Jump to content

Pastor needs separate plan...help


Guest LTurner

Recommended Posts

Guest LTurner

Looking for a separate retirement vehicle to cover only our pastor. Diocese has a DB plan, but pastor's benefits will be very small upon retirement. Will consider a DC plan, or Roth IRA, etc. Have no good experience in this environment. Funding will be from the church budget, not from pastor, nor deferred wages. What options can we look at? what do we need to be careful or watchful of?

Link to comment
Share on other sites

  • 2 weeks later...
Guest LTurner

Pastor is an employee, there are other employees (as church has a school also) - but the desire is to have a plan that "only" covers the preist. My reaction from conversations with the business administrator is that they're looking at approx. $2000/year minimum, and maybe not much more. I told them to look at a Roth, but they don't want father to have to fund it himself. I suggested working it into his pay and letting him fund it, but they weren't too happy with that suggestion. School/church has a 403b in place for all other employees.

Link to comment
Share on other sites

Next question - would the priest be highly compensated? The application of the nondiscrimination rules to church plans keeps getting deferred, but it is still good to think in the context of these general rules.

If he is not highly compensated, which few are, then you could make an employer contribution to the 403(B) plan for a category of employees limited to non-highly compensated priests.

If he is highly compensated, you need to push back on the idea of just adding it to his salary and letting him defer through the 403(B).

Link to comment
Share on other sites

Guest LTurner

he is not HCE

thanks for your input... I will be forwarding your advice/assistance to our business administrator who is really looking for the answers. Kudos!

Link to comment
Share on other sites

Guest LTurner

one more thought on this Becky...

if father is covered by a DB plan sponsored by the Diocese, is he limited in involvement in the 403b?

Link to comment
Share on other sites

Section 403(B)(1)(D)and 403(B)(12)(B) says that churches (and qualified church controlled organizations) as defined in IRC 3121(w)(3)(A) & B are not subject to the nondiscrimination rules - hence, if you use a 403(B) plan for pastor, you have no nondiscrimination requirements.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...