A Church Retirement Plan, or 403(b)(9) Plan, is designed for the unique needs of a church or those with 501(c)(3) church status.
Who is Eligible for a Church Plan Contribution?
Church Plans are allowed to choose which employees or group of employees will receive employer retirement plan contributions. Further, the church can decide how much each person, or categories of persons, will receive contributions. In other words, you can have different amounts of contributions for each person.
Tax Benefits of a Church Plan
Participation Flexibility—Every employee is eligible on a voluntary basis to make contributions to the plan. The church can determine which employees will receive the church contribution.
Housing Allowance—Allows participants with ministerial status to take non-taxable, ministerial housing allowance distributions in retirement from their 403(b)(9) plans, a big tax break.
Pre-SECA Tax—All monies contributed by the participant with a ministerial status are made pre-SECA tax—a 15.3% tax savings.
As you can see, the flexibility to choose who participates and how much they receive are big distinguishing characteristics of Church Plans.