Installed Pastor. What are the benefits of Pastor s Participation for First Presbyterian Church and for Sheila? PLN-609 3/18

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1 Minister Positions

2 Installed Pastor First Presbyterian Church is a 250-member congregation with relatively limited resources. When the church was preparing to search for a new pastor, the chairperson of the session Finance Committee encouraged the hiring of a stated supply minister, insisting that the church could not afford the salary and benefits for a full-time installed pastor. The session recommended, nonetheless, and the congregation decided to call and install a pastor, challenging itself to cultivate and commit the necessary resources. The congregation called and installed 25-year-old Sheila, a recent seminary graduate with no prior pastoral experience. She receives a salary of $32,000, which is the minimum required by presbytery policy. She is thrilled to have received this call and a steady income, which will help in the elimination of her educational debt. Six months after arriving at First Church, Sheila and her spouse, Chris, adopted an infant. The Book of Order (G ) requires that installed pastors of congregations (pastors, associate pastors, and co-pastors) be enrolled in the Benefits Plan of the Presbyterian Church (U.S.A.). According to this requirement, Sheila is enrolled in Pastor s Participation. Dues for Pastor s Participation include 25% of annual effective salary for family medical coverage (the minimum $11,000 applies); 11% ($3,520) for defined benefit pension; and 1% ($320) for death and disability. What are the benefits of Pastor s Participation for First Presbyterian Church and for Sheila? PLN-609 3/18

3 Installed Pastor The Board s Perspective 1. Due to the community nature of the plan, First Presbyterian Church is able to provide family medical coverage at less than the actual cost. This illustrates the community nature of Pastor s Participation, the Church s commitment to helping smaller churches who call pastors at lower salaries. The $11,000 charged for Sheila and her family is less than half the actual cost of family coverage. 2. Sheila accrues pension credits at the $58,000 national median salary for pastors. Dues at the median would be $6,380, which is $2,860 more than the church s contribution. Both Sheila and the church benefit from the community nature of Pastor s Participation. 3. The disability benefit which includes 60% continuation of salary, continuing medical coverage, and continuing accrual of pension credits at Sheila s effective salary or median, whichever is greater is unavailable in the commercial market. The lump-sum death benefit is determined by salary and age at death. It is multiplied for younger members with the assumption that it supports family members for a longer period of time. Without pension participation, death and disability coverage is priced at 2.5% of effective salary. In Pastor s Participation, in this case, it costs $320 per year. 4. Enrollment in Pastor s Participation affords Sheila access to the Retirement Savings Plan of the Presbyterian Church (U.S.A.), supplemental death benefits coverage, and such educational programs as Board University and the newly ordained Presbyterian CREDO conference. (Sheila s continuing education cost for this program is $500 for each of the two-week sessions; the Board covers the balance of the actual cost, for a total of $10,000). The Assistance Program provides Sheila with support, including the Minister Educational Debt Assistance Grant (up to $5,000 per year for up to 5 years) and Adoption Assistance Grant ($3,000). Twenty or more years of participation in the Pension Plan qualifies a retiree who meets income and asset requirements for Income and Housing Supplements from the Assistance Program. PLN-609 3/18

4 Installed Pastor in Pathways to Renewal Faith Presbyterian Church is a 135 member congregation with relatively limited resources. The church has not had an installed pastor in four years, utilizing a succession of temporary supply ministers. The community is now experiencing growth and the presbytery considers the congregation an opportunity for redevelopment. The presbytery s Committee on Ministry meets with the session to explore the possibility of calling a pastor in the Pathways to Renewal program of the Board of Pensions. The presbytery commits $10,000 per year for five years to assist the congregation in taking this step of faith. With the session s recommendation, the congregation votes to search for a pastor to be installed. The search culminates in a call to Jared, a 28 year old, married candidate recently approved for ordination. Jared receives a $30,000 salary which is the minimum required by presbytery policy. The Book of Order (G ) requires that installed pastors of congregations (pastors, associate pastors, and co-pastors) be enrolled in the Benefits Plan of the Presbyterian Church (U.S.A.). According to this requirement, Jared is enrolled in Pastor s Participation. The position qualifies for Pathways to Renewal with dues as follows: 16.75% of annual effective salary for family medical coverage with a minimum dues amount of $6,000 ($6,000) 2% ($600) for defined benefit pension; and 1% ($300) for death and disability. What are the benefits of Pastor s Participation for Faith Presbyterian Church and for Jared? PLN-623 4/18

