Lay Employee Pension System
In 2009, the 76th General Convention of the Episcopal Church passed Resolution A138 and its associated Canon, establishing the Church-wide Lay Employee Pension System (LPS) and naming The Church Pension Fund (CPF) as administrator.
Under this resolution Episcopal employers subject to the authority of the Church are required to provide a pension to all lay employees scheduled to work a minimum of 1,000 hours annually. Implementation was to be completed by January 1, 2013.
In 2012, the 77th General Convention passed Resolution C042
- Affirming the requirements of Resolution A138 and
- Extending the period for schools only to achieve the full employer contribution and match rates for defined contribution plans until January 1, 2018 according to a specific year-by-year phase-in schedule. Resolution C042 defines schools as serving children of any age, thereby including pre-school, nursery and day care centers.
Use this chart to determine your status and next steps.
|If you have eligible lay employees* AND:||Your next steps:|
|You have an existing plan with The Church Pension Fund (defined contribution or defined benefit)||
|You have an existing defined benefit plan outside The Church Pension Fund||
|You have an existing 401(a), 403(b), or other defined contribution plan outside The Church Pension Fund|
|You are a school serving children of any age and have a defined contribution plan with The Church Pension Fund or TIAA-CREF||
|You do not have a current lay pension plan|
*Scheduled to work a minimum of 1,000 annually
If you do not have lay employees scheduled to work 1,000 hours or more a year, contact us. Please provide us with the employer's name and address and a contact person.
We encourage you to choose a lay pension plan at this time and send us your adoption agreement. While the plan does not become active until you enroll employees, this step will facilitate enrollment if and when you do.
In the meantime, you may wish to provide the Defined Contribution Plan for those scheduled to work fewer than 1,000 hours a year at this time. To do so, send us your adoption agreement and enroll employees at any time.
All lay employees scheduled to work a minimum of 1,000 annually for any domestic diocese, parish, mission or other ecclesiastical organization or body subject to the authority of the Church are required to be enrolled in a pension plan that is either administered or authorized by CPF. Implementation was to be completed by January 1, 2013.
Employers may also provide pensions for lay employees scheduled to work fewer than 1,000 hours per year, but are not required to do so.
If you are required to adopt a Church Pension Fund pension plan, you have a choice of two plans:
- Defined Contribution Plan. Employer contributes at least 5% of the employee’s compensation and matches employee contributions up to another 4% of compensation. Employer may contribute more, provided the total contribution equals at least 9%. Download the DC Plan Adoption Agreement.
- Defined Benefit Plan. Employer contributes at least 9% of the employee’s compensation.
Under the Internal Revenue Code, churches and qualified church-controlled organizations (QCCOs) are exempt from certain legal requirements that apply to non-QCCOs (including the non-discrimination and universal availability requirements). Your adoption agreement has questions for you to answer that will assist you in your determination of your QCCO or non-QCCO status. Below is a short discussion of the definitions of church, QCCO, and non-QCCO for your reference. If, after reviewing the adoption agreement, you need additional assistance to determine whether your organization is a church, QCCO, or a non-QCCO, please call us toll free at (855) 215-5990, Monday - Friday, 8:30AM - 8:00PM ET (excluding holidays) or e-mail us at email@example.com .
The term “church” includes a church, convention, or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or association of churches. A “QCCO” is any church-controlled 501(c)(3) tax-exempt organization that does not generally offer goods, services, or facilities for sale to the general public and that receives less than 25% of its financial support from government grants or receipts from goods and services in related activities or business. Examples of a QCCO are a seminary or a social services organization that receives 80% of its support from a parish. “Non-QCCOs” are all other 501(c)(3) organizations qualified to participate in church retirement plans that are neither churches nor QCCOs. Examples of non-QCCOs are hospitals, universities, nursing homes, and retirement housing facilities.
Download the sample annual notice.
Employers should have been enrolled by January 1, 2013.
With the passage of Resolution C042, the period for schools only to achieve the full employer contribution and match rates for defined contribution plans has been extended to January 1, 2018, with a specific year-by-year phase-in schedule. Resolution C042 defines schools as serving children of any age, thereby including pre-school, nursery and day care centers.
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Contact us and we will help you understand the available plans and enroll.