Indiana Yearly Meeting
Pastor’s Information Packet
2015-2016
Directory:
o Staff contact information at Indiana Yearly Meeting (IYM)……………………………..……3
o Pastoral agreement……………………………………………………………………….…..4-6
o Pastoral compensation guidelines ………………………………………………....……….7-9
o Parsonage guidelines………………………………………………………………………….10
o Pastors and Recorded Ministers Report………………………………………………....11-12
o Continuing Education grant information & application form……….………………...…13-14
o Lacy Scholarship Loan / Grant Fund information & application form…………..……..15-18
o Evangelism & Outreach Growth grant information …………………………………………19
o USFWI John Sarrin Scholarship Fund information ……………………………………..….20
o Disbursing Board Assistance for Retired IYM Pastors information/application……21-22
o Adult Missions Scholarships information and applications ……………………………..…23
o Youth Missions Scholarships information and applications …………………………..…24
o Resources for Pastors……………………………………………………………………..25-26
o Process for Recording……………………………………………………………………..27-29
Indiana Yearly Meeting of Friends
4715 North Wheeling Avenue
Muncie, IN 47304-1222
765-284-6900
800-292-5238
765-284-8925 (FAX)
HOURS:
8:30 am - 4:30 pm
Monday-Thursday
STAFF:
Doug Shoemaker, General Superintendent:
Pat Byers, Assistant Superintendent:
Betty Ison, Office Secretary:
Carol Wright, Ministerial Advocate:
Indiana Yearly Meeting Pastoral Agreement
Monthly Meeting: Year: Pastor:
It is essential that the local Meeting and the pastor use the Indiana Yearly Meeting (IYM) Handbook for Elders, especially the sections that offer guidelines to establish the relationship between the pastor and the Meeting, and to describe the area of pastoral responsibilities. In consideration for the pastoral support below, to liberate the pastor from the necessity of “secular” employment, the pastor assumes accountability for furthering the work of the Meeting in worship and service. In consideration for the pastor’s ministry, the Monthly Meeting assumes the following support:
Salary Arrangements
The salary shall be considered each year at least three months prior to the beginning of the pastoral agreement, and current living costs shall be considered as well as the work being done by the pastor, and the years of experience he/she has had in the pastoral ministry. Ministry & Oversight and Stewardship & Finance should recommend the salary jointly to Monthly Meeting.
In developing a compensation package for pastors, it is important to keep in mind that pastors employed by a Meeting are considered “hybrid employees.” This means that they have a dual status, treated as employees by their Meetings but considered self-employed when it comes to FICA. Meetings should therefore issue W-2s to their pastors. Pastors must pay both halves of the Social Security and Medicare taxes, and pastors must either pay quarterly estimated taxes to cover these or request a voluntary withholding arrangement with the Meeting.1 All clergy income, including the housing allowance, is subject to self-employment tax (15.3 percent).
Salary Annually
1. Salary (less housing allowance) $______
Housing
2. Housing allowance2: $______
3. Fair Rental Value (FRV) of Parsonage (if provided) 3: $______
4. Utilities (if provided) 4: oil, gas, water, electricity, phone, cable $______
Benefits
5. Social Security tax contribution5: $______
6. Participate in a health insurance plan6: $______
7. Retirement7: $______
Reimbursements8
8. Travel Reimbursement9: $______
9. Professional Expense Reimbursement10: $______
10. Reimburse the pastor for moving costs (if applicable): $______
Other Benefits and Opportunities
A. Vacation for (2-3-4-) weeks with pay. The Meeting arranges for pulpit supply and visitation during the pastor’s absence. Duration of pastorate should be reflected by longer vacation period. Some sabbatical time should be considered after 7 years. Consideration should be given to some non-vacation time being available for the pastor to hold special meetings at another church if desired as well as seminars and workshops.
B. At least one day per week free from regular church assignments (day) ______.
C. The pastor is released to attend Yearly Meeting Sessions, Pastors’ Short Course, Pastors’ Retreat, Area Pastors’ Gatherings, etc.
This arrangement begins on ______and will be in effect for ______. Either party may notify the other of a desire to change at least three months previous to the end of any pastoral year.
