I am a professional working for a URJ-affiliated congregation. Am I eligible to participate in the Reform Pension Plan?
Eligibility for participation in the Reform Pension Plan requires that the individual is a member of their appropriate Reform Movement professional organization participating with the RPB and be employed by a URJ-affiliated congregation. In addition, 501(c)(3) non-profit organizations such as federations, Jewish community centers, etc. may also be considered eligible employers. Membership in or employment by the following organizations qualify for eligibility:
- Central Conference of American Rabbis (CCAR)
- Union for Reform Judaism (URJ)
- National Association for Temple Administration (NATA)
- Association of Reform Jewish Educators (ARJE)
- Early Childhood Educators of Reform Judaism (ECE-RJ)(Assistant Directors and Directors only)
- Program and Engagement Professionals of Reform Judaism (PEP-RJ)
- Advancing Temple Institutional Development (ATID)
- Reform Pension Board (RPB)
While a congregation that is not affiliated with the URJ is not an RPB-eligible employer, newly ordained rabbis from the HUC-JIR who commence employment with a congregation that is not affiliated with the URJ are automatically eligible to participate in the Reform Pension Plan for three years. An extension of up to two additional years is possible by writing a request to the RPB Board.
I am changing jobs from a URJ-affiliated congregation to a non-URJ affiliated. Can I still contribute to my RPB account?
Participants who change positions to a congregation that is not affiliated with the URJ but maintain an active membership status with their appropriate professional organization can continue to make contributions under a three-year grace period. The three-year grace period begins as of the plan year following commencement of employment with the non-affiliated congregation. When the three-year grace period concludes, participants are allowed to leave their pension accounts invested with the RPB and start taking distributions at retirement.
I work for a Reform congregation that may be suspended or terminated by URJ. Can I continue my pension contributions to the RPB Plan under either of these circumstances?
Suspensions from the URJ have no effect on RPB participation for current or new RPB participants. RPB participants who work for terminated congregations are given a three year grace period during which their pension contributions can continue. The definition of three years is three RPB plan years following termination.
Can I contribute to the RPB Plan if I work for a religious non-profit organization that won’t contribute on my behalf?
Clergy who work for a religious non-profit organization are eligible for full participation in the RPB’s programs. If your organization will not make employer contributions to the RPB retirement plan on your behalf, you can still contribute through elective salary deferrals. These contributions are subject to the annual IRS voluntary salary deferral amount limits and must be made through your employer with pre-tax dollars. Please contact us at the RPB office so that we can work with you to facilitate your contributions. To begin making contributions, we require the following items:
- A certification that shows that your employer is a non-profit organization as defined by IRS code paragraph 501(c)(3). Your employer could provide you with a copy of their tax exempt certificate, which the IRS provides to them.
- A letter from your organization to confirm that they will not make direct contributions to the Reform Pension Plan on your behalf.
- The relevant RPB forms to either enroll in the Reform Pension Plan if you will be a new participant, or to change your status from “inactive” to “active” if you are a current participant.
It is important to note that you are responsible for handling the recategorization of the elective salary deferral payment to the RPB to non-taxable income on your IRS income tax filing. Please contact the RPB office for more specific information.
My congregation will not contribute funds to the RPB Plan on my behalf. Can I make contributions from my salary?
If your congregation will not make pension contributions on your behalf, you can have your congregation withhold pension contributions from your salary as an elective salary deferral. Your congregation would then remit the contribution to the Reform Pension Board. You must first enter into a Salary Reduction Agreement with your congregation and maintain a copy of the agreement at the congregation’s office.
I belong to an eligible Reform Movement professional organization and work for a religious non-profit organization. Can I contribute to the RPB Plan if I am not a rabbi?
Non-rabbinic staff who work for religious non-profit organizations are eligible to participate if the individual has served eligible Reform Movement congregations for at least eight years and is a member of their appropriate Reform Movement professional organization. In these circumstances, you would be eligible to contribute to the Reform Pension Plan up to the maximum IRS elective salary deferral limits. You would only be eligible to participate in the RPB Rabbi Trust Plan.
