Protecting Your Future

Size: px

Start display at page:

Download "Protecting Your Future"

Maryann Fay Woods
5 years ago
Views:

Protecting Your Future Presented to the North Central District Clergy February 2015 TODAY S GOAL To present info on taxes, disability, death benefits, pensions, and local

1 Protecting Your Future Presented to the North Central District Clergy February 2015 TODAY S GOAL To present info on taxes, disability, death benefits, pensions, and local church matters. TODAY S GOAL To present info on taxes, disability, death benefits, pensions, and local church matters. To assist clergy in finding more resources on the same. 1

2 TODAY S GOAL To present info on taxes, disability, death benefits, pensions, and local church matters. To assist clergy in finding more resources on the same. To motivate clergy to action on their own behalf. To not waste your next hour. TAXES, POLICIES, GUIDELINES, ETC. TAXES: Look at the GCFA Tax packet for help. This site has quality material specifically on church and clergy taxes. TAXES, POLICIES, GUIDELINES, ETC. TAXES: Look at the GCFA Tax packet for help. TAX TIP: Nothing can be retroactive. Get policies and resolutions passed, signed, AND DATED before you get the first check, or you are in trouble territory. 2

3 TAXES, POLICIES, GUIDELINES, ETC. ACCOUNTABLE REIMBURSEMENT TIP: IRS says you must submit reimbursement within 60 days. If you submit it quarterly and are audited, you may lose the deduction because of late reimbursement. TAXES, POLICIES, GUIDELINES, ETC. Filling out your 2014 taxes? You May be Able to Claim the Retirement Savings Contributions Credit (Saver s Credit) Single, married filing separately, or qualifying widow(er), with income up to $27,750 Head of Household with income up to $41,625 Married Filing Jointly, with incomes up to $55,500 TAXES, POLICIES, GUIDELINES, ETC. PLAN COMPENSATION: Very important concept relating to your benefits. Plan Compensation is your salary plus housing we add 25% of your salary if you live in a parsonage, or your actual housing allowance if no parsonage. 3

4 TAXES, POLICIES, GUIDELINES, ETC. PLAN COMPENSATION: Very important concept relating to your benefits. Plan Compensation is your salary plus housing we add 25% of your salary if you live in a parsonage, or your actual housing allowance if no parsonage. So please fill out your compensation form correctly with regards to parsonage, housing allowance, utilities allowance, etc. It affects your pension! CHURCH TAXES On occasion, your church needs proof of 501(c)3 TAX STATUS (new bank accounts, charitable event permits, etc). The UMC has now made that easy to get, just go to: You may wish to go ahead and get a copy to keep in church office files. CHURCH TAXES We have a sample W-2 up on SGAUMC website to help your treasurer. Note your Compensation form has which box on W-2 form each item goes in. That should make it easier for your treasurer. 4

5 Note the right side says which W-2 box each item goes in. CHURCH TAXES New IRS Form 8823-B Must notify IRS of change in "responsible party". Beginning , if your Treasurer/Financial Secty changes, you have 60 days to notify IRS using form 8823-B. This is so they have updated contact info in case they need to contact the church. DISABILITY Definition of Disability: The General Board will consider you disabled, if, on the basis of medical evidence, you are unable to perform the usual and customary duties of a United Methodist Clergyperson due to bodily injury, disease, or behavioral illness or disorder expected to last for at least six continuous months. (NOTE: This is different from Social Security s definition.) (NOTE: Disability is not life-time you can go on and off) (NOTE: No short-term disability coverage is provided.) 5

6 DISABILITY After 24 consecutive months, a new definition of disability will apply to you. You will be considered disabled only if you are not able to engage in substantially all of the usual and customary duties pertaining to any employment for remuneration or profit in any occupation for which you are reasonably qualified by training, education or experience. In other words, the Plan considers you disabled during the first 24 months of your Claim if you are disabled from your own occupation (i.e., a United Methodist clergyperson). After 24 months, however, the Plan only considers you disabled if you are unable to engage in any occupation. DISABILITY ELIGIBILITY CPP ELIGIBILITY: A full, probationary or associate Clergy member (including a deacon) of The United Methodist Church, or a local pastor, who is: under full-time Episcopal appointment to The United Methodist Church, and receiving Plan Compensation equal to at least: 60% of the applicable Conference Average Compensation (CAC), or 60% of the Denominational Average Compensation (DAC), whichever is less. DISABILITY ELIGIBILITY DAC and CAC Denominational Average Compensation $66,259 for 2015 Conference Average Compensation $73,240 for

