Wespath and the Global Methodist denomination have designed a wonderful retirement plan (Covenant Personal Investment Plan) for the new denomination. One of the key values was to make it simple and affordable because a simple retirement plan doesn’t require a complex and expensive bureaucracy to administer it.
For affordable, many churches moving from United Methodist to Global Methodist will see a 30-40% decrease in the cost of their pastor’s retirement. For simplicity, you can be the judge. Here’s the details:
- 5% Nonmatching Contribution: The church contributes an amount equal to 5% of the pastor’s compensation.
- 5% Matching Contribution: The church then matches any contribution the pastor makes up to another 5%.
The hope is that pastors would contribute 5%, and their churches would contribute 10% to come up with Dave Ramsey’s recommended 15%. Suppose the pastor decides to not make any contributions. Perhaps they are already set for retirement. Then the church’s bill is cut in half to 5%. No backroom pension calculus needed to calculate the bill for the Covenant plan.
As a side note, the church can elect to include lay staff in the Covenant plan. The church can choose between three different levels for their lay staff: 1)Same as the pastor plan (5% nonmatch & 5% match); 2)Just the 5% match; 3)Only employee contributions. There is also a death and disability benefit provided for pastors at roughly half the cost of the current United Methodist plan.
In the video, I walk you through some of the finer details that the person putting together the budget or cutting the paychecks will need to know. Below there is a link to a spreadsheet that will help with this calculation.
Useful Links
- Pension Contribution Calculator: https://jctaccounting.com/wp-content/uploads/2022/11/gmc_pastor_pension_contribution_calculation.xlsx
- Covenant Retirement Brochure: https://globalmethodist.org/wp-content/uploads/2022/08/Covenant-PIP-Brochure91.pdf
- Covenant Death/Disability Brochure: https://globalmethodist.org/wp-content/uploads/2022/08/Covenant-Life-Options50.pdf
- GMC Retirement FAQ: https://globalmethodist.org/faqs/#1653420694960-f5145d9a-665d
- Wespath’s Disaffiliation Impact FAQ: https://www.wespath.org/assets/1/7/5641.pdf
Thanks for sharing! Good stuff. I will pass along.
Awesome!
I have been on staff as Music Director for New Hope Church, Goldsboro NC for 23 years. I was given this link to inquire about a possible retirement pension for staff. What do I need to do to tap in to this? Is this possible for a music director?
Thank you so much,
Hope Porter
200 East New Hope Road
Goldsboro, NC 27534
New Hope GMC
919-738-0520
Hi Hope, The Benefits staff and I are working to extend this benefit to lay staff at churches. I’m estimating that this will roll out halfway through 2024. Once rolled out, this should be a good benefit for all church staff.
Jeff P.