Prepared by the General Council on Finance and Administration The
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Prepared by The General Council on Finance and Administration The United Methodist Church 1 Music Circle North Nashville, TN 37203 615.329.3393 866.367.4232 www.gcfa.org In cooperation with The National Association on Commissions on Equitable Compensation (NACEC) www.gcfa.org/NACEC Page 0 FOREWORD Contents Foreword 1 Brothers and sisters in Christ, may grace and Our Specialized Language 3 peace be yours in abundance. It is a pleasure Scope 9 once again for The National Association of Judicial Decisions 10 Commissions on Equitable Compensation to Organizing and Planning 15 offer this guidebook as a resource to be used by Major Instruments 19 Annual Conference Commissions on Equitable Who Has What Role 23 Compensation in cooperation and consultation Sample Yearly Plan 26 with the General Council on Finance and Sample Arrearage Policy 30 Administration. Compensation Worksheet 33 In ¶625.1 of the Discipline, we find: “There shall be in each annual conference a commission on equitable compensation or other structure to provide for these functions and maintain the connectional relationships.” In its responsibility of recommending conference standards of pastoral support, the Commission on Equitable Compensation will need to be concerned that policies, procedures, and incentives are established which will insure that each pastor of an Annual Conference will receive a fair and just compensation for his/her full-time professional services and devotions to the Lord. This manual is published in order to provide information, ideas, and guidelines in the fulfillment of those tasks assigned to the Commission. The National Association of Commissions on Equitable Compensation has been in existence since February of 1974, and is provided guidance and consultation by the General Council of Finance and Administration (¶807.20). The National Association of Commissions on Equitable Compensation expresses its deep gratitude and appreciation to you as a part of our connected church, and to the staff on the General Council on Finance and Administration for their assistance and support in the ongoing work of the Association. Rev. Laurel Scott, President National Association of Commissions on Equitable Compensation September, 2012 Page 1 All Discipline quotations in this manual are from the 2012 Book of Discipline unless otherwise noted. Page 2 OUR SPECIALIZED LANGUAGE THEOLOGICAL FOUNDATION God calls persons to ministry to go into Our language often has technical meanings the entire world, preaching, teaching, and which can result in poor communication. This baptizing (Matthew 28:19), for without is made even more complex since over the them the world would not have heard quadrennia the language of The Book of Christ preached (Romans 10:14). These Discipline has changed, and so newer are called to be stewards of the mysteries meanings overlay older ones. In addition, of God (I Corinthians 4:1). The Church sets regional traditions in emphasis and language some persons aside for the role of clergy create communication barriers which often and ordains these persons to the work of require extra efforts. Finally, Internal Revenue pastoral ministry to be servants of the Service (IRS) regulations require technical servants of God. meanings. It is important for us to have a precise language so that we are not constantly Pastors answer affirmatively the question clarifying and reviewing old understandings. of John Wesley (¶336), “Are you determined to employ all your time in the The Book of Discipline work of God?” For such a called, set apart and committed clergy, the Church The enabling legislation for the Commission on assumes an obligation to plan adequate Equitable Compensation is found within the support (¶620). larger section titled “Pastoral Support” The Book of Discipline is clear that “the (¶¶620-628). The 1992 General Conference primary responsibility for payment of revised the language in this section of The pastoral salaries remains with individual Book of Discipline by consistently changing pastoral charges” (¶625.5; see also references to clergy ”salary(ies)” to either ¶247.13). The United Methodist Church, “base compensation” or, where the context through each Annual Conference, suggested that the reference was to a broader provides a program by which to seek support package, “compensation.” equity in pastoral support through the Commission on Equitable Compensation The following definitions are provided to give a and the counsel and supplements which it common understanding of these and other offers. major terms contained in this manual. Page 3 PASTORAL SUPPORT: The total package of THEOLOGICAL FOUNDATION compensation (including benefits), expense Why should the Commission on Equitable reimbursements, and expense allowances Compensation be so concerned about paid to or for a pastor to enable and equity in clergy compensation? support his or her ministry. 