The Envoy Resource Blog
Empowering You to Create a Successful Retirement Plan
Plan Selection
Finding The Best Plan For Your Unique Needs
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As a Christian ministry or church, it’s essential to have a retirement plan that is tailored to your unique needs. Why? Because you’ll have access to benefits and advantages that are specifically designed for your ministry or church.
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?
BRI is a biblical approach to investing where Christians align their investment decisions with their Christian values. Not all faith-driven investing is created equal. Different organizations screen investments differently.
The purpose of a Faith-Based Retirement Plan is to prepare Participants financially for a lifetime of ministry.
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?
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.
Discover 5 reasons why you NEED a retirement plan for your ministry.
A Church Retirement Plan, or 403(b)(9) Plan, is designed for the unique needs of a church or parachurch organization or those with 501(c)(3) church status.
Faith-based funds are the individual mutual funds or ETFs that are managed with a faith-based perspective. There are a growing number of investment managers focusing on this important area.
Plan Design
Determine Your Plan Specifics
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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.
Should your contributions to your retirement account be pre-tax or after-tax?
A quick look back in history suggests that determining how long it will take to get to your destination has always been important.
Do you offer faith-based funds in your retirement plan? if not, why not? Two hundred years ago the Quakers and the Methodists were the first to put socially responsible investing into practice.
Plan Admin
How To Manage Your Plan
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How is your plan constructed? Designed? Administered? Managed? How is it really being used by your staff? If there is no plan in place at all, the reality is immediately obvious.
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.
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.
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.
A Retirement Plan Oversight Committee is a wise and effective way to help ensure that the legally mandated oversight requirements are being met. The IRS 403(b) regulations have been touted as the most significant piece of legislation in the last 40 years for 501(c)(3) 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.
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.
Plan Results
Engaging Staff With Your Plan
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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.
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 people, or even analysts, talk about retirement, they talk about it as being one homogeneous season of life. A time of retreat and diminished capacity is the general characterization.
Nothing could be further from the truth or the reality of retirement.
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?
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.
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