Instructions for completing 2020 Appointed Clergy Compensation Form

The 2020 Appointed Clergy Compensation form is to be completed using the steps below. The approved compensation information reported on the signed form is the compensation that will be effective on January 1, 2020. This data will be entered into the conference clergy compensation database which generates the clergy pension calculation, graduated salary scale, and information used during the appointment making process. The accuracy of the data on this form is of great importance. A copy of these instructions should also be given to clergy.

1. Enter the clergy person’s name.

2. Enter the district where the clergy person is appointed to serve.

3. Compensation will be effective on: 1-1-20 and was approved at a Charge Conference or Mid-Year Change (selectappropriate drop down) held on: enter date of your charge conference.

4. Clergy Status box: Select the appropriate clergy classification.Select percentage of time if not full-time.

5. Enter the information in the Appointment Data table for the current appointment only.GCFA number and name of the church where the clergy is appointed, City where the church is located.Housing Code: Use the drop down arrow to select the appropriate code. P=Parsonage; H=Housing Allowance;N=Neither Parsonage nor Housing AllowanceHousing Allowance: This amount is paid to the clergy for housing purposes in lieu of a parsonage and is excludedfor income tax purposes when reported to the IRS. (Box 14 on your W-2). This amount is not included in theCharge Conference Approved Annual Salary section.Housing Exclusion: This is for tax purposes only. (Box 14 on your W-2) If the clergy is licensed/ordained ANDappointed, they can complete a Housing Resolution form and deduct from federal taxes the amount they state,provided federal government requirements are met for receipts. The Housing Exclusion is not an additionalamount added to compensation but rather part of the compensation designated for housing costs. This does not

affect the amount the church pays the clergyperson. Lay Supply Pastors are not allowed by the IRS to do anon-taxable housing allowance or housing exclusion.

6. Enter the information in the Compensation and other Financial Information table for the current appointmentonly. Enter numbers only, no commas or decimal points, i.e. $60,000 = 60000

a. In the first column, choose the Type of Support from the dropdown menu: Local Church, NCD (New ChurchDevelopment), Equitable Compensation, Other. If entering other, explain where indicated.

2020 Minimum Salary (full time)

Full Connection $45,200

Provisional Members $42,800

Associate Members $41,500

Local Pastor w M.Div. or 5 years COS $40,200

Local Pastor with < 5 years COS $39,200

• Pension: Clergy that are appointed at least half time(50%) are eligible and will be enrolled in the Wespathpension plan.

• No pension credit or contributions when appointed at25% time or less

• Lay supply pastors are not eligible for the clergypension plan.

• Please refer to the minimum salary chart to calculateeligibility for the pension plan.

b. In the second column, enter the Charge Conference Approved Salary (this includes all “cash” given toclergy as salary. Health care supplement is taxable income, but not pension eligible – question 5).

c. In the third column, enter the amount the Church pays for utilities. This should be a dollar amount, unlessthe church pays all of the utilities, in which case enter “All”. (Note: If the church pays a Housing Allowance,any amount for utilities shall be reported as part of the Housing Allowance, not as a separate amount.)

d. In the fourth column, enter the Housing Allowance (amount to be paid to the pastor in lieu of a parsonage,if applicable.)

e. Parsonage Value column should automatically populate 25% of clergy compensation when “P” is chosenfrom Housing Code dropdown in first table. (Do not enter an amount here if P is not selected from HousingCode)

f. Health Care Supplement amount. Please choose the correct amount from the drop down (see below forspecific amounts)

The columns will automatically total. It is not necessary to total the last row unless amounts are hand-written for exceptions (i.e.: Equitable Compensation applied to Health Supplement). Note reason forexception in the “Explanation” box below totals.

7. If clergy is opting out of supplemental compensation for health insurance give explanation.

8. In the space provided, enter the amount budgeted for the Clergy Reimbursable Account (see below for moreinformation) for business expenses.

9. In the space provided, enter the amount budgeted Continuing Education that is NOT included in the aboveReimbursable Account amount.

10. PRINT THE FORM AND OBTAIN THE REQUIRED SIGNATURES AND CLERGY INITIALS. The following signatures mustbe included to show approval: Clergy, Presiding Elder of Charge Conference, Staff/Parish Relations Chair, ChurchTreasurer, and District Superintendent.

Accountable Reimbursement Accounts (ARAs) can be designated for travel, continuing education, books, subscriptions, and/or office supplies, etc. In short, any expense of doing ministry for the church can be included. A formal resolution specifying the amount and purpose of the ARA must be passed by the Charge Conference or the Administrative Council/Board, a copy of which should be on file in the church office. The clergy should also have a copy. An ARA worksheet is attached to help write this resolution.

