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	Cardinal Reaffirms Commitment to Lay Pension Plan By Jim Lockwood The Pilot April 1, 2011 http://www.thebostonpilot.com/article.asp?ID=13166 Cardinal Sean P. O'Malley is reaffirming his commitment to meeting the obligations of the lay pension fund and will give anyone who has already elected to cash out of the plan a chance to reverse that decision. "As long as I have breath in me, I will do everything in my power to care for the thousands of people who have given their lives in the service of the Church," the cardinal said in a March 30 statement to The Pilot. In his statement Cardinal O'Malley also discussed the current financial health of the archdiocese that he says has improved from prior years. "Today, the archdiocese is in a much better place and most of the fiscal challenges have been resolved," Cardinal O'Malley's statement said in part. "We are no longer in fiscal free fall and are in a much better position to meet our obligations." Pension plan administrator Carol Gustavson told The Pilot that Cardinal O'Malley will send a letter to each former employee who has opted to cash out of the archdiocese's lay pension plan early by taking a lump sum distribution telling them they "can change their mind if they felt pressured" and that it will "make sure they understand he is involved." Gustavson could not say when the letter would be released. Cardinal O'Malley's actions come in the wake of recent criticism of the archdiocese's handling of the lay pension fund. Last week it became public that the Daughters of St. Paul have filed a lawsuit against the plan's trustees in an effort to withdraw funds contributed for their lay employees to the plan. The sisters are asking the Supreme Judicial Court to order the trustees to provide them with an accounting, or rule the sisters were never part of the plan and require the archdiocese to reimburse them for any contributions they have made. Also, earlier this week, former chancellor of the archdiocese David W. Smith met with reporters to outline what he called heavy-handed tactics to coerce former employees into an early cash-out of their pension benefits. In 2010, the archdiocese announced they were freezing contributions to the lay employee pension system and switching to a defined contribution plan similar to a 401(k). Earlier this year, the archdiocese offered about 1,800 former employees the option of cashing out of the archdiocese's pension fund at an amount reflecting the plan's current funded status, accepting an early annuity or remaining in the fund. Information packets detailing each option were mailed to the eligible former employees. The early disbursement would be discounted to reflect the plan's underfunded status. The archdiocese says the fund is currently only 83 percent funded. To date, Gustavson said 230 former employees have chosen the early cash out, and an archdiocesan statement released on its website March 28 said 22 have opted for an early annuity and 14 have elected to remain in the plan. The first early payments are expected to begin in the beginning of May. At a March 28 press conference Smith, who served as chancellor of the archdiocese from 2001 to 2006, said he is asking Massachusetts Secretary of State Bill Galvin and Attorney General Martha Coakley to take control of the archdiocese's lay pension fund and place it under the watch of an independent trustee. Smith said the archdiocese is scaring employees into the early payout through emphasizing the plan's underfunded status and that the plan is not insured. He said plan participants have not received sufficient information on how the 83 percent figure was calculated and that an independent trustee is needed because he said several current fund trustees have conflicts of interest as archdiocesan employers or vendors. "I am here today because almost 10,000 people, most of whom worked for years at low wages in service to the Catholic Church in Boston, have their retirement pensions endangered by a reckless attempt by the archdiocese to shirk their financial commitments by changing the previous 'defined benefit' plan with guaranteed benefits to a 'take your share of whatever happens to be left' offering," Smith said in a statement provided to the press. "Conflicted trustees are doing this through coercion and deceit, and by withholding information needed to evaluate their offer." He also said that the Church's pension plan is not bound by the federal Employee Retirement Income Security Act (ERISA), which provides minimum standards for private industry pension plans. However, he said that while the archdiocese is not acting illegally, it is acting immorally by asking participants to accept lessened benefits. He said such a move would not be permitted for an ERISA regulated plan. In her interview with The Pilot, Gustavson reiterated that the choice to leave the plan early was completely voluntary. She said the archdiocese hosted about 40 meetings and webinars that were attended by a combined 1,600 people including former employees, spouses or trusted advisors. "We're going to great lengths to make sure people understand it's voluntary," Gustavson said. "We're not asking people to make this decision lightly," she also said. "They were given over 60 days to make this decision." The plan went above 100 percent funded in 2007, but dropped after the 2008 stock market decline. Gustavson said the archdiocese's goal is to return the plan to fully funded status, which she cautioned could take well over 10 years depending on market projections and investment returns. Cardinal's statement on lay pension plan When I arrived in Boston the pension funds were in danger because the archdiocese was insolvent. We were running a $15 million annual deficit; we owed $30 million to the Knights of Columbus; the Catholic hospitals were losing $40 million a year; the Catholic Appeal had plummeted to $8 million; and there were about a thousand lawsuits against us. Some were even advocating that the archdiocese go into bankruptcy. Today, the archdiocese is in a much better place and most of the fiscal challenges have been resolved. We are no longer in fiscal free fall and are in a much better position to meet our obligation. I am so grateful to our pastors, parishioners, benefactors, the army of very competent volunteers serving on our boards and our hard working staff who have helped us along the road to recovery. Their efforts will allow us to continue meeting our obligations and to carry on the mission Christ has entrusted to us. If I did not care passionately about pension obligations I would never have transferred our Catholic hospitals to Cerberus. As long as I have breath in me, I will do everything in my power to care for the thousands of people who have given their lives in the service of the Church.
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