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Which is the best pension plan to consider?

Participation in either pension plan, the DB or DC, would be beneficial to your pastor and/or other staff members, as both plans provide an excellent means of saving towards retirement.

COMMON FEATURES OF BOTH PENSION PLANS

MEMBERSHIP - Open to all full-time credential holders and employees of local affiliated assemblies and ministries, and to part-time persons in the same categories under certain conditions.

PORTABILITY - Contributions can continue if a DB member moves to another ministry position with a participating DB pension plan employer. Similarly, contributions can continue if a DC member moves to another ministry position with a participating DC pension plan employer.

SUPPORT PAOC MISSION - Through investments in church/ministry mortgages. (For the DC plan, this will take place once the DC portfolio achieves critical size threshold.)

COMPARING THE DIFFERENCES

DB PENSION DC PENSION
Administered by PAOC. Administered by BMA Benefits, yet overseen by Board of Directors.
Established at the 1938 General Conference. Newly launched in May 2020.
Predictable retirement income, guaranteed for the life of the member, that is not subject to market fluctuations. Retirement income based on amount invested and the investment interest during the years the funds were invested.
An option, at retirement, to make provision for a lifetime spousal pension for an eligible spouse. Any remaining funds at the death of the member go to their designated beneficiary or estate as an inheritance.
Minimum percentages of contribution start at a combined (member + employer) 5%, increasing to a combined 10% in year 5. Minimum percentage of contribution remains at a combined (member + employer) 5% indefinitely.
Maximum percentage of contribution at any time is a combined 20% Maximum percentage of contribution at any time is 18%
Investments made at the direction of the Board of Trustees. The member invests their RRSP contributions in a well-diversified fund menu. Employer contributions are invested at the direction of the Investment Committee.
Transfers in are not permitted. Transfers in are permitted.
Ancillary Benefits include a disability benefit, if needed, and early or postponed retirement options. No ancillary benefits, but no-cost professional financial advice available from BMA Benefits to members and their families.
Under DB’s new status as a Specified Ontario Multi-Employer Pension Plan, likelihood has been significantly reduced that employers (e.g. churches) will be required to make up any shortfall in funding through special payments. Employers (e.g. churches) will not be required to fund shortfalls in funding, provided their contributions are current. It is up to the member to ensure that they will have sufficient funds for retirement.

HOW DOES THE EMPLOYER PARTICIPATE?

Both pension plans (DB & DC) require employer participation. The agreed-upon percentage (within the minimum and maximum allowable) is deducted from the employee’s pay and is considered a tax deduction. The employer matches the employee contribution and then remits the total amount to either this office (DB plan) or to Canada Life (Trustee of DC plan) each month.

CAN PENSION PLAN PARTICIPATION REALLY BE AN OPTION FOR A SMALL CHURCH?

Absolutely! While we are sensitive that some Church Boards may feel that pension plan participation is simply not a financially viable option, it is important to note that even participation at the minimum allowable percentage of contribution with either pension plan can grow over the years into an eventual pension that will be a great blessing to a pastor or staff member, and is a way to show your appreciation for their years of service with you.

REQUEST A ZOOM MEETING WITH A DB PENSION PLAN REPRESENTATIVE

We would love to connect with you! If you would like someone to be available to answer pension plan questions at a future Board meeting, we would be happy to arrange a mutually convenient time for an informal “Zoom” chat.


WANT MORE INFORMATION?

Further Information about both the DB & DC plans:

For the DB pension plan:

pension-fund

2450 Milltower Court, Mississauga, ON L5N 5Z6
P: 905-542-7400; Toll Free: 1-866-877-8481
Email: pensioninfo@paoc.org

For the DC pension plan:

blue and green shield logo for BMA benefits division

BMA Benefits
www.bmabenefits.com/paoc
P: 306-986-1357; Toll Free: 1-844-242-9642
Email: admin@bmabenefits.com