January 2012
Real Basics for Vestries

Providing Pensions to Your Lay Employees

Pattie Christensen and Michael Macdonald

The Episcopal Church has encouraged congregations and other institutions to provide pension benefits to lay employees for decades. And in 2009, the 76[1] General Convention made it a matter of canonical law.

Resolution A138 and its associated canon require that lay employees “who are scheduled to work a minimum of 1,000 hours annually for any domestic diocese, parish, mission, or other ecclesiastical organization or body subject to the authority of the Church” be provided with pension benefits, and named the Church Pension Fund (CPF) as the administrator of the Lay Employee Pension System (LPS). Read more. 

The deadline for implementing the LPS in your congregation is January 1, 2013.

With the deadline swiftly approaching, here are some tips and tools to enable vestry members, treasurers, and administrators to support their congregation’s compliance with the resolution.

Understanding your obligations under Resolution A138:
Watch this brief video tutorial to learn more about what the resolution requires and to determine if you have eligible employees. https://cpg.adobeconnect.com/_a235918/lpsunderstand/

What if you already have a lay pension plan in place?
Unless an employer is currently sponsoring a lay employee defined benefit plan or the employer is a school using a TIAA-CREF pension plan, the employer must adopt a CPF-sponsored lay pension plan. There are several reasons for this:

Having a single church wide lay pension plan administrator helps ensure portability of participation and pension benefits if an employee moves from one Church employer to another.

The selection and monitoring of the investment managers in CPF’s lay defined contribution plan are undertaken by the same CPF departments responsible for the management of the Clergy Pension Plan assets. Read more. (https://www.cpg.org/administrators/retirement/pensions-lay-employees/defined-contribution-plan/)

Understanding the financial impact of compliance on your budget:
Use this simple Pension Contribution Calculator to find out how much it will cost to provide pension benefits for your eligible employees. There is one specifically designed for congregations, and another specifically designed for schools.

Typically, employers find that the cost of providing lay employee pension benefits is not as expensive as they had thought. For example, providing a pension benefit for an eligible lay employee earning $36,000 annually in a congregation with 100 pledge units requires an increase of less than $1 per week per pledge unit.

Download a fundraising letter you can use to encourage parishioners to increase their pledges to cover the cost of providing lay pensions. (Use the Pension Contribution Calculator, and then insert the resulting amounts to customize the letter for your congregation.)

The benefits of adopting now, paying later:
Do something nice for your congregation’s employees today, without it costing you anything until next January. If you adopt CPF’s lay defined contribution plan today, your congregation’s employees can start saving for their retirement immediately, and you can postpone making employer contributions until the implementation deadline. Download an adoption agreement.

Questions? One-on-one help is always available:

  • Call (800) 936-7349, Monday – Friday, 8:30am – 8:00pm ET, to speak to a CPF representative.
  • Email us at layplans@cpg.org


Pattie Christensen and Michael Macdonald are both vice presidents at The Church Pension Fund.

Resources

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This article is part of the January 2012 Vestry Papers issue on Real Basics for Vestries
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