This page of Frequently Asked Questions answers many questions for those who already have a basic idea about RCRP and want more details. One of our officers prepared answers to more introductory questions for those wanting responses to basic concerns such as “Why save for retirement?” “How do I save for retirement?” “What is parsonage/housing allowance?” and “What is a ‘church plan’ like RCRP?”
Please note – All responses to these FAQs are presented as general educational information. For specific tax or legal advice, consult your personal advisor. Specific investment counseling is available from Fidelity representatives, and is available to all participants in the Plan.
Through participation in a qualified clergy retirement plan such as the RCRP, clergy are become eligible to receive disbursements from their accounts in retirement as a housing allowance (parsonage) They also have the flexibility to designate larger yearly contributions to the Plan than if they were contributing to a Traditional IRA.
The Rabbis and Cantors Retirement Plan offers access to low-cost index funds available through Fidelity, no required membership in a specific rabbinical or cantorial association, control of your own investment decisions, and it’s run by a non-profit organization, dedicated to the best interest of plan participants.
The Plan is run by a non-profit corporation, The Rabbis and Cantors Retirement Board, Inc. that is overseen by a volunteer board of directors, as detailed in About the Plan.
The Plan is a 403(b)(9) plan (a “church plan” in IRS language). The Plan rules allow Jewish clergy from all denominations to participate. As a church plan, the Plan has advantages over regular 403(b) plans, including being able to designate distributions in retirement as housing allowance (parsonage) for its participants in accordance with IRS regulations.
The last major revision of this website was posted March 15, 2018. Subsequent minor updates are made periodically.
Please note that RCRP cannot give tax or investment advice. Each participant opens an individual account which holds all the participant’s contributions at one of our participating vendors.
There is no “RCRP investment” determined by the Plan. As a participant, you can allocate your funds directly with Fidelity and can invest in most Fidelity mutual funds. You can hold multiple funds at Fidelity.
Investments include stocks, bonds, domestic, and international funds. They include index funds (until June 2016 called Spartan funds), actively managed funds, and target-date funds based on an anticipated date of retirement. Each participant makes his/her own decisions about investments. Fidelity currently offers 198 different investment options to Plan participants.
We currently offer Fidelity’s two SRI funds:
Fidelity does not yet offer an SRI bond fund. The RCRP board hopes to add additional SRI investment options in the future.
The RCRP currently incurs administrative expenses of about $14K per year, including legal expenses and liability insurance. To cover these costs, the Plan collects a modest annual fee from each participant, scaled to the amount invested as follows (as of July 2018):
|Asset Amount||Regular Fee||Reduced Fee|
|$10K – $49,999||72||36|
|$50K – $99,999||140||70|
|$100K – $249,999||200||100|
|$250K – $349,999||300||200|
|$350K - $499,999||400||300|
|$500K - $999,999||500||400|
The “Reduced Fee” is assessed to Plan participants who are members of organizations that make annual contributions of financial support to RCRP (currently the Alumni Association of the Rabbinical School of Hebrew College, Reconstructionist Rabbinical Association, OHALAH, Yeshivat Chovevei Torah, and Academy for Jewish Religion-California). Participant members of these organizations pay a reduced portion of the regular fee once the individual’s account reaches $10K in assets. No fee is assessed until the account reaches that level.
This fee schedule compares favorably with other clergy retirement plans. In addition to the annual fee, all mutual funds available through our vendors have additional underlying costs and fees. Please consult Fidelity for further information on costs and fees for specific funds.
Yes, but be aware that the parsonage benefit in retirement applies only to funds invested in other retirement plans that were earned while engaged in your rabbinate or cantorate. (See the question on “exercise of ministry” below.)
No, there is not. However, rules regarding transfers are more complex since 2015 due to a court decision affecting the IRS regulations. We recommend consulting a tax professional for advice.
In general, we are aware of these points.
According to the IRS, “exercise of ministry” for rabbis and cantors includes the following:
NOTE: Below is an informal summary of current IRS contribution limits, which can change annually. Please refer to IRS 403(b) Contribution Limits for further details (including limits for current year-end contributions).
In 2018, the limit (set by the IRS) for contributions made in this fashion goes up to $18,500 for those who will not yet be 50 years old as of December 31, 2018. The limit for those who will be 50 years old or older as of December 31, 2018, is $24,500.”
In addition to contributions withheld from your pay, your employer (or, if you don’t work for a synagogue, yourself) can contribute additional amounts to the plan. The total annual contribution limit to the Plan (set by the IRS) in 2018 is $55,000 (or 100% of your compensation, not including any parsonage/housing allowance), whichever is lower. In 2018 the figure is $61,000 if you will be 50 years old or older as of December 31, 2018.
The total contribution limits set forth above are for funds contributed to all qualified plans (not just this Plan). If you are contributing (or your employer is contributing) to another plan, you can still join the Plan but the total global contributions cannot exceed the relevant number above.
It depends on where you work:
Not at this time. Under the rules established by the IRS and affirmed by decisions of the Federal courts, only those duly ordained as rabbis and cantors are eligible to be considered as “ministers of the Gospel” for purposes of the tax code, and eligible to receive a housing allowance /parsonage designation.
The RCRP board has determined that a Maharat is the equivalent of a rabbi or cantor for purposes of participation in the Fund. See list of eligible ordinations/graduations.
Contact our office well in advance. Requests for designating parsonage/housing allowance must be made in advance, normally by November 1 in the prior year. Fidelity will report as housing allowance any properly designated withdrawals in an annual statement. Please complete this form to request that your distributions be designated as parsonage.
Yes. Required minimum distributions, or RMDs, are mandatory, minimum yearly withdrawals that generally must be taken starting in the year you turn 70½. While there is a minimum amount you are required to withdraw in order to avoid severe penalties, you can withdraw more than the RMD amount.
RCRP funds are 403(b) accounts. For RMD purposes, you cannot combine 403(b)s and IRAs; you must take RMDs from each category separately.
Learn more here: Fidelity can help you calculate your RMD
Also check the Internal Revenue Service’s FAQs
No. The PBGC provides protection only for pensions that are offered by employers as defined benefit pensions [e.g., 2% of salary for each year of employment will be paid in a pension upon retirement]. This Plan is a defined contribution plan. No insurance is available for such plans, nor is any required. Your fund at Fidelity is your own fund and is as safe (or at risk) as the fund of anyone else invested at this major mutual fund company.
There are no specific provisions in the new legislation that affect clergy or those employed by religiously affiliated institutions. Whatever impact a rabbi or cantor experiences will likely be the same that other taxpayers experience.
There was a court decision to that affect by one district court in Wisconsin in October 2017. The decision is under appeal as of December 2017, and for the present there is no change in federal law or tax policy. The housing allowance will continue in force until all appeals are resolved. This case is likely still years away from conclusion. The RCRP board and legal counsel will continue to monitor this situation. A more detailed update is included in a January 2018 mid-year letter to participants.
See “Pension Extends Coverage to More Rabbis” in The Forward.
The New York Times has cited our Plan as an example of “How to Fix A Retirement Plan at a School or Nonprofit”:
“The…Rabbis and Cantors Retirement Plan serves two purposes: It is a model for those who are unhappy with the fees and investment choices in their current plan, and it allows others to get a plan where they previously had none."
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