What you need to know about church pension plans
Almost all private retirement plans are required to comply with federal pension and tax laws. There is only one major exception: Church pension plans.
Employees and retirees covered by church plans are denied the basic protections provided to virtually all other private-sector workers who participate in pension plans.
Most important, church pension plans are not required to be covered by the federal pension insurance program. What this means is that if your plan runs out of money, your pension could stop – even if you have been receiving payments for years.
Church plans also –
Church pension plans can choose to be covered by federal pension laws, but very few do.
Without federal pension protections, the rights of employees and retirees are determined by state laws. State laws do not provide the insurance or other protections of federal law.
Click on the headings below to see more information.
There are two types of church pension plans:
If you are in a pension plan and your employer has a connection of any kind with a religious institution, it is worth checking to see if yours is a church plan.
If you are in church plan, you do not have a legal right to receive information about the financial status of your plan. If you are worried that the plan might run out of money – or if it already has stopped paying promised benefits or has reduced your pension – you should be sure to express your concerns. It is very important to communicate to plan officials (and to your employer or former employer) how important your benefits are to your financial security.
If you are in a plan that was established by a church or by a church pension board, it may be possible to persuade church officials that they have a moral obligation to make good on their promises to you. This can be done by forming a group to write letters and ask for meetings with church officials. If they are not responsive, the next step is to go to the media to gain the support of your community. This strategy can be very successful.
In addition, some retirees have brought lawsuits in state courts against the churches that established their plans claiming that the churches’ failure to make good on pension promises made to them is a breach of the church’s contract with them and a violation of the obligation of the people running the plan to act wisely, carefully, and solely in the retirees’ interests.
If you are in a plan where a church disclaims all financial responsibility for your pension because the plan was established by a hospital, school, or social services agency and not by the church, you may want to take the time to learn about the three dozen lawsuits that have challenged the legality of the Internal Revenue Service rulings that plans have relied on to claim that they are church plans exempt from federal law. The Pension Rights Center has information about these cases and has filed friend-of-the-court briefs in many of them. Our position is that the IRS rulings are not supported by the language or the history of the law.
Blogs & Newsletters
09/18/19
By Kyle Garrett As the Pension Rights Center’s Operations and Referrals Manager, I hear from thousands of individuals each year. Over the past decade, many of these calls and e-mails have come from people who worked for religiously affiliated hospitals, schools, and social services agencies. These individuals – former orderlies, executives, nurses, social workers, and […]
Press Release
05/08/19
Former employees of Saint James Hospital filed a lawsuit on May 7 in the Superior Court of Essex County New Jersey alleging that the Archdiocese of Newark has wrongly denied them at least $2.7 million in lifetime pension benefits. The retirees’ complaint alleges that their pensions were payable for life and fully protected by federal […]
Press Release
06/05/17
WASHINGTON – The U.S. Supreme Court ruled today that pension plans with ties to religious organizations may not have to comply with federal pension law. Today’s ruling leaves it to lower courts to decide whether hundreds of thousands of people who thought they were guaranteed federal protections will receive the pensions they earned. “Today’s ruling […]
Blogs & Newsletters
12/01/11
Have you received a notice informing you that your pension plan is seeking approval from the Internal Revenue Service to convert to a “church plan”? Here’s what this means to your retirement – and what you can do about it. Many people who work for nonprofit organizations that are associated with religious organizations – hospitals, […]
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