Retiring with Financial Dignity

When Alabama Baptists talk about goals, it is usually about baptisms, church starts, Sunday School attendance or missions giving. These are the benchmarks most people use when evaluating the effectiveness of service in the Lord’s kingdom.

Alabama Baptists have another goal, one that is not so widely publicized. That goal relates to ministers and church employees coming to the end of a lifetime of Christian service and being able to retire with financial dignity.

For too long, men and women have given themselves to serving God only to end their days living on the edge of poverty. Love of God and love of God’s people kept them in places unable to help them prepare for retirement. When active ministry ceased, these men and women were ill-prepared financially.

Alabama Baptists have aggressively addressed this sad plight. Through the state Baptist convention, Baptist ministers and church employees are offered protection benefits and retirement assistance as incentives to properly prepare for retirement.

Protection benefits include disability insurance up to $500 per month and a survivor protection benefit, a life insurance policy with a maximum benefit of $100,000 decreasing from age 35. The retirement benefit is a $17.50 contribution to one’s retirement account if the minister or church employee contributes as much as $105 per month toward retirement. The retirement contribution is immediately vested in the minister’s account which gives that person a 16.7 percent return on the $105 monthly contribution.

Alabama is one of the more generous state conventions at this point. Some states have a three-year waiting period before one is eligible for the retirement matching contribution. Not Alabama. The goal of Alabama Baptists is to provide individuals and churches with as much protection as possible as quickly as possible.

Despite this generous program, Alabama Baptists are making little headway in preparing ministers and church employees for retirement. Currently, Alabama has 1,648 people receiving benefits through the Southern Baptist Convention (SBC) Annuity Board. Of that number, 564 receive $200 a month or less. That is slightly more than one-third of the total.

It is hard to live with financial dignity when one’s retirement income is so low. That is one reason one out of 10 of the state’s annuitants receives supplemental assistance through a special program called Adopt an Annuitant. This program provides an extra $75 per month for persons in dire circumstances.

The reason for the poor showing is that Alabama Baptist churches are slow in offering retirement benefits to their ministers and church employees. Out of Alabama’s 3,171 cooperating Baptist churches, only 1,316 offer retirement programs through the SBC Annuity Board. That is slightly less than 42 percent.

Alabama is dead last among old-line SBC states in the percentage of churches participating in the Annuity Board program. The only singly aligned convention with a lower percentage of churches enrolled in the annuity program is the Dakotas.

By contrast, Florida has 69 percent of its churches participating in the annuity program. Mississippi has 55 percent; Georgia, 53 percent; Tennessee, 49 percent. Attributing Alabama’s low percentage to the large number of small membership churches does not hold up. These neighboring states have a similar percentage of small membership churches. Yet, churches in these states recognize the responsibility of helping their pastor and other church employees prepare for retirement.

Responsibility rests with the churches. That is the starting point. Every Alabama Baptist church should provide retirement benefits for the pastor and other church employees. A good rule of thumb is for the church to contribute a minimum equal to 10 percent of one’s salary and housing allowance to retirement.  Individuals may want to contribute beyond that level.

If a church refuses to provide retirement assistance, a minister or church employee may still participate in retirement programs through special arrangements.

The SBC Annuity Board provides a wide array of choices for retirement accounts. These range from low risk, fixed income investments to international equities. Costs are minimal. Retirement options are many. They range from single-sum distributions to life annuities. Ministers interested in maintaining a housing allowance after retirement will find it easier to accomplish through the SBC Annuity Board than through other pension plans.

The reasons for churches to furnish retirement assistance for the pastor and other church employees are overwhelming. The reasons to provide that protection through the SBC Annuity Board are just as convincing. Every Alabama Baptist minister and church employee deserves to come to the end of a career dedicated to serving God and serving God’s people knowing their retirement years will not be spent in poverty.

Derrell Crimm of the State Board of Missions staff in Montgomery assists churches with their retirement planning needs. He may be reached at 1-800-264-1225.