Minister Survey shows pastors struggle with consumer debt, retirement planning

One-third report their employer provides them no retirement contribution

by Dr. Angie Andriot and Dr. Susan Barnett, Research Services | Special to Presbyterian News Service

The eight-part series on a survey of nearly 5,000 ministers in the Presbyterian Church (U.S.A.) began Sept. 20.

LOUISVILLE — It comes as no surprise that Presbyterian Church (U.S.A.) ministers, like many people, face financial challenges. Most ministers report being financially stable, owning a home, paying their bills, and planning for (or living in) retirement, according to research conducted by PC(USA) Research Services. Available in English, Spanish, and Korean, the Minister Finance Report, which does not include educational debt, shows that about half of all pastors report that their household incomes are sufficient to meet their needs and manage debt. In fact, 25% of non-retired ministers report no consumer debt. However, about 1 in 4 pastors report they cannot afford vacations and big-ticket items.

What do ministers earn? That varies widely. Whereas 63% of pastors earn $50,000 or more in total effective salary, only 42% of specialized ministers who are paid earn $50,000 or more. Surprisingly, 29% of specialized ministers report receiving no income at all from their ministry.

An ongoing concern is the gender pay gap. Female pastors are paid less than male pastors. Seventy percent of male pastors report earning over $50,000, compared to only 53% of female pastors. This difference is consistent across type of call: men earn more than women at the pastor or co-pastor, associate pastor, interim pastor, and supply pastor levels.

In addition to the pay inconsistencies, ministers report some general financial concerns, including retirement, debt, and housing. Their top concern is retirement planning with the greatest concern expressed among those in their 40s; however, this concern does not significantly drop until individuals reach age 60, at which point only about 1 in 5 remain very concerned about retirement planning.

Ministers have reason to be concerned: 33% of pastors and bi-vocational ministers report no employer retirement contribution. Interim and supply pastors are significantly less likely to receive retirement benefits. Dr. Susan Barnett, Director of PC(USA) Research Services, explains further, “The question about retirement contributions allowed for multiple responses: Board of Pensions, 401 (k) or 403(b), other retirement programs, or no contribution. Yet, one-third reported no employer contribution. None. Age was not a factor; that is, the lack of retirement contribution was not unique to any age group.” For those working in secular positions, it is much worse: 50% do not receive an employer retirement contribution.

In addition to retirement concerns, 75% of non-retired ministers have consumer debt beyond mortgages and student loans. The study revealed that 23% of non-retired ministers hold more than $25,000 in consumer debt, with 10% holding more than $50,000. This compares to the average $6,124 average credit card/revolving debt and $27,649 debt for car loans of most Americans.

A surprising finding is that 10% of active ministers with more than $50,000 of consumer debt: 6% of active ministers have between $50,000 and $100,000 and 4% have more than $100,000 of debt (not counting mortgages and student loans). This leads to the question: how does a person eliminate a $50,000 plus debt when their annual salary may be equal to or less than the debt? Perhaps respondents made mistakes with their responses. However, the anonymity of the survey did not afford a means of verifying any personal data; therefore, we must treat the data as accurate. In addition, this finding does align with the 11% of ministers who report that their income is inadequate to meet their needs.

Photo by Akshar Patel via Unsplash

Housing was the financial area ministers were least concerned about (70% of ministers are homeowners). Still, concerns presented themselves. In this study, 12% of respondents report that their income prevents them from owning a home. Of those, 56% cannot afford the down payment. Barnett notes, “What we do not know is where respondents live, to have a better understanding of home ownership opportunities in their place of service. This was an anonymous survey so we cannot link these ministers to areas of expensive/affordable housing markets or to the availability of housing.”

However, even though we do not have a clear understanding of their financial picture, we know that home ownership is a goal and a building block for financial security. For all ministers who do not own a home regardless of their financial position, 45% want to be a homeowner. Currently 11% of respondents report living in a manse. Those who live in a manse for their entire careers can be disadvantaged as first-time home buyers. Even after many years in ministry, they may not have built up the home equity needed to help purchase a home.

How can ministers prepare financially for retirement? How can the gender pay gap be addressed? How can ministers attain home ownership? The results of the study identify these and other questions for individuals, congregations, mid councils, and the national church to address as ministers seek financial security.

Want to learn more? The findings in this article come from the Minister Finance Report available in English, Spanish, and Korean. This report is based on data from the PC(USA) Minister Survey, a massive 110-question survey which fielded from September to November of 2019. Invitations were sent by postcard to all ministers for whom the Office of the General Assembly had an address. The survey was also one of the Board of Pensions’ Call to Health challenges. This partnership contributed to nearly half of all responses. Twenty-three percent of the denomination’s 19,243 ministers (n=4,495) responded to the survey.

The survey was completed prior the COVID-19 pandemic. It is not related to a consultant’s visioning process report released Sept. 16 on recommended changes to the Presbyterian Mission Agency. The challenges and stresses of the pandemic impacted all of life – ministers and ministries included – and may have resulted in different responses in some instances had the survey occurred during the pandemic. The results, nonetheless, provide insights into the experiences, thoughts, and feelings of PC(USA) ministers.

This is the third in a series of eight articles on the survey results. Those articles, being published every Monday, are:

• Demographics
• Mental Health
• Finances
• Educational Debt
• Wellbeing
• Discrimination, Opportunity, and Struggles of Leadership
• The Call to Ministry
• Summary

Join “Coffee with Research Services” on each Thursday from Sept. 23 to Nov. 11 from 4-4:30 p.m. Eastern Time for a conversation about the survey and reports. Use this link to register for any or all of the sessions of Coffee with Research Services.