FAQs

Introductory Questions

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?”  As a "first step," we suggest downloading our Retirement Planning For Rabbis and Cantors FAQ, created by RCRP Board member Rabbi Robert Tabak.

Please note – All responses to the FAQs below and the Retirement Planning For Rabbis and Cantors FAQ linked above 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.

1. Why should Jewish clergy join a retirement plan designed for clergy instead of a regular plan such as an IRA?

Through participation in a qualified clergy retirement plan such as the RCRP, clergy are 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.

2. Why should Jewish clergy join the Rabbis and Cantors Retirement Plan [“the Plan”] instead of another clergy plan?

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.

3. Who runs the Plan?

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.

4. Legally, what is 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.

5. How often is the website updated with new information?

The last revision of this website was posted February 9, 2020. Subsequent minor updates are made periodically.

Investment Questions

6. If I participate, where and how will my money be invested?

There is no “RCRP investment” determined by the Plan. As a participant, you can allocate your funds directly with Fidelity. You can hold multiple funds at Fidelity and Calvert.
With advice from the RCRP investment committee and Fidelity, RCRP reorganized mutual funds in January 2019 to make choices easier. The major innovation is re-organizing the almost 200 mutual funds offered by Fidelity into four tiers for fund choices. (That term is not used on Fidelity platforms, but it is helpful to understand the options.) This will simplify choices for most RCRP participants. More details are included in our February 2019 Update to Participants.

Tier 1 (“ONE-FUND TARGET YEAR”) is a group of Target Date Funds (a balance of stocks and bonds) based on your estimated retirement year. This could be your one-fund investment choice.

Tier 2 is a short list of low-cost funds, listed under “CORE FUND” for those who prefer to choose their own investments, It includes four Fidelity mutual funds and four Calvert Socially Responsible Investment mutual funds. .Our investment committee believes that RCRP participants can manage their retirement accounts with good options using Tier 1 or Tier 2 choices only.

Tier 3 includes over 190 more Fidelity Funds.

Tier 4 is the option to open a Fidelity brokerage account. Most RCRP participants will not need to use Tier 3 or Tier 4, though they are an option.

Please note that RCRP cannot give individual tax or investment advice.

7. What types of investments are available through Fidelity (our primary account vendor)?

In addition to the target date funds (Tier 1), Tier 2 includes under “CORE FUND” four low cost mutual funds: US stock (Fidelity Total Market Index), international stock (Fidelity Total International Index), and two US bond funds(Fidelity Inflation Protected Bond Index and Fidelity US Bond Index). It also includes a money market fund. Over 190 additional Fidelity funds are available in Tier 3 (“Expanded Options”).

8. What are the socially responsible investment (SRI) options?

Included in Tier 2 on the Fidelity platform (“Core Funds”) are four low-cost SRI funds from Calvert funds, a well-known company in the fields of socially responsible investing and use of environmental, social impact, and governance (ESG) criteria.  . There is a SRI US stock (equity) fund, Calvert US Large Cap Core Responsible Index I; a SRI international fund, Calvert International Responsible Index I; a SRI bond fund, Calvert Green Bond I; and a SRI balanced fund, Calvert Balanced I. Investors preferring to use social screening criteria should be able to manage their retirement accounts with good options using these four funds.

Fidelity has also begun several new ESG funds, with differing selection criteria, which are available through Tier 3 (“Expanded Options.”)  More information from Fidelity is available here.

Annual Fees

9. What are the costs to participate?

The RCRP currently incurs administrative expenses of about $25K per year, including legal expenses and liability insurance. To cover these costs, the Plan collects modest annual dues from each participant, scaled to the amount invested as follows (as of July 2021):

Asset AmountRegular DuesReduced Dues
Under $10K 180
$10K – $49,9997236
$50K – $99,99914070
$100K – $249,999200100
$250K – $349,999300(n/a)
$350K - $499,999400(n/a)
$500K - $999,999500(n/a)
>$1 million700(n/a)

“Reduced Dues” are 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 dues once the individual’s account reaches $10K in assets. No dues are assessed by the RCRP until the account reaches that level. Please note that those accounts having balances over $250K are no longer assessed reduced dues as of July 2020. There is also a $20/year fee per participant assessed by Fidelity, which is deducted directly from each participant's account.

