Q. When is a pastor considered “retired”? Is this defined by the Internal Revenue Code and the plan document as age 59½, when the pastor actually no longer performs pastoral services, or by some other criteria?
A. Good question! For a pastor there really is no definition of “retired”. So some situations will be a gray area. I think it is reasonable to assume that the pastor is retired, if they no longer provide any pastoral duties for the church, or have retired from the church and now is working in a non-church environment.
Since any service for a church in the same denomination is considered the same employer, the pastor may not be “retired” if they continue service somewhere else. As stated earlier, this is a gray area with no IRS guidance, therefore each situation must be reviewed and determined based on the facts and circumstances.