• Denominational Average Compensation for 2013
• CPP Premium Holiday Ends in December
• 2013 Comprehensive Protection Plan Benefit Amounts
• Limits Increase for 2013 Retirement Contributions
• Help New Employees Focus on the Future

Denominational Average Compensation for 2013

The Denominational Average Compensation (DAC) for 2013 is $63,867

CPP Premium Holiday Ends in December

On December 31, 2012, the Comprehensive Protection Plan (CPP) premium holiday—which began January 1, 2010 for most plan sponsors—will come to an end. Contributions will be due starting in January 2013. CPP provides death, long-term disability and other welfare benefits for eligible clergy of The United Methodist Church and their families.

2013 Comprehensive Protection Plan Benefit Amounts

The 2013 Benefits Amounts for the Comprehensive Protection Plan are now available. Please note that General Conference 2012 approved several changes to CPP effective January 1, 2013, including a change to the retiree death benefit. For clergy retiring on or after January 1, 2013, the death benefit will be a fixed dollar amount instead of a percentage of the Denominational Average Compensation (DAC).

Limits Increase for 2013 Retirement Contributions

The Internal Revenue Service (IRS) establishes limits for retirement plan contributions each year. The following are the limits for 2013.

Code Section 402(g) Limits

• Participant before-tax contributions are limited to $17,500 (increased from $17,000 in 2012).
• Participants with 15 or more years of service with a “qualified organization” may be eligible to contribute up to an additional $3,000 per year, subject to a $15,000 lifetime limit and other rules. Participants can contact the General Board for help determining if they are eligible to make these additional contributions.
• Participants who will be age 50 or older by December 31, 2013 may make “catch-up contributions” of up to an additional $5,500 in 2013.

Participants with 15 or more years of service with a qualified organization and who have reached age 50 must use the “15 years of service” limit first.

Code Section 415(c) Limit
Total annual before-tax and after-tax participant contributions plus plan sponsor contributions to all retirement plans cannot exceed the lesser of a participant’s compensation or $51,000 in 2013. Note: Housing is excluded from compensation for this purpose.

Code Section 401(a)(17) Limit
The maximum participant compensation that can be considered for retirement contribution calculations is $255,000. Note: Churches and qualified church-controlled organizations are exempt.

Help New Employees Focus on the Future

In the first days at a new job most people fill out a staggering number of forms—signing up for health plans, insurance, tax withholding, direct deposit of their paychecks and more. While making sure they get paid today is vital, making sure they receive benefit payments during retirement is also very important.

From the big picture to the practical applications, we can support your efforts to increase retirement plan enrollment and participation. Consider the following suggestions to increase the number of employees contributing to UMPIP:

• Explain the advantages—You can make a difference in the financial well-being of your new employees by highlighting the UMPIP materials and suggesting that he or she enrolls in the plan and begins saving. The savings brochure illustrates the advantages of starting early through graphs and charts that show the value of investing over time. Don’t forget to tell your employees about the opportunity for matching contributions if you offer them. Also, be sure to let them know about the financial planning services available through Ernst & Young at no charge to participants.
• Follow up with new employees—One of the primary reasons employees wait until late in their careers to contribute to a retirement plan is that they simply never got around to enrolling. If new employees say they are considering UMPIP, follow up a week later to see what they’ve decided and to help them get started.
• Remind all employees—It’s a good idea to ask employees if they want to start or increase contributions to UMPIP at least once a year—for instance, during your formal performance review and salary increase process. Employees often find it easier to increase contributions when they receive a raise.

If an employee would like to change his or her contribution percentage or amount, please have the employee complete the Before-Tax and After-Tax Contributions Agreement form. This and other forms needed to administer the Retirement Plan for General Agencies (RPGA) and the United Methodist Personal Investment Plan (UMPIP) can also be obtained in the forms section in Benefits Access.

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