February 2020
Welcome to the new and improved Woodlawn Endowment and Planned Giving Program Newsletter. The 2019 Endowment Committee spent a great deal of time drafting a charter to bring these improvements to the Woodlawn family.
Reason for creating a charter:
Woodlawn has had an endowment program for thirty-five years that has operated under guidelines included in our Policies and Procedures manual. The Endowment and Memorial Committee has been working for a number of years to educate and encourage Church members and constituents to practice good personal finance; estate planning; and to remember The Church in their planning process. With help from the Kansas United Methodist Area Foundation, the Committee developed this charter to add clarity, structure and transparency to the program. It more clearly establishes three general funds:
- The Legacy Unrestricted Fund (current balance $14,354.53) will be the repository for gifts not otherwise specified for other funds.
- The College Scholarship Fund (current balance $5,439.81) will be used for post high school education (program to be developed).
- The Building Fund (currently unfunded) will be used for future building needs.
The charter also allows for donor restricted funds such as those already established:
- Hubert and Jane Pomeroy Fund (current balance $43,693.40) with use restricted to the General Fund.
- John and Mary Withers Fund (current balance $481,031.67) with use restricted to Derby Community Family Services.
- It also allows for future restricted gifts of $100,000 or more.
The charter also better defines Committee responsibilities, duties and makeup. Transparency is increased with policies for receipt of gifts, investment of funds and spending limits. Term limits have been established and new member replacements will take place annually. In addition, the Committee has decided to separate the Endowment and Memorial Committee into two independent committees to increase the focus individually on each program. The charter was approved unanimously at the Charge Conference meeting on November 24th last year.
Purpose:
The primary purpose of this Permanent Endowment Program is to provide a means for members and constituents of The Church to make gifts and bequests to provide a permanent endowment that will, become a source for long-term financial support and living memorials to their faith. Gifts to the Permanent Endowment Program will be held in perpetuity with income to be used to further Christian ministry and mission. This includes support of ministries of The Church, of the Great Plains Annual Conference of the United Methodist Church, ministries of The United Methodist Church nationally or internationally, and any other Christian ministry or mission deemed appropriate by the Permanent Endowment and Planned Giving Committee.
These permanent endowment funds and resulting income are NOT intended to provide for general operating expenses of The Church. It IS intended that annual budgetary process, together with annual giving, shall support normal and customary Church activities. Income from the permanent endowment funds should only be used to support ministries beyond standard local Church activities or to provide temporary assistance in starting new ministries in The Church.
The Program may accept both cash and non-cash gifts and bequests. Non-cash gifts may include stocks, various funds, bonds, real estate interest, precious gems and metals, and other items deemed acceptable by the Permanent Endowment and Planned Giving Committee.
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The following is for information only. As always, talk to your financial expert for details and how these changes may affect you.
Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act)
This is a bipartisan bill designed to aid Americans' ability to save for retirement. The bill seeks to improve the country's retirement prospects. The bill passed the U.S. House of Representatives in a 417-3 vote in July 2019 and then by the Senate as part of the Dec. 19 spending and tax-extension bills. It was signed into law by President Donald Trump on Dec. 20, 2019.
The bill went into effect on January 1, 2020. There are 125 pages and 30 provisions. Here are five important changes you might be interested to know:
Your RMDs Will Start at Age 72, not 70 ½
The bill pushes the age at which you are required to start withdrawing money from your traditional retirement accounts to age 72 from age 70 ½. These required minimum distributions (RMD), as they’re called, are Uncle Sam’s way of finally getting his share of your retirement savings that have been growing tax-free. Many retirees need the money from their retirement accounts to live on, so they’re already withdrawing a portion and paying taxes on it before the government requires them to do so. But those who don’t need the money and aren’t yet 70½ will now have more time before the RMD is required.
Those who are currently 70½ or older should not interrupt their RMDs but proceed with them as scheduled under previous rules. Those who turned 70½ on or after January 1, 2020, are subject to the new rules and will have an extra year and a half before they are required to start withdrawals.
The tax advantages of making Qualified Charitable Donations (QCDs) directly to the Church has not changed and can still be made starting after the age of 70 ½.
You Can Contribute to Your Traditional IRA After Age 70 ½
The law will allow you to contribute to your traditional IRA in the year you turn 70 ½ and beyond, provided you have earned income. This is currently prohibited; there is no age cap on contributing to a Roth IRA.
Working past the traditional retirement age of 65 can be a great way to increase your retirement savings. More Baby Boomers will likely do this if possible, allowing them to continue to save in their traditional IRA and enjoy the tax deduction.
You’ll Have to Pay Taxes on Inherited IRAs Sooner
The bill essentially eliminates the “stretch IRA”, an estate planning method that allows IRA beneficiaries to stretch their distributions from their inherited account — and the required tax payments on them — based on their life expectancy. Under the previous law if you named your grandchild as your beneficiary, most of your account could have stayed invested for decades past your death, and your grandchild could have continued to reap the tax benefits. Under the new law, most beneficiaries will have to withdraw all the distributions from their inherited account and pay taxes on it within 10 years. Exceptions are made for certain beneficiaries, including spouses and the chronically ill or disabled.
This provision is not retroactive and will not affect those who have already inherited an IRA. It will apply to those who inherit them starting on Jan. 1, 2020, and may affect the estate planning of those planning to pass on an IRA to a non-spouse.
You May See a New Annuity Option in Your 401(k)
The new law makes it easier for companies to include annuities in their retirement plan investment options. While there are several types of annuities, they generally aim to convert people’s retirement savings into a predictable lifetime stream of income during retirement.
Previously, many employers avoided including annuity products in their plans because they would be held liable if the insurance companies providing those annuities could not live up to their claims guarantees. Now, the burden rests solely on the insurance company. Still, employers must carefully examine annuity providers with solid track records.
If You Work Part-Time or for a Small Business, You May Have a 401(k) for the First Time
The legislation makes it easier for small businesses to band together to offer retirement plans. Such multi-employer plans are rare these days because current law requires participating companies to be similar, from the same industry. The new law removes this requirement to allow any combination of small businesses to join together to achieve economies of scale. The law removed another hurdle to multi-employer plans by saying that all members of a group can no longer be punished if one company fails to follow the rules.
Separately, the law would also require employers who offer 401(k)s to expand access to part-time workers who work at least 500 hours a year for three consecutive years or 1,000 hours for one year.
Questions:
For questions about the Woodlawn Permanent Endowment and Planned Giving Program, please contact anyone on your Endowment Committee. Current members:
Coy Allen, Pastor Lance Carrithers, Marvin Dunlap, Rita French, Becky Loosen, Donna Pelley, Phil Schroeder, Becky Yager
Remember: What you do with what you have can change the world. Please remember the Woodlawn Permanent Endowment and Planned Giving Program when making your financial plans.
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