Payment from the ARA is received by the clergy when he/she presents receipts or other satisfactory documentation for expenses incurred which are covered by the ARA. Unused portions of the ARA are not to be given to the clergy. To do so violates the tax free requirements set by IRS, and makes the entire ARA taxable income. Unused amounts can be held over to the following budget year. ARAs are not compensation. Housing allowance, medical expense, and dependent care expense are not to be included in an ARA. Reimbursement for the cost of travel for professional reasons is not compensation. Travel should be budgeted to cover the best estimate of actual expenses and included in an Accountable Reimbursement Account (ARA). Business travel expenses paid through an ARA plan are not reported on the clergy’s Form W-2, and are thus not taxable. Giving the pastor a monthly dollar amount that does not require documentation of mileageis not allowed. Monthly business travel allowances for which the clergy does not have to account are treated by IRS astaxable income and reported on Form W-2. Amounts so designated will be treated as Salary by the Florida Conference.

Continuing Education should be budgeted as an accountable reimbursement account. It is recommended that it be included in the ARA with other business expenses. It is possible to set up a separate line item for CE. An amount should be set that allows the clergy the opportunity to nurture himself/herself spiritually and sharpen pastoral skills and abilities through seminars and workshops, etc.

To access complete details regarding benefits available for your clergy, go to www.flumc.org Administration Tab, select “Human Resources/Benefits and Retirement”, select “Resources for Clergy.”

Health Care Supplement

As of January 1, 2017 the Conference sponsored health plan for clergy ended. Currently, the church must offer a health insurance plan or increase the pastor’s 2020 annual salary by the amount below:

Single clergy $11,183 Clergy plus one dependent (child or spouse) $14,538Family (3 or more) $17,893

(Clergy Couples will share the healthcare supplement)

This criteria applies to all full-time clergy, including deacons, appointed to a local church, mission, District or Conference staff. Full-time is defined as a base salary at or above 100% of the minimum salary according to the clergy’s Conference relationship (Full Connection, Provisional, Local Pastor, etc.) Participants not eligible for additional compensation in lieu of health insurance are part-time local pastors, supply pastors, retired pastors and those pastors appointed to extension ministries.

It is the clergy member’s choice to accept the insurance plan offered by the church or decline their health plan and request the additional compensation.

There are a few special considerations for clergy couples. Clergy couples, serving separate appointments, will have a choice of coverage offered by the local church(s) they serve or they can accept the appropriate additional compensation to purchase insurance. The shared amount must not total more than the amounts stated above for the family.

Clergy couples who have dependents will be classified as a family for benefit purposes. As such, clergy couples (either two party or families) must make election decisions for the family unit. Depending on the election the couple chooses, it is expected that each church will designate how they will share this expense for the family and document it on the pastor’s compensation forms for both clergy members.

However, there are many situations where clergy couples serve multiple employers. For details on how churches should cooperatively administer these benefits visit our website www.flumc.org/hr. Select the 2017 Health Initiative icon to review the FAQ’s for clergy couples.

The additional salary is taxable income to the clergy member. However, clergy receiving increased compensation can reduce the tax impact of this compensation by enrolling in a high-deductible health plan, setting up a health savings account with their bank, and making contributions to the account which can be deducted on the clergy’s tax return.

If you plan to request the additional compensation in lieu of insurance, the amount of your 2020 annual salary must be correctly listed on the 2020 Appointed Clergy’s Compensation form. You must make an election to either accept the health insurance plan offered by the local church (if available) or request the additional compensation by indicating the amount on the pastor’s compensation form.

If a clergy’s full-time appointment is shared between churches, the District Superintendent must approve the cost-sharing arrangement of the health supplement.

It’s important that church leaders and their clergy discuss this new arrangement and ask for a covenant or agreement as to the purpose of any additional compensation paid in lieu of health insurance. The additional compensation (if elected) is to be used specifically for the purchase of health insurance. While the local church cannot require clergy to show proof of insurance it is expected clergy will exercise sound judgement and secure adequate health insurance for themselves and their families.

Pension The Clergy Retirement Security Program (CRSP) became effective January 1, 2007 for eligible clergy and provides a pension

Clergy Couple or 2-point charge:$5592$7269 $8947

at retirement. The core program consists of separate defined benefit and defined contribution components. The plan was approved May 6 at the 2004 General Conference of The United Methodist Church and is the official pension plan of The United Methodist Church for all eligible clergy.

