Economic weakness hits compensation

Last fall, Teleios sent a questionnaire to pastors, asking about their compensation packages for 2010. The surprise wasn’t so much in the content of the responses, but in the number who answered and their comments. Seventy pastors responded – and many had something to say!

Raises in 2010?
About three-fourths of the pastors who responded work full time in pastoral ministry. More than half said they aren’t receiving raises this year. At least two of the pastors are expecting up to a 20 percent decrease in salary, and four more indicated they had already agreed to salary and benefit cuts last year.

Some pastors, who said they’ll receive a raise in 2010, indicated their increase would be smaller than in the past.

Some pastors reported they receive no pay or only occasional offerings for their pastoral services because “money is tight” or “that is our way.”

Ask and ye shall receive? A nationwide survey earlier in the decade showed that about half of its responding pastors did work up the nerve to ask for a raise. Of those asking, 75 percent reported they received an increase in salary. But today, many pastors are reluctant to ask for a salary raise – especially in this weak economy.

Denominational guidelines
The pastors’ congregations are generally aware of denominational guidelines when compensation is negotiated. About three-fourths of the pastors said their church’s governing body at least consults the guidelines.

Brenda Martin Hurst, Frazier, Pa., said, “. . . they follow the guidelines carefully . . . and provide good compensation for their pastor.” Meanwhile, a Friends pastor in Oklahoma said, “There are no specific guidelines … but we suggest salary be comparable to that of a local school teacher.”

Still, while most of these churches use the guidelines, there is wide variety in how congregations use them. Some follow them carefully while others have only a nodding acquaintance. One Pennsylvania pastor, whose church uses the Mennonite Church USA guidelines, said, “I wish there was more engagement and intentional discussion around these topics.”

Among pastors who said no guidelines are used, four work in congregations that don’t give regular compensation to pastors.

Benefits package 
The main benefits within the pastors’ compensation package are health insurance, retirement savings accounts, health savings accounts, and continuing education. The most common reimbursements for pastoral work are: mileage, professional and hospitality expenses, and conference attendance.

Less frequent benefits include a payment to offset Social Security self-employment tax (equal to 7.5 percent of salary) and reimbursement of cell phones expenses.

Funding health insurance and retirement
Since health insurance and retirement savings accounts are foundational in many benefit packages, we asked the pastors how these are funded. The majority of pastors said their church pays all of their health insurance. However, several of them noted that the church didn’t pay insurance for their families.

Fewer than 15 pastors said the church and pastor share the cost of health insurance premiums; another 14 said the church doesn’t pay for any health insurance coverage. A few of these pastors noted they receive some or all of their insurance coverage through their spouses’ employer or from a bi-vocational job.

Almost half of the pastors said their church fully funds their retirement accounts, and another 15 said they and their church both fund the accounts. Just about one third said they fund their retirement account alone, and some don’t have any retirement savings.

Appropriate compensation
Only a few pastors felt they were under-compensated. And a few pastors wondered whether their compensation fit well with their congregation’s financial condition – because they weren’t sure the church could afford a full-time pastor. Some were concerned about their compensation in light of their church’s mortgage, which they said had a stranglehold on the budget.

Yet, a significant majority of the pastors were satisfied with their 2010 pay. They said the compensation is appropriate, considering their congregation’s financial situation.