Comments on the Upheaval in the Financial Markets due to the Coronavirus

“The downturn in the financial markets over the past few days have been a stark reminder to all of us that while stocks move upward, they also can move down.  After more than a decade of increases, the substantial downturn, especially so rapidly, has been a major wake-up call for many investors.  

After a week when investors suffered deep losses at a rate not seen since the Great Recession more than ten years ago, it is important to understand that this situation is far from normal. However, fear is a strong motivator and has been the primary impetus behind the market losses recently.  

To put things in perspective, the fear surrounding the COVID-19 coronavirus outbreak caused the Dow to decline 12.4%, the S&P 500 to drop 11.5%, and the Nasdaq, which actually closed Friday with a marginal gain, to decline by 10.5%, all in just five days of trading last week. Since all three stock indices have dropped at least 10% from their peak, we have technically entered a market “correction.” To enter a true “bear market,” the indexes would have to drop 20% from their peaks.  We certainly hope that does not occur.  

While some have suggested that we were due for a correction, the speed of this correction has caused many to worry about where we go from here.  Even more concerning is that this correction was not caused by market-driven events, such as bad earnings reports, inflationary concerns, or excessive regulatory actions. Instead, fear of a coronavirus outbreak, with less than 100,000 cases globally, caused a massive sell off.  While broken supply chains and the inability to obtain component parts from China have certainly been worries, in reality those problems have not yet occurred on a wide scale. However, in this case it seems that perception has become reality. 

Not only did the stock market suffer but oil prices declined as well. Because the demand was so great from investors trying to get out of “risk” investments, such as stocks, into “non-risk” investments, the yield on the 10-Treasury note dropped to an all-time low, closing out the week at 1.127%. So, the entire “market” has suffered. 

While you have heard all this from the countless commentators on your favorite news channel, I know that your primary concern is about your own personal investments, and particularly your account in the Ministers’ Retirement Plan at the Church of God Benefits Board. I wish that I could tell you that all is going to be great so do not worry.  However, I do not have a crystal ball that provides me with that information.  


All of us have 20/20 vision in hindsight.  We only wish we had taken our gains from 2019 and gotten out of the stock market.  However, since we did not make that choice, we now must make choices based upon our current environment.  Getting out of the stock market completely now means that you turn your “paper” losses into realized losses.  

If the markets begin to recover, your “paper” losses could be made back in a few weeks or months.  On the other hand, you do not want to ride down a sinking ship, especially if you are near, or in, retirement.  

So, my advice is to seek guidance from our Heavenly Father and then make your investment choices based upon what is pleasing to your soul and on what allows you to sleep at night in perfect peace. 


Just two years ago in late January and early February of 2018, we experienced a similar rapid drop in the stock markets.  However, as you recall, since that time the markets have done nothing but climb, with only momentary setbacks.  Will we experience recovery that fast this time or will the markets continue to drop?  I wish I knew the answer to that question, but I do not. 

However, I do know the One that knows that answer!

While I certainly do not want to overly “spiritualize” your investment decisions, I truly believe that we serve a God that cares about every concern that touches our lives.  So, during this time of market volatility, join with me in prayer for guidance as we all make investment decisions regarding our future.”

Arthur D. Rhodes
President and Chief Executive Officer
Church of God Benefits Board, Inc. 

(Note: The staff at the Church of God Benefits Board will be happy to assist you, but we cannot guide you in your investment allocation.  We are specifically prohibited by law from providing investment advice.)

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Online Filing of Forms W-2 and W-3

Churches and other church-related employers, along with other businesses, may file Forms W-2 and W-3 electronically by visiting the Social Security Administrations’ website at On the website, you will need to select “Business Services Online (BSO)” and register as a user. Once registered, you can upload electronic wage files or use the site’s “Create Forms W-2 Online” to send electronic information to the Social Security Administration. This option allows you to create “fill-in” versions of Forms W-2 for filing with the federal government and to print out copies of the forms for filing with state or local governments, distribution to your employees, and for your records. From the information filled in on the Form W-2s, a Form W-3 will be created for you.
Due to a change in the law in 2016 (Public Law 114-113), W-3 forms now must be transmitted to the Social Security Administration (and 1099s to the Internal Revenue Service) by the end of January, whether you are filing by paper or electronically. Therefore, all W-2s and Form 1099s must be forwarded to the individuals AND to the appropriate governmental agency by no later than January 31.
Because of this change, it is recommended that you get the W-2s and 1099s out to the individuals as early as possible so that changes, if necessary, can be made prior to the mandatory filing date of January 31.
Further, church treasurers should consider using the government’s electronic filing system ( to complete both their W-2s and W-3. After a simple registration process, W-2s can be completed, printed, and then filed electronically.
Just remember that if you wait to file your W-2s and 1099s with the government in February or March, you will be late. The deadline is January 31.

