Roth 403(b) Option Now Available to Nazarene Pastors

2022 news 3Effective July 1, 2022, Pensions and Benefits USA (P&B) began offering a Roth 403(b) option to pastors and other church employees as part of the Nazarene 403(b) Retirement Savings Plan, according to Kevin P. Gilmore, executive director. The Roth option joins the traditional 403(b) as a choice for future planning.

“P&B is committed to periodically reviewing the Nazarene 403(b) Retirement Savings Plan to make sure it continues to help meet the retirement and financial goals of our pastors,” Gilmore said. “With the Roth 403(b), they will have another means by which they can achieve their retirement goals.”

Roth contributions and distributions are taxed differently from those of the traditional 403(b) plan. With the Roth 403(b), ministers can designate all or a portion of deferral contributions as “Roth contributions.” These are made on an after-tax basis and are included in current taxable income. Earnings on Roth contributions, however, are tax-free if they are part of a “qualified distribution.” A qualified distribution is one taken at least five tax years from the year of the first Roth contribution and after the participant has attained age 59½, become disabled, or is deceased. Assets from the Roth 403(b) may also be passed tax-free to a spouse or other heirs.

Traditional Nazarene 403(b) elective salary deferrals by participants and employer contributions are set aside pretax and distributions at retirement by ministers may be received as tax-free housing allowance, within IRS limits.

Employer contributions may not be made to the Nazarene Roth 403(b), per IRS regulations; however, they may be made to the traditional 403(b) plan. Also, Annual Pension Supplements (APS) by P&B will still be paid to the accounts of eligible ministers through the traditional 403(b) plan.

If desired, participants may contribute to both the after-tax Roth 403(b) and the pretax traditional 403(b), so long as they do not exceed the total IRS contribution limit for that year.

“We anticipate young pastors who have more time to accumulate tax-free earnings or who want to leave tax-free money to their spouse will be interested in the Roth 403(b),” Gilmore said. “We urge pastors to consult with their tax advisors to determine what works best for them, since everyone’s financial situation is unique.”

Learn more about retirement saving options in the Nazarene 403(b) Plan by visiting Benefit Plans at

Note: Investing involves risk, including risk of loss.