Employer Resources
Whether you’re a church or a nonprofit, if you employ an RCA minister of Word and sacrament, you have a hand in the minister’s retirement plan, insurance benefits, and even taxes. Find all the information and forms you need here.
Requirements for employers
As a way of ensuring that pastors are cared for and appropriately compensated, the RCA’s Book of Church Order (BCO) spells out the minimum benefits that employers must provide to RCA ordained ministers. In the form used for calling a minister, Formulary No. 5, churches make promises to pay a pastor adequately; make contributions to the RCA retirement plan; provide life, long-term disability, and medical insurance; and offer opportunities for professional development.
403(b) Retirement account contributions
- Full Time Ministers: 11% of compensation, or current EBPH amount to the RCA 403(b) Retirement program, whichever is greater.
- Part Time Ministers: 11% of compensation to the RCA 403(b) Retirement program (EBPH amount does not apply.)
- Current Effective Buying Power per Household (EBPH):
- 2023: $7,734
- 2024: $8,236
- View past EBPH Amounts
Group and long-term disability insurance
RCA ordained ministers actively serving at least 17.5 hours per week are provided with employer-paid group life and long-term disability (LTD) insurance benefits if enrolled through the Board of Benefits Services. RCA ordained ministers who are enrolled in life insurance through the Reformed Benefits Association (RBA) must work 20 hours per week or more.
Read more about life and LTD insurance through BOBS or life insurance through the RBA.
Beginning January 1, 2022, Supplement D Pastors (ministers ordained outside of the RCA excluding the CRC, ELCA, PCUSA and UCC) will be eligible to participate in group life and LTD through BOBS.
Medical insurance
BOBS annually sets the minimum standards for insurance coverage that employers must meet or exceed. Health-share plans don’t meet the BCO requirements. If a minister’s spouse carries the insurance, the church should cover the premium costs up to the premium costs of the RCA plan meeting the minimum standards.
Minimum Standards for Medical Insurance 2023
Minimum Standards for Medical Insurance 2024
Professional development
The BCO requires a minimum of one week per year, plus a stipend of at least 1/52 cash salary for the study program.
Hiring married co-pastors
As the practice of hiring married co-pastors has become a regular occurrence in a number of our churches, questions about how to properly provide benefits have arisen. The Board of Benefits Services has put together a guide to help churches and classes in the hiring process of co-pastors who are both Ministers of Word and Sacrament and are married to each other. We hope you find this to be a useful tool.
Exceptions
Under certain circumstances, part-time ministers may be exempt from benefits. This is also true of Canadian ministers. According to the Book of Church Order (Chapter 1, Part 1, Section 2, Article 7):
“A consistory shall fulfill the provisions of the call form (Appendix, Formulary No. 5) for retirement and insurance for all ministers serving the church under call or contract unless (a) regarding retirement, the minister is covered by the retirement plan sponsored by the Regional Synod of Canada or the retirement plan of the communion where the minister’s membership is held, (b) the classis determines that the minister is serving the church part-time, as defined by the Board of Benefits Services, and that circumstances warrant that the consistory be exempt from this requirement, or (c) the minister is serving less than part-time as defined by the Board of Benefits Services.”
If this applies to your employee, complete a Benefit Exemption Form.
Annual Insurance and Retirement Benefits Information
Wouldn’t it be great if your pastor could focus more on ministry and less on worrying about finances? We think so, too. Every year, BOBS puts together a guide to help ministers and churches understand the ins and outs of retirement and insurance benefits, the Annual Insurance and Retirement Benefits Information (AIRB) guide. The guide helps churches comply with the requirements set out in Formulary No. 5. It provides the most up-to-date information about insurance and retirement so your church can keep its promises to your minister.
Definition of Part Time
Similar to the requirement that BOBS set for the minimum standard for medical insurance for ministers, BOBS is also required to define “part-time employment.” Because different vendors have varying eligibility requirements, the definition of part time varies based on the product.
Retirement Program
A definition of part time for the RCA 403(b) Retirement Program is anyone working 1 to 29 hours per week; however, consistories are required to make contributions for all ministers serving the church under call or contract. Those working 30 hours or more are considered full time.
Life and LTD Insurance
For life and LTD insurance purchased through BOBS, part time is defined as working a minimum of 20 hours but not more than 29 hours per week
Medical insurance
For medical insurance, part time means working a minimum of 17.5 hours but not more than 29 hours per week. Those working 30 hours per week or more are considered full time. If insurance is purchased through the RBA, its terms of participation require that any insured member must work a minimum of 20 hours per week to be enrolled in medical, dental, vision, and life insurance. For further clarification, contact the RBA at 800-701-8992.
