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A church group that administers pensions and other benefits for clergy considered moving from DB to DC but didn’t because it determined the shift would be irresponsible, writes Rebecca Moore for Plan Sponsor.
The Church Pension Group collects contributions from Episcopal clergy to fund pension and other benefits. In a recent report it says “the primary motivation of most corporations in eliminating defined benefit plans has been to improve both the level and predictability of their quarterly earnings by eliminating the accounting expense of such plans; it has not been to provide a superior benefit to their employees,” reports Moore.
The group’s analysis shows that DB provides more value for the same contribution level as DC.
“Whether the church contributes 12 per cent or 18 per cent or 24 per cent, the clergy would fare better financially with a DB plan,” the report states.
“So, at the same cost to parishes, the DB plan provides a higher benefit to clergy than would a DC plan,” writes Moore.
More: DB is the principal retirement vehicle for most clergy.

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions

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