Saving for Retirement—Church Staff (US)

Churches are encouraged to help their employees save for retirement. The Christian Reformed Church has a defined benefit plan available for ministers of the Word and most churches contribute to this Plan monthly. But what about other church staff? Does your church contribute to a retirement plan or encourage contributions to a retirement plan through matching contributions?

One plan that the IRS has available for small employers is called a SIMPLE IRA, also known as a Savings Incentive Match Plan for Employees of Small Employers. A Simple IRA Plan can be set up by a church so that all eligible employees are able to participate through a salary reduction agreement and/or contributions from the church. The choices for setup are limited but that is what keeps it simple.

The documentation for setting up a SIMPLE plan is available on the IRS site and includes model notifications to eligible employees and model salary reduction agreements. The instructions indicate that the average time for learning about the law or the form is 2 hr., 26 min, recordkeeping 3 hr., 38 min, and preparing the form, 47 min. Other options for setting up a retirement plan such as a 403(b) or 401(k) usually involve paying for plan setup and an annual administration cost.

Yes, it will take a bit of your time to set this up and maybe some consultation with an accountant but what a great way to help your employees save for retirement.