Retirement
The RCA 403(b) Retirement Program is the primary retirement plan administered by BOBS. All employer contributions and employee salary deferrals made since January 1, 2005, have been credited to this plan.
Enrolling a new employee
Adopt the RCA’s 403(b) Retirement Program
Before your employees can enroll in the RCA 430(b) Retirement Program, you must have an RCA 403(b) Adoption Agreement on file, and all contributions must be consistent with it. The Agreement outlines the contribution formula, eligibility, and special requirements for its participants. It is an important legal document to ensure the adopting employer is compliant with the RCA 403(b) Retirement Program Plan Document.
The agreement should be updated whenever the information contained in it becomes outdated.
If you don’t have the agreement on file, please complete the RCA 403(b) Adoption Agreement according to the Adoption Agreement Instructions, then return a copy to BOBS and keep the original in your files.
Who is eligible to participate in the RCA 403(b) Retirement Program?
An RCA minister is eligible and required to participate when serving an RCA church or institution. Lay employees and non-RCA ministers are eligible to participate when serving an RCA church or institution with the written authorization of their employer. The exception to this rule is ministers who are in the Formula of Agreement (ELCA, PCUSA, and UCC) or ministers who are ordained in the CRCNA. In this case, those ministers must participate in the benefits services of the denomination of their ordination.
Complete the Participant Information Form
To enroll an employee in the RCA 403(b) Retirement Program, BOBS needs to set up the employee in the Fidelity system. Please complete the Participant Information Form for each eligible participant and return it to BOBS. BOBS will use the information to set up the RCA 403(b) account and will notify the employer once the process is complete.
Fidelity will send an enrollment package to new participants for beneficiary designation, salary deferral elections, and investment information.
Employee and employer contributions
Salary deferral elections
Participants can contribute pre-tax dollars to their account by deferring part of their salary.
Participants are encouraged to change their salary deferral elections online through their NetBenefits account. BOBS receives the weekly salary elections activity report from Fidelity and notifies employers about the elections made by their participants during the week. The employer then makes the necessary adjustments in the payroll system.
Alternatively, participants can complete a Salary Reduction Agreement and give it to the employer directly for processing. For compliance purposes, please return a copy of the Salary Reduction Agreement to BOBS each time a new election is made.
Ensuring correct contributions
To ensure that all ministers are receiving sufficient contributions to their retirement accounts, BOBS conducts the contribution verification program. Annually, we request salary information from churches to verify that the proper amount is being contributed to the retirement account of each pastor. The request for information is sent to churches as part of the Consistorial Report Form (CRF). Churches, classes, and other RCA employers are responsible for bringing these payments up to date.
Setting up contributions
Make contributions to your employee’s retirement account online using Fidelity’s Simplified Contribution Platform (SCP). This is an enhanced, simple, secure process for submitting 403(b) contributions.
To calculate the amount you should contribute to your minister’s 403(b) account, use this calculator: Contribution Calculator
If you need help, contact the Fidelity SCP team at 800-917-4369 or SCPhelp@fmr.com.
Insurance
Medical insurance
Group medical insurance is available through the Reformed Benefits Association (RBA). The RBA is a nonprofit corporation established by the Reformed Church in America and the Christian Reformed Church in North America. The RBA offers a variety of group medical insurance plans as well as group life insurance, vision, dental, and additional supplementary plans. Ministers who work at least 20 hours per week may enroll in medical insurance through the RBA.
Though you’re not required to enroll your employee in an RBA plan, any alternate medical insurance must meet or exceed the minimum standards that BOBS sets. (Health-share plans don’t meet the BCO requirements.) If a minister’s spouse carries the insurance, the church should cover the premium costs up to the premium costs of the RCA plan meeting the minimum standards.
If your minister’s medical coverage is through Medicare, they will also need to be enrolled in a Medicare Advantage or Supplement (Medigap) plan to meet the minimum standards for medical insurance.
Group life and long-term disability insurance
Employers must purchase group life and long-term disability (LTD) insurance for RCA ordained ministers. For ministers who are enrolled in group life and LTD through BOBS, they must be actively serving at least 17.5 hours per week. Life and LTD insurance is optional for commissioned pastors. Life insurance provides $175,000 of coverage for employees up to age 70. At age 70, the amount of life insurance is reduced by 50 percent. LTD covers up to two-thirds of an employee’s income if he or she becomes injured or sick and cannot work for an extended period of time. RCA ordained ministers are automatically enrolled in LTD insurance with the BOBS’ policy through Lincoln. Employees who are not enrolled in group life insurance through the RBA are also automatically enrolled in group life insurance with Lincoln. (Note that employer-paid group life insurance coverage over $50,000 is a taxable benefit to the employee; see “Imputed taxes” below.)
