Setting the Course for Retirement Readiness Iowa Annual Conference June 8, 2019 Presented by: Joni Mardesen, Dir HR/CBO

Overview Preparing for Retirement Wespath Plans Comprehensive Protection Plan Wespath Services Retiree Medical Program Housing Allowance Exclusion

Wespath Retirement Plans CRSP 2014+ CRSP UMPIP 2007-2013 CRSP 1982-2006 Ministerial Pension Plan (MPP) CRSP: Clergy Retirement Security Program UMPIP: United Methodist Pension Plan Pre-82 Plan (Ministerial Reserve Pension Fund)

DAC and CAC 2019 DAC: $71,361 2019 Iowa CAC: $69,466 Denominational Average Compensation (DAC): Average plan compensation of United Methodist clergy serving full-time appointments 2019 DAC: $71,361 Conference Average Compensation (CAC): 2019 Iowa CAC: $69,466

Wespath Retirement Plans CRSP 2014+ CRSP UMPIP 2007-2013 CRSP 1982-2006 Ministerial Pension Plan (MPP) CRSP: Clergy Retirement Security Program UMPIP: United Methodist Pension Plan Pre-82 Plan (Ministerial Reserve Pension Fund)

Pre-82 Plan Lifetime Payment Benefit is calculated by the formula: Years of Service x Past Service Rate (PSR) = Annual Benefit Example: 10 Years x PSR in 2019 ($650) = $6,500/year or $542/month

Pre-82 Plan Single Participant Single-life, no refund Benefit ceases upon participant’s death Married Participant Life with 70% to surviving spouse (spouse at time of retirement)

Wespath Retirement Plans CRSP 2014+ CRSP UMPIP 2007-2013 CRSP 1982-2006 Ministerial Pension Plan (MPP) CRSP: Clergy Retirement Security Program UMPIP: United Methodist Pension Plan Pre-82 Plan (Ministerial Reserve Pension Fund)

Ministerial Pension Plan (82-96) Benefit based on account balance Account balance invested until benefits begin MPP account balance remains separate until distributed in retirement

Ministerial Pension Plan (82-96) MPP Annuity is based on exactly 65% of MPP balance Remaining 35% of balance may be: Rolled over to UMPIP or other retirement plan Taken as a cash distributions using LifeStage Retirement Income Taken as a full or partial distribution 65% 35%

MPP Distribution Options: Life Annuities Example: Annuity Type Paid to You Life with 10-year Certain $1,501 Life with 5-year Certain $1,540 Life Only $1,551

MPP Distribution Options: Life with Survivor Annuities Example: Annuity Type Paid to You Paid to Contingent Annuitant Life with 100% $1,196 Life with 85% $1,239 $1,053 Life with 70% $1,284 $899

Wespath Retirement Plans CRSP 2014+ CRSP UMPIP 2007-2013 CRSP 1982-2006 Ministerial Pension Plan (MPP) CRSP: Clergy Retirement Security Program UMPIP: United Methodist Pension Plan Pre-82 Plan (Ministerial Reserve Pension Fund)

Clergy Retirement Security Program Defined Benefit (DB) Defined Contribution (DC)

CRSP DB Component – Service Before 2014 Monthly payment, payable for life, calculated as: 1.25% x DAC at retirement x Years of Service Example: .0125 x $71,361 (2019 DAC) x 7 years = $6,244/year or $520/month

CRSP DB Component – Service After 2014 Monthly payment, payable for life, calculated as: 1.00% x DAC at retirement x Years of Service Example: .01 x $71,361 (2019 DAC) x 5.5 years = $3,925/year or $327/month

Effective January 1, 2007 through December 31, 2013 CRSP: DC Component Effective January 1, 2007 through December 31, 2013 * 100% of UMPIP contributions up to 1% of compensation CRSP DC 2% Non-match 1% Match* Effective January 1, 2014

CRSP: DC Component Contributions were based on total compensation Account balance invested as directed by the participant or through LifeStage Retirement Income Available as a cash distribution Remaining balance goes to the beneficiary at death

Housing Allowance Exclusion Available to clergy in retirement. Amount to be excluded is the least of: Amount designated as housing allowance – 100% of pension received (per the retiree housing resolution in the Iowa Journal) Amount actually spent for housing Fair rental value of housing

Wespath Retirement Plans CRSP 2014+ CRSP UMPIP 2007-2013 CRSP 1982-2006 Ministerial Pension Plan (MPP) Pre-82 Plan (Ministerial Reserve Pension Fund) CRSP: Clergy Retirement Security Program UMPIP: United Methodist Pension Plan

United Methodist Personal Investment Plan Before-tax contributions After-tax contributions Roth contributions (after-tax) Rollovers, including: 401(a) 401(k) 403(b) IRA (traditional) 457 (b) plans may also be rolled over- these are government plans for most employees

Comprehensive Protection Plan (CPP) Death and Disability Benefits

CPP Active and Retiree Death Benefits Benefits Schedule in 2019 for: Active Clergy – serving ¾ time or more $50,000 Active Clergy Spouse $14,272 (20% of DAC) Retired before 1/1/13 Retired after 1/1/13 Retired Clergy 30% of DAC $20,400 Retired Clergy Spouse 20% of DAC $15,300 Retired Clergy Surviving Spouse 15% of DAC $10,200 Retiree benefit changes are in GC petitions

Wespath Services - Benefits Access Find current account information Tools Retirement Readiness Tool Retirement Benefits Projection Investment information Beneficiary designations Resources on finances and retirement

Wespath Services- LifeStage Retirement Income Converts defined contribution account balances into monthly income Adjusts payments annually for inflation Keeps payments within the “payment safety zone” Offers excellent probability of lifetime income, but not a guarantee The LifeStage Investment Management Service that will invest the participant’s account balance according to his or her personal risk tolerance and time horizon to retirement. Participants have the option to change risk tolerance and date of expected retirement

Wespath Services – EY Financial Planning Services No need to enroll – just call 1-800-360-2539

Retiree Medical Program

Retiree Medical Program

Retiree Medical Program

Housing Allowance Exclusion Available to clergy in retirement. Amount to be excluded is the least of: Amount designated as housing allowance – 100% of pension received (per the retiree housing resolution in the Iowa Journal) Amount actually spent for housing Fair rental value of housing

Housing Allowance Exclusion Not applicable to surviving spouses of retired clergy Attach a note to IRS Form-1040 Will receive a 1099-R each January from Wespath Retiree housing resolution will be in the Board of Pension action item of each Iowa Journal

Questions? Joni Mardesen, Dir HR/CBO joni.Mardesen@iaumc.org 515-974-8940