to diocesan offices include the status of assessment payments and compensation information. Pension benefits are based on a cleric’s years of Credited Service and Highest Average Compensation. Each assessment payment adds to the cleric’s earned Credited Service. When assessments are unpaid, the cleric’s pension benefit will not accurately reflect his or her actual service to the church.

Remember, a cleric’s Credited Service is not based on years of service to the Church, but on the period of months and years of service for which assessments are paid.

If assessments are unpaid for more than six months, benefits at risk include:

  • projected Credited Service, which affects
    • survivor benefits for the cleric’s spouse, or named beneficiary if the cleric dies before retirement
    • disability benefits
  • benefits for eligible dependent children
  • the lump sum death benefit
  • the life insurance benefit
  • the resettlement benefit

What does the recent United States District Court ruling regarding clergy housing allowance mean for Episcopal clergy?

This decision has no immediate impact because it is not yet effective. The U.S. District Court specifically ruled that its decision would not be effective until all appeals are resolved. The Wisconsin court’s ruling was recently appealed and it will take some time for the Court of Appeals to reach its decision. It is also quite possible that the decision by the Court of Appeals, whether it agrees or disagrees with the Wisconsin court, would be appealed to the U.S. Supreme Court. We will continue to monitor this case closely. In the meantime, the tax benefit enjoyed by many of our clergy remains unchanged.

As a member of The Church Alliance, a coalition of 38 church benefit programs, we plan to participate in the amicus curiae brief being prepared by the Alliance, and also will coordinate our efforts with representatives of The Episcopal Church.

The Wisconsin decision has no impact on situations where a church actually provides a rectory or similar church-owned housing for a cleric because it does not affect the ability of the cleric to continue to exclude from income the rental value of that home.

Clergy Pension Plan

Who pays pension assessments?

Title I, Canon 8, Section 3 of the Episcopal Church Constitution and Canons (2009) mandates that Church employers pay pension assessments on compensation paid to bishops, priests and deacons by all parishes, missions, and other ecclesiastical organizations or bodies that are subject to the authority of The Episcopal Church. Assessments are required for clergy serving full- and part-time, as well as those in supply or interim positions, when they are paid $200 or more per month, exclusive of travel expenses, for three or more consecutive months by the same employer. The diocesan or parish treasurer is generally responsible for making the pension assessment payments. In special circumstances, clergy may personally pay assessment to the Plan. View details

What compensation is subject to assessment?

For assessment purposes, compensation is based on four categories:

  • Cash Salary
  • Social Security Tax Reimbursement (SECA)
  • Utilities
  • Housing Allowance

View details

How much does the employer pay?

The current assessment rate is 18% of a cleric’s Total Assessable Compensation.

Where does the pension assessment money go?

Assessments are not held in individual accounts. Rather, they are invested in a general fund of pooled contributions from employers of all clergy who are canonically resident in and employed by The Episcopal Church. The assessments fund a number of benefits including the retirement benefits provided by the Clergy Pension Plan and the CPF-provided life insurance benefit. The Clergy Pension Plan is a defined benefit plan. Under this plan, clergy accrue benefits that are determined by a formula at the time of retirement, disability or death. These benefits do not fluctuate due to market performance.

What if the Clergy Pension Plan information is incorrect?

We rely on you and your clergy for accurate information about compensation and changes in work and family status. Incorrect information places benefits at risk. Each assessment notice you receive provides space for compensation updates and employment changes. An Annual Certificate is sent to the clergy in the first quarter of each year. This provides the clergy an opportunity to verify the compensation on record for the previous year, Credited Service earned and assessment status. Every fall, the clergy receive a Personal Information Summary which allows them to verify such information as name, address, beneficiary’s name, etc., as well as compensation and Credited Service. The Personal Information Summary also provides each cleric with an estimate of his or her projected retirement benefit.

How do we report changes in compensation?

Changes in compensation must be reported in writing on the Assessment Notice (section 3) or the Change in Cleric’s Compensation/Duties form (available for download at forms).

What should I do if the assessment notice is inaccurate?

Contact us at (855) 215-5990 Monday - Friday, 8:30AM - 8:00PM ET (excluding holidays). We’ll re-compute the assessment amount for you and issue a corrected assessment notice.

What should I do when a new cleric joins our staff?

Sometimes the cleric or former employer notifies CPF, but it’s always best for you to verify the compensation, start date, and other pertinent information with Pension Services by completing and mailing a New Assignment Notice (available for download at forms).

Can we increase retirement benefits by paying more than CPF assesses?

No. Pension benefits are based on a formula that includes Credited Service and Highest Average Compensation over a period of years as two of the primary factors. Paying increased assessments has no effect on this formula. Further, inflating a salary for a short period to achieve a higher benefit is prohibited since it would undermine the economics of the Clergy Pension Plan. The Church Pension Fund reserves the right to request support for a cleric’s Total Assessable Compensation as reported to Pension Services at any time. Parishes wishing to supplement a cleric’s income in retirement may select from a wide range of annuity and investment products available in the market. The Church Life Insurance Corporation offers several such products.

Do assessments end when a cleric’s duties terminate?

Yes, if compensation ends on the same date. However, when compensation continues under a severance agreement or sabbatical arrangement, or is expected to resume with new employment after a period of time, the possibilities for retaining active status in the Clergy Pension Plan vary. Including Pension Services personnel in the planning process will help your parish or diocese and the cleric make informed decisions under special circumstances.

Can a cleric keep working in the Church after retirement and continue to receive benefits?

Yes, provided that the following criteria are met:

  • The cleric receives permission from the bishop of the diocese in which he or she will be working.
  • The cleric will not be working for the same church institution from which he or she retired.
  • The cash remuneration will not exceed 50% of the national median compensation for all clergy.

If these requirements are not met, the cleric may request an exception. View details

Clergy over the age of 72 have no restrictions on the amount of compensation earned. Clergy may work outside of The Episcopal Church with no restrictions on the place of employment or the amount of compensation earned.

 

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