UMPIP pension accounts to allow Roth contributions

Beginning on January 1, 2016 participants may now make Roth contributions to their UMPIP accounts. You will receive a communication from the General Board of Pension and Health benefits in early October explaining this Roth savings.

Roth contributions are very unique—and there are a few important technicalities to understand. Roth contributions are made on an after-tax basis, so participants will not be taxed on them again upon withdrawal. Earnings on Roth contributions may be distributed tax-free as long as certain conditions are met:

  • The first Roth contribution was made at least five years prior to distribution, AND,
  • The participant has attained the age of 59½, is permanently disabled or has died.

Roth contributions may create tax advantages for some participants, while some may experience unintended tax consequences by making Roth contributions. In general, Roth contributions may be right for participants who:

  • Currently make after-tax contributions to UMPIP
  • Expect to be in a higher tax bracket during retirement
  • Have many years to save
  • Want a tax-free income source for themselves or their heirs

However, personal income tax circumstances are different for everyone and should be fully scrutinized before making a Roth election. In particular, clergy should consider their housing allowance exclusion and/or SECA tax circumstances, as applicable, before electing to make Roth contributions.

All participants are encouraged to contact EY Financial Planning Services at 1-800-360-2539 between 9:00 a.m. and 8:00 p.m., EST, for a personalized Roth consultation in light of their overall financial picture. EY Financial Planning Services has developed clergy-specific tools to help you understand the impact of your housing allowance exclusion and/or SECA tax circumstances on a Roth decision.

The General Board contracts with EY Financial Planning Services to provide confidential, objective financial counseling to eligible participants at no charge. Costs for these services are included in the General Board’s administrative expenses that are paid for by the funds. EY Financial Planning Services are available to active participants and surviving spouses with account balances, and to retired and terminated participants with account balances of at least $10,000.

CLICK HERE for an updated Contribution Election form for your convenience that allows you to make before-tax, Roth and after-tax contribution elections.