Details regarding CRSP are available at www.flumc.org click the Administration tab and Human Resources. Additional details regarding CRSP can be obtained from the Wespath website at www.wespath.org.

The amount each church will be billed for CRSP in 2020 will be calculated as: 15% of the clergy’s salary plushousing allowance. For clergy with a parsonage, calculate 25% of the clergy’s salary to get the value of the parsonage for pension purposes. The two added together will be considered as the clergy’s total compensation for calculating pension contribution.

If Housing Allowance: (Salary + Housing Allowance) X 15% = CRSP billing amount If Parsonage: Salary X 1.25 X 15% = CRSP billing amount Note: The additional compensation for the health supplement is not included in the pension calculation.

CRSP: The Clergy Retirement Security Program (CRSP) is a retirement program providing lifetime income and account flexibility designed for those who serve God as clergy in The United Methodist Church. You are eligible to participate in the CRSP if you are a clergy member or local pastor under Episcopal appointment serving at least half-time. Clergy appointments serving one-quarter time are no longer eligible to earn CRSP benefits based on an amendment to the Plan approved at the 2012 General Conference. The CRSP has two components: a Defined Benefit component and a Defined Contribution component.

The Defined Benefit component helps provide financial security with monthly retirement income for life. It’s called a defined benefit plan because the amount of your benefit is defined in advance by a formula that includes the Denominational Average Compensation (DAC) and your years of credited service. As your years of credited service to the Church grows, so will the amount of your monthly benefit.

You cannot outlive or run out of monthly Defined Benefit retirement benefits. They are not tied to how well you save, invest or grow your investments, unlike a Defined Contribution plan or other personal savings plan. You can estimate your monthly benefit using the Wespath pension projection calculator on their website at www.wespath.org through the Online Account Services Information System (OASIS).

The following calculation shows how the monthly benefit is determined: 1.25% x DAC x years of credit in the CRSP plan divided by 12 months. Based on an amendment to the CRSP Plan approved at the 2012 General Conference, the multiplier reduced from 1.25% to 1% for years of service accrued after January 1, 2014. The prior CRSP benefit formula of 1.25% will remain effective for all covered service prior to January 1, 2014.

The Defined Contribution component provides flexibility with a personal account balance that’s established for you. Every month the annual conference contributes 3% of your plan compensation to your Defined Contribution retirement account. Beginning January 1, 2014, 2% of compensation will go into the defined contribution account. To receive the other 1%, the clergy person must contribute matching funds of at least 1% of their total plan compensation into the UMPIP. Otherwise they forfeit the remaining 1%.

The CRSP plan provides the flexibility for you to grow your account balance by choosing from a variety of investment funds. Your Defined Contribution account balance increases or decreases depending on the performance of the investments you choose. When you retire, you will have access to 100% of your Defined Contribution account balance.

Revised 8/14/19

2020 APPOINTED CLERGY COMPENSATION

Please refer to the instruction sheet prior to completing this form. A copy of the instructions should also be given to clergy.

1. Name

2. District3. Compensation will be effective on and was

approved at a __________ on ______________

5. Appointment Data for Current Appointment only. If serving more than one church, list each church

GCFA# Church Name City Housing

Code

Housing

Exclusion*

1

6. Compensation and other Financial Information NUMBERS ONLY: DO NOT USE COMMAS, DECIMAL POINT OR DOLLAR SYMBOL

Type of Support

Charge Conference Approved

Annual Salary *INCLUDES

HOUSING EXCLUSION*

Utilities Housing

Allowance

Parsonage

Value+

Health

Supplement

Total:

7. If Clergy is voluntarily opting out of supplemental compensation for health insurance, please explain below: i.e. VA benefits.

___________________________________________________________________________________________

8. The amount budgeted for Clergy Reimbursable Account business expenses is $

9. The amount budgeted for Clergy Continuing Education is $ and is NOT included in Reimbursable Account above.

By signing below, I agree that a copy of the instructions for completing this form was provided to the clergy person named above and the information contained in this document is accurate to the best of my knowledge.

Pastor ___________________________________________ Date _____________

Church Treasurer ___________________________________________ Date _____________

SPRC Chair ___________________________________________ Date _____________

Presiding Elder ___________________________________________ Date _____________

District Superintendent ___________________________________________ Date _____________

Minimum Salary (full time)

Full Connection $45,200

Provisional Members $42,800

Associate Members $41,500

Local Pastor w M.Div. or 5 years COS $40,200

Local Pastor with < 5 years COS $39,200

Clergy Status: (select one) Full Member (Elder, Deacon) Provisional (Elder, Deacon) AM/OE/OF Local Pastor Lay Supply Pastor NOT ELIGIBLE FOR CLERGY BENEFITS OR TAX EXEMPTIONSCLM (Certified Lay Minister) Retired Pastor

If serving part-time, what percentage?

