One Size Fits All Retirement Plan

One Size Fits All Retirement Plan

Saturday, March 17, 2018

Hey Fletch … My question is regarding retirement and employer contributions. We’ve had a one size fits all approach but now our staff has grown in numbers and levels of responsibility and we need to revisit it asap. I’m wanting to know how others categorize which staff gets what for retirement.

DRF—That question may be out of my pay grade (pun intended). Let me copy Dixie Beard at GuideStone on this as she is an expert at GuideStone Financial Resources. I might give the correct answer … or she may have to set me straight. To my knowledge, you can still separate your employees into classes—such as pastors, administrative personnel, facility workers, preschool teachers, etc. Each class can have a separate retirement structure.

Dixie Beard—You were on the right track, David. If the church is offering a 403(b) non-ERISA retirement plan, the church has flexibility. The church can provide different levels of employer contributions for various classifications of employees. For example, the church can provide a 10% employer contribution for the ministerial employees, 5% for the administrative employees and 3% for all other employees. Or, the church can state they want to provide employer contributions for only the Senior Pastor. It is up to the church as to how it wants to establish the employer contributions.

About the Author:

For over 35 years, David has served churches from 1,000 to 8,000 members. As well as being a pastor, David is a spiritual entrepreneur. He founded XPastor as a global ministry tool for leaders of churches of all sizes. XPastor provides a website, an XP-Newsletter, the annual XP-Seminar, workshops, and online courses.