Compensation Consultants

The MBD has two trained representatives for the UUA Compensation Consultant Program whom have personnel, compensation, and human resource backgrounds. Each consultant is available to interpret the UUA compensation report, To Sustain the Living Tradition, to advise congregational personnel committees, and to lead human resources trainings in the district.

Contact:
Helen Lane - hlane@mbduua.org
Jim Peterson - jpeterson@mbduua.org

About The Work We Do

Q: Isn't the Minister's salary tax exempt?
A: Typically, a minister's "cash compensation" is divided into two distinct categories:Base Salary and Housing Allowance.

Base Salary is taxed just like everybody else - w-2 forms should be provided, the income is reported by the minister on a 1040, and the remaining calculations are done. Housing Allowance, however, is a different matter. Like military personnel, foreign service personnel and a few others, a housing allowance is not subject to ordinary income tax. It is, however, subject to Social Security tax (commonly called FICA or, in this case, SECA). If a parsonage is provided, the nominal value of the building is also subject6 to SECA.

Q: Is there percentage of the congregation's budget that should be devoted to salaries and benefits? Or a percentage of the endowment?
A: We wish it were that simple. Among the 800 or so active UU congregations, there are many, many variations in financial situations. For some congregations, paying the mortgage on the first building is the major item on the operating budget; for others, the building was paid for a hundred years ago and this need not be included as a yearly expense. Similar wide differences exist for allocations of the endowments.

Q: How often do the salary recommendations change?
A: Until 2005, changes were made every three years. As more and more congregations have adopted the UUA recommended practices and the process for connecting salaries to market rates has been streamlined, the UUA will now publish recommendations on an annual basis beginning in 2006. This will help congregations best adapt to changing economic conditions.

Q: How should we use these recommended ranges?
A: In the broadest sense, the entire span of the recommended ranges represents competitive rates of pay. One can find people paid at the low end of the scale and at the high end. Congregations are encouraged to aim for the middle of the range - a salary that is average in the market. The logical recommendation for an employee starting in a job is that he/she be paid in the lower end of the range, while an experienced and highly effective employee be paid in the upper end.

Q: How is the salary recommendation for a job that has no market match determined?
A: Not all jobs at a congregation can be priced in the market for employees. Most employers are faced with this issue. In these cases, just as with other employers, the content of the job is compared to others found in congregations. Every effort is made to assure that jobs with similar work requiring similar preparation and working with a similar degree of supervision are placed in the same salary range.

Q: The UUA recommends a 14% congregation paid contribution to retirement for staff working more than 1,000 hours a year. That is much more than most companies provide. Is some consideration made for this high level of deferred compensation?
A: Guidelines adopted by the UUA in the 1994 General Assembly (and widely published in many prior documents such as The Price We Pay), do specifically cite a 14% contribution as the standard for fairness. During the years since these guidelines were adopted, however, the retirement plan has been significantly changed. Plan participants may now designate a larger slice of their own base salary for the retirement program. Therefore, as the funding for salary and retirement both originate from the same source and available for allocating to either destination, the UUA now considers 10% as the guideline for fair contribution to retirement. As this amount is, in fact, higher than most retirement plans, adjustments are made to reduce the base salary calculations as an offset.

Q: Are all wages within what is considered "living wage"?
A: These recommendations for jobs at the lower rates of pay are calculated to provide a "living wage." The target for these calculations is the greater Boston area. Local conditions will prevail. If the "living wage" in another location is deemed to be higher than UUA recommendations, congregations are urged to do the right thing.

Q: Who is on the Committee on Compensation, Benefits and Pension? How did they get that job?
A: Membership on the committee is strictly voluntary. All members are nominated to the Committee on Committees, based on their individual interest in a topic and willingness to serve. Appointment is by the UUA Board of Trustees.

Q: What happened to the concept of Total Cost of Ministry (TCM) as a means to calculate salary and benefits for ministers?
A: The concept of TCM is a practice whose time has come and passed. This idea is based on the notion that a congregation calculates how much it was willing to spend for a minister. Once the figure was determined, the minister would determine how the money should be designated. On the surface, this sounds like a reasonable idea; in practice, this has lead to many, many cases with poor financial results for ministers.

For example, too many ministers were opting out of important benefits like health insurance, retirement savings and disability. This has had an impact financially on some of our congregations that then tried to help their beloved minister. Secondly, congregations did not do sufficient homework to determine the real costs of having employees, omitting consideration for such things as true cost of health insurance. Finally, as the TCM number was larger than just the base salary many congregations assumed the salary to be generous. The process recommended by the UUA for over ten years has been to provide an umbrella of common defined benefits and a competitive base salary for all employees.

Q: Are congregations required to pay salaries within these ranges? How about benefits?
A: True to the UUA commitment to local autonomy for congregations, none of the recommended salary or benefit guidelines are mandatory. Being clear, they are strongly recommended as reasonable and fair. Guidelines are intended to mirror the levels of salary and benefits an employee could find elsewhere in the community or the profession. All congregations seeking new leadership will be competing with other congregations and organizations. All UUA congregations and potential job seekers have access to this information and expect fair compensation as a term for employment.

Q: These geographic indexes show all cities near us to be a Wage Area Index below ours. Why are we so high? (or, low?)
A: The Wage Area Index are the result of comparing salaries paid to people doing the same work in over 240 communities around the country. They deal only with salary and not with the cost of living. Real estate costs do not figure in this review wages directly. Economic reality dictates that when costs go up, salaries go up - or job holders move to a lower cost area. People living in an area have made the necessary financial trade offs to remain there for non-economic reasons. Congregations may determine to use an alternative method for establishing wage rates compared to other locations.

About What We Do

Q: What do we do?
A: Frequently, all we do is supply answers to salary questions. Often assisting the congregation in understanding things like the GeoIndex. It will depend greatly upon your particular district: those with long-standing active DCCs (except when transitions occur) will be fairly easy going. If your district has not had a DCC active for a little while, getting the "word" back out can take a year, then you'll have some questions as congregations get actively working on this process again. A defined job description is attached, but in general:

Q: How much time does this take?
A: While this depends on the consultant, the district structure, and timings of surveys and transitions in the district, it can take from minutes a week to many hours (a congregational site visit has some prep time and, of course, the on-site time for the consult).

Q: Are their resources available to us?
A: There are many resources available to all DCCs.

Q: How is what I do paid for?
A: Hopefully, your district has a line item for this work. However, the Professional Staff Finances Office has some funding available to help with travel costs when your district is not able to fund travel. Your honorarium is paid out of a grant from the Council on Church Staff Finances.