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IRS Announces 2020 Standard Mileage Rate

The Internal Revenue Service recently issued the revised standard mileage rate which is used to calculate the deductible costs of operating an automobile for business purposes during 2020.

Beginning January 1, 2020, the standard mileage rate for the use of a car for business purposes will be 57.5 cents per mile for business miles driven – a one half of a cent decrease per mile from the 2019 rate. The standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile.

Churches that follow an accountable reimbursement plan should use the new rate to budget expenses for 2020.

Posted in 01 - January 2020, 2020, Uncategorized | Leave a comment

Board Grants Year-End “Bonus” to Participants

In the recent meeting of the Board of Directors of the Church of God Benefits Board, the entity charged with managing the Ministers’ Retirement Plan, action was taken to grant a special year-end interest allocation to all participants in the Trustees’ Fund.

Because earnings in the Trustees’ Fund were better than anticipated in 2019, this one-time allocation of interest was approved by the board to be distributed on December 20, 2019. Each participant with an investment in the Trustees’ Fund will receive a special interest allocation on a pro-rata basis. The allocation is expected to amount to over 1.60% of the participant’s investment in the Trustees’ Fund. For example, a participant with $1,000 in the Trustees’ Fund will have approximately $16.00 in interest added to their account while a person with $100,000 in the Trustees’ Fund will receive approximately $1,600. The pro-rata amount that each person receives will be based solely on the amount that person has invested in the Trustees’ Fund – and will not take into consideration the balances in the equity investments.

With the additional interest of 1.60%, the effective rate for the Trustees’ Fund in 2019 will exceed 5.60%.  

In making this announcement of the special year-end interest allocation, Board Chairman Mark Walker also announced that the return on the Trustees’ Fund for 2020 will continue to be at four (4%) percent. In a time when fixed return rates remain at a historical low, the Board determined that it was extremely fortunate that the Ministers’ Retirement Plan can continue to pay at a rate that greatly exceeds the market rate. While the Board has projected the rate for the Trustees’ Fund to remain at four percent in 2020, it is possible that the rate could change based upon market conditions.

Since the retirement plan is a non-profit entity, all earnings, outside of an allowable reserve, must be passed on to participants. With earnings greater than expected in 2019, the one-time allocation became the fastest and most economical way to make those additional earnings available to participants.

Chairman Walker also announced that the board would still offer the incentive bonus for new participants who join the plan in 2020. For any new participant who joins in 2020, the plan will match dollar-for-dollar the contributions made in 2020, up to $500 per participant.

Participants are reminded that they may invest in three other options besides the Trustees’ Fund. The other options are all based upon stock funds and fluctuate with the stock market. Your ability to withstand volatility should be taken into consideration before making any investment selection. Further, you should always remember that past performance is not a guarantee of future performance.

Posted in 12 - December 2019 | Leave a comment

Year-End Contributions to Your Retirement Account

All pension contributions received in the Board’s office by the close of business on Friday, December 27, 2019, will be posted to the participant’s account and will apply against the participant’s 2019 contribution limits. Contributions received in this office after that date, regardless of when they were mailed, will be posted against the participant’s 2020 contribution limits. For pension posting matters, the date of receipt by the Benefits Board determines when the amount is posted.

However, that does not prohibit those amounts from being claimed as contributions in the year they were deducted for tax purposes. For example, a pastor has $100 withheld from his salary on December 31, 2019 through a salary reduction agreement. The pastor’s W-2 form would be reduced by that $100 in Box 1 (while reporting the same in Box 12), even though the contribution to the pension plan was not actually posted at the Benefits Board until after January 1, 2020.

To ensure that your electronic contributions and church loan payments are posted in 2019, they will need to be sent to us no later than Monday, December 23, 2019.

It should be noted that the regular IRS rules for charitable contributions are slightly different. If you want a contribution to count as a charitable gift in 2019, it must be given to the church in 2019 or it must be mailed to the church in 2019, even though it may not be received until after the New Year. The date of postmark determines the year in which you receive credit for the contribution to your local church. On the other hand, on the first Sunday in January, you cannot date your check for December in hopes of getting credit for 2019.

