The Minutes of the Church of God General Assembly state that the local church should make contributions “to the Church of God Ministers’ Retirement Plan for the pastor of an amount equal to at least 5 percent of the cash compensation received by the pastor.” There is no specific recommendation in the Minutes concerning retirement contributions for other ministerial staff or church-related employees.
The Ministers’ Retirement Plan, available to ministers and church-related employees, is a 403(b)(9) retirement plan set up under the auspices of the Internal Revenue Service. The Ministers’ Retirement Plan, or MRP, is administered for the Church of God by the Benefits Board, Inc. The MRP operates almost identically to a 401(k) plan.
In 2015, the regular contribution limit to the Ministers’ Retirement Plan is $53,000 or the amount of the minister’s (or church-related employees’) taxable ministerial income, whichever is less. Of that amount, no more than $18,000 in 2015 can be contributed by salary reduction. The remainder of the limit must come from the church’s contribution.
In addition to the regular contribution limit, anyone that is 50 years of age or older during 2015 can contribute an additional $6,000 for the year, either through salary reduction or by the employer, as a catch-up contribution.
A second addition applies to those who have been in the ministry or have worked for a church-related organization for 15 years or more – commonly called the “church plan catch-up.” This catch-up provision allows those individuals that qualify to contribute an additional $3,000 per year, either through salary reduction or by employer contribution, as church plan catch-up. This catch-up provision is capped at a lifetime maximum of $15,000.
While a young minister may not see a retirement account as a valuable fringe benefit, it should be included in his package at least at the five percent level recommended by the Minutes. A more reasonable figure would be to set aside 10% of the minister’s cash compensation for contribution to the Ministers’ Retirement Plan. The church should take the position that they are not only providing for the minister now – but also in his retirement years.
If the church includes payments to the Ministers’ Retirement Plan in their compensation package, a resolution should be entered on the local church records to memorialize such.
It should be noted that the Ministers’ Retirement Plan is the only tax-deferred plan recognized by the Church of God, and therefore, the only retirement plan that a church can make contributions to on behalf of a minister.
Additional information about the Ministers’ Retirement Plan can be obtained from the Benefits Board. The Board makes available a Plan Summary that would be a helpful guide for church treasurers.
Church of God Benefits Board, Inc. 