Retirement Plans for Church Employees

Church Retirement Planning for Your Ministry

You’ve worked hard. You’ve sacrificed. Your ministry is flourishing. But there’s a problem. Your retirement plan has gone unplanned and unfunded. Not to worry – we can help.

IRS laws allow unique retirement options for ministers and church employees. Certain church plans have very high annual contribution limits and allow for a wide array of investment vehicles (ranging from the typical mutual fund to investment real estate).

Very few firms can help you prepare the way that we can. No matter what phase of your life you’re in or the direction your ministry is going, we will go with you and help you start a church retirement plan that fits your needs.

Introducing the 403(b)(9) Church Retirement Plan

“Yesterday was the best time and today is the second-best time to start saving for retirement,” Jared Hodge, our Director of Compliance Services, tells customers looking for a retirement plan for church employees.

Most churches don’t have a retirement plan in place, and ministers typically struggle with retirement savings. Many have thought about adding one for years before finally taking action to get their retirement on track. It’s a complicated area that can feel overwhelming, which is why many people delay dealing with it.

Learn More About the Best Retirement Plan for Churches

Our team offers 403(b)(9) options for those who are looking for the best retirement plans for their church. These plans are similar to popular 401(k)s in the secular world (allowing tax-deferred contributions from either employee or employer), yet were designed specifically for churches and have some incredible benefits not available in a traditional 401(k) or other plans.

Most notably, our 403(b)(9) plan allows a minister to receive distributions from the plan as tax-free housing allowance in retirement as well as higher employer contributions.

The Benefit of a Non-ERISA Plan

Secondly, our plan is a non-ERISA church plan, which means it is extremely flexible and allows the church to treat employees differently for purposes of eligibility, matching, and contributions. This flexibility in the operation of the plan is something that some our clients find very attractive.

Churches can choose to offer this retirement plan for pastors plan selectively – for example, just to their senior pastor or executive team rather than the entire staff. The plan also allows churches to give retirement bonuses in ways that aren’t possible with a standard 401(k). It is also flexible because it permits a wide array of investments, including everything from mutual funds to real estate. That being said, allowing less common types of investments may complicate the administration of the plan, so most clients stick with mutual funds and stocks.

Features of Our Pastor Retirement Program

A minister can take distributions as a tax-free housing allowance, even in retirement. Additionally, a church can treat different employees differently with respect to eligibility and contributions. That means you decide who is eligible to participate in the plan, who is eligible for matching contributions, who may receive church contributions, and more. That’s not possible in most other plans, which makes it even more important to use a reliable church retirement plan.

Additional information to consider:

• In 2024, the limit on annual additions was $69,000
• In 2024, the general limit on elective deferrals was $23,000
• In 2024, the limit on catch-up contributions (elective deferrals) for those who have reached age 50 by year-end was $7,500

Work with ChurchShield for Your Church’s Retirement Planning

The team at ChurchShield is ready to help you navigate the savings process for retirement, alleviating some of the stress that comes with starting and managing a retirement plan for pastors and churches.

For ChurchShield payroll clients, our compliance team will handle the retirement contributions of the plan, saving you time and administrative headaches. We can also work to ensure ministerial housing allowances are appropriate in order to maximize tax savings, both inside and outside of the plan.

Contact Us to Get Started

Contact us today to get more information on how we can help you develop the best retirement plan for your church.