Posted in 12 - December 2019, Charitable Gifts, Ministers, Retirement Contributions | Leave a comment

Contribution Limits for 2020

The Internal Revenue Service recently announced the new pension plan contribution limits for 2020. While there are many different limits that impact pension plans, the main limits that effect participants in the Ministers’ Retirement Plan are as follows:

  • The salary reduction limit for 2020 will be $19,500. This limit is available to all participants regardless of age.
  • The catch-up contribution for individuals age 50 or over will be $6,500 per year.
  • The overall contribution limit for 2020, not taking into consideration the age 50 or over catch-up contribution provision, will increase to $57,000 annually.
  • If a participant is 50 years of age or older, his or her maximum contribution limit in 2020 will be $63,500 after combining the regular limit with the catch-up limits.

A contribution limit worksheet is available on our website for participants to use to calculate their maximum contributions for 2020.

It is important to remember that the old “20% of salary” limits are no longer applicable. Now the limits are strictly dollar limits as set out above. Further, regardless of the limits, a participant is always limited by the amount of their taxable income.

Posted in 11 - November 2019, 2019 | Leave a comment

New Changes to Overtime Rules Adopted

Many church leaders think that the “wage and hour” laws, and particularly overtime pay rules, do not apply to churches. That could not be further from the truth. Churches and church employees are NOT exempt from the “wage and hour” laws – and failure to obey such could result in substantial penalties to the church. To get around these laws, many churches have often wrongly “exempted” their employees from the law.

However, on March 7, 2019, the U.S. Department of Labor issued “proposed” regulations concerning who will be eligible for overtime under the Fair Labor Standards Act (FLSA). These new regulations, finalized by the Department of Labor on Sept. 24, 2019, will take effect on Jan. 1, 2020. It is expected that the new regulations will have a substantial impact on churches and other non-profit entities.

Before reviewing the changes in the regulations, it is important to understand the foundation of the Fair Labor Standards Act. The FLSA requires that workers be paid the federal minimum wage (or a higher wage if the local jurisdiction or state has mandated such) for the first 40 hours worked in a regular work week. Further, for any hours worked past 40 hours in a regular work week, the FLSA requires that most employees be compensated at time and a half of their regular hourly wage.

To be exempt from this “time and a half” overtime pay rule, the employee has to be classified as an executive, administrative, or professional employee – often called the “white collar” exemptions. Each category of exempt employees is defined specifically under the FLSA. However, not only do you have to meet the definition for an executive, administrative, or professional employee, but previously you had to be paid a salary of at least $455 a week ($23,660 for a full-year worker). Under the new regulations that will go into effect on Jan. 1, 2020, the minimum salary threshold to be an exempt worker increases to $684 a week ($35,568 for a full-year worker).

For example, assume that a church has an employee, such as the director of the church’s daycare, that they have designated as being exempt under the Fair Labor Standards Act as an “executive” because the person supervises more than two people, her position is primarily managerial, and she has genuine input into the job status (hiring, firing, promotion, etc.) of the employees she supervises. This person has been making $32,000 a year and averages working 50 hours a week at the church. Since the new regulations do not go into effect until Jan. 1, 2020, the church is currently in full compliance with the law. However, after January 1, this person, even though they remain an “executive” and can be paid a salary, must be paid “time and a half” for any hours worked over 40 hours in a regular work week, simply because her annual base salary does not meet the new minimum annual salary of $35,568.

With the new rules, it is important to remember the following:

  • An employee, whether classified by the church as exempt or not, can be paid a salary and still be subject to the new overtime rules.
  • Even a worker that meets the criteria of being designated an executive, administrative, or professional employee must be paid overtime (time and a half) if they are compensated at less than $684 a week after Jan. 1, 2020.
  • Overtime for this purpose is considered to be any hours worked in excess of 40 hours in a regular work week.

Any time there is a change to the overtime rules, there are always questions about the applicability of the new regulations to ministers. In other words, if a minister works more than 40 hours in a week and does not make more than $35,568 in taxable income in a year, will a church have to pay the minister time and a half?

Currently, there is no clear, specific answer to this question in the regulations, but the answer seems to be no. While ministers are not statutorily exempt from FLSA requirements, several courts over the years have found that clergy are exempt under the “ministerial exemption” – in other words, ministers performing religious functions are excluded from the definition of employees under the FLSA. The Department of Labor in a 2005 opinion letter seemed to recognize this exemption as well.

