About Church Retirement Plans

The Church Alliance member organizations maintain church retirement plans at the denominational level for their congregations and affiliated organizations.

Retirement isn’t always top of mind for pastors, teachers, and other faith-based professionals as they go about their work making the world a better place. Most individuals who choose faith-based careers know they may not earn as much as they would in the corporate world. That’s why they need reliable, low-cost options to help them plan for retirement.

Denominations are best positioned to tailor retirement solutions to the reality of those in service to their faith. The benefits of Church 403(b)(9) Plans include

Plan investment options are cost-effective, as they are often developed by not-for-profit benefits boards or provided by large investment management companies.
Denominational benefits boards offer investment alternatives beyond annuity contracts and mutual funds, such as pooled investments in stocks, bonds, and other prudent options that benefit from lower fees and economies of scale.
Church plans are constitutionally permitted to consider social purpose values and faith-based screens in making their investments. Assets may be invested in accordance with the denomination’s faith and beliefs, with plans often screening funds to eliminate investments in companies engaging in certain types of activities, such as gambling and pornography.

Though some of these plans are governed by Internal Revenue Code sections 401(a) or 403(b)(7), most church retirement plans are governed by section 403(b)(9).

Retirement income accounts under section 403(b)(9), often referred to as “church 403(b)(9) plans,” offer robust savings options for clergy and lay workers of churches, synagogues, and church-related organizations.
These tax-advantaged workplace retirement plans may accept employer and employee contributions during an employee’s working life.
For employees with little or no savings near retirement, ministries may be able to use the special five-year post-severance contribution feature to continue contributions even after retirement.
In addition to being administered by not-for-profit entities and subject to strict legal and regulatory requirements, it is important to note that a deep sense of mission is central to church 403(b)(9) plans. Taken together, these distinctions help church 403(b)(9) plans offer secure retirement options for many clergy and lay workers.