5 Installed Pastor in Pathways to Renewal The Board s Perspective 1. Due to the community nature of the plan and Pathways to Renewal (available since the church is less than 150 members and has not had an installed pastor in more than two years), Faith Presbyterian Church is able to provide family medical coverage at less than the actual cost. This illustrates the community nature of Pastor s Participation, the Church s commitment to helping smaller churches who call young pastors (under 40) at lower salaries. The $6,000 charged for Jared and his family is less than a third the actual cost of family coverage and $5,000 less than the minimum cost outside Pathways to Renewal. 2. J ared accrues pension credits at the $58,000 national median salary for pastors. Dues at the median would be $6,380, which is $5,780 more than the church s contribution in Pathways to Renewal. Both Jared and the church benefit from the community nature of Pastor s Participation and Pathways to Renewal. 3. The disability benefit which includes 60% continuation of salary, continuing medical coverage, and continuing accrual of pension credits at Jared s effective salary or median, whichever is greater is unavailable in the commercial market. The lump-sum death benefit is determined by salary and age at death. It is multiplied for younger members with the assumption that it supports family members for a longer period of time. Without pension participation, death and disability coverage is priced at 2.5% of effective salary. In Pastor s Participation, in this case, it costs $300 per year. 4. Enrollment in Pastor s Participation affords Jared access to the Retirement Savings Plan of the Presbyterian Church (U.S.A.), supplemental death benefits coverage, and such educational programs as Board University and the newly ordained Presbyterian CREDO conference. (Jared s continuing education cost for this program is $500 for each of the two-week sessions; the Board covers the balance of the actual cost, for a total of $10,000). The Assistance Program provides Jared with support, including the Minister Educational Debt Assistance Grant (up to $5,000 per year for up to five years). Twenty or more years of participation in the Pension Plan qualifies a retiree who meets income and asset requirements for Income and Housing Supplements from the Assistance Program. PLN-623 4/18

6 Interim Pastor Jim is being offered a full-time position as interim pastor of a 500-member congregation. Jim is 36 years old with 10 years of experience as a pastor. He is married and has two children in elementary school. His wife, Elizabeth, does not work outside the home. The session has established a salary of $58,000 (the national median for pastors) for the interim position and has asked the chairperson of the Personnel Committee (a member of the interim pastor search committee) and the liaison from the presbytery Committee on Ministry to discuss a benefits package with Jim. Unless required by presbytery policy, a minister who is not an installed pastor may be enrolled in the Benefits Plan through either Pastor s Participation or menu options. The presbytery has many small rural congregations served by part-time leaders, either lay pastors or retired ministers who serve as stated supply ministers. The presbytery has no official policy or guidelines regarding the provision of benefits for these church leaders. What concerns or commitments should shape this conversation among the chairperson of the Personnel Committee, the presbytery s Committee on Ministry representative, and Jim? What should they recommend to the session? The conversation with Jim prompts the Committee on Ministry representative to raise with COM the need for guidelines. Do you think guidelines or policy would be helpful? If so, what should be addressed? How strict should the guidelines or policy be? PLN-610 3/18

7 Interim Pastor The Board s Perspective 1. The Board of Pensions recommends, generally, that ministers in church employment be enrolled in Pastor s Participation. Over the course of a career, a minister may serve in a variety of calls, some requiring enrollment in Pastor s Participation and some not. Portable benefits, including family medical coverage, a commercially unavailable death and disability program, and long-term participation in the defined benefit pension, will be extremely beneficial. 2. Dues for Pastor s Participation would include 25% ($14,500) for family medical coverage, 11% ($6,380) for defined benefit pension, and 1% ($580) for death and disability. 3. Enrollment in Pastor s Participation also affords Jim access to the Retirement Savings Plan of the Presbyterian Church (U.S.A.), supplemental death benefits coverage, educational programs through Board University, and the Assistance Program. Twenty or more years of participation in the pension program qualifies a retiree who meets income and asset requirements for Income and Housing Supplements from the Assistance Program. 4. It can be beneficial for presbyteries to adopt guidelines that advocate for benefits for ministers like Jim, who are not required by the Book of Order to be enrolled in the Benefits Plan of the Presbyterian Church (U.S.A.). There may, however, be situations in which the guidelines or policy are not helpful. Examples of such situations might include ministers who serve in part-time or temporary roles after retirement or tentmakers, who have access to benefits through another job. PLN-610 3/18