Should you have questions about the applicability of these rules to your employees, it is recommended that you check with a qualified employment attorney and seek professional advice regarding your situation immediately.

Posted in 09 - September 2019, Pay Roll Taxes, Tax Information | Leave a comment

Court Finds Housing Allowance Constitutional

In a surprising unanimous decision on March 15, 2019, the Seventh Circuit Court of Appeals held that the ministerial housing allowance did not violate the U.S. Constitution.  While Court observers were divided on their predictions about what the court’s final decision might be, the unanimous decision upholding the “cash” housing allowance took almost everyone by surprise.

“For both active and retired ministers, we could not have gotten, or even hoped for, a better decision.  There is no doubt that prayer made the difference in this situation.  So, we rejoice with our ministers in this incredible victory,” stated Arthur D. (Art) Rhodes, President and Chief Executive Officer of the Church of God Benefits Board, Inc.

The plaintiffs who brought this case, an atheistic organization called Freedom From Religion Foundation, stated that they are considering their options, now that the appellate court has ruled against their claim that the ministerial housing allowance violated the Establishment Clause of the First Amendment. Potential options include seeking a review of the decision by all members of the Seventh Circuit Court of Appeals or seeking an appeal to the U.S. Supreme Court through a writ of certiorari.  The chance of success under either option is very limited. Within 90 days or so, the losing party will have to exercise their preferred option on how to proceed regarding this latest decision.

The most likely option will be for the plaintiffs or a similar group to file a new lawsuit in another jurisdiction with the hopes of getting a more favorable decision.  It would most likely take several years for a new lawsuit to work its way through the legal system.

The current case, Gaylor v. Mnuchin, only dealt with the “cash” ministerial housing allowance paid by churches whose pastors either rent or own their own homes, as well as ministers in retirement who are drawing from a “church” retirement plan, such as the Ministers’ Retirement Plan of the Church of God.  The same challenge to the parsonage allowance (where a church provides a church-owned home for the pastor’s use) was dismissed early in the litigation due to a technical issue.

The Church of God International Office and the Church of God Benefits Board – the administrator of the Ministers’ Retirement Plan – were very active in fighting for the ministerial housing allowance, filing a legal brief at the appellate court along with some 40 other denominations and retirement plans.

“It is certainly evident that the Seventh Circuit looked very closely at the law supporting the ministerial housing allowance that has been in place for more than 60 years.  They also looked at the impact that disregarding that legal precedent would have on both active and retired ministers of the Gospel.  So, while this battle is certainly not over, we thank all those who have been praying for this result,” noted Dennis W. Watkins, legal counsel for the Church of God and a member of the Board of Directors of the Church of God Benefits Board.

Additional information on the litigation involving the ministerial housing allowance, along with a copy of the court’s recent decision, can be found at

Posted in 03 - March 2019, 2019, Ministerial Housing Allowance | Leave a comment

Board Manuals Updated for 2019

With each New Year comes new rules, new regulations and new contribution limits. Therefore, all the Benefits Board’s free educational manuals have been updated to take into consideration all relevant changes for 2019. You can access the latest version of each manual from the Benefits Board website. The topics covered are:

All manuals are available without cost and may be used by the local church and church officials to address the everyday issues most churches face. Please forward any questions or comments about the manuals to

Posted in 01 - January 2019, 2019, Informational Manuals | Leave a comment

Benefits Board Partners with ChurchEXCEL

The Church of God Benefits Board recently announced a new partnership with the Evangelical Council for Financial Accountability (ECFA) through ChurchEXCEL.  ChurchEXCEL is a FREE online resource portal that provides expert knowledge on church finances, policies, procedures, administration, and so much more!

At the Benefits Board, we understand how overwhelming and complex church financial management and administrative work can be.  We also understand the struggles and frustrations involved.  That is why we are excited to bring you this wealth of FREE information and materials to help you excel in ministry.  We have a heart to see our leaders thrive and hope to provide you with as much assistance as possible through ChurchEXCEL.

Many of the eBook resources are available in English, Spanish, and Korean.
To start taking advantage of this opportunity and all the FREE benefits ChurchEXCEL has to offer, visit  You can also access the ChurchEXCEL site through the Church of God Benefits Board site,

Posted in 11 - November 2018 | Leave a comment