This schedule compares favorably with other clergy retirement plans. In addition to annual dues, 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.

Transferring Funds

10. If I have an IRA (or another retirement plan) already, can I transfer it (“roll it over”) into the Plan?

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.)

  • Participants who want to transfer funds from an existing IRA or 403 (b) to the RCRP need to fill out an RCRP form certifying that these funds were earned in the course of professional work as a rabbi or cantor. The form is available here.
  • Participants will also need to fill out a transfer form from the mutual fund receiving the transferred funds. See our sign up page for forms.

11. Is there any limit to the amount that can be transferred (“rolled over”) from an IRA or 403 (b) fund to the Plan?

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.

  • The term “rollover,” often used for any kind of transfer between one retirement account and another, now has a specific meaning for the Internal Revenue Service. Not all retirement fund transfers are rollovers.
  • Each taxpayer is limited to one rollover per 12-month period (an individual 12 months, not a calendar year.) There are significant financial penalties for violating this rule.
  • The number of transfers that are NOT rollovers is not limited by the IRS.
  • Transfers directly from one mutual fund to another mutual fund (“trustee to trustee”) are not considered a “rollover,” unlike funds made personally payable to an individual.
  • Our best understanding is that transfers within RCRP funds, if made directly from one mutual fund to another mutual fund (“trustee to trustee”), are not considered rollovers.
  • Here are links to recent IRS policies on rollovers/transfers:
    IRA One-Rollover-Per-Year Rule
    IRS Clarifies Application of One-Per-Year Limit on IRA Rollovers

Defining “Exercise of Ministry”

12. What clergy compensation qualifies as “exercise of ministry?”

According to the IRS, “exercise of ministry” for rabbis and cantors includes the following:

  • Performing sacerdotal functions
  • Conducting religious worship
  • Controlling, conducting, and maintaining religious organizations
  • Performing services at a church-related hospital or health and welfare institution, or a private nonprofit hospital
  • Writing religious books or articles
  • Please refer to IRS Publication 517 for further information.

Contributions and Limits

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). Please also check the COVID-19 FAQ section below for additional relevant information on this topic.

13. What is the upper limit of the amount that my employer can withhold from my compensation and contribute instead on my behalf to the pension plan?

For 2021, the limit (set by the IRS) for contributions made in this fashion remains unchanged- $19,500 for those who will not yet be 50 years old as of December 31, 2021. The limit for those who will be 50 years old or older as of December 31, 2021 remains $26,000.

14. Suppose I want to contribute more than $19,500 (or $26,000, if applicable) to the plan. Can I do that? If so, how?

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 2021 is $58,000 (or 100% of your compensation, not including any parsonage/housing allowance), whichever is lower, and $64,500 if you will be 50 years old or older as of December 31, 2021. Details at: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-403b-contribution-limits. (Note: As of 12/27/20 this info not fully updated for 2021 at the IRS website.)

15. Suppose I am contributing to another retirement plan at the same time. How would that affect the foregoing figures?

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.

16. Can I make contributions to the Plan directly?

It depends on where you work:

  • If you work for a synagogue, the synagogue has to “adopt” the Plan (we have a simple online form for that) and only the synagogue can send in the contributions (both employee ones and employer ones).
  • If you don’t work for a synagogue (technically, if you don’t work for a church 501c3 organization), then you can join the Plan directly (and the employer does not have to sign the adoption agreement). This means you can send in contributions on your own up to the $55,000 (or $62,000) limit.
  • If you work in clergy service for a 501c3 that is not a synagogue (but not a church 501c3),  you can join the Plan directly. In this case you are permitted to contribute up to the limit of $58,000 (or 100% of your compensation, not including any parsonage/housing allowance), whichever is lower, and $64,500 if you will be 50 years old or older as of December 31, 2021.  (Note: As per #14 above, as of 12/21/20 this info not fully updated for 2021 at the IRS website.)
  • If you work for a for-profit entity (for example, as a chaplain for a for-profit hospital), you have to contribute directly, because a for-profit cannot adopt a 403(b) plan).

Eligibility

17. I serve as a chaplain, though I am not an ordained or invested rabbi or cantor. Am I eligible to participate?

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.

