Regarding the Clergy Compensation Worksheet

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Regarding the Clergy Compensation Worksheet Powered By Docstoc
					 Regarding the Clergy Compensation Worksheet
The Clergy Compensation Worksheet has been a project of the Massachusetts Conference’s
Leadership Commission for the last two years. It emerged from anecdotal references from both
the clergy and the churches in the way clergy compensation is currently calculated.

The methodology presented in these files has been reviewed and critiqued by members of the
Leadership Commission and Conference staff. A preliminary review by a voluntary panel of
settled clergy, seminarians, and laity provided additional feedback. The worksheet has also been
shown to some congregations in the search process. Additionally, a short presentation was made
of this worksheet at the 210th Annual Meeting of the Massachusetts Conference (October 2009)
as part of the clergy compensation hearing.

All these reviews were generally favorable. Although the worksheet has not been officially
adopted by the Conference for use in our churches, the Leadership Commission feels
comfortable enough with the worksheet in its present form to let congregations use it during
2010. Through this pilot roll-out, the Commission seeks broader feedback from congregations
and clergy so the worksheet can be refined for adoption at the 211th Annual Meeting.

The Clergy Compensation Worksheet consists of two files, a set of instructions (written as a PDF
and requiring Adobe Acrobat) and a spreadsheet (requiring Microsoft Excel® version 2002 or
later).

As part of our covenantal relationship, the Leadership Commission would like to invite you to
join in our aim to making the conversation around clergy compensation easier. We look forward
to receiving feedback, questions and ideas in the coming year. Please direct your questions or
comments regarding the worksheet to Rev. Quentin Chin (q.chin@verizon.net). Use e-mail only
to contact him. Your questions and comments are important and will help to refine the
methodology.
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Pastoral Compensation Worksheet Instructions
And may the Lord make you increase and abound in love for one another and for all, just as we
abound in love for you.
                                                                        1 Thessalonians 3:12

Introduction: What is the Purpose of this Document?

This document and the accompanying worksheet (referred to as files) provide churches and
pastors a guide to determining compensation. This document describes compensation and
especially notes the distinctive aspects of pastoral compensation. It also provides instructions to
complete the worksheets. The worksheets will provide a compensation amount based upon the
data search committees or finance committees enter.

This document also contains two supporting documents for reference. A chart provides a rough
breakdown of a pastor’s hours each week across the various tasks of ministry (See page 14). A
sample call agreement (See page 15) modified from an original document prepared by the United
Church of Christ and found on its website1 is included as well.

The methodology contained in these files departs from previous practices used to determine a
pastor’s compensation. The new methodology seeks to do any or all of the following:

       Expand the number of methodologies churches have to determine compensation
       Clearly delineate each part of the total compensation package
       Remove the ambiguity around published compensation packages in Opportunities2
       Provide both the church and the pastor the same files to determine compensation
       Identify the differences between pastoral compensation and the church budget

Note: Determining an interim pastor’s compensation should be no different than determining the
compensation for a settled pastor.

(Please note that the Massachusetts Conference of the United Church of Christ adopted this new
approach to clergy compensation on a trial basis for 2010. Although vetted with clergy, laity,
and seminarians, as more pastors and congregations use these files this approach will be tuned.)

Further descriptions of clergy compensation can be found in a document entitled, Assessing
Finances Developing a Call Agreement and Compensation Package3, as part of a series of
documents on search and call.



1
  http://www.ucc.org/ministers/pdfs/sample-call-agreement-pdf.pdf. The sample document was modified to be
consistent with the methodologies in this document.
2
  Opportunities is the denomination’s listing of clergy positions. Each listing includes information about the
compensation package.
3
  http://www.ucc.org/ministers/search-and-call/section-5-assessing-finances.pdf
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What is Compensation?

Compensation is a systematic way to recognize the value of work that a person performs for an
organization. Typically, compensation includes a combination of monetary pay and benefits,
such as, but not limited to, vacation, sick leave, and pension. However, compensation has
symbolic overtones that make it more than a simple transaction of work for pay. Consider the
following:

       It acknowledges the value the organization places upon the work.
       It acknowledges the skills the person who performs the work will bring to the position.
       It builds loyalty between the organization and the worker.
       It rewards and encourages peak performance.
       It encourages and maintains morale and satisfaction.

What Makes Pastoral Compensation Different?

Pastoral compensation expresses in financial terms a ministerial partnership between the
congregation and its pastor. Pastors are called, not hired, by a congregation to lead the body of
Christ on its faith journey. That perspective, then, shifts the typical understanding of
compensation from pay in exchange for work to pay in gratitude for building and nurturing an
individual’s and a community’s relationships with God. The pastor “equips the saints for the
work of ministry, for building up the body of Christ.4”

As idealistic as this might sound, “the fact remains that little impacts pastoral careers more than
compensation issues.5” Therefore, compensation should reflect the value the congregation has
for its ministry and the leadership it believes it deserves. Both the pastor and the congregation
should feel comfortable with the compensation package. It should also reflect the prevailing
economic situation of the community in which the church is located. In other words, the
congregation should not expect to pay its pastor near the bottom of the local pay scale nor should
the pastor expect to receive pay that exceeds the pay of comparable professional positions in the
community. One author described pastoral compensation as follows:

                    Don’t make your pastor live on more faith than you do.6

A pastor’s compensation, then, does not entirely follow the secular model that most people
understand as compensation. Pastoral compensation, which should acknowledge performance
and seniority as secular compensation does, also has constraints due to the ability of a
congregation to support its minister because a pastor’s compensation substantially rests upon the
membership’s generosity through its voluntary giving. While a person’s compensation in a
secular model can come from higher earnings or through promotions, those factors are not found
in churches. Thus, a pastor does not have a high earning potential. Nevertheless, a pastor faces

4
  Ephesians 4:12
5
  Wayne C. Barrett, C.F.P. Clergy Compensation Getting the Most from the Pastor’s Pay Package. Clergy
Financial Services. Grand Rapids, MI. 2005 Page 1
6
  http://www.my-pastor.com/pastor-salary.html (April 20, 2009)
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many of the same living expenses that his/her parishioners face. These include, but are not
limited to: student/seminary debt7, food, clothing, shelter, medical costs, dignified retirement,
and covering college costs for children.

Recognizing this difference, the current tax code makes some allowances for clergy to receive
extra value in their compensation. This creates a difference between compensation to the pastor
and cost to the church. The significant differences8 include:

        Income taxes. Churches are not obligated to withhold income taxes for clergy. Pastors,
         however, are not exempt from this tax.
        Social Security. Churches are not obligated to withhold the employer portion of social
         security (7.65% of income and housing). Pastors, however, are still responsible to pay
         taxes for social security, which would 15.3% of the combined salary and housing.
        Housing. Pastors do not pay income tax on either the rental value of the parsonage or
         their housing allowance. They, however, pay social security on it.

Recognizing these differences can help to increase the value of the compensation package by
lowering the pastor’s tax obligations.

Pertaining to the local church, the United Church of Christ Manual on Ministry states the
following with regards to compensation:

         We recognize our responsibility to provide our pastor with adequate
         compensation and fringe benefits. We will make these decisions in consultation
         with our pastor and in light of the compensation guidelines established by our
         Conference. We will provide for an annual review of compensation that considers
         effectiveness, cost of living, ministerial competence, and years of service.9

Whatever the cost of compensation that the church will bear, its value should be maximized for
the pastor’s compensation.

Basic Components of Pastoral Compensation

A pastor’s compensation had three basic components: salary, housing, and benefits. Salary
helps the pastor and his/her family meet their living costs as most other families do. However,
clergy compensation also includes housing, either provided as a parsonage by the church or as a
housing allowance. Benefits add value to the salary and housing components.




7
  Note: Many seminarians finish their educations with substantial five-figure debt, similar to a student leaving law
school of business school.
8
  See Barrett pages 2-5 for a more thorough explanation.
9
  Manual on Ministry. The Local Church in Relation to Its Pastor. Partners in Authorizing Ministry. Page 21
United Church of Christ. Parish Life and Leadership Ministry. 2002
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Housing

Housing includes a place to live and the maintenance of the dwelling. It can also include items
such as utilities and furnishings.

When a church provides a parsonage much of the above is included. However, a pastor should
receive a small housing equity allowance, 5% of annual salary, to build equity towards housing
ownership in the future, such as for the next pastorate or retirement.

When a church cannot provide a parsonage, a church would provide the pastor with a housing
allowance. Ideally, the church should be able to provide a housing allowance at a level that
would allow the pastor to maintain an average home in the community where the church is
located.

Benefits

A standard benefits package includes leave, such as but not limited to sick, vacation, and study
leave, retirement benefit, such as an annuity plan, life and disability insurance, both short term
and long term, pension, and health and dental insurances, as well as a vision plan. Benefits also
include two days off per week.

A pastor should receive at least one sick day for each month worked. S/he should receive at least
four weeks of vacation10 and two weeks of study leave. A pastor’s call agreement should also
provide time off for special leave, such as bereavement, paternity/maternity leave, or family care.

The Pension Board of the the United Church of Christ provides several of the above benefits for
its clergy, thus enabling a church to provide them as part of its call agreement. Specifically, the
Pension Board provides an annuity plan, which, based upon a General Synod resolution, is 14%
of salary basis (cash plus housing allowance), life insurance and disability insurance, as well as
health and dental insurances and a vision plan.11 Pastors and their families should be covered for
health insurance12 and dental insurance. They may also like a vision plan.13

After five to seven years of ministry, a pastor should receive a sabbatical14 of at least three-
months during which the church covers the pastor’s salary, housing, and benefits. Churches



10
   Some congregations may increase the number of vacation weeks in order to add some additional value to the
overall package.
11
   If a clergy person does not apply for health insurance as well as life insurance and disability insurance within the
first 90 days his/her first UCC employment (at least 20 hours per week), then s/he will be asked to supply evidence
of insurability (Statement of Health) when they apply for coverage at a later date and entry into the plans may be
denied if our independent underwriter identifies him/her as a risk to the plan’s security.
12
   Some families may have health insurance under a spouse’s plan.
13
   Dental insurance and a vision plan may or may not be a good value depending upon the family’s situation. These
costs could be covered through a Flexible Spending Account (See Page 5). This should be negotiated between the
pastor and the church.
14
   Lev. 25:2-7
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should set funds aside each year to have enough money to cover the pastor AND pastoral
coverage during the sabbatical time.

