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2019 news 2Contributing to the Nazarene 403(b) Retirement Savings Plan is a smart decision, since it allows Nazarene ministers and church employees to invest tax-free funds for retirement, similar to the way employees contribute to 401(k) plans offered by many companies. But as a denominationally-sponsored plan, the Nazarene 403(b) has a special value for ministers because it enables them to receive withdrawals as tax-free housing allowance in retirement.

The March 15, 2019 ruling by the 7th U.S. Circuit Court of Appeals unanimously upholding the constitutionality of the Ministers' Housing Allowance reaffirmed the value of the Nazarene 403(b) Retirement Savings Plan, since it left intact the ability for clergy to receive withdrawals from their accounts as tax-free, subject to current IRS limits.

“Our major concern in the challenge to the constitutionality of the Ministers' Housing Allowance centered on the fact that we believe a negative ruling would have eliminated this added value for those contributing to our 403(b) Plan,” said Roger Creeden, administrative director for Pensions and Benefits USA. “Many of our ministers have limited income throughout their careers, but our plan allows them to stretch the dollars invested for retirement with this tax advantage.”

Creeden added that P&B has established 403(b) accounts with Fidelity Investments for most Nazarene ministers, but only about 30% are contributing to them. “The Nazarene 403(b) Retirement Savings Plan is one of the best tools a U.S. Nazarene minister has to shelter retirement income,” he said. “When churches pay between 50% and 99% of their allocation to the P&B Fund, their minister receives a $200 base Annual Pension Supplement. Churches contributing at least 100% of their P&B allocation, receive the base plus 10% of the amount paid to the P&B Fund by the church. That can add up over time.

“Of course, it’s important that ministers make their own contributions to their plans also if they want to have a better retirement. This can be done by consulting with their church treasurer, who can create and adjust payments easily through the Online 403(b) Contributions system at pbusa.org.”

For more information on the Nazarene 403(b) Plan, contact Pensions and Benefits USA at This email address is being protected from spambots. You need JavaScript enabled to view it. or phone 888-888-4656.

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