75% 50% 25% <25% No pension credit or contributions when appointed at

25% or less time. Clergy that are appointed at least half time (50%) are eligible

and will be enrolled in the Wespath pension plan.

*HousingExclusion isnon-taxableportion ofannual salary

+Parsonagevalue is used for Benefit

purposes only, not to be usedfor income tax.

*The Annual Salary total should include Housing Exclusion but not include Health Supplement. Please enter Health Supplementin appropriate column.

HEALTH SUPPLEMENT

IS TAXABLE AND SHOULD BE INCLUDED

ON W-2 AS TAXABLE

EARNINGS.

HOUSING RESOLUTION

Rev._______________________________________________ General Information: To be eligible, the clergy person must be BOTH: (1) ordained, licensed or commissioned by the United Methodist Church, AND (2) appointed by the Bishop to the position at this church or salary paying unit. Clergy can exclude a portion of their income designated by their church or salary paying unit as a “Housing Allowance” under Section 107 of the Internal Revenue Code. To be excludible, amounts designated as a housing allowance must be used to provide housing and must not exceed the fair rental market value of the home. The housing allowance is an exclusion from income, not a deduction. This means it is not reported as part of the gross income for federal income tax purposes but is reported for social security tax and Medicare tax purposes. The cash paid for housing purposes along with the fair rental value of the parsonage (if provided) must be included in as part of the pastor’s gross income for self-employment tax. Conference Finance and Administration (CF&A) of the Florida Conference of the United Methodist Church for 2019, after considering the statement of the above named clergy who meets the above qualifications (1) and (2), setting forth the amount s/he estimates s/he will spend to provide a home for himself/herself and family during the year 2020, on a motion duly made and seconded, adopt the following resolution: Whereas Section 107 of the Internal Revenue Service code of 1986 had provided that a Minister of the Gospel may exclude from gross income the rental value of a home provided and any allowance to provide a home, therefore be it resolved:

Complete Part A or Part B

PART A – when a parsonage is provided to the clergy Church Parsonage Address:______________________________________________________________

1. The clergy person named above shall have the rent-free use of the home located at the location above for the year 2020 and for every year thereafter so long as s/he is Pastor of this United Methodist Church unless otherwise provided.

2. In addition to the parsonage, the pastor requests that some of his/her income be designated for housing purposes and will be non-taxable income. The clergy person named above requests a housing exclusion of:

$ ______________________ for the calendar year 2020. (This is what the clergy person estimates s/he will spend on furniture and other household items, and s/he will retain appropriate documentation for the Internal Revenue Service to substantiate these costs.) The housing exclusion will be paid as the non-taxable portion of the clergy’s annual salary. This amount is not additional income to the taxable base salary.

PART B – when cash instead of a parsonage is provided to the clergy

1. The above-named clergy person shall receive an annual housing allowance amount of $ ______________________ (income/cash in lieu of parsonage) for housing in the calendar year 2020 and all future years unless otherwise provided.

2. If, in addition to the housing allowance (above), the clergy person requests that the following amount of his/her income be designated for housing purposes and will be non-taxable income.

$ __________ ____for the calendar year 2020. (This is what the clergy estimates that s/he will spend on furniture and other household items, and s/he will retain appropriate documentation for the Internal Revenue Service to substantiate the costs.) The housing exclusion will be paid as the non-taxable portion of the clergy’s salary. This amount is not additional income to the taxable base salary.

______________________________ ______ ____________________________ ________ Signature: Finance Chair Date Clergyperson Signature Date or Council/Board Chair

ACCOUNTABLE REIMBURSEMENT POLICY

The _____________ United Methodist Church (“Church”) recognizes that certain expenses of ministry paid by the pastor/staff person are part of the ordinary and necessary costs of ministry in this Church/charge. Accordingly, we hereby establish an accountable reimbursement policy to defray them directly. The reimbursement account shall be an annual line item in the church budget. It shall be in addition to the pastorʼs annual salary and housing. The reimbursement account for shall be $_______________. (Amount may be determined by using the Accountable Reimbursement Worksheet.)

The following requirements for the policy are binding upon the Church and upon ____________________________, its pastor.

