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Ad- Ministry - ation

Ad- Ministry - ation. How the details of paperwork inform and assist t he ministry of the church. COMPENSATION. COMPENSATION. What is compensation? Total package vs income vs taxable Salary + housing + insurance + pension NEW ** + moving expenses **

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Ad- Ministry - ation

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  1. Ad-Ministry-ation How the details of paperwork inform and assist the ministry of the church

  2. COMPENSATION

  3. COMPENSATION What is compensation? Total package vs income vs taxable Salary + housing + insurance + pension NEW ** + moving expenses ** All pastors of same status get same insurance and pension benefits. Compensation form done at least annually Done online, usually at Charge Conference time

  4. COMPENSATION • Why did Al Capone go to jail? • Tax evasion • My goal is that your forms keep you out of jail! • Timeliness matters to the IRS • Accurate forms matter to the IRS • Your pension depends on accurate and timely paperwork • ANY adjustment to pay requires notification

  5. HOUSING ALLOWANCE • Two types of Housing Allowance • Housing Allowance in lieu of parsonage • Housing allowance where you exclude part of your income used to furnish and maintain the home or parsonage from income tax • Both require Resolution and records • 3 – point standard • Never retroactive

  6. ACCOUNTABLE REIMBURSEMENT Church should have an AR set up to reimburse you for ordinary business expenses Mileage Meals Books Must be reimbursed by voucher/receipt, or it is taxable income Anything purchased with AR funds belongs to church No more deducting unreimbursed business expenses

  7. MILEAGE Church may select IRS rate, Conference rate, or set their own reimbursement rate If they reimburse more than IRS rate, it is taxable If they reimburse less than IRS rate, you may have trouble claiming difference as business expense No more deducting unreimbursed mileage on taxes “Contemporaneous record” required

  8. TIME-LI-NESS Pardon my whine… This year pension and apportionment bills for Jan were delayed 6 weeks because 12 pastors just wouldn’t get their compensation forms in Please think of how your delay impacts the whole system

  9. BIG TAKAWAY – COMPENSATION If you only do one thing right in ad-ministry-ation, get your compensation right. What message do you send to your people if you can’t even get your own pay correct?

  10. TAX MATTERS

  11. YOUR TAX STATUS Once licensed, you are clergy You are an employee of the church By statute, for Social Security purposes only, you are self-employed You get a W-2 (NOT a 1099) Housing Allowance is excluded from income tax, but not from SS tax AR is not taxable if done right

  12. CHURCH TAX RESPONSIBILITY Church may withhold federal and state income taxes Church cannot withhold social security taxes Church may withhold excess income tax Church must issue a W-2 Sample W-2 on sgaumc.org Compensation form has W-2 notes Call us!

  13. YOUR TAX RESPONSIBILITY • Do AR correctly • Get Fair Rental Value of parsonage (and pay SS taxes on it) • Pay quarterly income taxes if church does not withhold • Keep mileage records • Honoraria is taxable • Constructive receipt

  14. TAX INTEGRITY Tax cheating is little more than theft Your people will know your character by your actions

  15. BIG TAKEAWAY - TAXES • The details matter • To you • To your church • To the IRS • To God

  16. STATISTICS AND APPORTIONMENTS

  17. STATISTICAL TABLES • Done annually (online) • 4 purposes • Accountability • Research • Apportionments (both conference and general) • For church to use in discerning the effectiveness of their ministry • Yes, there is a deadline, and if you miss it, you’re a deadbeat!

  18. STATISTICAL TABLES Pastor is responsible Does not mean pastor must do it We provide 2 logins – one for pastor, one for secretary, treasurer, whomever assists You can already know what we are going to ask, so you know what to track Someone in your church likes numbers

  19. STATISTICAL TABLES • Table II Finances – expenses, not income • We will import payments on benefits, apportionments, and mission specials sent through Conference Treasurer • The financial report the church uses may group expenses differently than the statistical table does – that’s OK • Table III income • Used for research, not apportionments

  20. APPORTIONMENTS • Apportionments are just the Annual Conference budget (voted on at AC every year) “apportioned” to the churches • Apportionment formula • Big churches pay more than small churches • Wealthy churches pay more than poorer churches • Apportionments done by formula, not case-by-case – treat everyone the same

  21. APPORTIONMENTS • We use your statistics to determine size and wealth • Membership • Expenses (not income, not assets) • Two year average to smooth out • See statistical tables for actual lines used • Preliminary vs Final apportionments • Have I mentioned that it’s helpful to get your statistics correct?

  22. USING DATA • www.umdata.org • Track the trends • Before and during your ministry! • Easy graphs to share • Tracking is only useful if it then leads to action!

