Redeemer Presbyterian Church is a 1,200-member congregation with relatively strong
resources. The session wants to provide a benefits package through the Board of Pensions
for employees. The Church Consultant meets with
the Business Manager and chairperson of the Personnel Committee, and explains that employees who are not ministers of the Word and Sacrament must be enrolled through menu options and that the employer must decide who will
receive benefits (by employee classifications) and which benefits will be offered. The session of
Redeemer Church decides to offer the following benefits to all full-time employees:
- preferred provider organization (PPO) medical coverage
- Employer will pay 100% of Member-only cost.
- Employer will pay 50% of Member + Spouse and/or Member + Family coverage; employee pays 50%.
- The employee elects the medical coverage needed.
- pension; employer pays dues at 11% of effective salary
- death and disability; employer pays dues at 1% of effective salary
Jessica is a full-time Christian educator at Redeemer. She is 38 years
old, married, and has two children, ages 12 and 15. She earns a $30,000
salary. Jessica’s spouse, Ruslan, is also employed. His employer provides
medical coverage for the employee only, at no cost to the employee.
Coverage of other family members is available, but the full cost of
coverage is passed on to the employee.
After discussing options with Ruslan, Jessica elects medical coverage through Redeemer for
herself and the children. Annual cost for medical coverage for Member + Children is $14,000 —
$8,000 for Jessica; $6,000 for the children (numbers are illustrative only; rates are established
according to ages and geographic location). The employer pays $11,000 and member pays
$3,000. Redeemer enrolls her in the defined benefit pension and death and disability. At her
salary, dues for the pension are $3,300; dues for death and disability are $300.
What would you identify as the benefits of this approach?
The Board's perspective
- There is flexibility to meet the medical coverage needs of the employee. Jessica
and her husband review their options and the associated costs. They utilize the medical benefit available to her spouse through his employer. Through Redeemer Presbyterian Church, Jessica elects medical coverage for herself, at no cost to the employee, and for her children, at half the cost to the employee. For a $3,000 employee contribution, she secures medical coverage for herself and her children.
- A pension is provided. It is accrued at the national median for other employees ($42,600), benefiting Jessica with additional credits on $12,600 at no cost to her or Redeemer Presbyterian.* The subsidy to the church is $1,386 (the cost of credits at the median), a reflection of community nature of the defined benefit pension.
- Death and disability coverage is provided.
- Access to supplemental death benefits coverage is provided.
- Access to the Retirement Savings Plan of the Presbyterian Church (U.S.A.) is provided.
- Access to educational programs (other than CREDO, which is only for ministers meeting criteria) is provided.
- Access to certain Assistance Programs is provided — Income and Housing Supplements, if she’s in the Pension Plan 20 years; Shared and Emergency Grants;
Adoption Assistance since her children are in medical; and Transition-to-College
* $42,600 - $30,000 = $12,600 x 11% = $1,386 subsidy