You need a retirement plan for your organization. Here’s why.
To attract new employees
1. When you have a retirement plan, it lets yours staff know that you care.
2. It lets them know that you want to encourage them in their financial understanding and stewardship responsibility.
3. Those attracted to your mission/ministry are initially attracted by what you do and who you serve. After they dig deeper into what it means to "work for or join your organization," the financial issues to the decision surface.
How much will I be paid?
How much do I have to raise?
How is health care handled?
Is there a retirement plan and can I take it with me if I leave the organization?
It goes further; many churches will not provide financial support to an individual working for a religious non-profit unless there is an “adequate” plan in place. “Adequate” is interpreted as meaning sufficient so that the person being supported can leave that support when they “retire.”
Research confirms that most workers in religious organizations will not retire from that organization, yet increasing numbers understand that saving for retirement is not a function of the employer only, but an important step they must take now and continue it through the job change process.
More “middle years” employees are retiring from their secular jobs and joining religious nonprofit teams. While they may have started their savings plan earlier, they need to finish it. Having a High Impact retirement plan in place provides the context for that part of their “finishing well” scenario.
To retain new employees and staff
Higher salaries, internal pay equity, and group benefits are keys to employee satisfaction and retention.
The supporting and enhancing a well defined and delivered, high impact, retirement plan is one of the signals to an employee that “you care.” You care not only about the “now,” but are concerned for their future as well.
When we examine the retention power of a retirement plan, that power is influenced by a number of factors:
Is the information about the plan clear to the participant?
Is the plan supported by an “engaged” sponsor or, is there never any reference to it?
How the plan is designed? An employer contribution, no matter how small, a matching contribution, and volunteer option for all are keys to enhancing the value and adding retention power.
We are often amazed about how some plan sponsors treat their plan...almost as a necessary activity instead of a key portion of the ministry’s attraction and retention plan/strategy.
Further, if the plan is “transportable” (i.e. the employee can take it with them when they leave), they have the freedom to act, which, interestingly enough, increases the likelihood of their staying. An open palm has greater attraction than a clinched fist. This is the thinking behind our consistent recommendation to not have a “vesting schedule.” A vesting schedule depreciates the value of the plan and seems to encourage earlier departures than one that positively encourages staying. An example is to increase the value of the match after a few years.
Clearly if the employee knows the value to them of the plan, and that the net result will be a Future Funded Ministry Plan in place, the attraction of staying is increased.
To retain key employees and staff
A suggested mission statement for your retirement plan: “Our retirement plan’s mission is to inspire, inform, encourage, and enable our staff to plan and implement better today so they can keep making a difference for a lifetime.”
“Impact”—our context here means, “Changed lives!” Can a retirement plan really do that? Change Lives?
The future impact is clear. A retirement plan that provides the financial freedom to minister when the paycheck stops is a great source of encouragement when you get to that point.
Unfortunately, many of us treat the retirement plan as a necessary program that only impacts the future and has little relevance to the present, except to drain assets that could be used for another purpose. We acknowledge that our act of putting aside resources for the future impacts the future. We are less clear how this act can and does impact the present.
If we change to face a different financial direction, lives change. A comfort level and the development of key skills such as understanding what is true today, knowing what is needed for tomorrow, and taking action to address those needs impacts not only tomorrow, but how we act today. Translating needs into plans, learning the language of investing, taking personal responsibility for current and future circumstance, communicating with a spouse or significant other about money matters, deciding on what steps to take, and then following through are all life skills needed today. Interestingly, all these skills can be developed with high impact within one of life's great laboratories, the Ministry Retirement Plan.
You create a high impact retirement plan when the following are in place:
A solid, well communicated plan design
Best of class investments guided by an Investment Policy Statement
An Oversight Committee that is focused on communicating and overseeing the plan
The metrics and measurements of participant involvement are regularly reviewed
Easily communicated basics and principles mentioned above are made available and put in front of participants
Ministry leadership models the actions and attitudes necessary to manage a successful plan
A retirement plan is necessary in order to attract, retain, and impact your staff. A clear mission statement is certainly a good place to start.
You are a Fiduciary. The landscape continues to change, so be engaged, organized, and connected. Envoy is here to help you choose confidently, invest boldly, and manage easily.
To design a new retirement plan tailored for your ministry, begin a custom proposal today!