I work for a Reform Movement institution, but my spouse does not. Does he/she qualify for the same RPB benefits that I receive?
A spouse does not qualify for the same benefits that you receive through your participation in the Reform Pension Plan. To be eligible for participation in the Reform Pension Plan, a person must be a member of a participating Reform Movement professional organization and be employed by a URJ-affiliated congregation.
Why are there two tiers of funds?
Can I invest in Tier 1 and Tier 2 funds at the same time?
Are there restrictions on how I can invest my money?
No. However, there is one restriction known as the Equity Wash rule which limits direct transfers between certain competing funds for 90 days.This rule applies to the transfer of assets directly from the RPB Capital Preservation Fund to either the Vanguard Short-Term Bond Index Fund or the Vanguard Short-Term Inflation-Protected Securities Index Fund.
You must first transfer the assets into any of the other funds for at least 90 days before they can be moved again into the Short-Term Bond Index Fund or the Short-Term Inflation-Protected Securities Index Fund. The funds to which this rule applies may change in the future.
What is the difference between the funds in Tier 1 and Tier 2?
The Tier 1 managed funds are designed to keep pace with rising markets and minimize losses during declining markets by investing in a diversified mix of asset classes.Each of the Tier 1 funds uses both active and passive investments to achieve its objective (growth, growth and income, income, or safety of principal). The RPB relies on actively managed investments for asset classes where empirical evidence suggests that managers can exceed the performance of a benchmark index. We rely on passive investments where there is less evidence that managers can add value above and beyond investing in the index.
Each of the Tier 2 Vanguard index funds represent a single type of investment or asset class (such as large cap U.S. stocks, short-term bonds). The funds available span the spectrum of asset classes and investment risk.
What is the difference between an actively managed investment and a passively managed investment?
Actively managed investments refer to a portfolio management strategy where managers use fundamental research, market forecasting, complicated computer models and their own experience to make specific investments. The goals of active management include outperforming a benchmark index such as the S&P 500 and/or maintaining a lower level of volatility than the benchmark–over longer periods of time. Most actively managed investments are designed to add value in up markets and minimize losses in down markets.The most common form of passive investments are index funds because they are designed to mimic the return of a specific benchmark such as the S&P 500. The manager achieves this by replicating the holdings of the benchmark index. When a particular index rises or falls, the value of a fund that tracks that index also goes up or down by the same amount.
Who makes the investment decisions in the Tier 1 and Tier 2 funds?
The asset allocation and underlying manager decisions for the Tier 1 funds are made by the RPB’s Board of Trustees guided by the recommendations of our outside investment advisory firm, Summit Strategies Group, the RPB Investment Committee, and the RPB’s Jewish Values Investing Policy.Investment decisions for the Tier 2 funds are made by Vanguard, the funds’ manager.
Is there a cost difference between the funds in Tier 1 and Tier 2?
Which tier of funds is right for me?
How can I make sure my portfolio is properly diversified?
Each of the Tier 1 funds is already well-diversified by investing across a wide spectrum of asset classes and investment strategies based on the fund’s objective. They should not require further diversification.Each index fund in Tier 2 holds a large number of individual securities but only within a specific asset class or segment of the market. A properly diversified portfolio of Tier 2 funds may include allocations to three or more different funds based on an investment objective or tolerance for risk.
How many funds do I need?
Why aren’t there more funds in the plan?
How often can I change my investment elections?
You can change your investments and transfer money between funds every five business days in InfoExpress. Vanguard has an additional frequent trading policy: if you move money out of a Vanguard fund, you cannot move money back into the same Vanguard fund for a period of 30 calendar days. Investment changes placed before the NYSE closes (4PM Eastern) will be executed that night and posted the following business day. Changes made after 4PM Eastern, will be executed in the evening of the following business day and posted the day after that.
Where can I (or my financial advisor) learn more about all the funds in the plan?
Why did RPB choose Aperio Group to create the Reform Jewish Values (RJV) Fund?
Does the RPB provide investment advice?
Where can I learn more about investing terminology?
When can I start drawing on my Reform Pension Plan account balance?
