Calculating the GMC Pension Bill for my Church

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.

  3 comments for “Calculating the GMC Pension Bill for my Church

  1. November 11, 2022 at 4:41 pm

    Thanks for sharing! Good stuff. I will pass along.

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