The Journey to Improve Minister Benefits

I would like to share my thoughts about some of the changes that have taken place at NBUSA in recent years and how it has enabled us to improve benefits for those we serve.

“Do everything you can to improve benefits for our ministers” was the heartfelt charge given by the Board of General Superintendents (BGS) when I became Executive Director in 2019. I quickly discovered not only were there no new funds available to support that goal—but there would soon be less. Not due to a lack of support from our churches but because the Funding the Mission (FTM) formula would eventually be restored to its pre-2012 level. Back then, FTM allocations were shifted to the NBUSA Fund and away from our universities to strengthen our legacy pension plan. I remember calculating the negative impact to the NBUSA Fund of the impending change.

Church leaders acted responsibly to address a serious issue with our pension fund, and the results speak for themselves. The stabilization of the plan for pensioners resulted in resources being made available to allocate to improve benefits for our active ministers, so 2024 was the right time to restore the original FTM formula.

The Lord has blessed NBUSA with the consistent and faithful support of churches and districts across the U.S. This support, along with favorable market conditions, has provided the opportunity to improve benefits for our ministers in the following ways:

• Extra Pension Payments – Retirees in our Basic Pension Plan received an extra month’s payment in 2022, 2023, and again this past March.

• Extra APS Contributions – Eligible active participants in our 403(b) plan received additional Annual Pension Supplement (APS) contributions in 2022 and 2023.

• COVID Response – A number of immediate, temporary changes were implemented to the 403(b) plan to help ministers cope with the financial challenges of the pandemic.

• Survivor Benefits – Doubled the life insurance benefit to $30,000 for active ministers up to age 50 and added a $7,500 benefit for those age 71-75.

• 403(b) Roth Option – Added a Roth component to the 403(b) plan to give participants the ability to invest after-tax dollars to obtain tax-free distributions in retirement. Using the Roth for a portion of your investments is a strategy to consider because the minister housing allowance benefit ends upon death and is not transferred to a beneficiary.

• 403(b) BrokerageLink® – Partnered with Fidelity Investments to introduce a brokerage option,(1) allowing participants to access a broad array of mutual and index funds.

• Bilingual Staff – Added a full-time, bivocational, Nazarene minister to our team to better serve the needs of our growing population of Hispanic clergy.

• 403(b) Minister Match – Launched January 1, 2024, this match program replaced the old APS system to directly address the significant and widespread lack of retirement readiness among our active clergy. It provides higher contribution levels from NBUSA through matching local effort contributions to a minister’s 403(b) account. It was later amended to include a match opportunity for eligible student loan payments.

• A Path to Retire Well – Too many of our ministers, active and retired, lack a clear understanding about the nature of the retirement benefits provided by NBUSA. Since our founding in 1919, these benefits have been intended to supplement and not be the sole source of their retirement benefits. To fund an adequate retirement for the average Nazarene minister, it takes a combination of personal savings, Nazarene benefits (provided by their local church and NBUSA), and Social Security.

The Minister Match program provides a clear and simple path and process for ministers to retire well—and it starts with the foundational requirement for local effort contributions by the minister and/or their local church in addition to their support of the NBUSA Fund, which is our primary source for funding our benefits. The positive results for the first year of the match program demonstrate what is possible when the local minister, church, and NBUSA work together towards a vision that Nazarene ministers retire well.

What a wonderful list of God’s blessings! What might He have in store for us next? We’re already working on exploring some new initiatives. Stay tuned—Lord willing, there is more to come!

Kevin P. Gilmore serves as executive director of Nazarene Benefits USA for the Church of the Nazarene.

(1) This option is treated and priced similar to a retail investment account but remains within the 403(b) plan. Funds invested are not provided oversight by the Investment Committee of the Church and do not benefit from the institutional pricing and lower cost structure of the plan’s preselected fund options.