Clergy ‘disadvantaged by Superannuation Bill’

Press, 19 November 1982, Page 20

Clergy ‘disadvantaged by Superannuation Bill’

Parliamentary reporter Clergy will be unable to buy their own homes when they .retire, if the Superannuation Schemes Amendment (No. 2) Bill goes ahead, church groups have told a Parliamentary select com : mittee. The Anglican, Baptist, Methodist, and Presbyterian churches joined forces in submissions to the select committee on the bill which will tax superannuation schemes’ net, income from investment at the rate of 31c in the dollar; At present, income on superannuation schemes is not taxed. The churches said that their schemes provided for taking of lump sum benefits at retirement by ministers of religion, Annuities could also be commuted into a lump sum amount.

The purpose was to help retired clergy buy their own homes, after having lived in rented or church property during their service. The Baptist Union said that maximum commutation of the annuity plus the lump

of $51,000, which would buy only a “very modest home.” This would be after 35 years in the fund. The Methodist Church said that after 40 years of contribution to the fund, a minister would be entitled to a pension of $1143 a year and a lump sum of $32,938 if he commuted the maximum 75 per cent of his pension. This would “hot provide for more than a modest home,” the submission said.

The Presbyterian Church said that 35 years of service would give a retiring minister $2622 a year, plus $51,800 in lump sum and commutation. He would be able to buy only a modest debt-free retirement home, the Church said.

The Anglican Church said that after maximum service of 42 years, the commuted pension would produce $24,500, and the minister would receive an annuity of $2237;.

“With the rapid appreciation in property values in recent years, many ministers seek to purchase a retirement home a few years before retirement.” the joint

this on the assurance that they will be able to repay the debt incurred from their lump sum benefits on retirement.”

"We are sure that the Government would not want to make Church Superannuation schemes subject to taxation. It is imperative that ministers of religion be able to have access to lump sums on retirement from their superannuation provisions.

The New Zealand Evangelical Missionary Alliance, an association of 60 missionary

societies, asked that, those f -<-“who did not have much of this world’s goods” would be able to take all their pensions in the form of a lump sum, if the pension to which he would otherwise be entitled were less than $3O a week.

The bill would require that he. paid his very small contribution into a lump sum scheme, only to have it taxed, and seriously diminished as a benefit. If he paid any, increase into a pension fund, he would receive “a triflingly small pension on retirement,” the alliance