Board of Pensions

[pucclm]

Good morning,

We're confused about the best way to account for the pastor's payments to the Board of Pensions. The full amount comes out of the pastor's paychecks. Would we need to enter the transaction four times for fund accounting? The amount is already in our general fund, then paid from the general fund to a liability account, then from the liability account to the BOP? It's done on autopay. We can't wrap our brains around how to get this amount to go in the correct place automatically each month. Should the payment to the BOP be considered a church liability even though it's paid from the pastor's salary?

Thanks in advance!!

[NeilZ]

Good morning,

We're confused about the best way to account for the pastor's payments to the Board of Pensions. The full amount comes out of the pastor's paychecks. Would we need to enter the transaction four times for fund accounting? The amount is already in our general fund, then paid from the general fund to a liability account, then from the liability account to the BOP? It's done on autopay. We can't wrap our brains around how to get this amount to go in the correct place automatically each month. Should the payment to the BOP be considered a church liability even though it's paid from the pastor's salary?

Thanks in advance!!

This is something that needs to be setup in Payroll. If the pastor pays all the dues, then you need to set this up as an 'Other Deduction', however, if the church pays as part of the total compensation for the pastor, this is created as an employer liability.

I having setup a Presbyterian church which has a Board of Pensions, the dues covered both health insurance and pensions, these were considered something that the church was required to pay. So this is definitely a employer liability. However, they also offered an additional method for the minister to sock away extra pension money in the form of a 403b. This is an 'other deduction', that can be setup as pre-tax, after-tax, or a non-Roth retirement plan for taxes. Since the BoP sends one bill for all these items, all such deductions go to the same liability account, which I called Board of Pensions, a no-brainer.

When the pastor gets paid, the system moves the funds to the liability account. When you get notice of payment or, if I remember right on the 1st of the month, you enter a manual check using the checking account as credit, and liability account as debit.

Does this help?

[pucclm]

This helps tremendously. Thank you so much!