A church plan is a pension plan that serves the employees of an organization that is either a church or is associated with (and shares common religious bonds with) churches or associations of churches.
 

Church plans can offer retirement income accounts, commingle assets for investment purposes and provide annuities without paying an insurance company.

Church plans like the Retirement Plan provide the annuities themselves at a better rate and lower cost. This is one of the primary benefits of a church plan, and provides a much better benefit to employees of YMCAs.
 

On December 21, 2004, President George W. Bush signed a bill into law which clarified that plans of the YMCA Retirement Fund are church plans (read more about our legislative success).
 

The Retirement Plan is a church plan under the tax code, which was confirmed by an Act of Congress. It only serves the employees of the YMCA, an organization that is associated with, and shares common religious bonds with churches and associations of churches. The common religious bonds the YMCA shares with Christian churches are strong and varied. These bonds include:

• The United Church of Christ, the United Methodist Church, the Presbyterian Church (U.S.A.) and many other denominations recognize service to the YMCA as a qualified ministry.
• The World Alliance of YMCAs was a founding member of the World Council of Churches. The YMCA is a member of InterAction, a multi-denominational international religious social services agency, through which it works with the Baptist World Alliance, Latter-Day Saints Charities, the United Methodist Committee on Relief and many other churches.
• YMCAs are listed in the World Council of Churches directory of Church and Ecumenical Organizations.
• The directors of local YMCAs are often members of the local Council of Churches and/or members of local ministerial organizations.
• The YMCA is listed in the Directory of Church World Service (a ministry of the National Council of Churches of Christ in the U.S.A.)
• The YMCA is part of the Church Benefits Association (formerly known as the Church Pensions Conference).

 

The Employee Retirement Income Security Act of 1974, as amended (ERISA) was passed to protect employee pensions.

It was passed in response to some spectacular company failures in the 1960's, most notably the Studebaker automobile company. They had failed to put aside sufficient money to pay pensions if they went out of business and, when they did, all their retirees lost their pensions.

This federal law requires certain standards for participation, enrollment, vesting and benefit payments. It also requires that the people who manage a pension plan (fiduciaries) meet certain standards.

The law generally classifies pension plans into three groups: company plans, government plans and church plans. There are different rules for each of these. It also classifies plans as defined benefit (formula) or defined contribution (individual account). Plans created before ERISA was enacted may not fall clearly into one of these categories.
 

Yes. Although church plans are not subject to ERISA, the YMCA Retirement Plan elected to become subject to ERISA in connection with the 2004 legislation confirming its status as a church plan. However, the legislation does not prevent the YMCA Retirement Fund from commingling assets or offering a lump sum distribution rather than an annuity to participants who have not attained age 55.