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.
- 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.
To be in compliance with these resolutions
- All employers should have adopted a retirement plan and enrolled eligible employees by January 1, 2013.
- All schools should have adopted a defined contribution plan by January 1, 2014 and begun contributing the full employer base and matching contributions by January 1, 2018.
Ensure Your Institution is in Compliance
|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)||Make sure all eligible employees are enrolled and receiving the required contributions.|
|You have an existing defined benefit plan outside The Church Pension Fund||Beginning January 1, 2013 it is your responsibility to ensure your plan complies with Resolution 138.|
|You have an existing 401(a), 403(b), or other defined contribution plan outside The Church Pension Fund, and are not a school|
|You are a school serving children of any age and have a defined contribution plan with The Church Pension Fund or TIAA-CREF||
Make sure all eligible employees are enrolled.
Beginning January 1, 2014 it is your responsibility to verify:
|You do not have a current lay pension plan||Evaluate the CPF lay plans, complete an adoption agreement, and enroll your eligible employees.|
*Scheduled to work a minimum of 1,000 hours annually
If You Do Not Currently Have Eligible Employees
We encourage you to adopt a lay pension plan now. While the plan does not become active until you enroll employees, this step will facilitate enrollment if and when you do.
You may also provide a defined contribution plan for those employees scheduled to work fewer than 1,000 hours a year so that they can save their own money for retirement, though you are not required to do so.
What Plans Are Available?
If you are required to adopt a Church Pension Fund pension plan, you have a choice of two types of 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 and match less, provided the total contribution equals at least 9%.
- Defined Benefit Plan. Employer contributes the required 9% assessment of an employee’s compensation.
Evaluate the CPF lay plans using our downloadable calculators.
“QCCO” vs. “non-QCCO” Organizations
Under the Internal Revenue Code, churches and qualified church-controlled organizations (QCCOs) are exempt from certain legal requirements that apply to non-QCCOs (including, for a defined contribution plan, the non-discrimination and universal availability requirements). The defined contribution plan 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 firstname.lastname@example.org .
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 sources or receipts from goods and services in related trades or businesses. 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.