The Rev. Valerie L. Balling Mr. Arthur Pedersen, II The Rev. J. Connor Haynes Co-Chair Co-Chair Secretary

Transcription

1 The Standing Commission on Clerical Compensation Report to the 232 nd Convention of the Diocese of New Jersey The Rev. Valerie L. Balling Mr. Arthur Pedersen, II The Rev. J. Connor Haynes Co-Chair Co-Chair Secretary Members: Mrs. Louise Hyland The Rev. Margaret Sterchi Mr. Robert McGonigle The Rev. Dirk C. Reinken Mr. Arthur Lobdell Mrs. Darrell Vigh Mr. Tal Kramer, Esq. Mr. Kirk Bonamici Resigned: The Rev. Jacqueline Rowe; The Rev. Gina Walsh-Minor The Standing Commission of Clerical Compensation (SCCC) is directed by Canon 33 to ensure that clergy are adequately, equitably and correctly compensated according to the Canons of our Diocese, in particularly Canon 74. The Commission undertook a comprehensive study of clerical compensation in neighboring and similar dioceses to determine if the minimum compensation package offered by the Diocese of New Jersey was competitive in order to attract the best clergy to our congregations. As the various components of clerical compensation differ from diocese to diocese, it took some time in order to compare apples to apples. The Commission s conclusion was that the minimum Base Cash Stipend as defined on the Clerical Compensation Charts needed to be increased in order to remain in-line with economic trends and competitive within our region. This reevaluation is in-line with the Commission s intention when it created the new Compensation Chart in 2011 (adopted by the 228 th Convention to take effect in 2013) that the Base Cash Stipend would remain static until such time as economic factors dictated a change. As explained in the Commission s October 28, 2015 letter to the congregations, the increases the Commission is recommending are about 1.5% to the current Bash Cash Stipends. The specific amounts are defined in the enacting Resolution below. In light of this recommended increase and supported by economic data, the Commission is not recommending a COLA increase for The merit increase for Years of Credited Service does still apply. PLEASE NOTE that congregations are required to return a Clerical Compensation report to the Diocese by March 1 st. The form of that report has changed to the dynamic Excel spreadsheet, which can be found at If you are not sure how to complete this report, please contact a member of the Commission. Reports can be returned to the Commission by attaching the completed Chart to an and sent to SCCC@dioceseofnj.org. The Commission continues to offer opportunities to instruct clergy and lay leaders on all aspects on clerical compensation and benefits. In coordination with the Benefits Committee and Church Pension Group (CPG), we offered a Compensation and Benefits Workshop on September 12, 2015 at Trinity Cathedral in Trenton. In addition to an indepth demonstration on how to use the Compensation Chart, attendees heard from tax professionals about the specifics of clergy taxes, what benefits clergy are entitled to, how to access information about benefits from CPG, and who to go to with questions. The Workshop was recorded and all the presentations are available at In conclusion, the Standing Commission on Clerical Compensation recommends the following resolution to the 232 nd Diocesan Convention for fiscal year 2016: Be it resolved, that the 232 nd Diocesan Convention approves the increase of the Base Cash Stipends on the Clerical Compensation Charts to $33,600 for the Curate/Assistant and $36,300 for all other full-time positions. The Part-Time Chart will be increased to $3,025 per Work Unit. We thank the members of this Commission for their gracious ministry to the Diocese. Respectfully Submitted, The Rev. Valerie L. Balling Co-Chair Mr. Arthur Pedersen, II Co-Chair

2 UPON COMPLETION, PLEASE SEND REPORT TO BY MARCH 1, ENTER IN BOX CREDITED SERVICE (CS) YEARS FROM CHURCH PENSION FUND up to 20 years as of January CS values from 1-10 has an increase of 2.5% per year, CS from has an increase of 2% per year. A B C* D E F G** EXAMPLE EXAMPLE COMPENSATION CASH CASH STIPEND Self-Employment PROFESSIONAL INSURANCE PREMIUMS COMPENSATION COMPENSATION COMPONENTS STIPEND BASE HOUSING EQUITY or Contributions Act PENSION EXPENSES CONTINUING (Medical, Dental, Life) PACKAGE PACKAGE POSTITION BASE x CS HOUSING SUBSIDY (SECA) OFFSET ASSESSMENT (unless car is EDUCATION AVERAGE of Single or Single Coverage Family Coverage CATEGORIES Diocesan Min 50% provided) Family Coverage I Curate/Assistant 33,600 33,600 Not Required 2,570 6,510 4,500 1,008 10,945 to 32,264 56,133 80,452 Newly Ordained (A x 7.65%) [(A+C) x 18%] (A+C+D+E+F+G) (A+C+D+E+F+G) II Assistant/ Associate 36,300 36,300 Not Required 2,777 7,034 4,500 1,008 10,945 to 32,264 62,564 83,833 Experienced (A x 7.65%) [(A+C) x 18%] (A+C+D+E+F+G) (A+C+D+E+F+G) IIIa Vicar/Rector/ 4,368 11,178 IIIb Priest in Charge/ 36,300 36,300 2,300 [(A+ Fair Rental [((A+B+C+Utilities) 4,500 1,008 10,945 to 32,264 