8 Presbytery Executive Susan is a minister who serves as full-time executive leader of a large programmatic presbytery with three ministers on staff. She has 32 years of experience as a pastor and mid council staff. Her salary is $116,000, twice the national median. She is 58 years old and single with no children. The Book of Order (G ) requires that installed pastors of congregations (pastors, associate pastors, and co-pastors) be enrolled in the Benefits Plan of the Presbyterian Church (U.S.A.). This constitutional requirement, however, does not apply to ministers who serve in validated ministries, including those who serve a mid council. Unless otherwise required by presbytery policy, a minister who is not an installed pastor of a congregation may be enrolled in the Benefits Plan through either Pastor s Participation or menu options. The Board of Pensions requires, however, that an employer who employs more than one non-installed minister must enroll all of them in the same manner, i.e., through either Pastor s Participation or menu options. The Board of Pensions recommends, generally, that a minister in church employment be enrolled in Pastor s Participation. Over the course of a career, a minister may serve in a variety of calls, some requiring enrollment in Pastor s Participation and some not. Portable benefits, including family medical coverage, a commercially unavailable death and disability program, and long-term participation in the defined benefit pension, will be extremely beneficial. In this case, dues for Pastor s Participation include 25% ($29,000) for family medical coverage (although Susan needs employee coverage only), 11% ($12,760) for pension, and 1% ($1,160) for death and disability. A member of the presbytery s Personnel Committee suggests that the presbytery save money by enrolling Susan in the Benefits Plan using menu options. He insists that the cost of medical coverage could be reduced significantly and thereby provide more money for mission. Questions and Considerations: 1. Does the presbytery have a policy or guidelines regarding compensation for non-installed ministers, such as interim pastors, with which congregations must comply? If so, should the presbytery apply the policy or guidelines to ministers employed by the presbytery? If not, what does the presbytery want to model to its churches regarding compensation and benefits? Does making a decision based solely on the cost of medical coverage for Susan, thus abandoning a commitment to community nature, compromise the presbytery s witness to the world and example to its member churches? 2. What are the risks in determining benefits based on an individual employee s need rather than sound and consistent employment practice for the position? What are the risks, in this case, of making a decision based solely on the costs of medical coverage for Susan? What if Susan s needs change? What if Susan is succeeded by a person with more extensive and expensive needs? Is there a possibility that the presbytery leaves itself underfunded for that eventuality? 3. What is the potential impact on other ministers employed by the presbytery? 4. To what Board programs or resources may Susan lose access if she is not enrolled in Pastor s Participation? PLN-611 3/18

9 Presbytery Executive The Board s Perspective 1. It can be beneficial for presbyteries to adopt guidelines that advocate for benefits for ministers who are not required by the Book of Order to be enrolled in the Benefits Plan of the Presbyterian Church (U.S.A.). There may, however, be situations in which the guidelines or policy are not helpful. Examples of such situations might include ministers who serve in part-time or temporary roles after retirement or tentmakers who have access to benefits through another job. In this case, the concern of the Personnel Committee member seems to be focused on cost. 2. The Benefits Plan is rooted in a Theology of Benefits, which asserts that compensation practices, including benefits, are issues of justice. By paying a percentage of higher salaries, we all contribute to the subsidy of those who are paid less. The decisions we make say something to the world about our values. They should be taken seriously. 3. There are inherent risks associated with determining benefits based on an individual s need rather than sound benefits policy and practice for the position. An individual s needs may change. The individuals in particular positions may change. 4. Since the Board requires that all ministers employed by an organization be enrolled in the same manner, a decision to enroll Susan through menu options would require the presbytery to enroll its other ministers on staff in the same way. The needs of those individuals, as well as the associated costs, may be significantly different from Susan s and could result in greater total cost in the final analysis. 5. Ministers who are not enrolled in Pastor s Participation do not have access to certain Assistance Program grants (Sabbath Sabbatical Support Grants, Minister Educational Debt Assistance Grants). PLN-611 3/18

