Calculating contributions properly begins with understanding the governing Plan's definition of Compensation. "Compensation” generally means all compensation received as an employee of an Employer to the extent includible in gross income, plus any Elective Deferrals and Catch-Up Contributions the employee makes under the Plan. For ministers, including highly compensated ministers, the housing allowance is included in the compensation base.
As the employer, you are solely responsible for correctly calculating and remitting contributions in accordance with the Plan's provisions and consistent with the commitments your congregation has made on your Employer Participation Agreement (EPA).
Employers have documented on their EPA any of the following which the Employer elected to exclude from Compensation for the purposes of making contribution calculations:
- certain amounts paid to ministers in lieu of FICA,
- insurance premiums paid by the Employer that are imputed to taxable income,
- and amounts paid by the Employer to offset Federal or state income taxes that the employee owes on benefits the Employer provides for the domestic partner or same-sex spouse of the employee.
Employers are required to remit the % employER contribution, as stated on their EPA (minimum 5%), on compensation earned for all employees who have satisfied the Year of Eligibility Service (YOES).
**Please NOTE: Unlike the insurance plans, there is no invoice for retirement plan contributions. Please follow instructions here for: How do I remit retirement plan contributions for my congregation/organization?
- More than 84% of participating employers in our plan provide an Employer's contribution of at least 10% (some through a combination of Employer's Retirement and Employer's Matching contributions).
- Reference your Employer Participation Agreement to view the Employer's Contribution percentage commitment.
- Employees cannot "opt out" of receiving the Employer's required contributions. If an employee has satisfied the YOES, you must remit EmployER contributions to their account.
If you do not have a copy of your organization's Employer Participation Agreement, please reach out to firstname.lastname@example.org with the name of your location.
**Remember to recalculate contributions when employees' earnings change.