Distributions Prior to Age 55
If you are under age 55, you may withdraw all or a portion of your pension funds after a one-year waiting period in which you no longer work for an eligible employer as defined by the RPB Pension Plan Document. These withdrawals can be made as a direct distribution or as a rollover to another qualified retirement plan. IRS penalties may be incurred for direct distributions.
Distributions between Age 55 and 59 1/2
If you are between the ages of 55 and 59 ½, you may withdraw all or a portion of your pension funds with no waiting period after you no longer work for an RPB-defined eligible employer. These withdrawals can be made as a direct distribution or as a rollover to another qualified retirement plan. IRS penalties may be incurred for direct distributions.
Distributions at Age 59 1/2 or Older
You may withdraw all or a portion of your pension funds with no waiting period and no employment restrictions once you reach the age of 59 ½. Click here for additional information on distribution options.
What are my plan distribution options in retirement?
The Reform Pension Plan offers several options for receiving distributions in retirement. Participants may choose one or a combination of the following distribution options:
- Draw from your account monthly under the Flexible Payment Option.
- Roll over all or part of your account balance to another qualified retirement account.
- Take a direct distribution of all or part of your account balance.
- Purchase an institutionally priced annuity with MetLife through the RPB.
Click here for additional information on distribution options.
I am planning to retire in less than a year under the Flexible Payment Option. What steps do I need to take with the RPB in order to start receiving monthly distributions from my pension account?
Approximately two months before you plan to retire, you should send a communication in writing to the RPB office using email, fax or postal mail informing us of the date that you are planning to retire and the retirement option that you wish to select. When your communication is received and approved by the RPB office, we will send you the relevant retirement forms and personalized information to facilitate commencement of your upcoming distributions. After you return the completed forms to the RPB office, we will set up your retirement distributions.
How often can I change the amount that I draw monthly from my RPB account in retirement through the Flexible Payment Option?
You can change the amount of your monthly distribution up to four times during each year of your retirement. As a guideline, the RPB recommends that the maximum amount that you withdraw annually does not exceed 15% of your pension account balance. Please contact the RPB office in writing if you would like to request an adjustment to your monthly distribution amount. We can accept your written request by email, fax or postal mail. Requests need to be received in the RPB office by the 8th business day of the month to be effective as of the 1st of the following month.
When will I receive my payment after I make a partial or lump sum distribution request?
Payments for non-recurring partial and lump sum distributions will be issued in the month following our receipt of the request.
What type of plan is the Reform Pension Board’s retirement plan?
The Reform Pension Plan is a Defined Contribution Plan organized within the framework of IRS 403(b) regulations. The Reform Pension Plan is also a church plan, as the RPB provides benefits to employees of religious institutions.
Is there a maximum contribution limit on the amount that I can contribute to my RPB 403(b) plan?
Yes. The IRS places limits on the contributions that can be made to 403(b) and other qualified retirement plans in a given year. The contribution limits are determined by whether the contribution being made is an “employer contribution” or an “elective salary deferral.” To see the current IRS maximum contribution limits and further information, click here to go to the “Maximum Pension Plan Contribution Limits” tab on our Programs & Services\Pension Plan\403(b) page.
What is the RPB’s investment philosophy?
The Reform Pension Board’s investment philosophy is based on two principles: a long-term investment outlook and a diversified portfolio:
The Reform Pension Board’s fundamental viewpoint is that investment decisions should be made based on expected long-term performance. Statistics indicate that changing an investment strategy based on short-term market volatility has historically been an ineffective, and at times counterproductive, approach. The Reform Pension Board remains constant in adhering to a disciplined long-term investment strategy.
The Reform Pension Board maintains a highly diversified investment portfolio to mitigate our exposure to any particular company or investment class. This approach helps diminish the effect of a single market event on the entire portfolio.
Does the RPB consider Socially Responsible Investing (SRI) as well as Environmental, Social and Governance (ESG) factors in making investment decisions?
Yes, the RPB has a Jewish Values Investing (JVI) policy that considers ESG as well as other factors in its investment process. To learn about the RPB’s JVI policy, please click on the following link: Jewish Values Investing
Can I roll over money from my other tax-deferred accounts, such as IRAs or 401(k) accounts, to my RPB 403(b) account?