10 Part-Time Stated Supply Wilson is a 62-year-old minister with 34 years of experience in churches of various sizes, from fewer than 100 to more than 1,600 members. Feeling the threat of burnout after years of serving congregations with large staffs and demanding programmatic schedules, his zeal for ministry is renewed by the prospect of serving a church with a more relaxed schedule and more focus on pastoral care in one-on-one relationships. Trinity Presbyterian Church is an 80-member church with modest resources. They cannot afford a full-time pastor, but Wilson feels compelled by the warmth of their fellowship, their love of worship, and a genuine commitment to serving their small town community. He is interested in their 25-hour per week position as stated supply for $25,000 per year, a salary which is a bit of a challenge for the congregation. Unless required by presbytery policy, a minister who is not an installed pastor may be enrolled in the Benefits Plan through either Pastor s Participation or menu options. The presbytery has a general policy that ministers serving in temporary pastoral roles (interim, stated supply) be enrolled in Pastor s Participation. Wilson and Mary, the Clerk of Session at Trinity Church, meet with the Executive/Stated Clerk and the chairperson of the Committee on Ministry to talk about the presbytery s compensation policy. Wilson discloses that his wife, an administrator with the local school system, has employer-provided medical coverage, which can include him at no cost. Wilson and Mary ask if the policy requiring enrollment in Pastor s Participation can be waived if the church still enrolls him in pension and death and disability. Assume the perspectives of the presbytery leaders. How would you respond to this request? PLN-612 3/18

11 Part-Time Stated Supply The Board s Perspective 1. This is a case in which flexibility of policy or guidelines may well serve the church without compromising Wilson s well-being. 2. Trinity Church could use menu options to enroll Wilson for benefits: a. medical coverage is waived; provided by spouse s employer b. 11% for defined benefit pension, $2,750; Wilson accrues pension credits at a prorated 71% of the $58,000 national median salary for pastors or $41,180. (Dues on $41,180 would be $4,530.) The church and Wilson benefit from the community nature of the pension, which augments the pension credits of those who are compensated at less than the median for their classification. c. 1% for death and disability, $250 d. Wilson will also receive access to supplemental death benefits coverage, the Retirement Savings Plan of the Presbyterian Church (U.S.A.), and certain education and Assistance Program offerings. Not being in Pastor s Participation would make him ineligible for CREDO, Sabbath Sabbatical Support Grants, and Minister Educational Debt Assistance Grants. Not being in medical coverage would make him ineligible for Adoption Assistance and Transition-to-College Assistance Grants. PLN-612 3/18

12 Emerging Ministry Leader, Employed Tina is a 28-year-old recent seminary graduate who was ordained by the presbytery as an evangelist. She leads an emerging worshipping community with 35 people and minimal resources. They gather weekly, on Saturday evenings, for worship in a local school. She teaches a Bible study at a local coffee shop Tuesday mornings and a book study in her home Thursday evenings. The community takes up an offering at each event; it is forwarded to the presbytery. Using mission and church development funds, the presbytery supports the emerging ministry and pays Tina an annual salary of $12,000 for 12 hours per week. Tina has another job with a modest salary and no benefits. She is married with no children. Her husband has a job that provides no benefits. The presbytery wants to be the best employer it can be and provide Tina needed benefits to the best of its ability with limited funds. Presbytery leaders schedule a meeting with Tina to explore possibilities. What possibilities should they explore and consider? PLN-613 4/18

13 Emerging Ministry Leader, Employed 1. Benefits eligibility: Tina does not meet the 20 hours per week requirement for Pastor s Participation or for pension and death and disability enrollment through menu options. 2. Her employer can, nonetheless, secure medical coverage through menu options: a. The coverage level (Member-only or Member + Spouse) can be elected depending on the need. b. The price of coverage will be based on age and regional cost. c. The employer, in this case the presbytery, must pay at least 50% of the cost of Member-only coverage of the lowest-cost option offered. d.the employer may offer the preferred provider option (PPO), exclusive provider organization (EPO), or the qualified high deductible health plan with health savings account (HDHP/HSA). Both the EPO and HDHP/HSA limit coverage to network providers only. For Member-only coverage, the HDHP/HSA has a deductible of $3,000. After the deductible is met, the member is responsible for 20% of medical expenses until the maximum copayment amount is reached. The HDHP is paired with the tax-advantaged HSA; which can be funded by the employer and/or the employee with pretax dollars to pay for eligible healthcare expenses; best practice is for the employer to make a contribution to the HSA. The Board s Perspective 3. The presbytery can enroll Tina in the Retirement Savings Plan of the Presbyterian Church (U.S.A.), but contributions must be withheld from her salary and submitted by the employer. 4. Since she is not in Pastor s Participation, Tina is not eligible for Presbyterian CREDO for newly ordained pastors. Enrolled in medical coverage only, she would have access through the Assistance Program to Shared Grants, Emergency Assistance Grants, and Adoption Assistance Grants only. PLN-613 4/18