View the LTD insurance plan highlights
View the LTD policy
View the group life and AD&D insurance plan highlights
View the group life insurance policy
Billing
Churches are billed on a quarterly basis for their ministers’ life and LTD insurance. To determine the monthly premium, use the Group Life and LTD Premium Calculator, which includes the current rates.
Payment can be made through a direct debit using the Automated Clearing House (ACH) or by credit card using the link on your invoice.
To sign up for ACH payments, complete the Direct Debit Authorization Form.
Imputed taxes
Employer-paid group life insurance for coverage in excess of $50,000 is a taxable benefit to the employee benefiting from the coverage. The Internal Revenue Code section 79 provides an exclusion for the first $50,000 of group-term life insurance coverage provided under a policy carried directly or indirectly by an employer. The imputed cost of coverage in excess of $50,000 must be included in income, using the IRS Premium Table, and are subject to Social Security and Medicare taxes. Use this calculator to determine the dollar amount that should be entered on the W-2 form.
Additional insurance
Voluntary life insurance
Ordained and commissioned pastors enrolled in group life insurance may also enroll in employee-paid voluntary life, spouse life, and child life insurance benefits. Your employee may enroll in voluntary life insurance only when he or she is first eligible for benefits or during an annual open enrollment period.
Long-term care insurance
BOBS no longer administers long-term care (LTC) insurance. If your employee has a question about an LTC policy, they should contact Unum directly at 866-679-3054.
Ending an employee’s service
The status for RCA ordained ministers will remain active until the classis officially declares them retired. Ministers who are planning to retire soon should contact their classis clerk. BOBS will send them a retirement kit after receiving the retirement notification from the classis.
If your lay employee or non-RCA ordained minister retires or is terminated, you will need to complete the Participant Retirement/Termination Notification Form and return it to BOBS. This is required for the participant to access their retirement account.
Upon retiring or being terminated, your lay employee or non-RCA ordained minister cannot remain insured through BOBS. Their medical and long-term disability (LTD) insurance will terminate upon their retirement date. They may continue their life insurance directly with Unum by converting or porting their insurance within 31 days.
Other benefits
Mental health benefits
Through the Employee Assistance Program (EAP), BOBS makes free counseling available to active and retired RCA ministers, denominational staff, missionaries, and their households. Pine Rest Christian Mental Health Services provides three free confidential Christian counseling sessions per issue either in person or online. This benefit comes at no cost to you, the employer.
Housing allowance
A housing allowance is the most significant tax benefit that clergy receive. Ministers can claim a housing allowance whether they pay for their own housing or live in a parsonage. (Retired ministers and, in some cases, commissioned pastors, are eligible to claim a housing allowance, too.) The minister is responsible for estimating the amount of housing allowance, but the employer (in the case of a church, the consistory) must approve the housing allowance with an official “board resolution.”
Sample resolution:
“The compensation for Rev. _________ shall include $_________ per year designated as housing allowance. This designation shall be effective until modified by the church board.”
Sabbaticals
A sabbatical is a time for pastors to focus on things that are important to their work and life with the church. Though not required, sabbaticals for pastors are highly recommended in order to renew the calling and creativity of our spiritual leaders. Such sabbaticals should include intentional times for reflection, rekindling the spirit, and deepening spiritual life and family relationships. BOBS recommends a sabbatical every five years for a period of two to four months.
Clergy compensation checklist
The compensation you provide to your employee goes beyond the salary, retirement, and insurance benefits. BOBS has created a simple checklist to begin thinking about a compensation package when negotiating the terms of a call.
Taxes and other information
Church reporting guide
The ECFA is a trusted partner and resource for best practices in ministry finance. Their annual reporting guide is comprehensive, accurate, and accessible. To understand your tax responsibilities as the employer of a minister, read through their Churches and Nonprofit Financial guide.
To purchase the eBook, visit the link below. By signing up for a free Church Excel account, you’ll get a discount on the book, in addition to many other free resources. The ECFA has graciously offered to give this resource to RCA churches for free. If you’d like the promotional code for a free download of the Churches and Nonprofit Financial guide, email us at retirement@rca.org.
Charitable contributions by payroll deduction
A taxpayer who makes charitable contributions by payroll deductions can meet recordkeeping requirements for the IRS. Read more about those requirements.
Church Excel
Church Excel is a financial best practices resource for churches and ministers. RCA churches may have free access to the service.
Minister’s Tax Guide
The ECFA is a trusted partner and resource for best practices in ministry finance. Their annual tax guide is comprehensive, accurate, and accessible. To better understand clergy taxes, read through their annual guide, Minister’s Tax & Financial Guide.
Have a question?
We are here to help!
Board of Benefits Services
475 Riverside Drive, Suite 1606
New York, NY 10115
retirement@rca.org
866-221-5480
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