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  Hub Archdiocese Considers Overhaul of Clergy Benefits

By Michael Paulson
Boston Globe
September 14, 2008

http://www.boston.com/news/local/articles/2008/09/14/hub_archdiocese_considers_overhaul_of_clergy_benefits/

The Roman Catholic Archdiocese of Boston, short tens of millions of dollars in its funds for assisting ailing and retired priests, is proposing to bring in a group of lay financial specialists to help overhaul its troubled clergy benefits plans.

The archdiocese is also pledging to conduct and make public a review of how the pension funds have been handled for the past quarter-century, according to church officials, who spoke to the Globe after briefing several hundred priests about the plan last week. The cardinal will decide whether to proceed with the plan after gathering reaction from priests.


The archdiocese's most recent annual financial report says its retirement and disability plan is underfunded by $110 million and calls the plan "the largest liability and concern facing the archdio cese." The archdiocese's new proposal, outlined by archdiocesan officials in a series of meetings with priests last week, is intended to improve both the financial health of the funds and bolster public and clergy confidence in their management.

The funds support about 800 diocesan priests, 300 of whom are retired.

Archdiocesan Chancellor James P. McDonough said in an interview Friday that about half of the unfunded pension liability will be raised over the next decade through the existing Christmas and Easter collections, which generate about $5 million annually that the archdiocese says is used entirely to benefit clergy. McDonough said the archdiocese will seek to raise an additional $50 million by a combination of fund-raising and by designating a third day each year, in addition to Christmas and Easter, on which all collections from weekend Masses will be deposited into the clergy retirement fund.

Across the country, Catholic dioceses have been facing increasing challenges financing the retirements of their priests, as a large number of priests are now nearing retirement age. Like all Americans, priests are living longer, and medical costs are rising. Priests often have little ability to plan for retirement because their salaries are low - about $30,000 in Boston.

In the private sector, some companies have eliminated or reduced their pension plans, but diocesan bishops are considered morally obligated to provide for their priests, and there is also public pressure to support priests in their old age. (Nuns and religious order priests, such as Franciscans and Jesuits, also face problems financing retirement, but their benefits are paid by their religious communities, not by the Catholic dioceses.)

"I am committed - the church is committed - to take care of our priests, and we will do whatever is necessary to do so," Cardinal Sean P. O'Malley said in an interview last month.

In the Archdiocese of Boston, confidence in the clergy benefits funds was shaken three years ago, after a presentation given by church officials to priests suggested that during a 17-year period ending in 2002 no money was deposited into the retirement account, even though during those years tens of millions of dollars were collected in donations from parishioners for that purpose.

Church officials have since repeatedly said that the funds were simply put into another clergy benefit account and used for the intended purpose, but the officials have struggled to put suspicions about the handling of the money to rest.

Critics have also questioned how much of the money intended for clergy retirement was used to pay stipends to accused sexual abusers who were on involuntary leaves, and whether that practice is ongoing. McDonough said the 25-year review will address that question. He declined to say anything more specific on the subject until the review is complete.

The leading critic of the archdiocesan pension funds has been Peter Borre, cochairman of the Council of Parishes, a group that has organized resistance to the parish closings. Borre wrote in an e-mail yesterday that he still does not believe the Christmas and Easter collections were used appropriately.

"Whatever the protestations of the hierarchy, the root cause of the clergy pension fund mess is the 17-year cutoff of inflows from the Xmas/Easter offertories," he said. "The '86-'02 cash flow was diverted into the Clergy Benefit Trust, the all-purpose slush fund to handle quietly the clergy sexual abuse problem before it metastasized in January 2002."

Borre praised O'Malley's efforts at financial transparency and McDonough's work to improve archdiocesan finances, but called on the archdiocese to release all past audited statements for the clergy benefits funds and to commit itself to inflation-adjusted retirement benefits for priests.

The archdiocese said initial feedback from priests at last week's meetings was positive, and some interviewed said they were glad the archdiocese was disclosing the scope of the problem and launching a review to determine how it arose.

"One thing that was a concern for me was that, while they had some idea what happened, it seemed to me they needed more of one, and a number of us were asking to get a clearer look at this," said Monsignor William P. Fay, the rector of St. Columbkille parish in Brighton, who said he was pleased by the archdiocese's plan to review the 25-year history of the pension fund. "We need to know, where does the problem come from that we currently have today, why is there a shortfall, and how are they going to deal with it? That would be very helpful, and very consistent with the (transparency) promise that the cardinal has made and been faithful to."

The Rev. Daniel J. Riley, pastor of Sacred Heart parish in Weymouth, was also supportive.

"There's a challenge there - a shortfall that needs to be addressed - but they're clearly addressing it," he said.

The new proposal represents a backing away from a draft plan the archdiocese circulated in 2005 that would have required more priests to continue working after retirement, encouraged retired priests to live in rectories, rather than independently, and insisted that priests who have money contribute more to financing their own retirement.

The plan was abandoned almost immediately after it became public.

McDonough said that the archdiocese has made no decisions about future benefits changes for retired and disabled priests, but that "some of those things are still on the table."

McDonough said priests will be expected to accept Social Security, Medicare, and Medicaid benefits. In the past, the archdiocese discouraged priests from accepting some government benefits, but that practice largely ended at least two decades ago, the archdiocese said.

Currently, the pension funds have only one trustee, the cardinal, and an advisory board of priests.

McDonough said that the archdiocese is now discussing establishing a seven-member board of trustees, four of whom would be laypeople, to oversee the funds. McDonough said he also intends to hire a staffer whose sole task will be to work with the retirement funds.

The new board of trustees would be charged with overseeing the review of past management of the funds and with evaluating any future benefits changes, McDonough said.

Michael Paulson blogs about religion at www.boston.com/religion, and can be reached at mpaulson@globe.com

 
 

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