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15 Non-Teaching Elder Positions

16 Full-Time Christian Educator Redeemer Presbyterian Church is a 1,200-member congregation with relatively strong resources. The session wants to provide a benefits package through the Board of Pensions for lay employees, other employees in Board terminology. The Church Consultant meets with the Business Manager and chairperson of the Personnel Committee, and explains that other employees must be enrolled through menu options and that the employer must decide who will receive benefits (by employee classifications) and which benefits will be offered. The session of Redeemer Church decides to offer the following benefits to all full-time other employees: 1. preferred provider organization (PPO) medical coverage a. Employer will pay 100% of Member-only cost. b. Employer will pay 50% of Member + Spouse and/or Member + Family coverage; employee pays 50%. c. The employee elects the medical coverage needed. 2. pension; employer pays dues at 11% of effective salary 3. death and disability; employer pays dues at 1% of effective salary Jessica is a full-time Christian educator at Redeemer. She is 38 years old, married, and has two children, ages 12 and 15. She earns a $30,000 salary. Jessica s spouse, Ruslan, is also employed. His employer provides medical coverage for the employee only, at no cost to the employee. Coverage of other family members is available, but the full cost of coverage is passed on to the employee. After discussing options with Ruslan, Jessica elects medical coverage through Redeemer for herself and the children. Annual cost for medical coverage for Member + Children is $14,000 $8,000 for Jessica; $6,000 for the children (numbers are illustrative only; rates are established according to ages and geographic location). The employer pays $11,000 and member pays $3,000. Redeemer enrolls her in the defined benefit pension and death and disability. At her salary, dues for the pension are $3,300; dues for death and disability are $300. What would you identify as the benefits of this approach? PLN-614 3/18

17 Full-Time Christian Educator The Board s Perspective 1. There is flexibility to meet the medical coverage needs of the employee. Jessica and her husband review their options and the associated costs. They utilize the medical benefit available to her spouse through his employer. Through Redeemer Presbyterian Church, Jessica elects medical coverage for herself, at no cost to the employee, and for her children, at half the cost to the employee. For a $3,000 employee contribution, she secures medical coverage for herself and her children. 2. A pension is provided. It is accrued at the national median for other employees ($41,000), benefiting Jessica with additional credits on $11,000 at no cost to her or Redeemer Presbyterian.* The subsidy to the church is $1,210 (the cost of credits at the median), a reflection of community nature of the defined benefit pension. 3. Death and disability coverage is provided. 4. Access to supplemental death benefits coverage is provided. 5. Access to the Retirement Savings Plan of the Presbyterian Church (U.S.A.) is provided. 6. Access to educational programs (other than CREDO, which is only for ministers meeting criteria) is provided. 7. Access to certain Assistance Programs is provided Income and Housing Supplements, if she s in the pension 20 years; Shared and Emergency Grants; Adoption Assistance; and Transition-to-College Assistance Grants, since her children are in medical. * $41,000 - $30,000 = $11,000 x 11% = $1,210 subsidy PLN-614 3/18

