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

COMPENSATION

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

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

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

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

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 can claim difference as business expense Always better to take AR reimbursement than deduct mileage on taxes Contemporaneous record required

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?

TAX MATTERS

YOUR TAX STATUS 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

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!

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

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

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

STATISTICS AND APPORTIONMENTS

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!

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 We import numbers from dashboard and payments

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

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

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?

USING DATA www.umdata.org Track the trends Easy graphs to share Tracking is only useful if it then leads to action

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 trendlines for your church, if you look

FINDING RESOURCES

RESOURCES www.sgaumc.org www.gcfa.org www.wespath.org www.umdata.org Administrative Services office Forms www.gcfa.org Tax packet, Charge conference forms, etc. Also printing church 501.c.3 www.wespath.org HealthFlex/WebMD Benefits access (also app) www.umdata.org Graphs of stats

PENSION & DISABILITY BENEFITS

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

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

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 beginning this fall

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

PENSION BENEFITS ¾ time and FT pastors are in CRSP ¼ and ½ time pastors get 14% of plan compensation put into UMPIP Upon retirement, we designate 100% of funds received from Wespath as housing allowance Housing allowance not passed on to spouse at your death

COMPREHENSIVE PROTECTION PLAN For ¾ and FT pastors Death benefit $50,000 if active $13,775 for spouse if active (2017 benefit) Child death benefit Some benefits adjust Lower benefit once retired Education benefit for surviving children Keep beneficiary form current

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

HEALTH BENEFITS

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

HEALTHFLEX HealthFlex Exchange offers 6 choices of health insurance plans Dental and vision options You have $909 to “shop” with Can buy up or buy down Full descriptions on sgaumc.org Select plan each year during open enrollment Call us!

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

CHARGE CONFERENCE

CHARGE CONFERENCE Forms, Forms, and more Forms! Downloadable – see sgaumc.org Some info is entered online (Compensation form, Leadership list) Packet provided today with some forms Each DS will explain precisely what they want

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

CHARGE CONFERENCE Special forms – approving Lay Speakers and Candidates for Ministry – require rejoicing GET LEADERSHIP IN 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.

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

Ad-Ministry-ation

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

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

Director of Administrative Services CONTACT US Derek W. McAleer Director of Administrative Services Derek@sgaumcadmin.com Cell 478-256-0305 Eleanor Dickson Pensions/Insurance Eleanor@sgaumcadmin.com Beth Acuff Apportionments Beth@sgaumcadmin.com Laura Hatcher Accountant Laura@sgaumcadmin.com