Signed (date) ______
______
Monthly Meeting Clerk M & O Clerk Pastor
Please send a copy of the signed agreement to:
IYM General Superintendent, 4715 N Wheeling Ave, Muncie IN 47304
Because all income pastors receive is subject to self-employment tax, they can face significant tax liabilities when it comes time to file. To avoid this risk and the need to make quarterly estimated payments, Meetings can withhold extra income tax from a pastor’s wages to cover what he or she will owe upon the request of the pastor. The simplest way to do this may be to have the pastor fill out a W-4, but any written request will work.
2 There is no cost to a meeting to designate a portion – or even all in some cases – of a pastor’s salary as housing allowance. There are significant tax advantages for the pastor in doing so. Salary designated as housing allowance is still subject to self-employment tax, but is no longer subject to income tax. This is the case whether or not the pastor lives in a church-owned parsonage. This amount must be established in writing in advance with the monthly meeting and can be as high as the pastor’s entire salary as long as it is reasonable compensation for services and is used for housing (which can include maintenance of the house, its contents, the garage, and the yard as applicable). The Meeting should report and label the housing allowance in Box 14 of the pastor’s W-2.
3 There are advantages to providing the pastor with a church-owned parsonage: 1) Easier transitions when turnover is relatively high; 2) no property taxes for church-owned property used as a parsonage; 3) congregation-covered maintenance. Similarly, there are disadvantages: 1) pastor cannot build equity, and may not have sufficient resources for housing in retirement as a result; 2) pastor lacks autonomy and privacy with respect to home; 3) pastor must pay self-employment taxes on the fair-rental value (FRV) of the parsonage. These considerations should be weighed by both the pastor and the Meeting before any agreement is finalized. It is the responsibility of any Meeting that provides a parsonage to determine an appropriate FRV for the home. It may be helpful to consult with local realtors or landlords to get a range of estimates. Any Meeting providing a parsonage should consult IYM’s Parsonage Guidelines regarding expectations for parsonage maintenance and care within IYM.
4 If a parsonage is provided, utilities provided by the Meeting increase the home’s FRV. If no parsonage is provided, utilities provided by the Meeting are taxable income to the pastor. Ministers who own their own homes will want to designate an amount to cover the total cost of owning, cost of their furnishings, cost of decorating, utilities, and etc.
5 Meetings can elect to assist their pastor(s) with Social Security tax payments or give the pastor the employer's half of FICA as income and withhold income tax on it. These contributions are taxable income, and so Meetings may wish to consider “grossing up” their payments to account for this. If a pastor chooses to pay quarterly estimated tax payments, the Meeting may wish to pay their contribution to the pastor on this basis - 9/15, 1/15, 4/15, 6/15.
6 Premiums for accident and health plans are considered a “tax free” fringe benefit.
7 The pastor should be covered under a pension plan, and 10% of salary and housing should be paid on this.
8 If your Meeting pays pastors or other staff for mileage or other expenses, it is best for the individual and the meeting to reimburse these expenses after the individual submits a mileage log or receipts. Allowances are wages and are subject to taxation. Amounts paid under a written accountable reimbursement plan, on the other hand, not only increase transparency but they are not wages and are therefore not subject to taxation.
9 Reimburse the pastor for actual documented travel expenses or on a per/mile basis at the current allowable mileage reimbursement rate set annually by the IRS.
10 Reimburse the pastor for actual allowable documented professional expenses including but not limited to attendance at Yearly Meeting Sessions, Pastors’ Short Course, Pastors’ Retreat, etc.
Indiana Yearly Meeting
Expectations for full-time, part-time, and pulpit supply pastoral service
2015-2016
Full-time Pastoral Ministry: Full-time commitment to ministry in the local meeting, with no other outside employment needed to provide adequate financial support for the pastor
Training/educationalrequirements / o Seminary training or equivalent
o Recorded Friends minister of enter recording process within two years after arriving in IYM
o Continuing personal/professional education for ministry
Typical duties
in the local meeting / o Preaching/leading worship every week
o Close cooperation with local Ministry & Oversight
o Spiritual care of members and attenders
o Community outreach
o Calling and visitation with individuals and families
o Officiating at weddings and funerals
o Encouraging all aspects of the meeting’s life and work
o Specific duties/expectations as agreed with the meeting
o Average of 35 or 40 hours a week, with one full day off per week
Typical duties
in the yearly meeting / o Attend Indiana Yearly Meeting sessions (this is not vacation time!)
