Home | About Us | Subscriptions | Advertising | El Centinela
Catholic Sentinel | Portland, OR Friday, April 29, 2016
CYO Football 2015 2015 Priest Reassignments, Archdiocese of Portland Cardinal Francis George dies Mothering with faith Sisters of the Holy Names, 2015 Live Nativity at St. John the Baptist 2014 Fall CYO results Catholic Charities Donor Lunch 2014 Year of Consecrated Life opening Mass Holy Spirit Sisters Jubilee 2014 Seaside youth conference Mount Angel 125th Northwest Hub Furlow at papal Mass 2014 Rosary Bowl NW Brother André 2014 Fall 40 Days for Life 2014 Inauguration of Fr. Mark Poorman Coffee shop at abbey First day of school, 2014 Regis High School 50th anniversary 2014 Crooked Finger Pilgrimage Mass with migrant farm workers Maronite Ordination Consecration to "Immaculate Heart of Our Lady of Fatima" CYO track Southern Oregon Evangelization 2014 Priest Ordination Christ the King youth 2014 priest reassignments Our Lady of Lavang Confirmation, 2014 Memorial Day 2014 2014 Transitional deacon ordination Padre Foster Granados visits Albany Bishop Smith ordination Canonization of Pope John Paul II, Pope John XXIII Bishop Peter Smith 2014 Easter Vigil 2014 Walk of Cross 2014 Chrism Mass CYO basketball 2014 St. Patrick of the Forest 150th Catholic Charities Celebration of Hope, 2014 Boys2Men Archbishop visits Oregon State Penitentiary 40 Day Vigil for Life, 2014 Pope Francis creates new cardinals St. Henry shelter 2014 CYO swimming Funeral of Fr. George Wolf Travel on a budget Lunar New Year, 2014 Tech in Catholic schools 2014 Right to Life Rally Archbishop visits Santiam Prison First Mass in Oregon Milwaukie Posada St. Francis, Sherwood, Toy Drive Central Catholic football Typhoon Haiyan Deacon Ordination/ Kresbach, Schmitt A Catholic fisherman St. Cecilia Centennial Southern Oregon Welcome Mass Shepherd of the Valley, Central Point, dedication Grotto Anniversary 2013 Champions of Faith Dinner Gardenripe farms Coleman hop farm Corvallis Year of Faith Archbishop Howard at St. Rose Hitchhiking priests Franciscan Spiritual Center Sacred Heart, Medford Migrant Mass Tanzanians' jubilee World Youth Day 2013 2013 Blessing of the Animals 2013 Freedom Mass Albany school closure Fabric art Megan graduates from Catholic school St. Vincent de Paul Hillsboro 2013 Deacon ordination Sister Theresa Lamkin St. Helen Mission, Brownsville Marist Brainiacs St. Mary, Eugene St. Francis eighth graders Ascension confirmation 2013 Pastoral Ministry Conference St. Joseph Salem — Year of Faith Archbishop Sample's Installation Mass 2013 Archbishop Sample Chrism Mass 2013 2013 Young Catholics Pope Francis inauguration Celebration of Hope Vlazny Farewell Mass Archbishop Vlazny Farewell St. Paul Church in St. Paul Valley Catholic Green Building Rite of Election 2013 Water summit 2013 Lunar New Year Alveda King in Eugene New Monsignors, 2013 2013 Right to Life Rally MLK Mass, 2013 St. Henry, Gresham, Centennial Jesuit High drama School uniforms Friar in the mall Holy Trinity food ministry January Book Covers St. Andre Bessette food Year of Faith Mass Nestucca Sanctuary Hillsboro Choirs Father Betschart installation Salem Religious Freedom Rally Year of Faith Vespers, Awards Roy's Catholic School Adelante Mujeres 10th anniversary New Blanchet House Missionaries of Holy Spirit Priest, religious photos Providence Nursing Schools Pioneros Fortnight for Freedom Mark Bentz Deacon Ordination OLL School Walk Through Gaga over science St. Philip Neri Centennial Ordination of Bishop Cary SVDP, Grants Pass Holy Cross School centennial Confirmation - Mount Angel Holy Land Pilgrimage Blanchet Watershed Chrism Mass, 2012 Bishop-designate Cary Pope in Cuba, 2012 SSMO 125th Jubilee Mass Pope Benedict in Mexico 2012 Catholic Charities Celebration 2012 Madeleine Mardi Gras Centennial Rally for Life, 2012 Martin Luther King Jr. Mass 2012 Day Laborers-Guadalupe Guadalupe 2011 Christ the King, Milwaukie, 50th Sesame Doughnuts Central Catholic Volleyball St. Peter Centennial Deacon Ordination, October 2011 St. Agatha Centennial Rosary Bowl 2011 St. Wenceslaus, Scappoose, Centennial Filipino celebration Polish Festival 2011 Holy War Football 2011 World Youth Day 2011 Sun Gold Farm Our Lady of Victory's New Church Freedom Mass 2011 St. Mary Church Steeple Removal Priest reassignments, 2011 Old Catholic Buildings Paige Rice, St. Mary's runner Graduation 2011 Easter vigils 2011 Pastoral Ministry Conference Basketball Holy War 2011 Search for Peace 2011

Mt Angel Towers 8.13

Home : News : Nation and World
Philadelphia church employees, retirees brace for pension changes
Catholic News Service

PHILADELPHIA — In an effort to plug a more than $150 million hole in the retirement plan for its lay employees, the Archdiocese of Philadelphia announced Nov. 5 that it would "freeze" the current defined benefit pension plan next summer.

