Episcopal Church Foundation Vestry Papers - for leading congregations

In July 2009, the 76th General Convention passed Resolution A138, establishing the Lay Employee Pension System (LPS), a Church-wide system for eligible lay employees (those scheduled for at least 1,000 hours of compensated work annually). ECF Vital Practices invited Pattie Christensen, assistant vice president, the Church Pension Group, to provide information about the LPS to our readers.

ECF Vital Practices (ECFVP): Why is it important that the Episcopal Church set up a church-wide pension system for lay employees?

Church Pension Fund (CPF): Resolution A138 speaks to social justice issues around adequate benefits for the Church’s lay employees. The Church has long made the provision of pensions for eligible clergy mandatory, and for the past 30 years has encouraged providing them for lay employees. In addition to our Clergy Pension plan, we offer both a lay defined benefit pension plan (since 1980), and a lay defined contribution pension plan (since 1992).

Over the past 30 years, various General Convention resolutions called upon church employers to provide pension benefits to lay employees. Through Resolution A138 and its associated canon, the Church put more substance into this sentiment by canonically requiring compliance with the Lay Employee Pension System by January 1, 2013.

While cost concerns around providing this benefit are real, so is the need of lay employees to have adequate pensions. The work and dedication of lay employees make many ministries possible, and providing them with adequate benefits is not only necessary, it’s the right thing to do.

ECFVP: What, specifically, does this resolution require?

CPF: That all lay employees scheduled for at least 1,000 hours of compensated work annually for any domestic diocese, parish, mission, or other ecclesiastical organization or body subject to the authority of the Episcopal Church be enrolled in a pension plan that is either administered or authorized by the Church Pension Fund.

ECFVP: What types of pension plans does the Church Pension Fund (CPF) offer?

CPF: We sponsor plans for both clergy and lay employees. The Clergy Pension Plan is a defined benefit plan that provides eligible Episcopal clergy with pension benefits.

For lay employees, CPF sponsors both a defined contribution plan and a defined benefit plan. The defined contribution plan is more popular since it has a lower contribution base for employers and it allows employees to make pre-tax contributions of their own. It also offers employees portability should they move from one Church employer to another.

ECFVP: What are the required employer contributions?

CPF: Employer contributions vary by plan. If a defined contribution plan is selected, the employer must contribute at least 5% of the employee’s compensation as defined by the plan. In addition, if an eligible employee contributes a portion of his/her compensation, the employer must match on a dollar-for-dollar basis, the amount the employee contributes, up to 4% of the employee’s compensation.

If a defined benefit plan is selected, the employer assessment will be at least 9% of the employee’s compensation.[1]

The Comparative Plan Highlights offers a ‘side by side’ comparison to help congregations and other church-related employers determine which plan best meets their needs.

ECFVP: How much will it cost a congregation or institution to comply?

CPF: The estimated average annual cost to provide a lay pension benefit for eligible lay employees who currently do not have this benefit ranges from $12 to $34 per pledging unit per year, depending on the size of the congregation or institution. The average annual cost across the Church is approximately $20 per pledging unit.[2]

We’ve developed a pension contribution calculator and instructions to help employers determine the cost in total and per pledging unit.

ECFVP: What’s the timetable for getting started and what resources are available?

CPF: Implementation is already underway on a Province-by-Province (regional) basis, with lots of support provided for employers. Congregations and other employers receive informational mailings, and can participate in webinars and on-demand tutorials through the Church Pension Group website.

These resources are designed to help employers understand the lay employee pension system, evaluate the options available to them, and access enrollment materials and forms. We also have staff available to answer questions.

ECFVP: Is it possible for congregations or other employers to adopt a lay employee pension plan earlier than 2013?

CPF: Yes. Church employers can adopt a CPF-sponsored lay pension plan now or at any time before the January 1, 2013 compliance date. To adopt CPF’s Lay Defined Contribution Plan, an employer can simply sign an adoption agreement. While an employer doesn’t have to start making employer contributions until January 1, 2013, employees can start saving immediately via payroll deductions. Employers interested in adopting the Lay Defined Benefit Plan should call us at 800.936.7349.

ECFVP: How is CPF helping employers make sure they are in compliance with this Resolution?

CPF: To help make compliance as easy as possible, CPF has designed an online registration tool that helps identify the covered population of employers and employees.

Rollout of the first phase of the CPG Registration System – called the Institution Roster – began in April. It’s designed to help confirm and collect relevant information about Church employers in each diocese who need to comply. The second phase – called the Employee Roster – will be rolled out later and will help confirm and collect information about employees. Together, these two rosters will give Church employers the information they need for compliance.

ECFVP: Where can congregational leaders go for additional information?

CPF: Additional information is available at the Lay Pensions Resource Center, or by emailing CPF staff at layplans@cpg.org

Resources:

Lay Pensions Resource Center http://www.cpg.org/productsservices/laypensionplans.cfm
Lay Employee Pension Plan Highlights and FAQs http://download.cpg.org/pensions/publications/lay/pdf/faqs_a138.pdf

Footnotes:

[1] The assessment rate for the Episcopal Church Lay Employees’ Retirement Plan is set and periodically reviewed by the Church Pension Fund’s Board of Trustees. The Church Pension Fund reserves the right to change the assessment rate for the Episcopal Church Lay Employees’ Retirement Plan at any time and without prior notice.

[2] Statistics derived from the Comprehensive Lay Employee Study, September 2008.

Pattie Christensen is Assistant Vice President, the Church Pension Fund and a member of the team responsible for implementing Resolution A138, the Church-wide Lay Pension System. She is responsible for educating employers and employees about the lay plans available through the Church Pension Fund, plus any asset transfers from previous plan providers into the Episcopal Church Lay Employees' Defined Contribution Plan.

The Church Pension Fund (CPF) was established by the 1913 General Convention and by an act of the New York State Legislature in 1914. CPF, together with its affiliates – Church Life Insurance Corporation, the Church Insurance Companies, the Episcopal Church Medical Trust, and Church Publishing Incorporated – are known as the Church Pension Group (CPG). CPG provides comprehensive, cost-effective retirement, health, and life insurance benefits to the Episcopal Church, its clergy and lay employees, and property and casualty insurance and risk management services to Episcopal churches and institutions. The core values that guide the Church Pension Fund in fulfilling its mission are compassion, fiscal stewardship, mutual respect, service, and adaptability.