Lay Employee Pension System
In 2009, the 76th General Convention of The Episcopal Church passed Resolution A138 and its associated Canon, establishing the Church-wide Lay Employee Pension System (LPS) and naming The Church Pension Fund (CPF) as administrator.
- Episcopal employers subject to the authority of the Church are required to provide a pension to all lay employees scheduled to work a minimum of 1,000 hours annually.
- Implementation was to be completed by January 1, 2013.
In 2012, the 77th General Convention passed Resolution C042
- Affirming the requirements of Resolution A138 and
- Extending the period for schools only to achieve the full employer contribution and match rates for defined contribution plans until January 1, 2018 according to a specific year-by-year phase-in schedule. Resolution C042 defines schools as serving children of any age, thereby including pre-school, nursery and day care centers.
To be in compliance with these resolutions
- All employers should have adopted a retirement plan and enrolled eligible employees by January 1, 2013.
- All schools should have adopted a defined contribution plan by January 1, 2014 and begun contributing the full employer base and matching contributions by January 1, 2018.
Ensure Your Institution is in Compliance
| If you have eligible lay employees* AND: | Your next steps: |
|---|---|
| You have an existing plan with The Church Pension Fund (defined contribution or defined benefit) | Make sure all eligible employees are enrolled and receiving the required contributions. |
| You have an existing defined benefit plan outside The Church Pension Fund | Beginning January 1, 2013 it is your responsibility to ensure your plan complies with Resolution 138. |
| You have an existing 401(a), 403(b), or other defined contribution plan outside The Church Pension Fund, and are not a school |
Evaluate the CPF lay plans, complete an adoption agreement, and enroll your eligible employees. |
| You are a school serving children of any age and have a defined contribution plan with The Church Pension Fund or TIAA-CREF |
Make sure all eligible employees are enrolled. Beginning January 1, 2014 it is your responsibility to verify:
|
| You do not have a current lay pension plan | Evaluate the CPF lay plans, complete an adoption agreement, and enroll your eligible employees. |
*Scheduled to work a minimum of 1,000 hours annually
If You Do Not Currently Have Eligible Employees
We encourage you to adopt a lay pension plan now. While the plan does not become active until you enroll employees, this step will facilitate enrollment if and when you do.
You may also provide a defined contribution plan for those employees scheduled to work fewer than 1,000 hours a year so that they can save their own money for retirement, though you are not required to do so.
What Plans Are Available?
If you are required to adopt a Church Pension Fund pension plan, you have a choice of two types of plans:
- Defined Contribution Plan. Employer contributes at least 5% of the employee’s compensation and matches employee contributions up to another 4% of compensation. Employer may contribute more and match less, provided the total contribution equals at least 9%.
- Defined Benefit Plan. Employer contributes the required 9% assessment of an employee’s compensation.
Evaluate the CPF lay plans using our downloadable calculators.
“QCCO” vs. “non-QCCO” Organizations
Under the Internal Revenue Code, churches and qualified church-controlled organizations (QCCOs) are exempt from certain legal requirements that apply to non-QCCOs (including, for a defined contribution plan, the non-discrimination and universal availability requirements). The defined contribution plan adoption agreement has questions for you to answer that will assist you in your determination of your QCCO or non-QCCO status. Below is a short discussion of the definitions of church, QCCO, and non-QCCO for your reference. If, after reviewing the adoption agreement, you need additional assistance to determine whether your organization is a church, QCCO, or a non-QCCO, please call us toll free at (855) 215-5990, Monday - Friday, 8:30AM - 8:00PM ET (excluding holidays) or e-mail us at layplans@cpg.org .
The term “church” includes a church, convention, or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or association of churches. A “QCCO” is any church-controlled 501(c)(3) tax-exempt organization that does not generally offer goods, services, or facilities for sale to the general public and that receives less than 25% of its financial support from government sources or receipts from goods and services in related trades or businesses. Examples of a QCCO are a seminary or a social services organization that receives 80% of its support from a parish. “Non-QCCOs” are all other 501(c)(3) organizations qualified to participate in church retirement plans that are neither churches nor QCCOs. Examples of non-QCCOs are hospitals, universities, nursing homes, and retirement housing facilities.
Download the sample annual notice.
Need Help Now?
Contact us and we will help you understand the available plans and enroll.
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