So…why do part-time pastor’s churches get billed for 2 different UMPIP amounts?
One is for the church’s contribution to the pastor’s pension – billed by the Conference Finance Office at 6% of pastor’s Plan Compensation. And, the second is for the pastor’s personal contribution to their pension through UMPIP.
ALL pastors, full and part-time make personal contributions to their pension through UMPIP.
These contributions are to be handled as a payroll deduction, based on what the pastor has chosen. They may choose:
If a percentage amount, such as the 2% default, is chosen, then the percentage is based on Plan Compensation.
- A percentage of 2% or more of their Plan Compensation or a
- Flat Dollar Amount ($$) equal to at least 1-2% of Plan Compensation
If the pastor chooses a specific dollar amount, such as $200/month, that is the amount of the payroll deduction. Please ask your pastor what they have chosen for their personal contribution amount to pension through UMPIP
Personal contributions may be designated as:
- Before Tax – meaning the entire contribution or payroll deduction is tax-deductible now and should be subtracted from the pastor’s taxable income on Line 1 of their W-2
- ROTH contributions – meaning the entire payroll deduction is included in the pastor’s taxable income on Line 1 of their W-2
After Tax – meaning the entire payroll deduction is included in the pastor’s taxable income on Line 1 of their W-2