Church Plans - Know the Rules

Retirement plans are an important tool for employers to attract and retain employees and, if properly designed, can help employers manage their workforces by ensuring employees are adequately prepared for retirement. There are significant tax advantages to retirement plans, including tax-free contributions and the tax-free growth of those contributions until distributions are required (generally at age 72). However, in exchange for these tax advantages, retirement plans are required to comply with a host of rules relating to eligibility, contribution limits, non-discrimination, and distributions. These rules can be particularly challenging for a church plan, since they frequently apply differently to a church plan—or sometimes do not apply at all—and they can vary depending on the type of retirement plan the church or church-related employer adopts. Most retirement plan resources do not address the unique rules that apply to church plans, and churches and church-related employers may not realize they are not taking advantage of the additional flexibility available to churches. We have prepared a chart to aid church and church-related employers in understanding the rules that apply to the different types of retirement plans available to a church.

For more information about church plans or the chart, please contact Tara Sciscoe or Shalina Schaefer.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.