Yes, RPB participants can roll over money from other qualified retirement accounts such as traditional IRAs, 401(k) and 403(b) accounts into their RPB 403(b) accounts. Funds rolled into the plan are tracked separately in our systems and on account statements. Please go to the Forms page on our website to download an RPB rollover form or contact the RPB office. We also provide letters of acceptance to facilitate the transactions as needed. Please note that Roth IRAs are not eligible to be rolled over to the RPB 403(b) plan.
How can a Plan participant who is going through a divorce divide the account balance between him/herself and the soon-to-be ex-spouse?
In the case of divorce, the RPB requires a Qualified Domestic Relations Order (QDRO) to divide the participant’s RPB account between the participant and his/her ex-spouse. Before a QDRO is processed through the courts, it should be forwarded to the RPB office for review to ensure that it satisfies the RPB’s legal requirements. The RPB provides a Model QDRO as a resource to assist you in this process.
Once a QDRO is filed and approved by the courts and the approved QDRO is received by the RPB office, the appropriate amount will be transferred from the original participant’s account to an account set up for the ex-spouse. The ex-spouse cannot contribute additional funds to the account but can leave the funds invested with the RPB or roll the funds out of the account.
What happens to my account balance upon my death?
Participants are required to designate beneficiaries upon joining the Plan. If you are married, your spouse must always be your primary beneficiary unless he/she signs off otherwise to acknowledge a different beneficiary.
In case of death, if your spouse is your primary beneficiary, he or she would take over the account in his/her name and have the same rights to the account as you, including assigning beneficiaries. Your spouse would not be able to contribute to the Plan or claim parsonage.
If you have listed someone other than your spouse as your primary beneficiary, such as your children, they have two options:
- They can roll over the pension money to an inherited IRA account.
- They can leave the money with the RPB and take distributions (which are taxable income) over no more than a five-year period.
Click here for additional information on beneficiary designation, located in the Programs & Services / Pension Plan / 403(b) section of our website.
Does the RPB allow participants to take hardship withdrawals?
The RPB allows participants who qualify to take hardship withdrawals from the Plan in accordance with IRS regulations. If you are considering requesting a hardship withdrawal, please read the “RPB Hardship Withdrawal Requirement Rules” and our “Q&A for Hardship Withdrawals” to learn the criteria necessary to qualify. We understand that you may be in a difficult situation, and we will be as helpful to you as possible. Contact the RPB office if you need to obtain a hardship withdrawal request package or have questions.
Does the RPB allow participants to borrow against their accounts?
No, the Reform Pension Plan does not offer any provisions for loans.
QDRO – In the Case of Divorce
In the case of divorce, the RPB requires a Qualified Domestic Relations Order (QDRO) to divide the participant’s RPB account between the participant and his/her spouse. Before a QDRO is processed through the courts, it should be forwarded to the RPB office for review to ensure that it satisfies the RPB’s legal requirements. The RPB provides a model QDRO as a resource.
Once a QDRO is filed and approved by the courts, the RPB will transfer the appropriate amount from the original participant’s account to an account set up for the ex-spouse. The ex-spouse cannot contribute additional funds to the account, but can roll the money out of the account or leave it invested with the RPB.
How does the Reform Pension Plan address parsonage declarations?
When retirees draw on their pension accounts in retirement, they are receiving distributions of pre-tax contributions and associated earnings. Under current IRS regulations, clergy can use their parsonage exemption to offset some or all of their taxable distributions depending on their housing expenses. The amount of parsonage they claim against their RPB distributions cannot exceed their income from the RPB. Retired clergy should check with a financial advisor to ensure compliance with the IRS parsonage rules.
For specific information on retired ministers’ parsonage benefits from the IRS website, click here: Retired Ministers. For additional information on parsonage, including information from the “Minister’s Guide for Income Tax,” please contact the Central Conference of American Rabbis (CCAR) at firstname.lastname@example.org.
How do I submit for my parsonage exemption each year through the RPB?