Should the pastor die during his/her tenure, the pastor’s family should receive any cash salary
earned but not yet paid, housing, FICA, and Medicare offset. They should also receive the cash
value of any vacation leave.

Increasing Compensation Value

A church can add value to a pastor’s compensation through the tax code without significantly
adding more cost.

Housing Allowance

If a church pays a housing allowance to its pastor, this offers substantial help to raise the pastor’s
compensation without increasing the cost to the church. The maximum exclusion, however,
must follow these restrictions:

      The housing allowance must be designated as such as “housing allowance” and is
       separate from the salary. Once the housing allowance is established it cannot be changed
       except by resolution as specified with a new call agreement. The church should issue the
       pastor a statement for tax purposes of the amount of money paid that year for housing.
      The housing allowance should reflect the actual amount of qualified expenses for the
       pastor to maintain a home.
      The fair market rental value of the pastor’s home, including utilities and furnishings in
       that particular neighborhood.

Reimbursable Plan

Oftentimes a person has certain professional expenses over the course of a year that would come
out of his/her salary. These expenses could include books, meals (pertaining to administration),
and dry cleaning the preaching robe.

A reimbursable plan requires the following:

      Establish the plan in advance by specifying the amount of money to fund the plan and the
       general purpose of the plan.
      Payment is made only to reimburse the expense. Reimbursement can only be made with
       proper documentation.
      Any unused balance in the reimbursable plan returns to the church’s general fund. The
       pastor cannot receive any of this money – effectively, this is a “use it or lose it” plan.

Reimbursement of travel expenses does not constitute compensation to the pastor. Rather, it is
one of the costs for doing the ministry of the church.


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Tax-Deferred Pension Contribution

Pension contributions should be considered as tax-deferred. These are payments made by the
church directly to the United Church of Christ Pension Board.

FICA Allowance

While the church is under no obligation to pay its portion of the social security allowance for the
pastor, a church can help a pastor by paying 7.65%, the employer’s share, of the salary and
housing to cover the employer’s portion. The total cost to the clergy is 15.3% of the combined
salary and housing.

Flexible Spending Account15

Through the United Church of Christ Pension Board, a church can establish a Flexible Spending
Account for its pastor. Pastors can reduce their out-of-pocket costs for medical care and child
care by having the church deduct a designated portion of salary and putting it into a Flexible
Spending Account, which the pastor can draw upon to cover these costs. This money is not
subject to income tax or FICA tax.

Additional Leave Time

Some pastors may be willing to accept additional time off as a way to add value to a
compensation package. Additional time off could be above the minimum four-weeks of
vacation. It could also be giving the pastor some Sundays where leading worship is not required
in order for the pastor to have more time during the week to attend to his/her other duties. An
example of this would be to give the pastor the Sunday off following a day-long leadership
retreat. Offering Sundays off can be attractive for those clergy who work less than 0.75 FTE.

Relocation Expenses

When a pastor accepts a call with a church that requires relocating the pastor and his/her family,
the church has the responsibility to pay reasonable relocation costs. The pastor has the
responsibility to secure written estimates of the costs involved and to submit them to the
church’s governing board. Relocation costs include the expense of advance home hunting trips,
moving household goods, mileage for transporting the pastor’s automobile(s), and meals and
lodgings for the pastor and his/her family.

Relocation expenses are not included as part of the pastor’s compensation package. They are
also a one-time expense for the church.
.




15
  Pension Boards – United Church of Christ. www.pbucc.org
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Basic Premise for These Methodologies

Pastoral compensation determined by the accompanying workbook has the following underlying
assumptions:

        The foundation for clergy compensation is the size of the church’s average worship
         attendance
        Compensation above the foundation amount will be adjusted based upon years of
         ordained ministry experience, number of staff reports, and any life experiences the pastor
         brings to the position.
        The worksheet divides the clergy compensation into its three distinct components:
         salary, housing, and benefits
        The worksheet also provides the church assistance in calculating the full cost of
         supporting the pastoral office.

The workbook provides four different scenarios, each with its own worksheet:

        Base with Housing Allowance – Use this to determine clergy compensation when the
         church provides no parsonage
        Base with Parsonage – Use this to determine clergy compensation when the church
         provides a parsonage
        Salary Comparison – Use this to determine clergy compensation based upon a lateral
         salary survey within the community. This methodology uses the average salary for all
         the school principals who serve the community where the church is located as its
         benchmark
        Calculation Based on Budget – If a church has a budget amount that it cannot exceed to
         support the pastoral office, which includes clergy compensation and pastoral office
         expenses, use this sheet determine the clergy compensation.

Defining Hours by Full-time Equivalent (FTE)

Similar to other professional positions, clergy hours are not consistent from week to week. The
variations in weekly hours are a function of the liturgical season, such as Holy Week, and the life
of the congregation, such as extra services for funerals and weddings or helping people in crisis.

Rather than defining full-time ministry as a specific set of hours, this compensation methodology
defines full-time ministry as a range of hours, 40 – 50 hours, per week. The methodology refers
to this as FTE. Therefore, calling a full-time clergyperson will be expressed as 1.0 FTE.

