The facts about church pension plans
Almost all private retirement plans are required to comply with federal pension and tax laws. There is only one major exception: Church pension plans. Employees covered by church pension plans are denied the basic protections provided to virtually all other private-sector workers who participate in pension plans.
- Do not have to give employees information about their benefits or about plan investments.
- Are not required to pay benefits fairly.
- Are not required to adequately fund the pension plan.
- Are not covered by the federal pension insurance program that guarantees most private pension benefits.
Church pension plans can choose to be covered by federal pension laws but most choose not to be. When a church plan opts out of federal pension protections, the rights of employees and retirees are determined by state laws. State laws do not provide the same protections as federal law. However, they generally require that the trustees who run church plans must act wisely, carefully, and only in the interests of plan participants. Individuals who have been improperly denied benefits may be able to ask a state court for a jury trial and also for “compensatory” and “punitive” damages that are not available under federal laws.
Learn more about church plans by reading these fact sheets:
- What is a “church pension plan”?
- Why does it matter if a pension plan is a church plan?
- Why are church pension plans not covered by federal laws?
- What are the types of church pension plans?
- The legislative history of church pension plans
- What can you do to protect employees in church pension plans?
- Workers covered by church pension plans tell their stories
Looking for help with your retirement plan?
If you have a problem with your retirement plan, free help may be available from the U.S. Administration on Aging's network of Pension Counseling and Information Projects. Find help now.
PensionHelp America connects people who need help with their pension, 401(k), and other retirement plans with the pension counseling projects, legal services providers, and government agencies that can help answer their questions. Visit www.pensionhelp.org.
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Retirement USA is a national initiative that is working for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. Visit the website.
Did You Know?
A 401(k) plan is a retirement savings plan in which the benefit is based on contributions to an individual account and the investment return on those contributions. Typically, employees make contributions to the plan and, in many cases, employers match the employees' contributions. These plans are called defined contribution plans. In most 401(k) and other retirement savings plans, the employee is responsible for choosing among the investments offered by the plan. Other types of retirement savings plans are 403(b) and 457 plans.