1. Jesus says, “the laborer is worthy of his COMPENSATION: That portion of a total hire”, (Luke 10:7) and Paul reminds us clergy support “package” which would be “you shall not muzzle the ox when it is considered as compensating a pastor for treading out the grain” (I Timothy 5:18; pastoral service. Compensation may Deuteronomy 25:4). include, in addition to cash compensation 2. Wesley was concerned that clergy have paid directly to the pastor, contributions to a responsibility not to be “in debt so as to both tax-paid and tax-deferred retirement embarrass you in your work” (¶336), plans, payments to cover or assist the which implies the church, has a pastor with the personal share of Social responsibility that it neither lead its clergy Security taxes, and a variety of other into positions of embarrassing benefits and allowances (such as utilities indebtedness, nor leave them there. The and other housing-related allowances). emphasis on equity between believers is Care should be taken to assure that a affirmed in Acts 2:44 - 45 (NRSV) “All who pastor's compensation does not drop below believed were together and had all things the amount required to maintain eligibility in common; they would sell their for Comprehensive Protection Plan possessions and goods and distribute the coverage. Consult with your Annual proceeds to all, as any had need.” Conference pension and insurance officer for details. 3. The great commission to go into all the world, preaching, teaching, and baptizing Compensation, however, would not include brings with it a cost. Systems of clergy accountable reimbursement plans that support which foster the use of the right simply reimburse accountable expenses pastor in the right place, hold up the hope incurred in the performance of pastoral of seeing the great commission bear its service, such as travel expenses. Note that promised fruit. 1995 court rulings determined that United Methodist clergy are employees for income 4. The Commission on Equitable tax purposes. The salary paying unit must Compensation embraces the great provide a yearly W-2 tax form. Clergy commandment to love our neighbors as remain self employed for purposes of social we love ourselves by wanting for each security. pastor what our members want for themselves – compensation adequate to free persons for the work of pastoral ministry. Page 4 BASE COMPENSATION: That portion of a pastor's compensation which is paid ADDITIONAL RESOURCES directly to the pastor as cash The National Association of Commissions compensation, contributions authorized on Equitable Compensation (NACEC) in by the pastor to either a tax-paid pension cooperation with the General Council on program or a tax-deferred program (such Finance and Administration (GCFA) offer as a 403(b) plan), payments to assist the the following resources: pastor with the personal share of Social • www.gcfa.org/nacec.html is the website Security taxes, and some other kinds of for NACEC and is hosted by GCFA. cash compensation, such as bonuses, payments to private investment • A Summary of Equitable Compensation programs, and the like. Plans is compiled by GCFA each year encompassing all U.S. Annual Conferences. The summary is available on the NACEC Base compensation would not include website and distributed to the annual other items included in total conference treasurers and the chairpersons compensation, such as utilities and other of Commission on Equitable housing-related allowances, accountable Compensation. It is a valuable source of reimbursements for professional expenses comparative information. (such as continuing education, books, and the like), and the cost of benefits such as • Resource materials are gathered at the quadrennial consultations from the life or health insurance. participating annual conferences. Copies of these materials are on file with the EQUITABLE COMPENSATION: The term Equitable Compensation Desk at GCFA. used in ¶625 to describe both (1) the Annual Conference fund used to These include: supplement support for those pastors • Guidelines for Equitable Compensation whose base compensation falls below a Program, Supplemental Base minimum level established by the Compensation Program, & Other Pastoral conference, and (2) the Commission Support whose task is to help the conference • Applications for the various programs define and promote levels of support administered by the Commissions on which will be “equitable” for the pastors Equitable Compensation in the conference. • Brochures and pamphlets illustrating a Each word in the phrase deserves variety of approaches toward encouraging attention. Compensation has already been