Pastors who work part-time will be called as a percentage of 1.0 FTE16. (Please see Appendix A
for a description of the hourly allocations across the tasks of ministry clergy may perform during
a given week.) The following chart provides a reasonable expectation for a work week based
upon a percentage of 1.0 FTE:

16
  Note: An ordainable call for part-time ministry in some Associations requires at least 0.5 FTE.
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 FTE Pct.   Base Hours                 Max. Hours
       0.25                      10            12.5
       0.50                      20            25.0
       0.60                      24            30.0
       0.75                      30            37.5
       1.00                      40            50.0

Understanding Pastoral Compensation within the Church Budget

Using a purely secular understanding of a budget, clergy compensation is part of an
organization’s personnel costs. The budgeted amount for clergy reflects the full cost of
supporting the pastoral office which includes clergy compensation plus expenses such as, but not
limited to, continuing education/conferences, travel, sabbatical set aside, and other expenses that
the pastor may incur on behalf of the church. Thus, supporting the pastoral office exceeds the
compensation that the clergy actually receive.

Consider a local school principal’s compensation as an illustration. The published salaries for
local school principals do not include the additional costs to support the principals’ offices,
which are included in other parts of the school budget and are usually aggregated with other
personnel. These additional costs could include17: disability insurance, health insurance, dental
insurance, travel expenses, and professional development18. Note that FICA, disability
insurance, health insurance, and dental insurance are part of a principal’s compensation, but are
not reflected in the salary figure. Typically, these benefits add 30% to 40% value to the stated
salary.

Maintaining Compensation Value

Every year the pastor and authorized representatives from the church should review the terms
of the pastor’s call agreement. A pastor’s call agreement should specify a negotiating period
when the pastor and representatives of the church should re-evaluate its terms. An annual review
of the call agreement ensures the following:

        The pastor and the congregation are comfortable with the overall compensation.
        An opportunity to maintain the call agreement’s value with the cost of living.
        An opportunity to change allocation amounts, such as housing allowance, reimbursable
         account, and flexible spending account.
        Allows adjustments to the call agreement to accommodate new situations. (e. g., the
         pastor gets married or starts a family)
        Make adjustments to recognize the pastor’s performance.

17
   Municipal in employees in Massachusetts are not eligible to receive social security, thus no contributions are
made on their behalf.
18
   Note: For clergy compensation FICA, health insurance, dental insurance, and books are included. Excluded are
funds set aside for sabbatical, travel costs, and professional development.
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Instructions for Determining Pastoral Compensation

Each scenario has its own worksheet. Using these worksheets will require users to have
Microsoft Excel® (they will work with versions prior to 2007). Each worksheet has its own set
of instructions. Cell references in the instruction set will be marked in bold.

The budgeted amount for the clergy compensation will appear at the bottom of the sheets for
Base with Housing Allowance, Base with Parsonage, and Salary Comparison. Please bear in
mind that the budgeted amount looks high because ALL of the costs to maintain the pastor’s
office is included.

General Instructions

     1. Select the worksheet that best conforms to your situation by clicking on one of the
        bottom tabs.
     2. Enter the data in the appropriate cells. (Note: Each worksheet is protected. You can
        only enter data in cells that are unlocked.) As the data are entered in the cells, the
        worksheet will calculate the compensation and the budget amount.
     3. Save the worksheet upon completion.

Instructions for Base with Housing Allowance

     1.  Enter the number FTE in B3. This number cannot exceed 1.0.
     2.  Enter the size of the congregation in B4.
     3.  Enter the average percentage of worship attendance in B5.
     4.  Enter the number of years of ordained experience in B10.19
     5.  Enter the number of total FTE for direct staff reports in B11.
     6.  If the church would like to recognize the pastor for life experiences, enter a specific
         amount in D12.
     7. Enter the median cost for housing in D17.
     8. Enter NO if the pastor cannot afford housing in your community in B19.
     9. Enter the median cost of housing the community where the pastor will probably reside in
         D20.
     10. Enter the amount the church will pay for UCC health insurance in D29.
     11. Enter the amount the church will pay for UCC dental insurance in D30.
     12. Enter the amount the church will pay for UCC vision plan in D31.
     13. Enter YES if the church will pay the pastor’s social security offset in B35.
     14. If the church will pay the pastor’s health insurance that is not a plan through the UCC,
         enter the amount the church will pay in D36.
     15. If the church will pay the pastor’s dental insurance that is not a plan through the UCC,
         enter the amount the church will pay for dental insurance in D37.
     16. If the church will pay the pastor’s vision plan that is not a plan through the UCC, enter
         the amount the church will pay for dental insurance in D38

19
 When churches seek a pastor, they should enter the number of years of ordained experience they desire for their
next pastor
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   17. Enter the amount the church will pay for books in D39
   18. Enter the amount the church will set aside for travel in D45.
   19. Enter the amount the church will pay for conferences and continuing education in D46.
   20. Enter the amount the church will pay for other benefits in D47.
   21. Enter the amount the church will set aside each year to fund the pastor’s sabbatical in
       D48.




