Frequently Asked Questions

1. What information do I need before using PlanAhead?

2. What accounts should I include in "Other Investments" under "Other Savings Information"?

3. How is my pension benefit determined? Why is it different from the estimate on my statement?

4. Does the tool take into account legal limits on the amount of benefits or contributions to my retirement plans?

5. How is my savings plan balance used to provide retirement income?

6. How are cost-of-living increases reflected in my retirement income?

7. What does it mean that X% of needs are met?

8. Why do my needs end at a fixed age?

9. Can I set my own estimate of my needs?

10. What is meant by "your current secular employer retirement plans"?

11. How are cost-of-living increases reflected in my needs?

12. What is the basis for the Social Security benefit shown?

13. Can I put in the actual benefit estimate that I received from Social Security?

14. How is Medicare reflected?

15. What are some of the key assumptions used in PlanAhead?

16. Is the information I enter protected?

17. What do I do if the email link is not working?

18. Who do I contact for help?

 

1. What information do I need before using PlanAhead?

PlanAhead estimates your retirement needs and income based on the information you enter. While estimates of the following information may produce a reasonable guide to your retirement needs and income, having recent actual information available will produce more accurate estimates.

If you are married and plan to include your spouse in your planning, you should have this information available for both you and your spouse.

  • Annual compensation (from employment with the Episcopal Church (TEC), with a secular employer and your spouse's employment sources)
  • The number of years of credited service earned under The Church Pension Fund Clergy Pension Plan (Clergy Pension Plan) for pension benefits and life insurance benefits and credited service earned for the Medicare Supplement Health Plan (MSHP) subsidy. Prior to the effective date of the revised Clergy Pension Plan (expected to be 1/1/18), credited service earned was earned for both the Clergy Pension Plan, life benefits and the MSHP subsidy. After the effective date, full payment of monthly assessments earns one month of credited service for the Clergy Pension Plan and life benefits. However, to earn credited service for the MSHP subsidy, full payment of assessments at or above the monthly Hypothetical Minimum Compensation is needed. See question #14 for details.
  • Your spouse's employer-provided pension and savings plan descriptions
  • Recent statements from your savings, investment and retirement accounts, including:
    • Recent Personal Information Summary (PIS) from The Church Pension Fund (CPF) and other employer-provided pension and retirement savings plans
    • Personal savings accounts, brokerage accounts, IRAs, 401(k)s, 403(b)s (e.g. RSVP) and all other accounts that will provide you income in your retirement
    • Any pension plan statements in addition to those from CPF and your spouse's current employer
  • Current rate of contribution (as a percentage of annual compensation or dollar amount) to your employer-provided retirement savings plans and your spouse's employer-provided retirement savings plans.
  • Current rate of contribution to your other savings, investment and retirement accounts

2. What accounts should I include in "Other Investments" under "Other Savings Information"?

You should include all accounts you expect to use to provide retirement income. This might include checking and savings accounts, brokerage accounts, IRAs, 401(k)s and 403(b)s, and employer-provided savings accounts.

3. How is my pension benefit determined? Why is it different from the estimate on my statement?

Your pension benefit is estimated using the formula specified in the Clergy Pension Plan and the inputs you enter. If your retirement date is earlier than your normal retirement age or the date on which you earn 30 or more years of credited service (the age you can retire and begin receiving unreduced benefits) the pension will be adjusted for early retirement, as provided in the revised Clergy Pension Plan expected to become effective 1/1/2018. If you request that pension payments continue to your spouse after your death (a joint and survivor annuity), the Clergy Pension Plan payments may be adjusted for the cost of this benefit.

The tool assumes continuous employment up to retirement, with a full year of credited service each year. If your work pattern or work history is very unusual, the estimate of your pension benefit produced by the tool may be significantly inaccurate.

The tool produces an estimate of your benefits and uses approximations. Your actual benefit at retirement will be calculated based on the exact provisions of the Clergy Pension Plan, your credited service and compensation history. If you are near retirement, call Client Services at (800) 802-6333 to request an estimate.

