The RMMN’s Empowered Initiative is a voluntary program in which ministers can choose to have 10 percent of their monthly tithe to the Network forwarded to a 403(b) retirement account. This initiative offers two Assemblies of God investment options. The first is Church Extension Plan in Salem, Oregon; and the second is Ministers Benefit Association in Springfield, Missouri. Both organizations offer a 403(b) retirement plan and are exceptional options that can help you diversify your retirement savings. Following are eight reasons why using more than one plan may be advantageous:
1. Diversification of investments. Different 403(b) plans may offer a range of investment choices such as mutual funds, annuities, or other investment vehicles. This allows you to spread risk across a wider range of assets than a single plan may provide.
2. Access to different investment strategies. Providers of 403(b) plans offer various investment options to fit a range of personal investment strategies and choices. Investment strategies can focus on various things such as your projected retirement date, index versus managed funds, fixed income versus equity growth, socially and biblically responsible investments, fixed annuities, and self-directed investments based on your personal preferences. Utilizing multiple providers may enable you to choose from a broader range of investment strategies that complement your preferences and enhance your overall retirement portfolio.
3. Management cost savings. By using multiple providers, you can compare costs and administrative fees associated with each. This allows you to choose providers with lower fees which can reduce the expenses related to managing your retirement savings. Over the years, lower management fees can significantly increase the returns in your retirement fund.
4. Service and support. The level of customer service, coaching, online tools, educational resources, and support plans providers offer can differ significantly. This includes the ease of accessing account information, responsiveness to inquiries, and customized coaching available to participants.
5. Flexibility in rules and incentives. Providers may offer varying contribution sources, limits, loan options, matching opportunities, employer incentives, vesting periods, and withdrawal rules. Using multiple providers allows you to tailor your contributions based on your unique financial situation and take advantage of the specific benefits offered by each provider.
6. Employer matching considerations. If your employer provides a matching contribution to your 403(b) plan, using multiple providers could allow you to maximize employer matches across different accounts. For example, to diversify my retirement savings, my employee contributions go to one 403(b) provider in a more aggressive fund and all my employer contributions go to another 403(b) provider with lower-risk investments.
7. Risk management. If one provider faces financial difficulties or other issues, having accounts with multiple providers can help mitigate risk. Your entire retirement savings is not solely dependent on the performance or stability of a single provider.
8. Philosophical compatibility. There are three types of retirement providers for ministers. The first group is secular investment providers who offer retirement plans to ministers and churches but have little understanding of the unique complexities of a minister’s remuneration package, Christian values, or the importance of moral investment options. The second group is faith-based organizations whose advisors are Christian businesspeople but whose primary focus is on business and profit over ministry values. For example, one faith-based provider recently publicly supported gay pride month on their social media outlets. In this case, their social agenda overshadowed their Christian worldview. The third group is plan providers whose entire organizational structure, culture, and employee base are centered around biblical values. You will need to decide how your provider’s philosophy will affect whom they partner with, how your money is invested, and who benefits from the earnings of those investments. It is important to choose a provider who has practical experience in ministry, understands finances, and is compatible with your ministry philosophy and ethical standards.
These are the reasons why it is essential to carefully consider your financial goals, investment strategy, and the features of each 403(b) provider before deciding whom to use. Their differences can significantly impact your overall retirement savings experience. For these reasons, I use both CEP and MBA to invest my retirement savings, and I encourage you to do the same.
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