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Instructions for Base with Parsonage

     1.  Enter the number FTE in B3. This number cannot exceed 1.0.
     2.  Enter the size of the congregation in B4.
     3.  Enter the average percentage of worship attendance in B5.
     4.  Enter the number of years of ordained experience in B10.20
     5.  Enter the number of total FTE for direct staff reports in B11.
     6.  If the church would like to recognize the pastor for life experiences, enter a specific
         amount in D12.
     7. Enter the amount the church will pay for UCC health insurance in D25.
     8. Enter the amount the church will pay for UCC dental insurance in D26.
     9. Enter the amount the church will pay for UCC vision plan in D27.
     10. Enter YES if the church will pay the pastor’s social security offset in B31.
     11. If the church will pay the pastor’s health insurance that is not a plan through the UCC,
         enter the amount the church will pay in D32.
     12. If the church will pay the pastor’s dental insurance that is not a plan through the UCC,
         enter the amount the church will pay for dental insurance in D33.
     13. If the church will pay the pastor’s vision plan that is not a plan through the UCC, enter
         the amount the church will pay for dental insurance in D34Enter the amount the church
         will pay for books in D35.
     14. Enter the amount the church will set aside for travel in D41
     15. Enter the amount the church will pay for conferences and continuing education in D42.
     16. Enter the amount the church will pay for other benefits in D43.
     17. Enter the amount the church will set aside each year to fund the pastor’s sabbatical in
         D44.




20
  When churches seek a pastor, they should enter the number of years of ordained experience they desire for their
next pastor
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Instructions for Salary Comparison

       1. Enter the number FTE in B3. This number cannot exceed 1.0.
       2. Enter the average salary for all the public school principals for the school district in
           which the church is located in D8. (Note: This is public information and is available
           from the local school district.)
       3. Enter the median cost of housing in D12.
       4. Enter NO if the pastor cannot afford housing in your community in B14.
       5. Enter the median cost of housing the community where the pastor will probably
           reside in D15. (Note: This number is only used to separate the housing portion from
           the total monetary compensation for tax purposes. Principal salaries typically
           include housing.)
       6. Enter the amount the church will pay for UCC health insurance in D24.
       7. Enter the amount the church will pay for UCC dental insurance in D25.
       8. Enter the amount the church will pay for UCC vision plan in D26.
       9. Enter YES if the church will pay the pastor’s social security offset in B30.
       10. If the church will pay the pastor’s health insurance that is not a plan through the
           UCC, enter the amount the church will pay in D31.
       11. If the church will pay the pastor’s dental insurance that is not a plan through the
           UCC, enter the amount the church will pay for dental insurance in D32.
       12. If the church will pay the pastor’s vision plan that is not a plan through the UCC,
           enter the amount the church will pay for dental insurance in D33
       13. Enter the amount the church will pay for books in D34.
       14. Enter the amount the church will set aside for travel in D40.
       15. Enter the amount the church will pay for conferences and continuing education in
           D41.
       16. Enter the amount the church will pay for other benefits in D42.
       17. Enter the amount the church will set aside each year to fund the pastor’s sabbatical in
           D43.




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Instructions for Calculation Based Upon Budget

        1.  Enter the budget amount to support the pastoral office in B3.
        2.  Enter the amount the church will set aside for travel in B6.
        3.  Enter the amount the church will pay for conferences and continuing education in B7.
        4.  Enter the amount the church will pay for other benefits in B8.
        5.  Enter the amount the church will set aside each year to fund the pastor’s sabbatical in
            B9.
        6. Enter the median cost for housing in D15.
        7. Enter NO if the pastor cannot afford housing in your community in B17.
        8. Enter the median cost of housing the community where the pastor will probably
            reside in D18.
        9. Enter your congregation’s membership size in B23.
        10. Enter the average percentage of worship attendance in B24.
        11. Enter the number of years of ordained experience in B26.21
        12. Enter the number of total FTE for direct staff reports in B27.
        13. If the church would like to recognize the pastor for life experiences, enter a specific
            amount in D28.
        14. Enter the amount the church will pay for UCC health insurance in D34.
        15. Enter the amount the church will pay for UCC dental insurance in D35.
        16. Enter the amount the church will pay for UCC vision plan in D36.
        17. Enter YES if the church will pay the pastor’s social security offset in B40.
        18. If the church will pay the pastor’s health insurance that is not a plan through the
            UCC, enter the amount the church will pay in D41.
        19. If the church will pay the pastor’s dental insurance that is not a plan through the
            UCC, enter the amount the church will pay for dental insurance in D42.
        20. If the church will pay the pastor’s vision plan that is not a plan through the UCC,
            enter the amount the church will pay for dental insurance in D43.
        21. Enter the amount the church will pay for books in D44.
        22. If the total pastoral compensation (D47) exceeds the budgeted amount for pastoral
            compensation (B12), the difference between budget and actual will be shown in D49.
            (The number, a negative number, will appear red and in parenthesis.) Close the
            difference by entering an FTE amount that is less than 1.0 in D51. As long as the
            number in D49 is a negative number, you must reduce the FTE.