18. I am ordained as a Maharat and have not chosen the title “Rabbi.” Can I still participate?

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.

Approaching Retirement

19. I am a participant approaching retirement age. Is there anything that I should know?

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.

20. When I reach a certain age am I required to withdraw some retirement funds each year?

Yes. Required Minimum Distributions, or RMDs, are mandatory, minimum yearly withdrawals that, as per the provisions enacted into law in late 2019, required those who had reached the age of 70½ to take your first RMD by April 1, 2020.  However, for those who have had not met that plateau, the CARES Act suspended retirement plans Required Minimum Distribution (RMD) for 2020 and those who did withdraw their RMD prior to passage may be entitled to some accommodation for future RMDs. (Consult your accountant or Fidelity directly if this is you).

For 2021, you must take an RMD from your account in 2021 if you were 70 ½ or older on December 31, 2019, as would have already started your RMDs and are required to continue. And, you are required to take an RMD for 2021 if you were born at any time in 1949 or earlier, as this means that you would be at least age 72 on December 31, 2021.

If you were born 1950 and after, you are not subject to RMDs for 2021 because you would not have reached age 70 ½ by December 31, 2019 and you would be under age 72 as of December 31, 2021.

If you are subject to an RMD, while there generally is a minimum amount you are required to withdraw in order to avoid severe penalties, you can withdraw more than the RMD amount and these funds can be withdrawn as housing allowance, provided you submitted the required request forms (see FAQ 19) as per our policies by the end of the previous calendar year.

Please note that 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

21. Should I expect to receive any tax forms or documents from Fidelity related to disbursements from my account?

Yes. Assuming you have reached and have requested and received disbursements from your RCRP account, you should expect to receive a notice from Fidelity that a 1099R form is available to download from your Fidelity account or NetBenefits webpage or received one by mail. This form should indicate the total amount withdrawn during the previous tax year. Please note however, that where the form customarily indicates the "taxable amount" of the distribution, it will likely say “unknown” or similar.

This is because Fidelity does not have any means to determine whether the amount received qualifies as "housing allowance" as it is defined by law and the tax code. It is each participant’s responsibility to determine that the proceeds that they received meets the standards that permit the distribution to be considered not subject to Federal income tax*. Please consult your tax preparer or accountant to assure your Federal tax return is in compliance. Careful planning and making sure to request “housing allowance” distributions in retirement in November of the year prior to receiving them by filing this request form will help assure that the amounts you receive from your account will meet the requirements so that they are not subject to Federal taxation. Any distribution from your account that does not meet the requirements to be considered as “housing allowance” is subject to Federal income tax and would need to be declared as income when filing your tax return.

*Please refer to Retirement Planning For Rabbis and Cantors FAQ

Are Funds Guaranteed?

22. Does the Pension Benefit Guaranty Corporation (“PBGC”) provide a guarantee that will protect my funds?

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.

Legal Updates

23. Does the tax reform law passed in December 2017 affect clergy parsonage/housing allowance?

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.

24. What about a recent federal district court decision holding that housing allowances for clergy were unconstitutional?

There are currently no active cases in the courts that threaten the existence of the 403(b)(9) plans for clergy that are the basis for the plan we offer. There was a challenge that had reached the Federal Court of Appeals in 2018, but in 2019 the decision that sided with the plaintiffs was overturned and the litigants have chosen not to continue their appeal. The RCRP board and legal counsel will continue to monitor the situation and keep our participants informed.

COVID-19 Update

25. How does the recent legislation passed by Congress and signed into law effect participants in 403(b)(9) plans like the RCRP?

The Board updated all participants on the changes to Federal law that could impact our participants on April 6, 2020. Read that statement here. The legislation basically eases the process for participants to take loans against the funds help in the RCRP accounts and relieves those reaching age 72 in 2020 from taking required minimum distributions. For further guidance, please consult your financial advisor or tax professional. Fidelity also continues to provide guidance during this time and has forwarded links to online info and websites through e-mail to our participants. We are not aware of other recent legislation significantly affecting our plan

Learning More and Participating

26. Has the press written about the Plan?

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."

27. How do I sign up?

Follow the directions on our Sign Up page.

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