4. Does the tool take into account legal limits on the amount of benefits or contributions to my retirement plans?

For most users, the legal limits will not apply. For higher income earners and users with significant employer contributions to defined contribution plan, the limits may need to be considered in retirement planning. Below is a brief description of how the legal limits on your benefits and contributions are applied in PlanAhead:

  • The IRS 401(a)(17) compensation limit that restricts the amount of annual compensation that may be considered for qualified retirement plans ($270,000 in 2017) is applied to all employer provided retirement plans except The Clergy Pension Plan as PlanAhead assumes that you will earn a benefit under the nonqualified Benefit Equalization Plan if your compensation or benefit exceeds the qualified plan limits. Legal limits are applied, however, to defined benefit plans offered by other secular employers or offered to your spouse.
  • Contributions to the RSVP and other employer provided retirement plans include the annual participant contribution limits ($18,000 in 2017). If your current age is at least age 50, the contribution limit reflects catch-up contributions ($6,000 in 2017). Note however, that the legal limits are applied to individual retirement plans, not to the total of all retirement plans of a user. A user with secular employment, or multiple employer provided retirement plans, should consider if their total benefits and contributions are in compliance with legal limits.
  • Contributions to the RSVP and other employer provided defined contribution plans do not include the IRS 415(c) limits on contributions ($54,000 in 2017).
  • Benefits payable from a qualified defined benefit plan do not include the IRS 415(b) limits on annual benefits ($215,000 in 2017).
  • Calculations for clergy members with secular employment apply the legal limits to individual retirement plans; not to the total of all retirement plans. A user with secular employment should consider if their total benefits and contributions are in compliance with legal limits.

Applicable legal limits are applied on an approximate basis only. PlanAhead For Retirement is not intended to be used as a tool for providing tax or investment advice or compliance information.

5. How are my savings used to provide retirement income?

Your savings are used by the tool to fill the gap between your needs and your pension and Social Security income over your expected lifetime. The tool assumes all your projected savings will be spent by the end of your expected lifetime. If you indicate that you are married, the tool assumes your projected savings will be spent by the end of your joint life expectancy.

If you want to leave an estate rather than exhaust all your savings, go to the Advanced Inputs page. Find the question about one-time needs after retirement. Enter the dollar amount of the estate you would like to leave to your heirs as a need. Enter the age of your life expectancy from the graph (the highest age where the graph is still showing retirement income being paid). This will reserve some of your savings for an estate, and will result in a lower score.

6. How are cost-of-living increases reflected in my retirement income?

Your Social Security benefits are projected to increase with inflation. Although not guaranteed, cost-of-living increases on your Clergy Pension Plan benefit are programmed in PlanAhead. Non-CPF pensions are not projected to increase. PlanAhead uses your savings balances to fill in your retirement needs. As your needs increase with inflation, the amount of your savings allocated to provide income increases accordingly. In this way, PlanAhead shows how your projected savings plus employer pension plans can provide retirement income that increases as your needs increase.

7. What does it mean that X% of needs are met?

Your score is the average percentage of your projected needs expected to be met by your projected retirement income. This result is calculated as the present value at retirement of your projected retirement income divided by the present value at retirement of your projected retirement needs. The present values are calculated using your post-retirement rate of investment return assumption. If the result is more than 100%, the value of your projected income exceeds the value of your projected needs.

In a few cases, the graph may show that retirement income exceeds your needs in some years and is less than your needs in other years. The percentage of needs met is the average percentage of your needs that will be met throughout retirement, taking into account both years of excess income and years of shortfall. This percentage of needs met by projected income is the best measure of your overall retirement income projection, based on all the information and assumptions you have entered.

8. Why do my needs end at a fixed age?

The tool uses your life expectancy (the expected number of years you will live beyond retirement) at your retirement age to illustrate your retirement needs and income sources. Life expectancy is merely an average length of time; in reality, half of us will live longer and half will die sooner. To be conservative, PlanAhead uses a default life expectancy longer than the average. If you want to change the life expectancy used by PlanAhead, you can do so on the Advanced Settings page.