21
  When churches seek a pastor, they should enter the number of years of ordained experience they desire for their
next pastor
Pastoral Compensation Instructions
Draft – v. 2.0a November 2009
Page 13 of 23
DRAFT – September 2009
Version 2.0

Distribution of hours across tasks of ministry

 Hours of Ministry
 For Full-time (1.0 FTE)
                                                                                                                        Min.
 Category                           Description                                                                         Hrs          Max. Hrs

                                    Preparing worship, including writing sermon and writing liturgy, meeting with
 Worship                            worship planning committee                                                                 9.5       13.5
 Presence on Sunday Morning         Leading worship and participating in fellowship                                            2.5        3.0

                                    Maintaining office functions, coordinating functions and activities, meeting
 General Administration             with trustees, supervising staff                                                           6.0        8.0

                                    Includes counseling in office, home visits, hospital visits, phone calls, writing
                                    notes, and travel to visits outside of church, meeting with congregational care
 Pastoral and Congregational Care   committee                                                                                  6.5        9.5

                                    Preparing lessons, teaching classes, Bible study, researching (separate from
                                    sermon preparation), adult small group/leadership development, new program
 Christian Formation                planning, meeting with Christian education committee                                       4.5        6.0
 Youth Ministry                     Working with youth/confirmation.                                                           2.0        3.5
 Evangelism                         Serving on community boards, meeting people in the community                               1.0        2.5
                                    Working on missions, meeting with missions committee, bearing witness to
 Justice and Missions               justice issues                                                                             3.5        5.0
 Spiritual Development              Theological reflection, continuing education                                               2.0        4.0
 Wider Community Service            Serving denominational bodies, maintaining denominational ties                             2.5        5.0
 Total Hours                                                                                                                   40         60



Note: These are estimated hours and serve as an approximation for the way a pastor might divide his/her time over a typical week.
They may be higher for congregations where the average attendance in worship exceeds 150 people per week. Note that weddings and
funerals are not included.

Distribution of Hours – v. 2.0
Page 14 of 23
DRAFT – September 2009                                      Sample Call Agreement
Version 2.0

                                 Sample Call Agreement

   On this day, __________, in ______________, having sought the guidance of the
Holy Spirit and believing that God has called us to share in a mutual and common
ministry in Christ, the members of _________________United Church of Christ at a
regularly-called meeting, held on ______________, voted to enter into covenant with
you, a servant of God, to become pastor and teacher of this church beginning on
___________.

I. TERMS OF CALL

    This is an agreement between ____________________ United Church of Christ
in___________________, ________________ and the Reverend _____________________
called as Senior Pastor. All parties execute this agreement in good faith.

   The terms of call outlined in this agreement are contingent upon your holding
Ordained Ministerial Standing with the _____________________ Association of the
____________________Conference of the United Church of Christ. Should Ordained
Ministerial Standing be suspended, revoked, or transferred for any reason, this
agreement can be terminated immediately by the Church Council, representing our
congregation.

   Believing that the cause and mission of Christ’s church will be forwarded under
your pastoral and spiritual leadership, we join in this agreement.

   Our church calls you to accept this pastoral office by recognizing and
acknowledging with us the responsibilities and duties as our pastor, including those
described in our Articles of Incorporation and Bylaws of this church and those by
the customs and usages of the pastoral office of the United Church of Christ as
defined in the United Church of Christ Manual on Ministry, (particularly sub-
sections entitled, “The Local Church in Relation to Its Pastor,” and “The Ordained
Minister’s Code,” which include the right and responsibility of participation and
leadership in the mission of the United Church of Christ, the ecumenical church,
and the community.)

   As a congregation, we wholeheartedly commit ourselves to the following terms of
the covenant as we call you to be pastor and teacher.

II. RELOCATION EXPENSES

   Our church will pay reasonable relocation costs to move you and your family
from _________, ________ to ___________, ________. It is your responsibility to secure
written estimates of the costs involved and submit them to our Church
Sample Call Agreement – v. 2.0
Page 15 of 23
DRAFT – September 2009                                     Sample Call Agreement
Version 2.0

Council/Governing Board so that we can adequately plan and execute our part of
these logistics. Relocation costs include the expense of advance home hunting trips
for you and family, moving your household goods, mileage for transporting your
automobiles, and meals and lodging for you and your family enroute. These costs
will not exceed ________.
    Our church will reimburse you in the amount of __________for the cost of your
required Criminal Background Check document.

III. SALARY AND HOUSING

    Because our church is committed to fair and just compensation, we provide the
following financial care. All figures listed in this section are annual amounts and
will be pro-rated during the remainder of the current budget year.

                                    Cash Salary

  Beginning on _______________, our church will pay a cash salary of $__________.
The treasurer of our church will make these payments on a semi-monthly basis.

                                 Housing Allowance

    Our church will provide a housing allowance of $__________ in accordance with
Internal Revenue Service guidelines. Your housing allowance includes the costs of
all utilities, maintenance, and furnishings.

                                        OR

                                    Parsonage

    Our church will provide a parsonage with all utilities. We will attend to regular
maintenance on this home, including lawn care and snow removal. You will receive
a housing equity allowance of ___________ to enable you to build equity to housing
ownership in the future. A portion of your cash salary in the amount of __________
will be identified as a non-taxable furnishings allowance.

IV. BENEFITS
                                   Annuity Plan

   Our church will pay, on your behalf, an amount equal to 14% of the pension
basis to your account in the Annuity Fund of the United Church of Christ. The
pension basis equals total cash salary plus housing allowance. Using the
information in this agreement, the pension basis for this year is ________and the
annual contribution is ________.
Sample Call Agreement – v. 2.0
Page 16 of 23
DRAFT – September 2009                                         Sample Call Agreement
Version 2.0

                                 Health and Dental and Vision Plan

   Our church will provide coverage for you and your eligible immediate family in
the United Church of Christ Health Insurance and Dental and Vision Plans or will
provide you coverage in your existing plan.