The decision to freeze the plan and cease the accrual, or accumulation, of benefits in the Lay Employee Retirement Plan after June 30, 2014, affects 8,500 current lay employees of the archdiocese.

All current staff of the archdiocese including workers in parishes and schools, the Archdiocesan Pastoral Center, agencies and facilities of Catholic Human Services and other church entities learned the news in meetings.

More details and a personalized statement of expected benefits were to be mailed to all beneficiaries Nov. 7.

Following that distribution, staffers of a call center will be available to answer specific questions regarding the announcement beginning Nov. 12, the archdiocese said in a statement.

"This action is not being taken to resolve a short-term concern," said Timothy O'Shaughnessy, chief financial officer of the archdiocese. The $478 million in assets of the plan "are well managed, they're in a separate legal entity governed by a separate trust agreement and a separate pension board.

"The shortfall of $150 million is an issue that needs to be dealt with for the long term. An underfunded obligation of $150 million puts a duty on us to ensure that we have a plan to cover the shortfall," he said.

The latest initiative to stabilize the archdiocese's teetering finances follows moves over the past 18 months to sell church buildings and land, lease Catholic cemeteries, market archdiocesan nursing homes for possible sale and lay off 25 percent of the workers at the archdiocese's headquarters.

The underlying reasons for those decisions were a financial condition marked by a reported $39.2 million operating deficit for the fiscal year ended June 30, 2012, and revelation of $350 million in long-term debt, the largest component of which was the $152 million shortfall in the pension plan.

Approximately 4,700 retired archdiocesan employees are already receiving benefits from the traditional pension plan, known as a "defined benefit plan" because workers receive a set monthly retirement benefit.

In such a plan, employees do not contribute to the pension; the employer contributes funds based on a percentage of the employee's salary. The monthly pension benefit is based on a formula using a participant's years of service and compensation history.

Under the plan, the archdiocese will contribute a percentage of payroll but the employee also will be able to contribute to the fund on a pretax basis -- up to limits indicated by rules of the Internal Revenue Service -- and be able to choose the makeup of funds in which to invest for his or her retirement.

While the liability, or expected payout, of the defined benefit plan will not grow over time after the freeze, the archdiocese will continue to contribute toward it to achieve financial stability for the fund so it can satisfy its commitments to retirees.

The switch from traditional pension plans such as that of the archdiocese to defined contribution plans has accelerated in recent years for companies of all sizes as well as other dioceses.

One factor is people are working more years and living longer than was expected at these plans' inception, be that Social Security in the 1930s or the archdiocese's plan, which started in 1965. The result is much higher benefit liability for such a plan because of the length of time it is likely to be enjoyed by a retiree.

In such cases, pension plans face the dilemma of raising contribution rates (taxes, in the case of governments, and charges to parishes and church entities, in the case of the archdiocese); changing the benefit structure; or both.

The archdiocese's Lay Employee Retirement Plan as of June 30, 2012, held assets of $478 million, but actuarial calculations indicate a liability of $630 million at that date for future retirement benefits. The difference between the two has been growing for years and now stands at $152 million.

By freezing the plan and thus the growth in potential benefits to be paid, the decision allows the archdiocese time to replenish the fund through continued contributions to fully fund benefits for today's workforce. The fund is expected to be in balance by approximately 2031.

Since 2012, the pension charge to parishes and other entities has been raised to 7.5 percent. Next summer at the time of the freeze, the charge will rise at least to 8.5 percent -- 4 percent will constitute the contribution toward the traditional pension plan and 4.5 percent to the new defined contribution plan.

"If we maintain the (current) plan and keep charging 7.5 percent, we will keep falling further behind," O'Shaughnessy said.

"By freezing the plan at June 2014 and contributing to it annually, we believe that we can get the plan to fully funded status in 20 to 30 years," he added. "Until then, there are assets that are adequate to meet the retirement benefit plan payments to participants that they have earned, until the plan is fully funded."

Archdiocesan officials said a vendor to operate the new retirement plan will be selected by spring, and the full plan document with details will be completed. Archdiocesan employees will receive new information at that time.

O'Shaughnessy said the archdiocese is taking action now "to ensure that we've got a plan that meets its ultimate obligations. I'm very confident about the short term and the medium term but for the long term we need to put a solution in place that works for both the plan and the archdiocese. And that's what we think we've done."

Article Comment Submissions
Submit your comments, please. 
Comments are reviewed before being posted to the site. Comments must use respectful language and address the story. Comments are not posted immediately to the site. The site editor may edit content for appropriateness. There may be a delay of 24-48 hours. Comments may also be considered to appear as letters in our print edition, unless the writer specifices no.
Note: All information on this form is required. Your telephone number is for our use only, and will not be attached to your comment.
Submit an Article Comment
First Name:
Last Name:
Anti-SPAM Passcode Click here to see a new mix of characters.
This is an anti-SPAM device. It is not case sensitive.

Advanced Search

Mary Jo Tully ~ The Path to Resurrection

News | Viewpoints | Faith & Spirituality | Parish and School Life | Entertainment | Obituaries | Find Churches and Schools | About Us | Subscriptions | Advertising
E-Newsletter | RSS Feeds

© 2016 Catholic Sentinel, a service of Oregon Catholic Press

Software © 1998-2016 1up! Software, All Rights Reserved