Pension Quandry

I would be happy to have some perspective on this. The Central Texas Conference, like many if not all Annual Conferences, will be establishing a new way of figuring clergy pensions for 2007. For more information about the new plan in general, please check the General Board of Pensions site.

Here is the way our conference Board of Pensions is proposing we fund it: each church will pay 12% of each clergy’s compensation package, up to the DAC (Denominational Average Compensation), then an additional 5% on the entire compensation.

Thus, some churches will be paying a total of 17% of their clergy compensation towards pension. On the other hand, a church that pays its clergy $150,000 (and we have at least a couple who do) would pay only 9.2% total. For a specific example, the cost to our cabinet-level folk will be 11.3%.

Sure, in actual dollars the higher paying church is out quite a bit more money. As a percentage of its budget, though, the larger, higher-paying church will be spending far less than the smaller churches.

I ran the numbers provided by the Conference Office, and a flat rate of 14% across the board would adequately fund our conference’s pension. In response to this suggestion, I was told that our largest two churches already pay 10% of the total apportioned budget of the CTC, and that this would be too much to put on them.

I wonder how many of the smaller churches, many of which are declining anyway, will be driven under by this new plan, which shifts more budgetary weight (as a percentage of budget) to them, rather than to the larger churches.

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