Pensions and Benefits USA is a partner in ministry to the more than 14,000 faithful ministers and church-employed laypersons and families who serve thousands of Nazarenes in churches of all sizes in communities across the USA. With a variety of services—such as life and disability insurance and retirement benefit plans—we also serve as a conduit of tax and benefit information for ministers at every stage of their career— from their first pastorate through retirement.

To pay for these benefits, we rely on the faithfulness of our churches to contribute to the Pensions and Benefits Fund. When local churches and U.S. districts pay their Pensions and Benefits Fund, they’re helping to support important benefits for their own ministers and church employees. The local church, the district, and Pensions and Benefits USA are partners together in this ministry.

Social Security

Social Security is a vital part of everyone’s retirement. Under current tax laws and under the Church of the Nazarene polity, ministerial participation in Social Security is virtually mandatory. Pensions and Benefits USA encourages local churches to reimburse the Social Security tax paid by their ministers. Most Nazarene churches already make this a standard part of their employee benefit packages, and have for over fifty years.

Nazarene 403(b) Retirement Savings Plan

This defined contribution pension plan provides a way for Nazarene ministers and church-employed laypeople to save for their own future retirement needs. Voluntary contributions are deducted from the employee’s salary before any income taxes are incurred. Therefore, employees do not pay income taxes on their contributions and compounding earnings until they withdraw the money. Withdrawals made by retired Nazarene ministers may be designated as “Housing Allowance” and thereby may qualify as tax-free withdrawals.

Most Nazarene ministers are enrolled automatically. They receive an Annual Pension Supplement (APS) from the Pensions and Benefits Fund into their personal accounts. If their local church or district pays 100 percent of its Pensions and Benefits Fund allocation, then a “bonus” contribution is made into their account. The Board of Pensions and Benefits USA sets the annual amount of the standard contribution and of the “bonus” contribution.

Participants may control how all their monies are invested. They may choose to invest in any of several different funds. The investment strategies of these funds range from conservative to aggressive.

"Grandfathered" Pension Plan

This plan covers both active and retired ministers who have qualifying years of service prior to 1996. Although closed to new entrants, it will continue to pay retirement benefits to fulfill its promises.

Retirees receive a monthly benefit calculated by multiplying their years of service by an established benefit formula. The formula includes a base amount per year of service, a bonus factor for years over 10, and an offset factor for P&B Fund contributions to the individual’s 403(b) plan account. The Board of Pensions and Benefits USA establishes the formula and reviews it regularly.

Ministers with qualifying years of service prior to 1996 are covered automatically by this plan, but they are not allowed to make individual contributions to it. Benefit payments come from annual Pensions and Benefits Fund income and from investment income on the money held in reserve to pay future benefits. Over 4,700 are currently receiving benefits under this plan.

Other Services

Besides these, Pensions and Benefits USA provides a variety of other valuable services for pastors, such as the Pastors Life Insurance Plan. This plan automatically provides a base level of life insurance coverage to ministers actively serving local churches.

Every eligible ordained minister has at least $5,000 of life insurance coverage. Every eligible district-licensed minister has at least $2,500 of life insurance coverage.

“Bonus” coverage goes to any eligible minister either in a local church or on a district that pays 100 percent of its Pensions and Benefits Fund. This “bonus” coverage can raise total coverage amounts to as much as $50,000 for younger ministers. They generally have the fewest assets with which to cope if an untimely death occurs.

Participants pay no individual premiums for this coverage. The cost of the plan is borne by the Pensions and Benefits Fund.

Additional life insurance coverage is also available for ministers and church-employed laypeople. Participants may choose their own amount of coverage. As with all term life insurance plans, the youngest participants pay the lowest premiums. Employer payment of these premiums means tax benefits for the participants.

Beyond this, we also offer such services as:

● Long-Term Disability Insurance Plan,

● Accidental Death and Dismemberment Insurance Plan,

● Emergency Medical Assistance,

● Temporary Monthly Disability Benevolence, and

● Funeral Assistance.

Tax and Compensation Information

Perhaps our most valuable services include information related to tax and compensation. We provide ministers with a wide range of materials to help in dealing with such matters. We also work closely with CPA and Clergy Tax Specialist Dan Busby, who assists us with the development of district tax/ compensation seminars and related information.

Communications

We offer a variety of information services, ranging from tax memos to brochures on our services. We also produce a bimonthly eNews publication that includes timely information of interest to ministers. These range from physical and mental health to personal finance and church technology. Additionally, Pensions and Benefits USA produces a quarterly printed newsletter aimed at mostly retired ministers. And, of course, we maintain a website filled with valuable information for ministers and church treasurers. You can also sign up for a free subscription to our eNews at this site.

Our Mission

Pensions and Benefits USA exists to support the church by providing uniquely designed benefit plans and related services, by educating and informing to facilitate effective use of these plans and services, and by collecting sufficient income to maintain their long-term viability to free those serving in local and district ministries from the administrative and financial encumbrance associated with these arrangements.

Our motto is “Serving Those Who Serve.” If we may be of service to you, contact us via email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 1-888-888-4656.

by Don Walter
Pensions and Benefits USA Director