In November 2019, the Christian Reformed Church in North America began rolling out a new 403(b)(9) retirement plan that congregations in the United States can make available to commissioned pastors and other church staff.
Unlike some other retirement plans, once the 403(b)(9) begins distributing funds to the ordained pastor retirees, a portion of the payments can be counted as housing allowance for tax purposes.
This plan also allows each participating congregation to make their own decisions about which staff are added to the plan, what their employer contributions will be, and when employees will qualify for this benefit.
This new plan is administered by Envoy Financial. Each congregation interested in participating should connect directly with Envoy to set up their program.
To learn more, congregations are asked to visit crcna.org/retirement. A few “frequently asked questions” are also answered below.
1. What is a 403(b)(9)?
A 403(b)(9) is a defined contribution plan specifically designed for the unique needs of evangelical churches or church organizations. While similar to other 403(b) and 401(k) plans, 403(b)(9) plans are not subject to certain ERISA requirements, such as annual Form 5500 reporting. In addition, 403(b)(9) plans offer retired ministers the ability to have retirement distributions designated as housing allowance.
2. Who is it for?
Each participating congregation will have the flexibility to determine which of their employees are eligible. This could include commissioned pastors as well as other paid staff. The congregation may also impose service requirements before an employee can participate in the plan.
3. Why should my church participate?
This program is designed to help churches provide a defined contribution retirement program to their staff with the least amount of administrative effort. Envoy, working in conjunction with the CRCNA pension office, is offering a plan that closely resembles the denomination’s 401(k) program with easy one stop set up. Each church gets to decide who will be included and what the employer contribution will be. Investment options will be monitored by the U.S. Pension Trustees (who are appointed by Synod) taking care of what may be a burdensome task for many congregations.
4. What will it cost my church?
Each participating congregation will connect with Envoy Financial and decide what their financial contributions toward the plan will be. The ongoing administrative cost to the church is $100 per year with the first year’s cost being covered by the denomination through a grant.
5. Why isn’t this available for Canadian churches?
The 403(b)(9) is a specific U.S. retirement program.
6. Can churches provide this to Ministers of the Word instead of participating in the Ministers’ Pension Program?
This program is not intended to replace the existing Ministers’ Pension Program. However, a church can elect to allow a Minister of the Word to participate in the 403(b)(9) program as long as they remain an active participant in the Ministers’ Pension Plan.