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Pension Funds and Bankruptcy

Can a bankrupt minister protect his pension funds?

• Can a minister who files for bankruptcy protect his pension funds from bankruptcy creditors? That was the issue before a federal bankruptcy court in an important ruling. A 56-year-old minister declared bankruptcy, and both he and his denominational pension board sought to protect his pension funds from the reach of creditors in the bankruptcy proceeding. The pension plan is funded by a combination of member and congregation contributions. The plan provides that the minister shall contribute 3% of his salary and the congregation which employs him shall contribute 8% of the member's salary. Both the member and the congregation may make additional optional contributions, which are to be allocated as member or congregation contributions, respectively. When a member attains the age of 60 years or completes 40 years of service, the combined accumulation of the member and congregation contributions ...

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Posted:
  • May 1, 1991