7 DISABILITY BENEFITS DISABILITY BENEFITS: Generally, you will receive disability benefits equal to 70% of your Plan Compensation, up to 200% of the DAC. Your disability benefits may be reduced for certain amounts, such as Social Security disability benefits or other income. In general, your annual disability benefit will not be less than 40% of the DAC in effect on the date of your first payment. DISABILITY & SS IF YOU ARE NOT IN SOCIAL SECURITY: The CPP Disability assumes the minister is in Soc. Security. Once you get CPP Disability, they assist you to apply for Soc. Sec. Disability. Once you get Soc. Sec. disability, your payment from the church plan is reduced by your payment from Soc. Sec. The two plans are designed to work with Soc. Security, and priced that way for the church. DISABILITY & SS IF YOU ARE NOT IN SOCIAL SECURITY: If you are not in Social Security and go on CPP disability, they will immediately reduce your payment by the amount you would have gotten from Soc. Security. 7

8 DISABILITY & SS IF YOU ARE NOT IN SOCIAL SECURITY: If you are not in Social Security and go on CPP disability, they will immediately reduce your payment by the amount you would have gotten from Soc. Security. THE TAKEAWAY: If you are not in Soc. Security, you should strongly consider a private disability policy that will pay the amount Soc. Security would have paid. DISABILITY RECAP CPP provides long term disability coverage, but not short term coverage. Generally, you will receive disability benefits equal to 70% of your Plan Compensation. Disability is only for Full Time status CPP assumes Social Security coverage. If you are not in Soc. Security, you should strongly consider a private disability policy that will pay the amount Soc. Security would have paid. DEATH BENEFIT - ACTIVE Active Participant Death Benefits: If you die while an Active Participant, the General Board will pay a death benefit of $50,000 to your Beneficiary. The benefit will be paid in a single sum, unless your Beneficiary elects to receive the payment in 12 equal monthly payments. Any benefit paid to your estate will be made in a single sum. 8

9 DEATH BENEFIT - ACTIVE Active Participants receiving CPP disability benefits continue to be eligible for death benefit coverage. If you die within 31 days of the date you cease to be an Active Participant (for reasons other than becoming a Retired Participant), you will continue to be eligible for this death benefit as if you were an Active Participant at the time of your death. DEATH BENEFIT - RETIRED Retired Participant Death Benefits: If you retired on or after January 1, 2013, the benefit will be $20,000. If you retired prior to January 1, 2013, the benefit will be equal to 30% of the DAC in effect on the date of your death. (about $19,800 right now) DEATH BENEFIT RECAP Active Participant Death Benefits: $50,000 to your Beneficiary. Make sure your beneficiary papers are up to date. Form is on SGAUMC website. Retired Participant Death Benefits: If you retired on or after January 1, 2013, the benefit will be $20,000. If you retired prior to January 1, 2013, the benefit will be equal to 30% of the DAC in effect on the date of your death 9

VOLUNTARY TRANSITION PROGRAM What if your sense of call has faded? Many clergy may feel trapped, unable to exit even if they no longer sense a call.

10 VOLUNTARY TRANSITION PROGRAM What if your sense of call has faded? Many clergy may feel trapped, unable to exit even if they no longer sense a call. CPP includes a Voluntary Transition Program to help provide financial support for clergy who want to transition out. Does require surrender of credentials. Contact me for more information (PRIVATE). More CPP info on SGAUMC website PENSION AND RETIREMENT Need for updated beneficiary forms Note - beneficiary form decides who gets it, not will or estate. If re-married, spouse deceased, child born, then re-do your beneficiary forms now. Note plan for secondary beneficiaries. Beneficiary Form is on SGAUMC website. 10

