Agreement of Understanding

This agreement of understanding is between:

Church Name: _____________________________________________________

Pastor's Name: _____________________________________________________

This agreement presents the terms of the pastoral appointment by the stationing committee. It seeks to reduce the possibility of wrong assumptions/misunderstandings on the part of the pastor or the parish. The goal is to have a healthy working relationship between pastor and congregation.

Starting Date

Employment will begin ____________________________________.

Salary

The annual salary is $ ______________________ and will be paid to the pastor (circle one)

• weekly
• bi-weekly
• monthly

Social Security

State the amount of Social Security the church will pay the pastor this year. $______________________

If the pastor has opted out of the Social Security system, state how this benefit will be paid instead of payment into Social Security.

_________________________________________________________________________

_________________________________________________________________________

Insurance

State the health insurance coverage that is provided by the church for the pastor and family.

__________________________________________________________________

State the disability insurance coverage. ____________________________________

Pension

The denominational pension program is two-part: the Defined Benefit Plan and the 403(b) Tax Sheltered Annuity Plan.

1. State the amount the church will pay into the Defined Benefit Plan:

$______________________________ (addition to salary reduction)

2. State the amount the church will contribute via a Salary Increase Agreement to the 403(b) TSA Plan. (The treasurer withholds the pastor's percentage via a Salary Reduction Agreement and sends it directly to the denominational treasurer each month.)

$______________________________ (in lieu of salary reduction)

Housing

Will the church provide a parsonage or a housing allowance that will enable the pastor to rent or purchase a home? Yes No

State the fair monthly rental value of the house or the monthly housing allowance provided for the pastor:

Rental value: $______________________________

Monthly housing allowance: $______________________________

State any expectations or restrictions concerning the parsonage (if any).

__________________________________________________________________________________________

Utilities

What utilities will the church pay as part of the housing package? _____________________________________

__________________________________________________________________________________________

How are the utility bills paid?

___ Paid by the church treasurer

___ The pastor pays the utility bills and submits an expense voucher.

___ Other (explain).

___________________________________________________________________________________________

Vacation

State the number of weeks of vacation per year. __________________

(Standard guideline: 2 weeks for 1-5 years of service; 3 weeks for 6-10 years; 4 weeks for 11-20 years; 5 weeks for 21+ years)

How long does a pastor need to be at a church before receiving vacation? _______________

State any expectations of the pastor regarding vacation time. __________________________________________

__________________________________________________________________________________________

Continuing Education Budget

How much is the pastor’s annual continuing education budget? $_____________________

Moving Expense

State the moving arrangements (rental truck, professional mover) and who is responsible for expenses.

___________________________________________________________________________________

____________________________________________________________________________________

Travel Expenses for the Pastor

The pastor will pay ______________ cents per mile for a maximum of ______________ miles per year for ministry travel.

How often does the pastor turn in travel expenses to the church treasurer? ____________________________

State any special arrangements regarding travel expense.

________________________________________________________________________________________

______________________________________________________________________________________________

Reimbursement Plan for Church Expenses

State the policy and procedure for the reimbursement of expenses incurred in the ministry. (The cost of ministry should be paid by the church). Note: the IRS states that reimbursement of expenses cannot be deducted from salary.

______________________________________________________________________________________________

______________________________________________________________________________________________

Professional Ministry Expenses

What professional ministry expenses will the church cover?

• Home entertainment
• Professional dues
• Continuing education
• Periodicals
• Civic activities
• Book allowance
• Work-related meals
• Equipment
• National conference expenses
• Other: ____________________________________________________________

Review of Salary and Benefits

State when salary and benefits will be reviewed by the Personal Relations Commission/Board of Administration.

______________________________________________________________________________________________

Special Understandings (schooling, working spouse, pets, etc.)

______________________________________________________________________________________________

______________________________________________________________________________________________

______________________________________________________________________________________________

Signatures

____________________________________________ ________________________
Chairperson of the PRC/Board Chairman / Date

____________________________________________ ________________________
Pastor / Date

____________________________________________ ________________________
Cluster Leader / Date

A copy of this agreement can be downloaded in PDF format or as a fillable Word form.