  23. BIG TAKEAWAY – STATS AND ASKINGS You know its coming, you know what will be asked – prepare You don’t have to do it, you have to make sure it is done You can see the trend-lines for your church, if you look

  24. FINDING RESOURCES

  25. RESOURCES • www.sgaumc.org • Administrative Services (departments) • Don’t call before you look here • www.wespath.org • HealthFlex/WebMD • Benefits access (also app) • www.umdata.org • Graphs of stats

  26. PENSION & DISABILITY BENEFITS

  27. PENSION BENEFITS All licensed pastors get pension benefits, no matter what the salary Pension is based on “plan compensation” (salary + housing + moving) If in parsonage, multiply salary by 1.25, then add moving to get “plan compensation”

  28. PENSION BENEFITS • Main pension plan is Clergy Retirement Security Plan (CRSP) • We have a hybrid pension plan • CRSP-DB is defined benefit (turns into a monthly check) • CRSP-DC is defined contribution (turns into a lump sum you can get in several ways) • Your CRSP benefit is paid by the church • Bill comes from my office

  29. PENSION BENEFITS • Personal pension contributions go into United Methodist Personal Investment Plan (UMPIP) • 1% minimum to get match - 3% is more normal • Must be withheld, paid by Treasurer • Can do pre-tax, after-tax, or Roth • Auto-enrollment in the fall at 1% (you really need to give more) • Bill comes from Wespath to your treasurer

  30. PENSION BENEFITS • Full time clergy and ¾ time clergy are in CRSP. • ¼ and ½ time clergy are in UMPIP. • Church will be billed 14% of plan compensation, put in your UMPIP account. • You can waive out of pension, but you MUST file the correct form within 30 days of starting at church.

  31. PENSION BENEFITS If your compensation form is right, bill for UMPIP will be right UMPIP can be changed mid-year Can rollover IRA into UMPIP without tax consequence Upon retirement, UMPIP can be received as lump sum, monthly checks, or whatever

  32. PENSION BENEFITS Upon retirement, we designate 100% of funds received from Wespath as housing allowance Housing allowance not passed on to spouse at your death (reason to consider Roth for some contributions)

  33. COMPREHENSIVE PROTECTION PLAN • For ¾ and FT pastors • Death benefit • $50,000 if active • $14,272 for spouse if active (2019 benefit) • Child death benefit • Some benefits adjust • Lower benefit once retired • Education benefit for surviving children • Keep beneficiary form current

  34. COMPREHENSIVE PROTECTION PLAN • For ¾ and FT pastors • Disability benefit • 70% of PC for 2 years • Then coordinates with Social Security • First 2 years meet our standard (cannot do work of UM pastor) • After that, meet SS standard (cannot work) • Not divided into short-term and long-term, just disability • Can be retroactive

  35. HEALTH BENEFITS

  36. HEALTHFLEX • Mandatory health insurance for full-time pastors • Church pays “defined contribution” for pastor • Optional insurance for spouse and family • Pastor pays for spouse and family • Health Insurance not available for part-time clergy

  37. HEALTHFLEX HealthFlex Exchange offers 6 choices of health insurance plans Dental and vision options You have $950 to “shop” with Can buy up or buy down Full descriptions on sgaumc.org Select plan each year during open enrollment Call us!

  38. BIG TAKEAWAY -- BENEFITS United Methodist clergy have very rich benefits compared to the private sector Your pension will not be enough if you do not contribute

  39. CHARGE CONFERENCE

  40. CHARGE CONFERENCE Forms, Forms, and more Forms! Downloadable – see sgaumc.org Some info is entered online (Compensation form, Leadership list) Each DS will explain precisely what they want Do your dashboard monthly and CC will be much easier.

  41. CHARGE CONFERENCE Great time to review the church insurance coverage – so many have only property coverage Worker’s Comp is mandated for pastor D&O coverage, employee crime/ dishonesty, and employment practices liability are highly recommended Make sure liability covers sexual misconduct for staff and volunteers

  42. CHARGE CONFERENCE Special forms – approving Lay Speakers and Candidates for Ministry – require rejoicing GET CHURCH LEADERSHIP IN YOUR DASHBOARD with emails – we do very little paper mailing anymore, much targeted emailing We do not share our email list, so the address is as safe as any are these days. Leadership has time limits – mark them.

  43. BIG TAKEAWAYCHARGE CONFERENCE It has to be done Get a detail person in your church to help you Find last year’s copy DO THE DASHBOARD

  44. THE STANDING RULES

  45. WHAT ARE THE STANDING RULES? • These are the rules that guide our conference (similar to by-laws) • They are found in the Conference Journal • You can download a .pdf of them from sgaumc.com

  46. WHY DO I CARE ABOUT THE STANDING RULES? • They include rules • About your vacation • About the church having Worker’s Comp insurance on you • About the church paying your AC expenses • About your paycheck when you move • About your continuing education • About what’s in the parsonage • And more ….. SO MUCH MORE!

  47. STANDING RULES HELP US • Standard rules mean we all have similar expectations • Standing rules mean you don’t have to negotiate it with your church • Standing rules give an outside authority to settle matters

  48. Ad-Ministry-ation

  49. BIG TAKEAWAY AD-MINISTRY Ad-ministry helps the church care for its pastor Ad-ministry helps the pastor care for their family Ad-ministry assists the church in analyzing the effectiveness of its ministry Ad-ministry meets your obligation to the work of others Those who are faithful in the little things will be rewarded

  50. CONTACT US:Administrative Services Office P O Box 13145 Macon, GA 31208 800-535-4224 478-738-0048 520 Professional Dr, Ste 1 Macon, GA 31201

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