PENSION AND RETIREMENT Moving target of Social Security retirement date Multiple pensions - Pre-1982, MPP, 2 versions of CRSP PENSION AND RETIREMENT Moving target of Social Security retirement date

11 PENSION AND RETIREMENT Moving target of Social Security retirement date Multiple pensions - Pre-1982, MPP, 2 versions of CRSP PENSION AND RETIREMENT Moving target of Social Security retirement date Multiple pensions - Pre-1982, MPP, 2 versions of CRSP Wonderful online estimator on Benefits Access site will help you at gbophb.org. It can tell you what steps to take now to retire as you want in 5 or 25 years. Go to 11

12 Log in to Benefits Access Log in to Benefits Access Site where you can play with your benefit possiblities 12

13 Select the Take Action option Site with tools You have two main tools to select from 13

14 You have two main tools to select from The Retirement Readiness tool Click here to play around with various things you might do to get to the pension you want to have. 14

Select the Retirement Benefits projection tab Here you can get a projection of what benefits you will receive depending on the retirement date, and how much you contribute PENSION AND RETIREMENT IRS

15 Select the Retirement Benefits projection tab Here you can get a projection of what benefits you will receive depending on the retirement date, and how much you contribute PENSION AND RETIREMENT IRS Retirement Contribution Limits Increase for 2015 In 2015, employees may contribute up to $18,000 (up from $17,500) in before-tax participant contributions to retirement savings plans If the employee will be age 50 or older by the end of 2015, amount is $24,000 (up from $23,000). 15

16 PENSION/RETIREMENT RECAP NO ONE ELSE WILL TAKE CARE OF THIS FOR YOU! Make sure you are saving for retirement, Update beneficiary forms. Use GBOPHB pension calculator to see where you are, figure out next step. More CRSP info on SGAUMC website FINANCIAL PLANNING Don t forget that Ernst & Young financial planners are available to you at no charge. You can call them with a question. You can arrange a call for more in-depth advice. You can them your financial info so they can give you informed advice. You Are Not On Your Own! 16

17 2/19/15 Find Ernst & Young info on GBOPHB website Find Ernst & Young info on SGAUMC website Find Ernst & Young info on SGAUMC website 17

18 OTHER BENEFITS Many other benefits available through GBOPHB and HealthFlex. Find them by logging in to HealthFlex, and look at left bottom. Go to GBOPHB.org and select HealthFlex Log in to HealthFlex/Web MD 18

19 2/19/15 Same place you take the Health Quotient Note all the choices on bottom left Select EAP site, for example 19

20 2/19/15 Great vendor with free services for UMC clergy Select Live Well You ll get a whole list of options 20

21 For example, legal matters such as wills are discussed OTHER BENEFITS RECAP GBOPHB AND HealthFlex provide you with many free (to you) services. These do not replace trained professionals in your area, but they will guide you in your thinking. ONE ODD NOTE Pre-1982 Pension Apportionment will be paid up in 2020, but may not completely go away in 2021 due to changes in mortality, earnings, etc. 21

22 QUESTIONS? If you have questions relating to your personal finances, pension, insurance, etc., it is likely best to call me directly at the office. me Eleanor Dickson is VERY capable on pensions and insurance questions QUESTIONS? This PowerPoint is available on the SGAUMC website. If you forget the link, just go to website, look under Administrative Services office, find district training button on the right. TODAY S GOALS I hope you are prepared, or will prepare, in case of disability. 22

23 TODAY S GOALS I hope you are prepared, or will prepare, in case of disability. I hope you are prepared, or will prepare, for retirement. TODAY S GOALS I hope you are prepared, or will prepare, in case of disability. I hope you are prepared, or will prepare, for retirement. I hope you and your church do your taxes right. TODAY S GOALS I hope you are prepared, or will prepare, in case of disability. I hope you are prepared, or will prepare, for retirement. I hope you and your church do your taxes right. I hope I have not wasted your hour. 23

Comprehensive Protection Plan

Comprehensive Protection Plan Summary Plan Description Caring For Those Who Serve Protection for you and your family. Important income replacement benefits for you and your dependents. If you have any