9. Can I set my own estimate of my needs?

Yes. The tool allows you to override the needs calculated with your own needs estimate. You can set your own needs percentage using the Advanced Inputs page. You may want to use your own estimate of needs if you expect much lower or higher income needs than are shown in the tool. Note that if you use this override, the tool will calculate your needs as that percentage multiplied by your compensation immediately before retirement. It will not include an adjustment for medical expenses. You will need to include medical needs in your override percentage.

10. What is meant by "your current secular employer retirement plans"?

If you currently have a secular position in addition to your clergy position, you may be actively participating in more than one retirement plan. "Your Current Secular Employer Retirement Plans" is where you enter information about retirement plans through your current secular position. If you have benefits in retirement plans from previous employers, those go on the "Other Investments" page.

11. How are cost-of-living increases reflected in my needs?

PlanAhead For Retirement increases the amount you need for living expenses each year by a cost-of-living increase rate. Similarly, the amount you need for medical expenses is increased each year by a medical trend rate. These assumptions are necessary to project an income that maintains your purchasing power during retirement. You can adjust the assumptions for cost-of-living increases in the Advanced Settings if you think you will need a different level of inflation protection. There are various reasons for using a lower estimate of inflation. (For example: your income needs may gradually reduce as you grow older and become less active.)

12. What is the basis for the Social Security benefit shown?

Your Social Security benefit is estimated beginning with your current pay and projecting both forward and backward to estimate a full career of earnings history. The tool assumes that you have been, or will be, employed in a job covered by Social Security for the full 35 years used to calculate the benefit level. If this is not the case because you were not working in all years or worked in a non-covered job such as certain government jobs, the tool may overestimate your Social Security benefit.

You can enter your (and/or your spouse's) earnings history into one of the online benefit calculators at www.ssa.gov to get a more precise estimate and enter those estimates on the Input page. When you enter your estimate in this tool, you will likely want to use the "future dollars" estimate. If you use the "current dollars" estimate, it's a much more conservative assumption and will result in a lower score.

If you think Social Security benefits will not be provided at the same level as the current law, you can make adjustments for that in the Advanced Settings - Social Security page.

If you allow the tool to calculate a Social Security benefit for your spouse, and have input an income for your spouse, the tool will project your spouse's earnings history forward and backward in time to estimate your spouse's Social Security benefit. The tool will then use the larger of your spouse's Social Security benefit or 50% of your Social Security benefit for your spouse. If 50% of your spouse's Social Security benefit is larger than your Social Security benefit, this will be used for you. Be aware that both your estimate and the estimate for your spouse assume a full career of covered employment and could overstate your benefit if there are long periods when you were out of the work force. For a non-working spouse, this benefit is computed as 50% of your Social Security benefit beginning at the later of your retirement date and the age when your spouse is eligible to receive Social Security.

13. Can I put in the actual benefit estimate that I received from Social Security?

Yes. Instead of having the tool estimate your Social Security benefit based on your current salary, you can enter your actual benefit estimate from Social Security on the Input page of the tool. You can use the Social Security retirement estimator at www.ssa.gov to get your benefit estimate in "future dollars." When you enter your estimate in this tool, you will likely want to use the "future dollars" estimate. If you use the "current dollars" estimate, it's a much more conservative assumption and will result in a lower score.

14. How is Medicare reflected?

The tool assumes you and your spouse will be eligible for Medicare at age 65. The retiree medical insurance expenses shown reflect medical insurance costs beyond those covered by Medicare. These expenses will either be paid out-of-pocket or through supplemental insurance.

As of the effective date of the Clergy Pension Plan revisions, credited service under the Medicare Supplement Health Plan (MSHP) subsidy is only earned if monthly assessments equal to 18% of $1,500 (1/12 of the revised Hypothetical Minimum Compensation of $18,000) are paid to CPF. If assessments paid to CPF are less than 18% of $1,500, you will not earn credited service under the Medicare Supplement Health Plan (MSHP) subsidy, but you will earn credited service under the Clergy Pension Plan and life insurance benefit.