                            Social Security and Medicare Offset

    Our church will compensate you for the portion of Social Security and Medicare
we would pay if you were permitted by the Internal Revenue Service to be paid as
an employee of the church. This amount is the percentage established annually by
the IRS. The current percentage equals ________of cash salary and housing
allowance, and will be paid to you on a quarterly basis.

                       Life Insurance and Disability Income Plan

If you are eligible to participate, our church will contribute 1.5 % of the salary basis
to the Life Insurance and Disability Income Plan of the United Church of Christ on
your behalf. Using the information contained in this agreement, the annual
contribution for this plan is $__________ (1.5 % of the salary basis).

                                   Flexible Spending Account

Our church will establish a Flexible Spending Account through the United Church
of Christ Pension Board. The amount paid from each paycheck, ____________, will
be used for out-of-pocket costs for medical care or child care or both, which the
pastor can draw upon to cover these costs. The pastor will submit receipts or other
documentation to draw this money. This money is not subject to income tax or
FICA tax and cannot be carried over from one year to the next.

V. OTHER PASTORAL MINISTRY EXPENSES

   Our church recognizes that to call forth the gifts God has given you to lead our
church faithfully, we must provide both resources and support that will assist you in
remaining vital, creative, and energetic for this ministry on our behalf. Therefore,
our church will provide you the following pastoral ministry support and
reimbursement for expenses incurred while you are conducting ministry on behalf of
this church.




Sample Call Agreement – v. 2.0
Page 17 of 23
DRAFT – September 2009                                    Sample Call Agreement
Version 2.0

                                 Professional Expenses

   Our church will reimburse you for professional expenses not to exceed
___________per annum. Professional expenses include such items as books, journals,
entertainment expenses for church guests, professional dues, vestments, and other
legitimate costs incurred as a result of your service to this church. You may submit
expense items for reimbursement on a monthly basis.

                Conference, Association and Wider Church Meetings

   Our church values your participation in the wider church. Thus, we will
reimburse reasonable expenses for attendance and participation in our United
Church of Christ national, conference, association, and other meetings. When these
events occur during a time we regularly gather for worship, the church will make
other provision to provide leadership for our worship services. The amount
established for meeting expenses is included as a portion of professional expenses.

                                 Continuing Education

    Our church encourages and supports your opportunities to participate in clergy
in-service and continuing education programs to strengthen your ministry in this
church. Therefore, we have budgeted $________ annually for the cost of the
educational opportunities, not including travel costs, which are addressed
separately below. We expect you to discuss with the Church Council, in advance, the
nature, timing, and programmatic impact of these opportunities so that we can
negotiate with you the dates and types of events that best support our church’s
programs and your needs for development.

                                     Travel Costs

   Our church will reimburse you, at the Internal Revenue Service mileage rate
established each year, for using your automobile in fulfilling the duties of the
pastoral office. It is your responsibility to keep a log of mileage for appropriate
services in case of a tax audit. There are also times when other transportation
means will be necessary, as well as the cost of room and board while attending
conference, association, and wider church meetings as well as continuing education
events. Therefore, we have established up to $________ for this year to cover such
costs.

VI. SABBATICAL LEAVE

   Our church will provide you with a sabbatical leave of ________ months after
________ years of full-time ministry with our church. During your sabbatical, we
will pay your full salary and benefits. We expect you to share with the Church
Sample Call Agreement – v. 2.0
Page 18 of 23
DRAFT – September 2009                                      Sample Call Agreement
Version 2.0

Council, at least one year before beginning the sabbatical, the developing plans for
time away. In your absence, we covenant to care for our church, our programs, our
worship life, and each other. Further, we covenant not to use this time to
accomplish or decide alone what we have not been willing or able to do together. We
will, and we expect you will also, use the time to reflect on our mutual ministry in
Christ and how we can live more fully into our call as Christ’s church. Upon your
return, we will invite you to share an overview of activities and learnings from your
sabbatical with the church. Unless otherwise agreed before the sabbatical, we
expect that you will continue as our pastor and teacher for at least one year after
your return.

VII. WEEKLY SCHEDULE, VACATION, FAMILY AND COMPASSIONATE
LEAVE

                                 Weekly Schedule

    We realize that the demands of church life come at all hours of the day and night
and that the covenant with our church requires your attention to matters often
beyond your control. In addition, we recognize your need each week to take time for
self and family. Therefore, we encourage and support your ability to manage the
equivalent of ________ days off per week for rest, relaxation and time with family
and friends.

                                      Vacation

   Our church provides you _____ weeks of vacation leave during each 12 months of
service. The congregation is responsible for our church programs, worship life and
each other during your vacation.

                                    Study Leave

   Our church desires that our pastor be current in theological issues and trends as
well as developments in the art of ministry. Therefore, we provide you with _____
weeks of study leave during each 12 months of service. The congregation is
responsible for our church programs, worship life, and each other during this study
leave.

                                  Parental Leave

   Parental leave is extended if you and your family experience the birth or
adoption of a child. You will receive ________ days of parental leave so that you can
care for self and family. Parental leave does not accrue and unused leave is not
payable upon termination.

Sample Call Agreement – v. 2.0
Page 19 of 23
DRAFT – September 2009                                       Sample Call Agreement
Version 2.0

                                 Personal/Compassionate Leave

   Our church realizes that life is not always predictable or within our control.
Therefore, in the event of special circumstances, compassionate leave is available.
We understand special circumstances to include the death of an immediate family
member, sickness, or personal crisis. We provide you with up to ________ days of
compassionate leave per incident. Compassionate leave does not accrue and unused
compassionate leave is not payable upon termination.