18 Full-Time Music Director The session of Hosanna Presbyterian Church, a 650-member church with moderate resources, is adding a new position to the staff: a full-time Music Director. For years the church has had a parttime choir director, who worked 15 hours per week for a $15,000 salary with no benefits. With the retirement of the choir director and recent increases in the number of families with children joining the church, the church would like to hire a full-time person to lead the existing choir and establish graded choirs for children and youth. The Personnel Committee is exploring benefits options with the Board of Pensions Church Consultant. The Church Consultant inquires about Hosanna s other employees and learns that there is only one other staff member, other than the pastor, who works 20 or more hours per week; an administrative assistant works 40 hours per week. After consultation with the Church Consultant, the Personnel Committee recommends that the church offer benefits to full-time other employees as follows (through menu options): 1. the exclusive provider organization (EPO) a. Employer will pay 80% of Member-only cost and 50% of any elected family coverage; the employee pays the balance of desired coverage. b. Employer offers employees the opportunity to elect the PPO (preferred provider organization) option at their own expense (the employee pays the cost differential from EPO). 2. The employer enrolls full-time other employees in the defined benefit pension. The employer pays dues at 11% of effective salary. 3. The employer enrolls full-time other employees in the Death and Disability Plan. The employer pays dues at 1% of effective salary. The session has approved a $36,000 salary for the Music Director. They have identified a candidate for the position. Kim is 42 years old, married, and has one child, 16 years old. Kim s spouse, Karen, is a highly compensated professional with access to very good medical coverage for the employee, entirely paid by the employer, and the same coverage for family, for which the employee contributes 20% of the cost. Kim and Karen review the available options for medical coverage. After assessing cost and coverage, they decide to waive participation in the medical benefits provided by Hosanna Presbyterian Church. Securing medical coverage through Karen s employer is more attractive financially. What are the benefits of this approach? PLN-615 3/18

19 Full-Time Music Director The Board s Perspective 1. There is flexibility to meet the medical coverage needs of the employee, who waives medical and utilizes the medical coverage available to his spouse for less out-of-pocket cost. 2. The plan s increased flexibility still allows access to the Board s defined benefit pension. The church pays the 11% contribution of $3,960. Kim accrues credits at the national median of $41,000 for other employees; this benefits the employee through accumulation of pension credits on an additional $5,000 of imputed salary and the church through acquisition of those additional credits at no cost. The subsidy to the cost for the church is $550, a reflection of community nature of the plan.* 3. Death and disability benefits coverage is provided. 4. Access to supplemental benefits coverage is provided. 5. Access to the Retirement Savings Plan of the Presbyterian Church (U.S.A.) is provided. 6. Access to educational programs is provided (other than CREDO, which is for ministers who meet criteria). 7. Access to certain Assistance Program benefits is provided Income and Housing Supplements if he s in the pension 20 years; and Shared and Emergency Grants. He is not eligible for Adoption Assistance or Transition-to-College Assistance Grants since the children are not dependents in the Board s medical program. * $41,000 - $36,000 = $5,000 x 11% = $550 subsidy PLN-615 3/18

20 Part-Time Day Care Program Director Tabernacle Presbyterian Church is a 1,600-member church with moderate resources. It operates a morning day care program. Tabernacle offers part-time employees who work 20 or more (but less than 40) hours per week the following benefits: 1. medical coverage through the Board s qualified high deductible health plan with health savings account (HDHP/HSA); the church pays 50% of the cost of Member-only coverage and none of family coverage, and makes a contribution of $2,400 to the HSA. The church offers employees the opportunity to elect the preferred provider option (PPO) or exclusive provider organization (EPO) at their own expense (the employee pays the cost differential from the HDHP/HSA) 2. enrollment in the Retirement Savings Plan of the Presbyterian Church (U.S.A.) and up to a 5% match of employee contributions The Director, Patricia, is 30 years old, married, and has one preschool child, who is in the program. She works from 8 a.m. until 1 p.m., five days per week, and is paid an annual salary of $25,000. Patricia s husband, Daniel, is employed. His employer provides medical coverage, paying the full cost for employees and 40% for family members. Patricia and Daniel review coverage options and related costs. Patricia elects Member-only coverage in the HDHP/HSA through Tabernacle Church. Daniel enrolls himself and their child in the medical program his employer offers. What are the benefits and considerations? PLN-616 4/18

21 Part-Time Day Care Program Director The Board s Perspective 1.There is flexibility to meet medical coverage needs of the employee, who elects Member-only coverage. Annual cost for Member-only coverage in the HDHP/HSA is $6,800 (number is illustrative only). The employer pays $3,400 (50% of HDHP/HSA cost); the employee pays $3,400 (numbers are illustrative only). The church models the best practice in making a contribution to the HSA. Patricia and Daniel take advantage of Daniel s employer-provided options to secure medical coverage for Daniel and their child. 2.The employer encourages all employees to save for retirement by matching contributions to the Retirement Savings Plan of the Presbyterian Church (U.S.A.) up to 5%. 3.Access to educational programs is provided (other than CREDO, which is for teaching elders who meet criteria). 4. Access to certain Assistance Program grants is provided Shared and Emergency Grants; will not be eligible for Income and Housing Supplements if she s not in pension for at least 20 years; not eligible for Adoption Assistance or Transition-to-College Assistance Grants since her child is not a dependent in the Board s medical program. PLN-616 4/18