70,599 91,918 Interim Rector (Negotiated for Interim) Value + Utilities ) x 1.3) x 18%] (A+B+C+D+E+F+G) (A+B+C+D+E+F+G) Rectory Provided x 7.65%] Vicar/Rector/ Diocese of New Jersey Base Clergy Salary Schedule for January December 2016 Priest in Charge/ 36,300 36,300 16,000 4,001 10,134 4,500 1,008 10,945 to 32,264 82, ,207 Interim Rector [(A+B) x 7.65%] [(A+B+C) x 18%] (A+B+C+D+E+F+G) (A+B+C+D+E+F+G) Rectory NOT Provided * If cleric's combined compensation of cash stipend, housing Subsidy and/or equity and utilities is MORE THAN $113,700, the amount over $113,700 is multiplied by 1.45% and then added to $8,170. The dynamic version of this chart adjusts for this calculation. ** AMOUNTS NOT REGULATED BY THE STANDING COMMISSION ON CLERGY COMPENSATION. INSURANCE IS INCLUDED IN COMPLETE COMPENSATION PACKAGE Assumptions: Sample calculations based on FULL TIME EMPLOYMENT and the following: 1 Bold values established by Diocesan Convention and cannot be decreased. All other numbers may vary due to negotiation, evaluation, usage or rates. 2 Cash Stipend is the minimum required by the Diocesan Convention. The cleric and church are encouraged to negotiate compensation based on experience and job responsibilities. 3 CS increase is only enforced to 20 years in order to allow clergy a variety of opportunities toward the end of their careers. This calculation can still be used for establishing a work experience minimum beyond 20 CS years. 4 Fair Rental Value of Rectory or Rental Rectory Estimate of $16,000/year used in calculations on this chart. Value will vary. Please have property professionally appraised. 5 Utilities (heating, electric, sewer, etc.) Estimate of $4,800/year used in calculations on this chart. Depending on usage and energy efficiency, costs will vary. 6 Medical/Dental/Life Insurance Expenses based on 2015 Rate Chart at highest single and family premiums. Cost will vary depending on coverage. 7 If cleric has insurance coverage from a spouse or partner, the cleric may negotiate with the church for additional remuneration to offset premium costs of that coverage. 8 If a Housing Subsidy is provided for Curate/Assistant/Associate, that expense MUST be included in SECA and Pension Assessment calculations. 9 The SECA Offset calculation does NOT include the Housing Equity amount ($2300) if that money is directly deposited into a tax deferred account (such as a 403(b)). If the cleric opts to receive the money (in order to invest in a ROTH account, for example) then that amount does need to be included in the SECA calculation.

3 DEFINITIONS Categories: There are four categories for FULL TIME CLERGY POSITIONS based on experience and job responsibilities with the sub category of RECTORY PROVIDED or RECTORY NOT PROVIDED. Full Time: Five or six workdays, consisting of no more than 12 to 14 Work Units (WU). Work Unit (WU): A block of time noted as morning, afternoon, evening - usually 2½ to 4 hours in length. Curate: Newly ordained clergy mentored or apprenticed by experienced clergy member during the first 18 months from date of Transitional Deaconate ordination. Assistant/Associate : Experienced clergy called to assist and support Senior Clergy in specific ministry(ies) or specific tasks to augment the mission of Church. Newly Ordained Vicar/Rector/Priest in Charge/Interim Rector : Called priest to a mission or parish within the first 18 months from date of Transitional Deaconate ordination. Vicar/Rector/Priest in Charge/Interim Rector : Experienced priest called to serve in a mission or parish. Cash Salary Minimum: Amounts are recommended minimums by The Standing Commission on Clergy Compensation after conducting a comprehensive salary survey of surrounding diocese in the Northeast region as well as diocese in which a noted pattern of clergy transfers. Credited Service (CS): Provided by Church Pension Fund on the Personal Information Summary. This calculation offers clergy and congregations a metric for the minimum cash stipend based on experience, compounded annually. The SCCC will enforce using this calculation through 20 YCS in order to allow clergy the option of various opportunities toward the end of their careers, though it can be used for the clergy person's entire career. Pension Base: The total of Cash Stipend, Social Security, Utilities, and Housing Subsidy. (See Pension Base Definitions for further clarification.) Pension Assessment: 18% of Pension Base (salary, housing Subsidy, Social Security Offset) Professional Expenses: This minimum includes reimbursement for travel expenses for work related activities, functions, seminars, etc. to maintain or improve work related skills; car mileage at IRS rates; professional journals and books related to work; hospitality and entertainment, vestments and clerical attire, etc. NOTE: All items (books, computers, etc.) purchased with these monies belong to the church. Continuing Education: This minimum amount may be applied to fees for work related workshops, seminars, classes