o Be actively informed on IYM program and missions
o Serve on an IYM committee
Recommended
financial support / o Equal to or exceeding a first-year teacher’s salary in your local public high school (The Indiana average for 2014 was approximately $33,000.)
o Housing allowance of parsonage and utilities (see note on page 3)
o 50% of Social Security (applies to both salary and housing/parsonage allowance)
o Allowance for attending conferences and retreats ($500 recommended minimum)
o Reimbursement for professional expenses: books, stationary, hospitality, travel allowance of mileage (2015 rate is 57.5 cents per mile) etc. as agreed with meeting
Recommended
benefits / o Health insurance – preferably paid directly to the provider to prevent the pastor being taxed on that amount as if it were income
o Health care reimbursement plan for non-deductible expenses
o Two weeks of paid vacation annually during first two years of service; three weeks of paid vacation during years three through seven; four weeks of paid vacation thereafter (based on pastor’s cumulative years in full-time service, not just on years at any one meeting)
o Retirement allowance (10% of base salary)
Part-time Pastoral Ministry: 15 to 35 hours/week, with the likelihood that the pastor will need to find additional income from an outside source such as another job, spouse’s employment, pension income, etc.
Training/educationalrequirements / o At least some formal education at the college level in ministry (Bible, theology, other specialized courses)
o Completion of two introductory seminars provided annually by IYM:
a. IYM Faith & Practice
b. Friends history and polity (not required if a person is recorded in another yearly meeting or if the General Superintendent deems it unnecessary for an incoming pastor)
Typical duties
in the local meeting / o Minimum of 15 hours/week (less is considered pulpit supply)
o Visitation on a limited basis, especially in crisis or major illness
o Officiating at weddings and funerals
o Encouraging all aspects of the meeting’s life and work
o Specific duties/expectations as agreed with the meeting
Typical duties
in the yearly meeting / o Attend Indiana Yearly Meeting sessions (this is not vacation time!)
o Be actively informed on IYM program and missions
o Serve on an IYM committee (time and interest permitting)
Recommended financial support / o Base salary on a pro rata basis tied to the IYM recommended minimum salary, divided by the average amount of time expected each week. For example, if a full-time pastor is expected to work 2,000 hours per year, then $33,000 divided by 2,000 = $16.50 per hour. A part-time pastor working 20 hours/week would be paid 20 x $16.50 or $330 per week
o If a parsonage is provided, the cash salary may be reduced, but care should be taken that the pastor’s other financial needs are not neglected (see note on page 3)
Recommended benefits / o Financial benefits (health insurance, retirement) on a pro rata basis tied to the average amount of time expected each week; for example, an expectation of 20 hours/week should mean 50% minimum financial contribution by the meeting towards the cost of health insurance
o Two weeks of paid vacation annually
Pulpit Supply Ministry: Less than 15 hours per week, with reimbursement on an hourly or per diem basis
Training/educationalrequirements / o At least some formal education at the college level in ministry (Bible, theology, other specialized courses)
Typical duties
in the local meeting / o Preaching
o Officiating at weddings and funerals as needed
Typical duties in the
yearly meeting / o None expected, but always welcome
Recommended
financial support / o Minimum $165 per week (based on $16.50 per hour and expecting ten hours for sermon preparation, travel time, and being present for all of Sunday morning)
o Service at weddings and funerals often requires considerable extra time and should be compensated
o If the pulpit supply arrangement continues for more than three months, it should be formalized by an agreement approved by Monthly Meeting for Business
Recommended benefits / o None expected, but always welcome
General Notes
Formal agreement
o IYM M&O recommends that meetings consider using the standard pastoral agreement (available from the Yearly Meeting office)
o Whether or not the standard pastoral agreement is used, a formal agreement should be prepared in writing, approved by Monthly Meeting for Business, and signed by the pastor, the clerk of Monthly Meeting, and the clerk of Ministry and Oversight
o IYM M&O also recommends the IYM Handbook for Elders and Pastors, and Chapter VI in IYM Faith and Practice, both available from the Yearly Meeting office
Parsonage vs. housing allowance
o If a housing allowance is provided, the amount must be approved each year in a separate minute by Monthly Meeting for Business, and a copy of the minute must be provided for the pastor’s tax records
o The pastor must pay 15.3% self-employment tax on the rental value of the parsonage plus utilities; this amount must be set by an experienced real estate person for the pastor’s tax records