Because the tool includes information about your CPG-sponsored retiree medical plan, if any, the tool assumes that you will enroll in the Medicare Supplement Comprehensive Plan offered by the Medical Trust, if eligible.

Since Medicare coverage is not available before age 65, early retirees will have higher needs for medical coverage in the years before they turn 65. If your spouse is younger than you, you may see the needs for retiree medical coverage in the graph reducing once you reach age 65, and again when your spouse reaches age 65.

15. What are some of the key assumptions used in PlanAhead?

PlanAhead uses the following basic assumptions and methods.

  • Your retirement income needs can be estimated from your projected compensation and national average research on needs. The calculator assumes you will need 100% of your pre-retirement income at the time of retirement.
  • You are covered by Social Security and Medicare, and 100% of the current Social Security benefit is projected to be available when you retire.
  • Pre-tax income is compared to pre-tax estimated needs. Taxes are considered in estimating needs after retirement.
  • Knowledge of past investment performance over long periods is useful in planning for the future.
  • If eligible, PlanAhead assumes you will purchase the Medicare Supplement Comprehensive Plan for you and your eligible spouse.
  • PlanAhead assumes that your spouse will be an Eligible Spouse on the date of your retirement.
  • The Clergy Pension Plan benefit included in the calculation excludes the resettlement benefit, and life insurance.
  • All contributions to a defined contribution plan are pre-tax contributions and your contributions to any qualified defined contribution plan will not exceed your taxable compensation in any year.
  • Your pension benefit is not reduced for any approved qualified domestic relations order (QDRO).
  • The IRS 401(a)(17) compensation limit that restricts the amount of annual compensation that may be considered for qualified retirement plans ($270,000 in 2017) is applied to all employer provided retirement plans except The Clergy Pension Plan as PlanAhead assumes that you will earn a benefit under the nonqualified Benefit Equalization Plan if your compensation or benefit exceeds the qualified plan limits. Legal limits are applied, however, to defined benefit plans offered by other secular employers or offered to your spouse.
  • Longevity: The calculator's default assumption is that you will live 7 years longer than your average life expectancy. Average life expectancy is assumed to be 87 for a 65-year old male, and age 89 for a 65 -year old female. You can change the life expectancy in the Advanced Settings of the calculator.

16. Is the information I enter protected?

The data you enter into PlanAhead is your personal information. To protect your privacy, PlanAhead uses a secure internet connection and may require your email address and a password in order to access your records. Do not share this information with others, and be sure to log off the site completely when you are finished working.

PlanAhead requires the use (including, in certain cases, the storage and retrieval) of your personal information, including nonpublic personal financial information. By using PlanAhead, you consent to such use by Milliman and CPF and its affiliates for the purpose of providing you access to the tool.

"Cookies" and Your Privacy: A cookie is information that a web site puts on your computer's hard disk so it can remember something about your web session at a later time. When your PC's browser uses cookies, it "remembers" what web sites look like - it doesn't have to build a page from scratch every time you want to go back to it.

PlanAhead uses cookies to connect your input on one page to calculations and graphs on a different page. PlanAhead will not work without cookies being enabled by your browser. However, none of your personal information is stored in the cookies themselves.

17. What do I do if the email link is not working?

If you are having trouble using the email links, try opening your email and starting a new message. Highlight the email address link, right click and choose Copy. Then, click in the "To" field of your email and right click and paste. Now, send your email as usual.

18. Who do I contact for help?

PlanAhead provides more detailed information to answer your questions in several ways.

Green text brings up a pop-up box with additional information when you move the cursor over the text. When you move your cursor away, the box disappears.

If you have questions about taking the next step toward a secure retirement, please contact Laurence Dresner at the Church Pension Group (CPG) at 800-223-6602 ext.1803 or email or email .

If you have questions about using the tool or technical issues, contact Milliman at PlanAhead@milliman.com

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