The Conference has received multiple questions from churches regarding the CalSavers Retirement Savings Program. We thought it would be helpful to provide a brief summary of CalSavers and what this Program means to churches.
Checking in with our Chancellor, she indicates CalSavers was established by the State of California to provide employees a way to save for retirement through automatic payroll deduction. Employers are generally required by law to register for CalSavers if they do not sponsor a retirement plan and have five (5) or more employees.
However, religious organizations are exempt from this Program under state law and are not required to participate. Religious organizations are also exempt from the Program’s registration requirements. Therefore, no action is required from churches regarding CalSavers.
Good News: United Methodist churches have other options – they can help employees save for retirement by participating in the United Methodist Personal Investment Plan (UMPIP). UMPIP provides a retirement savings plan for eligible clergy and employees of The United Methodist Church and affiliated organizations. In fact, the Book of Discipline recommends the church council provide “100 percent vested pension benefits of at least 3 percent of compensation for lay employees of the local church who work at least 1040 hours per year, are at least 21 years of age, and have at least one year of permanent service.” (¶ 258.2.g.12). UMPIP permits employer contributions, CalSavers does not. Churches with limited resources can provide employees the option to participate in UMPIP with employee-only pre-tax or after-tax contributions. All a church needs to do is sponsor the plan and select the plan features it wants to offer to meet the needs of both the church and its employees.
UMPIP helps your employees achieve and maintain financial health after they complete their service to the Church, and participants can rest assured contributions are invested in accordance with the Social Principles of the UMC.
To set up an adoption agreement for your lay staff, follow the steps on this form: Wespath Adoption Agreement for Local Church/Salary-Paying Unit Sponsorship of Lay Employees
For more information about UMPIP, click here.
The Cal-Pac HR/Pensions office is also available for questions about the adoption agreement process at 626.568.7318.