Rev. Carol Zaagsma, Minnesota, speaks during discussion of the new retirement plan at the 2024 United Methodist General Conference in Charlotte, N.C. Wednesday May 1, 2024. Photo by Larry McCormack, UM News.

A new retirement plan for United Methodist clergy in the U.S. has won approval overwhelmingly at General Conference.

The plan is called Compass, and was conceived and championed by Wespath, the denomination’s pension and benefits agency.

Wespath retirement plans going back generations have offered U.S. clergy a monthly pension benefit for life, but Compass is a defined contribution plan, more like a 401(k) offered by most corporate employers.

Wespath leaders said the denomination’s steady numerical decline over many years required a new, sustainable approach to supporting retired clergy.

"Passing the Compass pension plan was needed to ensure that we can continue to provide reliable and sustainable retirement income to those who have faithfully served. Compass will be a defined contribution plan (vs. defined benefit plan) like a 401k or 403b. This means that clergy own their account balances and can now designate a beneficiary (or beneficiaries) to receive the receive the balance of your retirement account. The Compass plan also helps ensure adequate retirement income for lower-paid clergy. For example, each church will contribute a flat $150 to clergy retirement accounts regardless of income (with an additional 3% contribution and then a $1/$1 match up to 4% of their pay)," explains Jim Ducker, Executive Director of Finance and Administration for the Dakotas Conference. "LifeStage Retirement Income is a feature of Compass that is designed to optimize monthly payments, so they last throughout the retiree’s lifetime (and spouse’s lifetime, if applicable). The online tool demonstrates various retirement income scenarios so clergy can better plan for their retirement."

During May 1 floor debate, there was an effort to refer the plan back to Wespath for adjustments.

Emily Allen, delegate from the California-Nevada Conference, made the motion and predicted Compass as proposed would worsen compensation inequities for women and people of color in the clergy ranks.

“The systemic racism and sexism in our salary for our clergy will be passed to retirement,” she said.

But Jessica Vittorio, a Wespath board member and North Texas Conference delegate, urged passage.

“I know there are concerns related to equity,” she said. “Wespath has heard them, and I trust that Wespath is committed to continuing to evaluate the impact of the plan.”

Scott Brewer, a Great Plains Conference delegate and chair of the Financial Administration Committee at General Conference, also strongly supported Compass and said annual conferences need to be the first responders on unequal pay.

“We need to do serious work on equity as it relates to compensation for our clergy,” he told fellow delegates.

The referral motion failed and late on the morning of May 1, delegates approved the plan by a vote of 658 in favor and 64 opposed.

“We are pleased the General Conference has taken this important step,” said Andy Hendren, Wespath’s top executive. “Their thoughtful action will strengthen the long-term sustainability of benefit plans for our church and ensure retirement security for clergy.” 

Wespath has for years offered the Clergy Retirement Security Program, which combines both defined-benefit and defined-contribution components. That program will be frozen at the end of 2025, with Compass taking effect on Jan. 1, 2026.

Clergy will retain CRSP benefits earned through the end of 2025, then begin earning benefits through Compass. The benefits of clergy who already have retired are not affected by the plan.

With Compass, clergy will have retirement accounts that they control. They are encouraged to contribute at least 4% of their salary to receive a full matching contribution from the church. All U.S. clergy, regardless of their church’s size, will get at least a $150 monthly contribution plus 3% of pay for their account balance — and beyond that will get another dollar for dollar match on up to 4% of pay.

Compass also will provide matching contributions to help clergy pay off student loans.

"Compass will provide matching contributions on qualified student loan payments made by clergy. Essentially, the plan treats clergy’s student loan payments as if they are participant contributions, and then provides an appropriate match as if such payments had been participant contributions to the plan. To receive this match, clergy must certify to their conference annually how much they made in student loan payments for the year," Jim Ducker said.

Wespath developed a program called LifeStage Retirement Income that will guide Compass members in how much they can take out of their accounts without risking depletion of the funds they have for retirement.

The Compass plan is described in full in a UM News article and by materials from Wespath.

Wespath is one of the world’s largest faith-based pension agencies, serving more than 100,000 retired and active clergy and other church staff, and more than 150 United Methodist-related institutional investors. The self-supporting nonprofit agency managed about $26 billion in assets at the end of 2023.

Wespath handles investments for pensions and other retirement-plan assets on behalf of United Methodist annual conferences, which are the plan sponsors and legally responsible for paying benefits.

Compass is expected to be less costly than the CRSP and will not generate additional long--term liabilities for annual conferences, some of which have been hard hit by disaffiliations of local churches.

“Any clergy or surviving spouses currently receiving monthly benefits will not be affected. They can rest assured that their monthly benefits will not change,” said JoAnn Early, Dakotas Conference Benefits and Human Resource Officer. “Both Wespath and the Board of Pensions are planning on providing webinars and emails for all active clergy over the next 18 months to make sure that all active clergy are aware of what Compass is all about and what it will look like for you in your years of service and retirement.”