and courses to maintain and improve work related skills. Housing Equity: This minimum annual amount is designated at $2,300 allocated when Rectory is provided. That money may be paid into a tax sheltered annuity or directly to the cleric (to put into a Roth IRA, for example), however the cleric is responsible for paying all income taxes associated with that additional income. Insurance Premiums: Group Health Insurance Rate (Medical, Dental, Life insurance). Short-term disability is provided and paid by the Church Pension Fund. Long term insurances available and should be offered to clergy at the time of employment. Payment of LTD Insurance is a negotiated issue. Worker's Compensation Premiums are based on total employed by the church. NOTE: Churches are encouraged to consider having a Life Insurance policy for the cleric payable TO THE CHURCH in case of his/her unexpected death to cover loss of income during that difficult time. Pension Base Definitions (Source: Church Pension Fund Active Clergy Group) Cash Stipend : yearly salary, bonuses, one-time cash payments, tuition paid for dependents, & any salary reduction used to fund an annuity, TSA (tax sheltered annuities), 403(b) plans, or RSVP (Retirement Savings Program). Social Security: Any payments given to offset the cost for self employment taxes in accordance with Self-Employment Contributions Act (SECA) tax, which is the self-employed version of the FICA tax that employees pay. Clergy are considered employees for Federal Income Tax purposes, but as self-employed for Social Security purposes. If the clergy person chooses to "opt-out" of Social Security, the congregation is still obligated to pay its full portion of the SECA Offset, and clergy person takes responsibility for the tax liability. Utilities : Amounts paid to the clergy or directly to suppliers on behalf of the clergy for utilities (including gas, water, sewer, electric, phone, etc.) Housing Subsidy paid to the clergy: $16,000 with no rectory provided Housing Subsidy if house is provided rent-free: For pension purposes, the housing subsidy will be assumed at 30% of the total cash stipend, Social Security and utilities. Housing Subsidy if both housing meals are provided free of charge then housing subsidy will be assumed at 40% of the cash stipend, Social Security and utilities. Housing Subsidy if house is provided rent free and in addition the priest also receives a cash housing Subsidy: For pension purpose, the housing Subsidy will then be assumed at 30% of total of cash stipend, Social Security & utilities, plus the cash house subsidy.

4 Diocese of New Jersey Minimum Clergy Salary Schedule for January December 2016 PART TIME UPON COMPLETION, PLEASE SEND REPORT TO SCCC@DIOCESEOFNJ.ORG BY MARCH 1, ENTER IN BOX CREDITED SERVICE (CS) FROM THE CHURCH PENSION FUND up to 20 years as of January CS values from 1-10 has an increase of 2.5% per year, YCS from has an increase of 2% per year. A B C D E F G* Self-Employment CASH STIPEND CASH STIPEND HOUSING Contributions Act PENSION ASSESSMENT PROFESSIONAL CONTINUING INSURANCE TOTAL MINIMUM PER MINIMUM COST (SECA) OFFSET (Non-retired only) EXPENSES EDUCATION COST COMPENSATION WORK UNITs (WU) x YCS OFFSET Diocesan Min 50% (IF NO RECTORY) OFFSET PACKAGE Active Clergy 2,983 2,983 Negotiated [(A x WU) x 7.65%] [((A x WU)+B+C) x 18%] [(4500/12) x WU] [(1117/12) x WU] Negotiated (A+B+C+D+E+F+G) Retired Clergy 2,983 2,983 Negotiated [(A x WU) x 7.65%] [(4500/12) x WU] [(1117/12) x WU] Negotiated (A+B+C+E+F+G) * AMOUNTS NOT REGULATED BY THE STANDING COMMISSION ON CLERGY COMPENSATION. INSURANCE IS INCLUDED IN COMPLETE COMPENSATION PACKAGE Assumptions: Sample calculations based on PART TIME EMPLOYMENT and the following: Bold values established by Diocesan Convention and cannot be decreased. All other numbers may vary due to negotiation, evaluation, usage or rates. Cash Stipend is the minimum required by the Diocesan Convention. The cleric & church are encouraged to negotiate compensation based on experience & job responsibilities. If a housing Subsidy is provided directly to the cleric, those amount must be added to Cash Stipend to calculate the SECA offset. [({A x WU} + B) x 7.65%] If a cleric is living in church provided housing and a housing equity amount is paid into a tax deferred account on behalf of the cleric (such as a 403(b)), that amount is NOT included in the SECA offset calculation, but the Fair Rental Value of the church provided housing and the cost of utilities is used. [({A x WU} + FRV + Utilities) x 7.65%] If the cleric is living in church provided housing, any housing equity amount and the cost of utilities (if paid by the church) must be included in the Pension Assessment calculation. [(({A x WU} + B + C + Utilities) x 1.3) x 18%] Churches are encouraged to ensure that the cleric has adequate Medical/Dental/Life Insurance. If Active Clergy has coverage offered by a spouse or partner, the church should help offset that coverage. If Retired Clergy has to pay for additional insurance coverage above retirement benefits, the church should help offset that cost. DEFINITIONS