22 Presbytery Stated Clerk The presbytery is committed to being the best employer it can be. Its personnel manual conveys its benefits policies. For full-time staff, the presbytery fully pays dues for medical coverage for the employee and family (as needed), pension, and death and disability. For part-time staff working at least 20 hours per week, the presbytery pays dues for Member-only medical coverage and makes a 5% contribution to the Retirement Savings Plan of the Presbyterian Church (U.S.A.) (RSP). Part-time employees may elect other levels of medical coverage at their own expense and contribute to the RSP through salary deferrals. The presbytery has two full-time positions: Presbytery Executive and Stated Clerk, which is vacant due to the recent retirement, after 18 years of service, of a minister member of the presbytery. There are two parttime positions: a 20-hour per week administrative assistant and a 20-hour per week bookkeeper/treasurer. The Presbytery Executive is a minister. The presbytery enrolls her in the Benefits Plan in Pastor s Participation, required for installed pastors and available for other ministers. Pastor s Participation includes family medical coverage, pension, and death and disability. Dues for these benefits, based on established percentages of effective salary, are paid fully by the employer. The Personnel Committee consciously decided to enroll minister members of the presbytery staff in Pastor s Participation, following what is required of congregations in enrolling their pastors and thus supporting Pastor s Participation s distinctive expressions of community nature. Calvin is an elder with 20 years experience as a corporate archivist. He is the finalist in the search for a Stated Clerk. It is a full-time position with a salary of $64,000. He is 42 years old, married, and has three children, ages of 9 to 16. Questions and Considerations: 1. In light of the presbytery s personnel policies and the specific circumstances, how should the Personnel Committee address benefits for the Stated Clerk position? 2. What are the distinctive expressions of community nature in the Benefits Plan? 3. How would you assess the presbytery s approach to the provision of benefits for part-time employees? PLN-620 3/18

23 Presbytery Stated Clerk The Board s Perspective 1. The presbytery s personnel manual stipulates that medical coverage for the employee and family (as needed), pension, and death and disability be provided for full-time employees. These benefits, the same as those in Pastor s Participation, can be provided for Calvin through menu options: a. Dues for pension participation and death and disability coverage are available for 12% of effective salary. b. Medical coverage is available through the preferred provider option (PPO); all that differs from Pastor s Participation is the pricing for coverage, which is based on demographic factors, including age and the cost of services in Calvin s area. The presbytery would fully pay for medical coverage at the level needed, presumably family coverage. c. The presbytery fulfills the commitment of its personnel manual and provides parity of benefits between the full-time Presbytery Executive and the Stated Clerk, although the cost of medical coverage is calculated differently for menu options and Pastor s Participation. 2. Community nature is evident in several ways: a. With the Pension Plan, workers whose salaries are less than the national median for their employee classification receive pension credits as if they were paid the median salary. These additional credits come at no cost to the employer or employee. b. With PPO medical coverage, deductibles and out-of-pocket maximums are lower for lower-paid church workers. [Pastor s Participation sets dues for PPO medical coverage as a percentage of effective salary (subject to the medical minimum dues rate). Consequently, churches that pay their pastors smaller salaries secure the benefit for a lesser cost while the benefit remains unaffected.] 3. The clearest, most coherent way to classify employees is on the basis of full-time and parttime employment: a. The presbytery commits to providing specified benefits to part-time employees who meet the 20-hour per week minimum established by the Board of Pensions for Benefits Plan enrollment. b. The presbytery s policy for part-time employees encourages equitable treatment of employees in that classification and utilizes the flexibility of the Benefits Plan to scale the benefits to part-time employment. 4. Apart from the requirement that installed pastors be in Pastor s Participation, employers have considerable latitude in determining the benefits to offer to certain groups of employees and how employer and employee will share the costs of certain benefits, such as medical coverage. PLN-620 3/18