Accordingly, the Church hereby establishes an accountable reimbursement policy, pursuant to I.R.S. regulations and upon the following terms and conditions: 1. The pastor/staff person shall be reimbursed from the reimbursement account for his/

her ordinary, necessary and reasonable business expenses incurred in the conduct of the ministry for and on behalf of the Church. The following expenses are budgeted in this accountable reimbursement policy, as suggested for the employment needs of the pastor/staff person. (See Accountable Reimbursement Policy Worksheet)

2. The Committee on SPR Chairperson, Church payroll person or treasurer, (as designated by the Church) must be given an adequate accounting of each expense, including but not limited to a statement of expense, account book diary, or other similar record showing the amount, date, place, business purpose, and business relationship involved. Such documentation shall include receipts for all items of $25 or more. Appropriate documents, cash receipts, canceled checks, credit card sales slips, and contemporaneous records for those non-receipt expenses less than$25.00 must be attached to each expense report. A log of total miles per day and enumeration of their general purpose shall suffice to substantiate automobile mileage, but under no circumstances will commuting mileage between the pastorʼs home and Church office be reimbursed. Copies of the documentary evidence and expense report shall be retained by both the pastor/staff person and the Church. The Committee on SPR Chairperson (or Treasurer) shall be responsible for approving the expense. The Committee on SPR Chairperson (or Treasurer) shall exercise his/her discretion regarding the adequacy of the substantiation and the appropriateness of any reimbursement. Questions arising in these areas will be resolved by the SPR Chairpersonʼs or Treasurerʼs decision, subject to the review and approval of the Committee on SPR/Committee on Finance.

3. It is the intention of this policy that reimbursements will be paid after the expense has been incurred by the pastor/staff person. However, should circumstances require payment of an advance for any particular anticipated expense, the pastor/staff person must account for the expense and return any excess reimbursement within 30 days of the issuance of the advance. Any excess advance must be returned to the Church before any additional advances are provided to the pastor/staff person.

Church Name______________________________

Pastor Name_______________________________

4. Budgeted amounts not spent must not be paid as a salary bonus or other personalcompensation. If such payments are made, the entire amount of the accountablereimbursement policy (Item 11) will be taxable income to the pastor/staff person.The Church will be required by law to report that amount as part of the pastorʼs/staffpersonʼs compensation. Disposition of any unspent balances remains at thediscretion of the Committee on Finance and the Administrative Council or Board inbuilding the budget for the next Church year.

5. It is understood by the various parties that all elements of this resolution must becarefully followed to prevent the Church from being required by regulation to list totalpayments for the following items on I.R.S. information reports (W-2/1099-MISC) as“includable compensation.” The primary responsibility of expense reporting is for thepastor/staff person to the Committee on SPR Chairperson, church payroll personand/or Treasurer.

Adopted on ________________________, by the Administrative Council/Board

(Charge Conference) of the ______________________________ United Methodist Church.

______________________________ _____________________________ Chair, Administrative Council/Board Committee SPR Chairperson/Church Treasurer

______________________________ _____________________________ Pastor/Staff Person Secretary

This is a sample of an Accountable Reimbursement policy. The specifics of each policy should be reviewed by each church and minister considering their specific concerns. If legal or tax advice is required, the services of a competent professional advisor should be sought.

ACCOUNTABLE REIMBURSEMENT POLICY WORKSHEET

The following are suggested items for inclusion in this Accountable Reimbursement Policy. It is only the bottom total under “11” which is put in the policy itself. This worksheet is for budgeting purposes and it is permissible for the reimbursed individual to shift items from one area to another.

1. Automobile (standard federal mileage rate), parking and tolls $___________

2. Office supplies and postage $___________

3. Office equipment, computer and software $___________

4. Books, subscriptions and periodicals, such as professional journals $___________

5. Professional dues $___________

6. Religious materials, vestments and business gifts $___________

7. Continuing education and seminars (as approved by the SPR Comm.and/or the Comm. on Finance) $___________

8. Entertainment required for Church business $___________

9. Travel fares, lodging and meals while on business for the Church $___________

10. And other such business expenses, if any (as approved by the Comm.on Staff Parish Relations and/or Comm. on Finance) $___________

11. TOTAL $___________

* Total in this column must be the same as total reimbursement amount set forth in the first paragraph ofthe Policy. Administrative Council/Board action is required for an increase to item “11” (total). To allow forthe pastor/staff personʼs spending discretion, only item ”11” is necessary to be reported as a line item inthe Charge Conference approved budget and in the policy document. Circumstances dictate that theabove expenses will vary from church to church and from time to time. Nonetheless, expenses assumedby the pastor/staff person in excess of Total are not excludable from reported compensation. Expenses inexcess of reimbursement may or may not be deductible, from taxable income on the pastor/staff personʼstax return. Rev 07/30/09