Compensation Assessed

Church employers are required by Canon law to pay pension assessments on behalf of clergy, based on their compensation. The current assessment rate is 18% of total compensation. For assessment purposes, total compensation includes:

  • Cash salary or stipend
  • Overtime
  • Bonuses
  • Special service fees
  • Employer-paid tuition paid for the cleric's dependents
  • Employer contributions to a qualified retirement plan (e.g., 403(b), 401(a), IRA, etc.)
  • Housing equity, which is defined as employer-paid contributions to a non-qualified deferred compensation plan or "promise to pay" agreement
  • Social Security Tax Reimbursement (SECA)
    • Compensation the employer provides to offset the cleric's self-employment (SECA) taxes
    • Generally a fixed dollar amount or percentage of the cleric's salary
  • Utilities
    • Allowance paid to the cleric to cover the cost of utility bills, such as fuel, gas and electricity, or
    • The amount the employer pays for utilities on the cleric's behalf
  • Other taxable income
  • Housing, calculated based on the formulas noted below.
    • If housing is provided rent-free, but no cash housing allowance is provided, the assessable value of housing is calculated at 30% of the sum of the cleric's cash salary or stipend, employer-paid tuition for dependents, Social Security tax reimbursements, and utilities.
    • If housing is provided rent-free and the cleric receives an additional cash housing allowance, the assessable value of housing is the greater of the actual cash housing or 30% of the sum of the cleric's cash salary or stipend, employer-paid tuition for dependents, Social Security tax reimbursements, and utilities.
    • If both housing and meals are provided cost-free, the assessable value of housing is calculated at 40% of the sum of the cleric's cash salary or stipend, employer-paid tuition for dependents, Social Security tax reimbursements, and utilities.
    • If the cleric's compensation is received from more than one church employer, but only one provides housing, all of the church employers are assessed for a proportionate share of the housing.
  • Possibly, all or a portion of the cleric's severance or pay continuation

Please see the Guide to Benefits Under the Clergy Pension Plan for more information.

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