Guest LTurner Posted January 11, 2001 Posted January 11, 2001 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?
BeckyMiller Posted January 15, 2001 Posted January 15, 2001 Need more information. Is the pastor an employee of the church? Are there other employees? What level of commitment towards funding are you thinking about?
Guest LTurner Posted January 24, 2001 Posted January 24, 2001 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.
BeckyMiller Posted January 24, 2001 Posted January 24, 2001 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).
Guest LTurner Posted January 24, 2001 Posted January 24, 2001 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!
BeckyMiller Posted January 24, 2001 Posted January 24, 2001 Preacher's kid myself, so always willing to help! They do need to remember to create a bona fide document providing for the employer contribution.
Guest LTurner Posted January 24, 2001 Posted January 24, 2001 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?
BeckyMiller Posted January 24, 2001 Posted January 24, 2001 Probably not, but if you get a good 403(B) provider they can figure this out.
Ellie Lowder Posted January 29, 2001 Posted January 29, 2001 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.
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