Single Defined Benefit Plan

Overview

The Church of the Nazarene Single Defined Benefit Plan was created by the merger of the General Church Pension Plan with the Basic Pension Plan, effective January 1, 1996.

The benefits of those who participated in the Basic Pension Plan and in the General Church Pension Plan which accrued up to December 31, 1995, will be paid from the Single Defined Benefit Plan. Participants in either or both Plans as of December 31, 1995, may continue to accrue additional benefits under the Single Defined Benefit Plan after December 31, 1995, as explained below.

Each participant in the General Church Pension Plan and the Basic Pension Plan became a participant in the Single Defined Benefit Plan as of January 1, 1996. There are no new participants in the General Church Pension Plan, the Basic Pension Plan, or the Single Defined Benefit Plan after December 31, 1995.

Unless and until each participant's accrued benefit under the General Church Pension Plan or the Basic Pension Plan is 100% vested, the Board of Pensions and Benefits USA will keep separate records to properly reflect the different percentages of vesting each participant may have after the Plan merger.

The illustrations and examples used in here do not demonstrate all possible scenarios. If your situation is not reflected in the illustrations or examples, and you have questions, please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. or 888-888-4656.

What about benefits for participants in the Basic Pension Plan?

Effective January 1, 1996, the church established the Church of the Nazarene 403(b) Retirement Savings Plan, which will be referred to here as the "403(b) Plan." You can learn more about it by visiting this link. The 403(b) Plan works together with the Single Defined Benefit Plan in the calculation of benefits for a participant in the Basic Pension Plan.

Under the Single Defined Benefit Plan, a person who was a participant (or beneficiary) in the Basic Pension Plan will receive the highest pension calculated under two separate formulas.

The first formula uses the pension provided by the amount in the participant's account under the 403(b) Plan derived from contributions from the Pensions and Benefits Fund of the Church of the Nazarene on or after January 1, 1996, plus earnings.

The second formula uses a pension derived from the formula (described in more detail below) under the Basic Pension Plan as of July 1, 2001, including service credits after December 31, 1995, and any increases in the pension benefit on or after July 1, 2001.

You will receive a pension benefit under the Single Defined Benefit Plan which equals the highest pension calculated under these two formulas.

Starting January 1, 1996, eligible participants have an amount credited to their account under the 403(b) Plan as determined by the Board of Pensions and Benefits USA. These contributions are called Annual Pension Supplements (APS). This means the Church will provide benefits for participants under both the Single Defined Benefit Plan and the 403(b) Plan. For this reason, the benefits provided by the Church from APS funding of the 403(b) Plan by the Pensions and Benefits Fund will offset the pension provided under the Single Defined Benefit Plan. In other words, the pension is based on the highest amount under the two formulas described above and then is offset by the pension which could be provided from the portion of the 403(b) Plan attributable to APS contributions by the church from the Pensions and Benefits Fund. All of these calculations are done on an actuarial basis.

Here's an illustration of how these formulas work:

Formula #1 Cash value of your Nazarene 403(b) "offset" account derived from Pensions and Benefits Fund contributions: $3,013.78
 
  403(b) "offset" account monthly benefit value: $19.97
 
Formula #2 40 years of credited service at Basic Pension Plan standard formula, at age 65: $506.00

Since Formula #2 in this example produces the highest pension amount, the monthly pension amount paid from the Single Defined Benefit Plan (SDBP) would be determined as follows:

Grandfathered Basic Pension Plan monthly benefit value: $506.00
 
Minus:
 
403(b) "offset" account monthly benefit value: - $19.97
 
Total monthly benefit from SDBP: $486.03

Therefore, the participant gets $486.03 from the SDBP plus the value of the 403(b) "offset" account for a total grandfathered benefit value.

What about benefits for participants in the General Church Pension Plan?

Participants in the General Church Pension Plan, (or their beneficiary) are eligible for a pension under the Single Defined Benefit Plan equal to the pension that they would have received had the General Church Plan continued. But eligibility for this pension is contingent upon participants making the required employee contribution equal to 3% of pay after December 31, 1995. Whether they elected to continue to make required contributions under the Single Defined Benefit Plan after December 31, 1995, or not, the pension which they had accrued up to December 31, 1995, is unaffected.

Those who continued the required contributions under the Single Defined Benefit Plan after December 31, 1995, have continued to accrue additional pension credits. Additionally, the Church has created an account in each participant's name under the 403(b) Plan and will contribute to that account an amount equal to a percentage of the average cash salary paid to Nazarene pastors in the U.S. (APS) as reported for the prior Church year. This amount which the Church contributes to the 403(b) Plan on behalf of participants, plus earnings, will offset the pension they receive attributable to their participation after December 31, 1995. All the calculations of the pension and the offset to that pension from the 403(b) account are done on an actuarial basis.

Here's an illustration of how this works:

Grandfathered General Church Pension Plan monthly benefit amount at age 65: $500.00
 
MINUS:
 
403(b) "offset" account monthly benefit value: - $19.97
 
Total monthly benefit from SDBP: $480.03

Therefore, the participant gets $480.03 from the SDBP plus the value of the 403(b) "offset" account for a total grandfathered benefit value.

What about other provisions of the Basic Pension Plan and the General Church Pension Plan?

The Single Defined Benefit Plan resulted from the merger of the General Church Pension Plan with the Basic Pension Plan on January 1, 1996. The formulas described above show how pension benefits are calculated after December 31, 1995. Other benefit provisions of both Plans as of December 31, 1995, continue in effect under the Single Defined Benefit Plan. For this reason, detailed descriptions of both of the Plans are included in this Summary.

What if you're a participant in the General Church Pension Plan and didn't make required contributions after December 31, 1995?

Participants have the right to elect not to make contributions to the General Church Pension Plan after December 31, 1995. However, if they choose not to contribute, they do not accrue additional pension credits under the Single Defined Benefit Plan. Essentially the pension is frozen as of the date the participant ceases making required contributions.

For example, let's say a participant decided to make required contributions after December 31, 1995, but later stopped. In that case, the benefit under the Single Defined Benefit Plan will be frozen as of the date the individual ceased making required contributions and the 403(b) offset will be determined as of that date.

In either case, the participant's pension credits will be payable upon death, retirement, or total and permanent disability under the provisions of the General Church Plan in effect as of December 31, 1995. Those provisions are described later in the Plan document. However, plan provisions are not continued for the purpose of increasing pension benefits beyond those held immediately prior to the date on which a participant fails to make required contributions, and this includes benefits for total and permanent disability.

What if you were a participant in both the General Church Pension Plan and the Basic Pension Plan?

Here's an illustration of how this works:

Step 1: Monthly frozen accrued benefit from the grandfathered General Church Pension Plan payable at age 65: $200.00
 
Step 2: 20 years of credited service under the grand-fathered Basic Pension formula: $231.00
MINUS:
  403(b) "offset" account monthly benefit value: - $19.97
  Total monthly benefit value from grandfathered Basic Pension Plan: $211.03
 
Step 3: Total SDBP monthly benefit ($200.00 + $211.03): $411.03

Therefore, the participant gets $411.03 from the SDBP plus the value of the 403(b) "offset" account for a total grandfathered benefit value.

Please note, this information is intended for educational purposes only. In the event there is a conflict between the information contained on this page and that found in the Plan Document, the details of the Plan Document will govern. You'll find the SDBP Plan Document here.

For Frequently Asked Questions about the Basic Pension Plan, visit this link.

For Frequently Asked Questions about the General Church Pension Plan, visit this link.