24 Emerging Ministry Leaders and Self-Employment Case 1 Joshua, a recent seminary graduate, is a candidate preparing for ordination. He has completed his ordination exams and is approved by the presbytery to seek a call. He and his wife, Marissa, own a small coffeeshop, a business Marissa started during Joshua s seminary years. With missional zeal, Joshua gathers a group of about 20 young adults weekly for Bible study on Thursday nights after the coffeehouse closes. The presbytery is aware of this ministry, but it has neither officially endorsed the program nor committed financial support. The group collects weekly donations (typically about $50 per week), used to cover the costs of coffee and Bible study materials. Joshua approaches the Committee on Preparation for Ministry with the proposal that he be ordained to lead this emerging ministry. Several participants plan to marry and have asked Joshua about conducting the services. Ordination would allow him to officiate at weddings and generate ministry-related income. Joshua has learned also that with ordination and ministry-related income, he would qualify to secure medical coverage through the Board of Pensions. Several members of the Committee on Preparation for Ministry are reluctant to ordain someone to a position the presbytery cannot fund for a ministry that is not yet officially established. Others in the presbytery argue that innovative and entrepreneurial forms of evangelism are needed. How would you respond to Joshua s request? What benefits would he be eligible for through the Board of Pensions? Case 2 For more than 30 years, Debbie has served as a pastor and on mid council staffs. She wants now to engage in new, cutting-edge ministries of consultation and spiritual direction for both individuals and organizations. Debbie is boldly adventurous and sees herself as self-employed in this new ministry. She does not know how many contracts she will generate in the first year of operation. At the outset, at least, she will not have a set salary and is not sure what level of income she will secure. She has set aside savings to help her launch the venture. She is married and her husband is supportive of her new sense of call. Indeed, his mature and stable professional status affords a level of security as Debbie explores and develops new forms of ministry. Debbie approaches the Committee on Ministry and requests validation of this ministry in which she will be self-employed and will set up an advisory board including members of the presbytery. She also wants to explore the availability of benefits with the Board of Pensions. How would you respond to Debbie s request? What benefits would she be eligible for through the Board of Pensions? PLN-621 4/18

25 Emerging Ministry Leaders and Self-Employment The Board s Perspective 1. The cases present unique issues to the presbytery. Joshua is a candidate seeking ordination and validation of an emerging ministry. Debbie is ordained, experienced, and seeking validation of an emerging ministry of a very different sort. The cases raise ecclesiastical questions the presbytery must wrestle with. Eligibility for benefits depends on the decisions made and the evolving nature of the respective ministries. 2.Not ordained and having no employment with a Presbyterian-related organization, Joshua is not eligible for enrollment in the Benefits Plan. If, however, he were ordained and receiving some level of ministrygenerated income (the $50 per week offering and potential wedding honorariums), Joshua could secure medical coverage through menu options. As a self-employed minister, he would then be considered the employer under Section 3.2(a)(3) of the Benefits Plan. He could enroll for medical coverage and would be potentially eligible for the Retirement Savings Plan of the Presbyterian Church (U.S.A.) (RSP), neither of which require the minimum 20 hours for ministers. As long as there is ministry-generated income from which RSP contributions can be withheld, he could use other resources (such as income from other employment or personal assets) to pay for medical coverage. The cost for medical coverage would be based on age, regional cost of services, coverage level, and medical option selection: preferred provider organization (PPO), exclusive provider organization (EPO), or qualified high deductible health plan with health savings account (HDHP/HSA). RSP contributions are limited to ministrygenerated income, so Joshua cannot defer coffeeshop earnings for an employee contribution. 3. If the presbytery validates Debbie s ministry, she will be considered self-employed. If working without a specified salary and less than 20 hours per week, she is not eligible for the full range of benefits available through the Board of Pensions. As a self-employed minister, she would be considered the employer under Section 3.2(a)(3) of the Benefits Plan. She could enroll for medical coverage and the RSP, neither of which require a minimum of 20 hours for ministers. As long as there is ministry-generated income from which RSP contributions can be withheld, the cost, she could use other resources (such as income from other employment or personal assets) to pay for medical coverage. The cost would be based on age, regional cost of services, coverage level, and medical option selection: PPO, EPO, or HDHP/HSA. RSP contributions are limited to ministry-generated income. If at some point Debbie is working on a salaried basis and for 20 or more hours per week, she would be eligible for other benefits through menu options or Pastor s Participation. PLN-621 4/18

26 PLN-608 4/18