The RPB sends parsonage exemption forms to retired clergy each fall in advance of the upcoming year. The participant must confirm or lower the amount of parsonage that they declared for the past year and project the amount of parsonage that they wish to set for the upcoming year. The RPB transmits the collected information to the applicable financial institution, who then issues a Form 1099-R to the participant to reclassify the income from taxable to non-taxable.
Following my death, can my surviving spouse continue to utilize the tax benefits of parsonage?
The parsonage allowance is only available to the clergy member, not to their surviving spouse.
Does money that is rolled over from other tax-deferred accounts such as 403(b)s or IRAs to the RPB qualify for parsonage in retirement?
Rollover contributions and associated earnings will be coming from sources that did not directly contribute the funds to the RPB, and therefore, the RPB does not have the authority to approve parsonage resolutions from distributions coming from rollover funds even if coming from another “church plan.”
What is a Rabbi Trust?
A Rabbi Trust is a non-qualified deferred compensation arrangement in which funds are invested in an irrevocable trust to be held for the benefit of employees for retirement purposes. The funds contributed are tax deferred in a similar manner to other tax deferred vehicles such as the Reform Pension Board 403(b) plan. The name “Rabbi Trust” was established because the first IRS letter ruling with respect to this type of trust involved a rabbi; however, the Rabbi Trust is widely utilized in commercial enterprises and not-for-profit organizations.
Why the need for a Rabbi Trust?
IRS regulations limit the amount of deferred income that can be contributed to tax deferred plans such as the RPB 403(b) plan.
The IRS places limits on the contributions that can be made to a 403(b) plan. Click here to see the maximum contributions for the current plan year.
What do you mean by taxable income?
For clergy, taxable income is salary plus other taxable congregational income such as FICA tax reimbursement, but not including parsonage. For all other RPB participants, it is your W-2 salary.
How will I calculate my RPB 403(b) maximum and my Rabbi Trust contribution?
You don’t have to! The Reform Pension Board realizes that performing tax calculations can be complicated and time-consuming. The Board of the RPB decided to relieve its participants of the responsibility of becoming knowledgeable in this area. The staff, along with the Board’s outside legal and pension plan expert counsel, has researched the IRS rules and incorporated the formulas, including some of the exceptions, into our computer system.
Do I have to be concerned about administration?
No, the Reform Pension Board will do all the administration.
How will I know how my money is being invested?
Your account statements will show your RPB 403(b) plan and the Rabbi Trust funds separately.
What is the relationship of the Rabbi Trust money to my congregation?
The Rabbi Trust funds are invested by the RPB and held in trust by the RPB, but the actual account (contributions and earnings) is technically an asset of the congregation that contributed the funds.
Does that mean the congregation can use the money?
No. The only time that Rabbi Trust funds could be accessed is if the congregation becomes legally insolvent. Under those circumstances, assets in the Rabbi Trust would be available to the claims of creditors of the congregation that contributed the funds.
What if the congregation has a severe cash flow problem?
The Rabbi Trust assets cannot be used.
What if the congregation merges with another congregation?
The Rabbi Trust assets remain intact.
Can I commingle the Rabbi Trust assets with the RPB 403(b) plan into one account when I retire?
Unfortunately, you cannot. Each account is treated separately.
Why does the RPB maintain two different Rabbi Trust accounts?
As a result of the American Job Creation Act of 2004, there are two Rabbi Trust accounts based on when your contributions (and resulting investment earnings) were made to the RPB. Contributions received prior to January 1, 2005 (Rabbi Trust Account) and contributions received on or after January 1, 2005 (Rabbi Trust Post–2004 Account) are segregated in different accounts.
Are there any differences in how the two Rabbi Trust accounts are processed?
The main difference between the two Rabbi Trust accounts is in the way money is distributed at retirement.
How is the Rabbi Trust money paid out at retirement for contributions (and related earnings) that were received prior to January 1, 2005?
The rules concerning distributions from Rabbi Trust Pre-2005 accounts that are from contributions and associated earnings made up until December 31, 2004 are as follows:
- You are not eligible for a distribution until the later of your turning age 65 or retirement.
