Many of our members are being asked to take cuts/freezes in their compensation packages. Many of us have opted to (or had our congregations) lower or eliminate our retirement contributions for one, two or a number of years. Please be advised that the ACC strongly discourages that practice. Your retirement funds are the most expensive monies that you can return. Take the case of a 45-year-old cantor who plans to retire at age 65. A $5,000 reduction in just one year of her contract would result in a $23,305 loss upon retirement (assuming an 8% return on investment). If that $5,000 reduction continues each year until retirement, the loss grows to $247,115.
Therefore, the ACC has obtained the assistance of attorney, Michael Gan, who has written a fine position paper for the CCAR, and now for the ACC on presenting the case for NOT cutting any retirement payments, even in this economy. He explains why it is not only a moral decision but why, in the end, it does not make sense for the congregation. We now have a copy of that article available to ACC members on our website along with “talking points” that you can use in your discussions with your congregation. Michael Gan is an attorney with the law firm, Peer, Gan and Gisler in Washington, DC, and is also the son of a Reform Rabbi. His practice includes the negotiation clergy contracts. His article is available on the Contract Support page of the website.
Any Investment house has brochures speaking to this issue. Fidelity has one as well.