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How To Intelligently Provide For Your School Staff In Today’s Challenging Times
A wag once said “ Since we know school workers should be humble servants, we will care for their physical needs with this in mind.”
In reality it is a good thing that no thinking person figures that way. Ask yourself these questions however:
1. Would you be willing to work the hours they work for the pay they receive?
2. Could you support and educate your family on the salary you pay them?
3. Are their salaries keeping par with today’s high cost of living?
4. Considering their education and what similarly educated people earn in similar secular work, are they being fairly compensated?
5. Could you provide the standard of living you expect of them on the salary and benefits you currently offer?
6. If you had to give an account of your stewardship, would you feel that you have treated them fairly and honestly with your expectations for the compensation you give?
Living expenses have risen nearly 20 percent in the last five years according to the Consumer Price Index. The Department of Labor also reports that most professionals have had between 12 to 21 percent salary increases in the same period. How are you doing for your minister and staff?
A school that desires to intelligently provide for their staff with a fair compensation package, should consider salary and benefits for the following areas.
You may want to investigate information concerning a reimbursement policies for staff expenses. Such a policy treats the staff’s expenses as non-taxable income. This can provide a pastor and staff with a reduced tax burden.
1. Operating/Business: Costs that should be paid expenses that would assist staff to make what you pay them, go further.
a. Transportation expenses
Travel to seminars, conventions, and etc, as well as taking individuals of the school to meetings and such. Auto expenses could run from $1,000 to $5,000 or more than the average member in your church. The IRS allows thirty-six and one-half cents per mile. Certainly you should not expect to offer them less.
b. Office expenses
Library books, tech equipment and other items for study and work with your school.
c. Hospitality and entertainment expenses
Luncheons and entertainment with school officials, and others, in the home or take them out to eat, etc.
d. Continuing education expenses
Seminars, conventions, formal continuing courses of study that can help them stay current for the work of your church, as well as other formal education that they feel will help them, as they minister with you.
2. A realistic take-home salary
a. Noting experience
b. Educational backgrounds
c. Suggestion, note salaries of area public school teachers and administrators.
3. Housing allowance: Costs that should be paid expenses that would assist your pastor and staff to make what you pay them go further.(would you like living in the home you provide them or assist them with owning)
Many schools today are no longer providing housing because staff opt for housing allowances instead. This allows the staff to exclude the designated housing allowance from taxable income. They are also allowed to claim the interest expenses and property taxes on their schedule A for further tax reduction. This provides the opportunity for the them to realize home appreciation that can assist if needed when retirement or a move should happen. It also provides the satisfaction of owning a home, an important benefit.
a. Provided housing, is it possible to provide other options?
b. Assist the staff with owning a home.
c. A reasonable housing allowance should provide your staff with a home
Utilities : Costs that should be paid expenses that would assist your pastor and staff to make what you pay them go further.Some pay the basic costs, some pay the full costs.
a. Home heating expenses
b. Electric expenses
c. Water and sewer expenses
d. Telecommunications expenses
e. Internet expenses
4. Reasonable vacation opportunities and holidays Refreshment and family time together. A time to recharge them for heir work and ministry at your church. It will help them be fresh and have less burnt out.
5. Security measures and benefits: Costs that should be paid expenses that would assist your pastor and staff to make what you pay them go further. we can assist you with these for your minister, staff, and r medical insurance coverage.
Consider including other health benefits, dental, vision, hearing, etc.
b. Disability insurance coverage
To pay when they are laid up and cannot minister
c. Group Life insurance
We can assist you with coverage offers $10,000 to $250,000 with very little underwriting, a great benefit if a staff member has a health issue. A big benefit many employees receive with their employers. The cost is below the normal offering for similar individual insurance. The IRS does require the premium for life insurance provided above $50,000 to be shown as taxable income. The portion below is non-taxable. We will assist with figures for taxable and non-taxable premium portions.
d. Adequate auto insurance coverage
This would include their auto or provided work auto
e. Home insurance
This would include their personal possessions or home insurance if they own their home.
f. Coverage for libraries, tech equipment, and other items used by them. These are usually excluded from their home insurance as tools of the profession.
g. Professional liability and other protection
Coverage for them as they minister, and guide the church in general, along with the individuals entrusted to their care.
h. Long Term Care insurance
Coverage for extended periods of time when they and their spouse are not able to care for themselves
i. Pension and retirement care
What have you done for your minister when they can longer carry in the work of the school? Tax deferred annuities allow
the staff to deposit money into a tax-deferred plan from their salary that the school can also contribute to. We offer specially designed 403b plans with no administration costs or setup costs as other plan would have. These 403b plans have unique opportunities for your staff. For clergy, there is an opportunity to draw their housing allowance tax free from it after they have retired from working with you at your school.
j. Embarrassment Fund
A sum of money your school can provide your staff’s spouse and children if they live in provided housing while working with you. Ask yourself when would you have to ask them to leave to make room for the next staff member? What would they live on? Where would you put the new staff member if the family of the former staff member remains in the provided housing?
k. Key-personal insurance.
No staff member would care to leave their work with your school
suddenly by death, especially when your school has accepted a
new building program or other major projects under their leadership. When a school experiences the lost of a key staff member by death finances usually decrease as the school seeks to deal with the loss in their own and
varying ways. Many may leave the school, leaving those left behind with financial matters that are far to great for them. Others may withhold funds they had given regularly previously as they seek to deal with the loss. From the many schools we deal with, we have seen some schools experience some very sad and trying times after such a loss. We offer several products that can and have made a wonderful difference for those schools that have taken advantage of them to protect their school in this area.
l. Health and fitness programs :
Consider providing some physical opportunities for staff workouts with consideration for memberships in some area facilities or provide opportunity at your own location for staff and others. A health staff will
offer a more excellent program for your school that is most cost effective and efficient. Staff members as a profession are really careless in this area and need all the encouragement you can give.
Let us know were we might be of assistance as you plan and review these important areas that most lay people expect and take for granted from their employer. The average employer offers benefits that are of a value that is near or more than 35% of employee compensation today.
This has not been designed as all inclusive, nor are we in the business of offer accounting or legal advise. This information is given as suggestions to provoke thought and action on these issues. A more in depth review may be necessary with your accounting and legal advisers, our expertise is financial planning, risk management, and insurance. We are available to assist you if you feel that assistance is desired.
Dorr R. Phelps, GP, LUTCF, CPIA, CSA, RFP, CFP
Phelps Financial Services, Inc.
659 Park Meadow Rd., Suite H
Westerville, Ohio 43081
Phone 614-899-6000 Fax 614-899-6022
Web site www.phelpsfinancial.com
Email dphelps@phelpsfinancial.com
©Phelps Financial Services, Inc. 2000-2004 All rights reserved
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