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Q&A Note: Whenever used, the term “member” shall be taken to mean a minister or employee for whom an annual contribution is being made by a participating congregation or institution within the fellowship
What is the purpose of the Plan?
Who may be enrolled for benefits under the Plan?
Who may make application for enrollment?
When may an enrolled member retire?
Are refunds available?
What amount of benefit
will be received by a
retired member?
May a retired member choose to receive a partial lump payment at the time of his 65th birthday?
Designating a Beneficiary . . .
What is the Tax Treatment of Pension Payments?
Double Tax Advantage Possible . . .
What happens if a member dies before reaching age 65?
Suppose a retiree dies shortly after retirement, are any number of pension payments guaranteed?
Is there an alternate payment plan for the beneficiary of a deceased pensioner?
What happens if an enrolled member transfers to another congregation, college, seminary, or related institution within the fellowship?
Actuarially sound . . .
The Plan can be amended or terminated by the Board of Governors . . .
Additional Information . . .
What is the purpose of the Plan?
The purpose of the Plan is to help provide ministers and other employees of Fellowship churches, colleges, seminaries, and related institutions to have adequate financial income after age 65.
Who may be enrolled for benefits under the Plan?
All ministers and other employees of the fellowship of Christian Churches and Churches of Christ, colleges, seminaries, and related institutions within the fellowship who have not attained age 64, may be enrolled.
Who may make application for enrollment?
Application must be made by elders or authorized spokesmen for congregations or by duly authorized officers of any college, seminary, or institution within the fellowship.
When may an enrolled member retire?
A member may retire at any time after one year of credited service. Benefits from this Plan will not, however, be paid until shortly after the member’s 65th birthday.
Are refunds available?
No! The purpose of the Plan is to provide a retirement income; hence, ALL contributions are deposited into the Trust fund and cannot be withdrawn except as retirement benefits. The Plan neither makes “roll overs” or receives “roll overs.”
What amount of benefit
will be received by a
retired member?
The amount of monthly benefits received by a retired member from the time of his 65th birthday for his lifetime, will be determined according to the rate per month for each unit for each year of credited service within the fellowship, as shown in the schedule under the paragraph titled “Pension Payments.”
May a retired member choose to receive a partial lump payment at the time of his 65th birthday?
Yes. Approximately ninety days prior to his 65th birthday each member will have the choice of an option known as the “Partial Lump Sum Payment Option.” This option provides the retiree a lower monthly benefit in return for a lump sum of money when his pension begins. If a member elects this option, he must specify the percentage by which he wishes his pension reduced --the maximum percentage reduction is 10%. Then the amount the pension is reduced will be translated into an actuarial equivalent number of dollars as determined by the Pension Plan’s actuaries.
For example: If a member at age 65 is entitled to a pension benefit of $500.00 monthly, he may have his pension reduced to $450.00 under the lump sum payment option. In return for the reduction in the lifetime monthly pension payment, on reaching 65 he will receive a check from the Pension Plan for $5,000.00, which is the actuarial equivalent of the reduction of the pension benefit by $50.00 per month. The retiree will then receive regular monthly checks of $450.00 as long as he lives.
Designating a Beneficiary . . .
A member may designate any person as the beneficiary of his or her death benefits under the Plan. A beneficiary designation must be in writing, but need not be in any particular form. In order to be valid, however, the beneficiary designation must be delivered to the Plan Administrator before the member’s death. In the event that a member does not designate a beneficiary, the Plan will pay the member’s death benefits to his or her estate.
What is the Tax Treatment of Pension Payments?
Pension payments, in general, are taxable income. However, amounts distributed to a member from the Plan may or may not be taxable as income. Two examples of pension payments being non-taxable are amounts which are rolled over to an Individual Retirement Account and amounts which constitute a “parsonage allowance” as described in the following paragraph.
Double Tax Advantage Possible . . .
When the contribution is made by the institution served, taxes are deferred until retirement. Ordained persons will have 60% of the amount they receive at retirement treated as parsonage allowance; only 40% of the pension will be reported on 1099R as taxable. Additional amounts of the pension for parsonage allowance (up to 100%) may be requested of the Board of Governors. It is understood that the individual will keep accurate records of the use of this allowance for the provision of the home; the minister -- not the Board of Governors or Trustee --is responsible for records for the IRS.
What happens if a member dies before reaching age 65?
If the member dies before reaching age 65, monthly payments will be
made to his previously designated beneficiary until a total of 120 such payments have been made. If the beneficiary dies before receiving the remaining payments, the remaining payments will be paid to the estate as either one lump sum or monthly payments.
Suppose a retiree dies shortly after retirement, are any number of pension payments guaranteed?
Yes. If a retiree dies before he has received 120 monthly pension payments, his monthly pension amount will be continued to his beneficiary until 120 such payments have been made, including payments to both the retiree and his beneficiary. This 120-payment plan is known as the Ten-Year Certain Plan.
Is there an alternate payment plan for the beneficiary of a deceased pensioner?
In July, 1999 the Board of Governors authorized an alternate pension payment plan for beneficiaries who are spouses. The alternate plan will pay one-half of the monthly amount the pensioner was receiving for the lifetime of the spouse. The requirements are: the pensioner must be vested for four years; this choice must be made in writing before the pensioner receives his first pension payment; this choice is only available if the pensioner’s beneficiary of record is the spouse of the pensioner; the beneficiary will not begin to receive the monthly payments until the beneficiary is 65.
What happens if an enrolled member transfers to another congregation, college, seminary, or related institution within the fellowship?
The Plan is designed to give an enrolled member full benefit for all service within the Fellowship. The transferring member’s eventual benefit after age 65 will be the same as if he had continued to work for his original organization.
If an enrolled member does leave the ministry or employment of the fellowship for a period of time and later returns, does he lose his earned service?
No. However, benefits will be paid to him at age 65, in accordance with the funds invested for him.
Actuarially sound . . .
The Plan was determined to be actuarially sound in a recent study done by Fringe Benefits Design, Inc. of Overland
Park, Kansas.
The Plan can be amended or terminated by the Board of Governors . . .
The Board of Governors reserves the right to amend or terminate the Plan, including the amount of benefits paid thereunder, at any time. However, no amendment can reduce the vested amount of the benefits to which a member is already entitled.
Additional Information . . .
This brochure summarizes some of the more important provisions of the Plan. It is, however, only a summary and it omits many details in the Basic Plan Document which could be important in a given situation. Therefore, if there is a conflict between this summary and the terms of the Plan Document, the Plan Document will control. If you have any questions after reading this summary, or if you wish to obtain a copy of the Plan Document, please contact the Plan Administrator.
