Pension Calculations (CRSP, CPP and UMPIP)
PENSIONS – all pension contributions (church and pastor’s personal) to CRSP, UMPIP, and CPP are based on the Wespath definition as Plan Compensation. For a pdf file click here.
How to calculate pension amounts:
Plan Compensation = Cash Salary + Housing
- Does your pastor live in a parsonage? If YES, then Plan Compensation = Cash Salary x 1.25 for parsonage
- Does your pastor have a housing allowance paid in addition to cash salary to provide their own home? If YES, then Plan Compensation = Cash Salary + Housing Allowance
- If your pastor is appointed 50% of less and has neither a parsonage or a housing allowance provided, then Plan Compensation = Cash Salary only.
All pastors are automatically enrolled in making a 2% personal contribution to their pension plan through the UMPIP (United Methodist Personal Investment Plan) – unless they choose another amount (percentage or dollar amount.) If no intentional choice is made by the participant, they are automatically enrolled in a 2% personal contribution to UMPIP.
To calculate a percentage contribution to UMPIP, multiply the pastor’s Plan Compensation x % personal contribution and divide by 12 to get an estimate of the monthly payments you will be required to make to Wespath directly. WESPATH bills the church for the pastor’s personal contributions to UMPIP, not the Finance Office of the annual conference.
Example: Cash salary of $50,000 with parsonage = $50,000 x 1.25 = $62,500 PLAN COMPENSATION
Personal Contribution to UMPIP of 2% of PLAN COMPENSATION = $62,500 X 2% = $1,250/year or $104.16/month
Note: The exact amount will be billed by Wespath directly to the Church. Personal contributions to UMPIP are NOT included in the monthly billing statement from the Conference Finance Office.
- Is your pastor appointed full-time or ¾ time? If yes, then your Pension-related billing will be calculated as follows – note that this calculation was included in your Pastoral Compensation Form approved at Charge Conference
- Parsonage Example: $50,000 salary x 1.25 (parsonage) = $62,500 Plan Compensation
CRSP (pension) payment = $62,500 Plan Compensation x 12% = $7500/year or $625/month
CPP (death and disability coverage) = $62,500 Plan Compensation x 2.4% = $1500/year or $125/month
Housing Allowance Example: $50,000 salary + $24,000 Housing Allowance = $74,000 Plan Compensation
CRSP (pension) payment = $74,000 Plan Compensation x 12% = $8800/year or $740/month
CPP (death and disability coverage) = $74,000 Plan Compensation x 2.4% = $1776/year or $148/month
- Is your pastor appointed 50% or 25%? If yes, then your church makes a 6% contribution to the pastor’s pension through the UMPIP plan.
UMPIP is the same place the pastor’s personal contributions are made. So, you will receive a bill from the Finance Office for an amount to be paid to UMPIP and Wespath will send you a bill for the pastor’s personal contribution to pension through UMPIP.
The church contribution is 6% of PLAN COMPENSATION.
Example: If the pastor’s salary is $20,000 and there is no parsonage and no housing allowance provided for the pastor, then the church’s contribution to pension through UMPIP is $20,000 x .06 = $1200/year or $100/month church contribution to pastor’s pension through UMPIP.
Parsonage Example: Salary of $20,000 x 1.25 = $25,000 PLAN COMPENSATION x 6% = $1500/year or $125/month church contribution to pastor’s pension through UMPIP
Housing Allowance Example (housing allowance in addition to salary):
Salary of $20,000 + Housing Allowance of $10,000 = PLAN COMPENSATION of $30,000 x 6% = $1,800/year or $150/month church contribution to pastor’s pension through UMPIP