VIII. DISABILITY AND DEATH BENEFITS

                                      Disability Benefits

   Initial Disability. If you become disabled and unable to meet pastoral
responsibilities while serving our church, we are responsible for paying full salary,
housing, and benefits for ________.

   Period of Disability. If disability prevents you from performing pastoral
responsibilities longer than ________ days, the church anticipates that the United
Church of Christ Life Insurance and Disability Income Plan will become effective.

                                        Death Benefits

    In the event of your death while serving our church, we will provide your
immediate family, in addition to salary earned but not yet paid: cash salary and
housing for the current month; cash salary, housing, Social Security, and Medicare
offset for a period of ________ days; and the cash value of any vacation leave earned.
Further provisions, if necessary, may be considered and will be discussed with your
family by our Church Council/Governing Board, and our Conference/Association
minister, and the association committee on the ministry.

                                 Disability and Death Benefits

   If death occurs during the first 90 days of your disability, the church will provide
your immediate family with up to ________ days of cash salary, housing, health and
dental benefits, and Social Security and Medicare offset for both the initial period of
disability and for a death benefit.

IX. REVIEW OF PASTORAL CALL AGREEMENT

   Through our Church Council/Governing Board and in accordance with our
church’s budget cycle, the church will negotiate with you, annually, to update this


Sample Call Agreement – v. 2.0
Page 20 of 23
DRAFT – September 2009                                       Sample Call Agreement
Version 2.0

agreement, keeping in mind increases in the cost-of-living, possible merit increases
in salary, and consequent increases in benefits based on salary and housing.

X. OFFICE PROVISIONS

We agree to provide you with an easily accessible office, and to be sensitive to your
needs for adequate support staff, appropriate surroundings and equipment.


XI. EVALUATION OF OUR CHURCH’S MINISTRY

   Our church accepts its responsibility to live faithfully and in covenant with you,
our pastor and teacher. Accordingly, at the end of our first year together and every
year thereafter, we covenant to study, review and evaluate the priorities and total
ministry (including staff) of our church. The Church Council will establish or assign
a committee with responsibility to conduct this evaluation and make report to the
Church Council.

XII. MEDIATION PROCEDURES

    Our church acknowledges that even as we pledge our faithfulness to God, one
another and you, there may be times when difficulties within our relationship begin
to overwhelm us. In those instances, we covenant with you to seek the support,
advice, and wisdom of our association, conference or regional minister, or our
association committee on the ministry, in order that we actively work to maintain
the goodness of our relationship and the goodness God has placed within it. Either
you or the Church Council, representing our congregation, can request such a
consultation, if in the opinion of either, our relationships are becoming ineffective or
unhealthy.


XIII. TERMINATION OF PASTORAL CALL

   Our church recognizes that relationships are always changing and that many
reasons can lead to a separation. Thus, either party can terminate this pastoral call
agreement giving at least 90 days’ written notice to the other or upon other terms to
which we both mutually agree.

XIV. FREEDOM AND RESPONSIBILITY OF THE PULPIT

   Not withstanding any of the other responsibilities outlined for our pastor in the
Articles of Incorporation and Bylaws of this church or in the other resources
referenced on the first page of this document, in accepting pastoral leadership we
also accept your freedom of expression in the pulpit as it pertains to matters of faith
Sample Call Agreement – v. 2.0
Page 21 of 23
DRAFT – September 2009                                     Sample Call Agreement
Version 2.0

and faithfulness according to the insight of scripture, the work of the Holy Spirit,
the traditions of the United Church of Christ, and the context in which we live our
lives.

AGREEMENT

In witness thereof, we have signed our names on this ___ day of __________ 20_____.

For the congregation:

Moderator/President: (Signature)
_____________________________________________

Date ____________________________

Clerk/Secretary: (Signature)
__________________________________________________

Date ____________________________


Treasurer: (Signature) _____________________________________________

Date ____________________________

Pastor-Elect’s Acceptance:

Signature _________________________________________________________

Date ____________________________

(Note: Affix church seal here, if available)

____________________________


Four copies; one each to the following:
Pastor-Elect
Association Church and Ministry Committee
Associate Conference Minister
Local Church




Sample Call Agreement – v. 2.0
Page 22 of 23
DRAFT – September 2009
Version 2.0
                                        Bibliography

http://www.hr-guide.com/data/G400.htm (April 20, 2009)

Manual on Ministry (Published 2002). The Local Church in Relation to Its Pastor. Partners in
Authorizing Ministry. Page 21

http://www.my-pastor.com/pastor-salary.html (April 20, 2009)

Barrett, Wayne C., C.F.P. Clergy Compensation Getting the Most from the Pastor’s Pay
Package. Clergy Financial Services. Grand Rapids, MI. 2005

United Church of Christ Pension Boards. www.uccpb.org

United Church of Christ, Sample Call Agreement: http://www.ucc.org/ministers/pdfs/sample-
call-agreement-pdf.pdf
United Church of Christ, Assessing Finances Developing a Call Agreement and Compensation
Package, http://www.ucc.org/ministers/search-and-call/section-5-assessing-finances.pdf




Bibliography – v. 1.4c
Page 23 of 23