Retirement
The Free Will Baptist Pension program is administered by the Board of Retirement and Insurance, an agency of the National Association of Free Will Baptists, Inc. Any licensed or ordained minister or any employee of a Free Will Baptist church or agency is eligible to participate in the plan.
Types of Contributions:
- Employer (ER) Contributions. Employer contributions are made by the employer as a budgeted amount above the employee’s taxable income.
- Salary Reduction (SRA) Contributions. These contributions are tax deferred, non-budgeted employee contributions made through an agreement between the employee and the employer. The church or employer withholds the specified amount and sends it directly to the retirement office.
- Voluntary Employee (EE) Contributions. Participants make voluntary contributions directly to the retirement fund from taxable income.
Three Plan Options:
- PLAN ONE: Full Participation With Full Benefits. The church or employer is required to contribute a minimum of 5% of the employee’s base salary (taxable income), which excludes housing and other expense allowances. However, the employer may contribute any amount beyond the required 5% as long as all tax deferred contributions (ER and SRA) do not exceed IRS limits. In addition to the employer’s contributions, the employee may contribute any amount of tax paid (EE) contributions.
- PLAN TWO: The Individual Plan. This plan makes it possible for an employee to participate when the employer contributions do not meet the required 5% for Plan One. The employee and/or employer is required to contribute a minimum of 3% of the employee’s base salary (taxable income) which excludes housing allowance and other benefits. The employee may contribute any amount beyond the 3% as long as all tax deferred contributions (ER and SRA) do not exceed IRS limits.
- PLAN THREE: The Introductory Plan. Designed for those who do not meet the minimum requirements of plans one or two, this plan requires a minimum contribution of $10 per month. The contributions may come from the employee or the church/employer.
Term Life Insurance
Term life and accidental death or dismemberment insurance is available to most participants. It is mandatory in Plan One, optional in Plan Two, but unavailable in Plan Three. Premiums are deducted from monthly contributions.
Program Highlights
- Earnings are added to the retirement fund on June 30 and December 31 each year. The fund is invested to maximize growth during one’s working years.
- After three years, a participant may borrow up to 50% of the money he or she has contributed.
- Employer contributions are for the participant’s use at retirement, disability, or death. The participant may not withdraw against these funds until one of the above occurs.
- Tax sheltered funds are subject to tax upon withdrawal.
- Benefit payments for ordained participants may be tax exempt.
- In the event of disability, the funds become available to the participant. When a participant dies, the account belongs to the named beneficiary or estate.
- $25,000 level term insurance may be available to all participants.
- Insurance premiums may be waived in the event of disability.
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