- Your options regarding the timing and schedule of distributions are as follows:
- You can elect to defer receiving distributions from your Rabbi Trust Pre-2005 account until no later than April 1st in the year following the year you turn 70 ½ regardless of your employment status. To do so you must have an election form on file with the RPB in the calendar year prior to the year you turn 65 or, if later, the calendar year prior to the year that you retire. You must specify the start date and the installment schedule (one to fifteen years).
- If no election form is on file with the RPB, a payout over five years (the “Default Election”) will commence in the year you are first eligible to receive a distribution, but no later than April 1st following the year you turn 70 ½.
- Regardless of your election, the minimum annual distribution from the Rabbi Trust is $25,000 or your account balance, whichever is less.
How is the Rabbi Trust money paid out at retirement for Rabbi Trust Post – 2004 accounts?
The rules concerning distributions from Rabbi Trust Post-2004 accounts that are from contributions and associated earnings made in or after January 1, 2005 are as follows:
- You are not eligible for a distribution until the later of your turning age 65 or retirement.
- Your options regarding the timing and schedule of distributions are as follows:
- You can elect your start date and distribution schedule:
- You can elect to defer commencement of your distribution, but it must be for a minimum of five years, and distributions must commence no later than April 1st in the year following the year you turn 70 ½ regardless of your employment status.
- Your distribution election form must be on file with the RPB before you turn 64. It should specify the start date and the installment schedule (one to fifteen years). After you turn 64, any election form on file with the RPB will be irrevocable.
- If no election form is on file with the RPB, a payout over five years (the “Default Election”) will commence in the year you are first eligible to receive a distribution, but no later than the April 1st of the year following the year you turn 70 ½ regardless of your employment status.
- You can elect your start date and distribution schedule:
Regardless of your election, the minimum annual distribution from the Rabbi Trust Post-2004 is $18,000 (the current IRS maximum deferral amount) or your account balance, whichever is less.
Can contributions that were placed in my Rabbi Trust account be transferred back to my 403(b) account?
Contributions in the pre–2005 Rabbi Trust account can be transferred to your 403(b) account if in any year you are still making pension contributions and have not used up your entire elective salary deferral limit. The RPB will notify you each spring of any transfers being made to your 403(b) account. Contributions in the Post–2004 Rabbi Trust account cannot be transferred to your 403(b) account.
What if I do not want any pension contribution funds automatically contributed to the Rabbi Trust?
You must inform the RPB in writing, jointly signed by you and an officer of the congregation. You must realize, however, that your pension contribution to the RPB will be limited to the IRS 403(b) maximum limits and your ultimate pension benefit from the RPB will be less than would otherwise be available.
What does daily valuation mean?
Valuation is the process of updating participant accounts with investment gains or losses, as well as contributions, distributions, and administrative fees. For retirement plans like ours, this may occur as frequently as daily or as infrequently as annually. Until now, participant accounts have been valued monthly. Going forward accounts will be valued every day the New York Stock Exchange (NYSE) is open. Values will be updated each evening using that day’s closing price. While participants’ accounts will reflect daily market activity, contributions and distributions will continue to be processed monthly and administrative fees processed quarterly.For a full summary of how Daily Valuation works, read our Quick Guide to Daily Valuation.
When will my account balance be updated?
How frequently can I change my investments and when will the changes take effect?
With daily valuation, you can make investment changes once every five business days for both Tier I and Tier II funds. Changes will take effect the next day that the New York Stock Exchange (NYSE) is open. The purpose of the 5-day rule, which was recommended by our custodian bank and record keeper and approved by the RPB Board of Trustees, is to minimize transaction costs to the Plan that may result from excessive trading.
For Tier II funds, Vanguard stipulates an additional 30 calendar day frequent trading policy. This policy states that if you own one of Vanguard’s funds directly and decide to reduce or eliminate your allocation to that fund, you cannot go back into, or increase your allocation to, that same fund for 30 calendar days.
Can I cancel or modify an investment change that I made?
What other enhancements are available with Daily Valuation?
Along with daily balance updates, you will also be able to:
- See daily price history
- Invest future contributions in different funds or with different percentages from current balances
- For retirees, request that the RPB issue distributions from specific funds
- Change your investments more frequently and see the effect of that change the next business day
- View fund performance information in InfoExpress