Today 403(b) plans provide significant benefits and advantages for churches, parachurch, and mission sending organizations.
Since Christian ministries have different and unique needs, it's important to tailor any retirement plan and to be aware of the tax code and the department of labor rules. Not only to be aware but to benefit from them.
The subject of retirement plans tends to be so overwhelmingly ”secular” that little thought has gone into this subject. Is there even such a thing as a faith-based retirement plan? And if there is, what does it look like and how is it different from a secular retirement plan?
What does your retirement plan cost? Are your expenses too high? How do you even know? The average participant will say that their retirement plan costs nothing. As a plan administrator, you know that’s not right. But do you wonder what the expenses are? And what they are for?
Is your retirement plan too complex and taking a lot of your time? If it’s too complicated for you, it will definitely be too difficult for your employees to understand. And if it's not easy for them to understand, then you are missing key pieces. Your retirement plan is too valuable not to put the right parts totally in place.
Does your retirement plan offer a diversified investment menu for your employees? How do you know? In short, offering a high-quality menu of investments to your employees will help meet their unique needs and different risk profiles. But let's dig deeper.
A quick look back in history suggests that determining where you are and how long it will take to get to your destination has always been important. The Romans put up obelisks and we put up signposts every 10th of a mile. These signposts determine your exact location and tell us how far to the next state line.
Back in 1995, the IRS and Department of Labor (DOL) found many opportunities to fine 403(b) plans inside of non-profit hospitals. Since they found so many hospital plans out of compliance, they began to move on to school districts. And guess who's next? That's right—the non-profit Christian organizations.
Retirement Plan compliance is critical as you're a Christian organization and an example to others. Two governing agencies that oversee retirement plans are the IRS and The Department of Labor. You probably don’t want to become an expert on all of the regulations but you certainly want to arm yourself in case one of them shows up on your doorstep.
A Retirement Plan Oversight Committee is a wise and effective way to help ensure that the legally mandated oversight requirements are being met. The new IRS 403(b) regulations have been touted as the most significant piece of legislation in the last 40 years for 501(c)(3) organizations.
What is a fiduciary? A fiduciary is a person or group of people that oversee and make decisions about the retirement plan for the benefit of the participants. So you're wondering if you're a fiduciary? After reading that definition you know the answer is yes.
Executive Pastors, Business Managers, Board Members, CEO’s, COO’s, and HR Directors associated with Non-Profits are often in the dark when it comes to understanding retirement plans. Often this includes those who are directly responsible for the oversight of their plan or charged with the responsibility of setting up or finding a new vendor.
As a Christian, you are called by God to serve. This calling does not end when you stop receiving a paycheck. Retirement is not only a reward for past service but a stepping-stone to future ministry. We call this your Future Funded Ministry! When you successfully construct and fund a retirement plan, you are creating a source of money to fund your future ministry activities. What an exciting way to live!
One of the biggest concerns of Plan Sponsors is the fear of low-plan participation. Imagine spending your money, time, and effort in setting up a new plan for your employees, and they don’t understand or take little interest in the plan. Maybe you’ve already experienced this!
Just like there are tools to encourage increased Bible reading, there are also tools to that will encourage you to increase your savings. Discover 4 great retirement plan educational tools that you can use as resources to encourage your staff.
When an ordained, licensed, or commissioned minister receives a portion of their compensation as housing allowance, that portion is excluded from gross income and therefore not subject to federal income tax. This can represent substantial tax savings for the minister. Further, when an ordained, licensed, or commissioned person retires, a portion of their 403(b)(9) retirement plan distribution can be received as housing allowance, providing additional tax savings in retirement.
US Citizens are waking up to the fact that retirement lasts a long time. That truth holds many implications. The US Government is waking up to the fact that less than 50% of US adults have savings or have only nominal savings. The Retirement Planning industry is waking up to the fact that most participants in formal retirement plans are financially illiterate.
It may be the hardest thing to do. Change suggests disruption, confusion, difficulty and inconvenience. We are wired to keep doing what we’ve always done. And yes, we will then get what we always got. If what we have is too painful, not encouraging and/or just plan hard, I’m open to change. What about you?