5 Active clergy: Under age 72 and not claiming retirement benefits from the Church Pension Fund. Active cleric is entitled to have a Pension Assessment paid by the church he/she works for. Retired clergy: Receiving retirement benefits from the Church Pension Fund. Clerics are allowed to make up to $35,500 total compensation a year and still receive full Pension benefits. Total compensation includes any housing (e.g. rectory) and/or utilities paid for by the church. For all rules regarding retirement compensation, please go to Work Unit (WU): A block of time noted as morning, afternoon, evening - usually 2½ to 4 hours in length. A 3/4 time position is equal to 9 work units, a 1/2 time position is equal to 6 work units, a 1/4 time position is equal to 3 work units. Credited Service (CS): Provided by Church Pension Fund on the Personal Information Summary. This calculation offers clergy and congregations a metric for the minimum cash stipend based on experience. The SCCC will enforce using this calculation through 20 YCS in order to allow clergy the option of various opportunities toward the end of their careers, though it can be used for the clergy person's entire career. Cash Stipend Minimum: Amount is recommended by The Standing Commission on Clerical Compensation. It is 1/12 of the range of minimum salaries of the various clergy position categories. Pension Base: The total of Cash Stipend, Social Security, Utilities, and Housing Subsidy. (See Pension Base Definitions for further clarification.) Pension Assessment: 18% of Pension Base (salary, housing subsidy, Social Security Offset) Professional Expenses: This minimum includes reimbursement for travel expenses for work related activities, functions, seminars, etc. to maintain or improve work related skills; car mileage at IRS rates; professional journals and books related to work; hospitality and entertainment, vestments and clerical attire, etc. NOTE: All items (books, computers, etc.) purchased with these monies belong to the church. Continuing Education: This minimum amount may be applied to fees for work related workshops, seminars, classes and courses to maintain and improve work related skills. Housing Equity: This minimum annual amount is designated at $2,300 allocated when Rectory is provided. That money may be paid into a tax sheltered annuity or directly to the cleric (to put into a Roth IRA, for example), however the cleric is responsible for paying all taxes associated with that additional income. Insurance Premiums: Group Health Insurance Rate (Medical, Dental, Life insurance). Short-term disability is provided and paid by the Church Pension Fund. Long term insurance is available and should be offered to clergy at the time of employment. Payment of LTD Insurance is a negotiated issue. Workers Compensation Premiums are based on a total employed. NOTE A: While Housing Subsidy and Health Insurance are not required, it is recommended that clergy and congregations use prorated full-time minimums as a basis for those negotiations. NOTE B: Churches are encouraged to consider having a Life Insurance policy for the cleric payable TO THE CHURCH in case of his/her unexpected death to cover loss of income during that time. Pension Base Definitions (Source: Church Pension Fund Active Clergy Group) Cash Stipend : yearly salary, bonuses, one-time cash payments, tuition paid for dependents, & any salary reduction used to fund an annuity, TSA (tax sheltered annuities), 403(b) plans, or RSVP (Retirement Savings Program). Social Security : Any payments given to offset the cost for self employment taxes in accordance with Self-Employment Contributions Act (SECA) tax, which is the self-employed version of the FICA tax employees p Clergy are considered employees for Federal Income Tax purposes, but as self-employed for Social Security purposes. If the clergy person chooses to "opt-out" of Social Security, the congregation is still obligated to pay its full portion of the SECA Offset, and clergy person takes responsibility for the tax liability. Utilities : Amounts paid to the clergy or directly to suppliers on behalf of the clergy for utilities (including gas, water, sewer, electric, phone, etc.) Housing Subsidy paid to the clergy: $16,000 with no rectory provided Housing Subsidy if house is provided rent-free: For pension purposes, the housing Subsidy will be assumed at 30% of the total cash stipend, Social Security and utilities. Housing Subsidy if both housing meals are provided free of charge then Housing Subsidy will be assumed at 40% of the cash stipend, Social Security and utilities. Housing Subsidy if house is provided rent free and in addition the priest also receives a cash housing Subsidy: For pension purpose, the housing Subsidy will then be assumed at 30% of total of cash stipend, Social Security & utilities, plus the cash house Subsidy.