How Do the Changes Impact Me?
Will my monthly retirement benefit change?
These revisions will not change your monthly pension check and may increase certain other benefits that you may be entitled to receive in the future under the Clergy Pension Plan.
Your Credited Service (CS) and Highest Average Compensation (HAC) were established at your retirement and are not impacted by the revisions. In addition, the survivor benefit option that you chose at retirement cannot be modified.
I am thinking of getting married in retirement.
Your new spouse will not be a beneficiary of your pension.
If you wish to provide your new spouse with a survivor benefit following your death, you must make a Marriage After Retirement election on or before December 31, 2017.
Effective January 1, 2018, the Clergy Pension Plan will no longer offer retired clergy the option to reduce their own pension benefit in order to provide a survivor benefit for a spouse they marry after retirement.
- Please contact CPG at (866) 802-6333 if you have any questions or would like to schedule a discussion with one of our financial education specialists.
I plan to work after retirement
You may work in retirement for an Episcopal institution that participates in the Plan under the Working While Pensioned (WWP) rules while receiving your pension benefit if you meet the following two criteria:
- You will not be working for the same Church employer from which you retired; and
- Your compensation for a 12-month period is below 50% of the U.S. median compensation for full-time clergy ($38,250 in 2018, $39,000 in 2019). See Housing below for details on when a housing allowance will be included toward your compensation limit.
These restrictions do not apply to clergy age 72 or older or to clergy who work for an employer that is not participating in the Clergy Pension Plan.
If you receive temporary housing (i.e., expected to last for one year or less), whether a cash housing allowance or an employer-provided residence, it will not be included toward the compensation limit. However, housing that is not temporary (i.e., expected to last for more than one year) will be included as compensation as of the date the housing is first provided.
- Employer-provided housing and cash housing allowance that is not used toward housing owned or rented by you prior to your work after retirement, will not be counted toward the compensation limit until January 1, 2019. If you are receiving housing starting January 1, 2019, and you are expected to receive it for more than 12 months, it needs to be included as compensation as of January 1, 2019.
Working While Pensioned Exception
If your compensation is above the limit or you return to work for the same Church employer, you are eligible to apply for an exception for up to two years in your lifetime. (Exceptions granted for work performed prior to January 1, 2018 will not count toward this limit.) To apply for an exception:
- You must submit an application for the exception executed by your bishop;
- If you return to the same Church employer, you must serve in a capacity with limited scope and compensation;
- If you are 65 or older, your employer must comply with the Medicare Secondary Payer rules; and
- If you are under age 65 and you return to the same employer, you must demonstrate that a bona fide severance has occurred pursuant to IRS requirements.
If you are receiving Social Security, your Social Security payments may be impacted if you receive more than a certain amount of compensation set by the IRS. Speak to a financial or tax advisor to learn how this may impact your Social Security benefit.
Download information on Working While Pensioned.
Are there changes to other benefits that may impact me or my survivors?
Several of the changes to the Clergy Pension Plan may impact the benefits for which you or your survivors are eligible. These changes will not reduce the overall value of the benefits.
Christmas benefit – Effective January 1, 2018, the years of CS used when calculating the Christmas benefit will no longer be capped at 40 years. Retired clergy with over 40 years of CS will receive an increased benefit beginning in December 2018.
In addition, the Christmas benefit for your survivor beneficiaries will increase from $20 to $25 per year of CS. Survivor beneficiaries who are currently receiving benefits (other than beneficiaries receiving a child benefit) will receive a Christmas benefit based on the new formula beginning in December 2018.
- Early retirement medical bridge benefit – Clergy who retired with 30 or more years of CS and who are under the age of 65 will receive a medical bridge benefit of $17.50 per year of CS until they turn 65. Retired clergy whose bridge benefit was reduced at age 62 will receive an increased bridge benefit on a go-forward basis beginning in January 2018 until age 65.
- Life insurance benefit – If you are eligible for retiree life insurance coverage, your benefit will be calculated at six times your HAC, up to a maximum of $50,000.
- Child benefit – If you die on or after January 1, 2018, your eligible children will receive a monthly child benefit under the new provisions. Child benefits that have commenced or will commence prior to that date will be provided in accordance with the current provisions.