Twenty three years ago, I had a pension with Arvin. They got “bought” by Meritor. After a couple years, they sent out an email that basically said that the pension fund was “theirs” now, and they were under no obligation to keep it running and pay me anything when I retired. I took the hint, and withdrew what little money was in it, and got hammered with taxes, because of course I was.
Almost no one gets pensions any more. The few people who still get them might get something like a third of their salary when they retire, if they work roughly their entire career at the same place. For the most part, we’re all expected to fund 401K’s, or otherwise figure retirement for ourselves. Am I going to have enough to live on? Well, considering that I’m going to retire the year Social Security officially goes “broke,” I highly doubt it. But that’s beside the point. It’s on me to figure out, one way or another, same as everyone else.
Which brings me to my question: should retired ministers get a “pension” from their church upon retirement? Now, obviously, churches are not funding some massive investment portfolio to pay an actual “pension” out of the dividends from, but the idea is the same. Should churches continue to provide some sort of income to former ministers after they have retired? If no, then I guess we’re done with this thought experiment.
If yes, then how much? Since we’re talking about the church providing an ongoing salary like a pension, what percentage of the former minister’s salary would be appropriate? And, since we’re talking about paying this out of ongoing tithes, which could be used to hire new staff, and give raises to current church employees, how long should this be paid?
Let’s put some numbers to this. According to ZipRecruiter, the average salary of a minister in Indiana is $60,000 per year. Let’s be generous, and say that our hypothetical minister was working at a large church, and his pay was double that, or $120,000/yr, or $10,000/mo. How much do you feel it would be appropriate to pay this retired minister, and for how many years? 100% for life? 50% for 10 years? Some sort of sliding scale that phases out over time? Nothing, as it was on them to prepare, like all of us?
Here are some additional thought experiments. Should there be anything in the “pension” for the minister’s spouse? Does it change your answer if the church had been paying into an ampe life insurance policy? Next, let’s say that our retired minister still has “some gas left in the tank,” and takes another job after retirement, and is making a non-trivial salary with that gig, as well as collecting Social Security. Does this change your answer? Finally, what if he had been working for a huge church, and making 3 or 4 times the average, at $15-$20K/mo? Does that change your answer? In other words, do you feel like this is based on cost of living today, or is it purely based on how much he had been making?
My own biases are leaking out in this discussion because I got the rug pulled out from under me, but that’s why I’m interested in other people’s opinions. I want to see this from other people’s points of view. What do you think?