Three pension funds operated by the Archdiocese of Milwaukee for priests, lay employees and unionized cemetery workers have unfunded liabilities totaling $41.8 million, according to documents filed as part of the archdiocese's bankruptcy proceedings.continue at MJS
The gap between current assets and future payouts for the priest and lay workers' pensions - at 9.6% and 16.9%, respectively - fall within reasonable ranges given the economic conditions of the last few years, according to pension experts.
But the size of the lay workers' pension liability (at $37.4 million) and the funding level of the cemetery workers' pension (55% - with $1.3 million in assets and a $1 million unfunded liability) raise concerns about the health and future of those benefits, pension experts say.
"Anything funded below 80%, you'd have to look at, but a large gap is cause for concern, said Eric Loi, staff attorney for the Pension Rights Center, a consumer advocacy group in Washington, D.C.
Archdiocese spokeswoman Julie Wolf blamed the shortfalls on poor investment returns and said in a statement that there is "no current cause for concern for employees."
"All benefits have been timely paid, and it is clear that the plans will continue to pay all benefits payable in the immediate future," she said.
The pension liabilities are laid out in claims filed last week against the assets of the archdiocese. They are among 160 claims totaling $123.4 million filed to date by creditors in the church's Chapter 11 bankruptcy. In this case, it is the archdiocese itself and the pension trustees making the claims to protect the pensions.
Milwaukee archdiocese pension funds fall short $41.8 million
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"Archdiocese spokeswoman Julie Wolf blamed the shortfalls on poor investment returns and said in a statement that there is "no current cause for concern for employees." "All benefits have been timely paid, and it is clear that the plans will continue to pay all benefits payable in the immediate future," she said."
IMMEDIATE FUTURE! CURRENT CAUSE FOR CONCERN! What about 10, 20 or 30 years from now, Ms. Wolf?
Church pension plans are not insured by the Pension Benefits Guaranty Corporation and are not subject to ERISA funding rules. The Archdiocese can manage or mismanage them as they please. Participants in church pension plans essentially have no rights or recourse in the event of a default. Do you want your retirement income to remain at risk?
"The pension liabilities are laid out in claims filed last week against the assets of the archdiocese. They are among 160 claims totaling $123.4 million filed to date by creditors in the church's Chapter 11 bankruptcy. In this case, it is the archdiocese itself and the pension trustees making the claims to protect the pensions."
If everything is so safe and okay, why is the pension trustees group filing a claim to protect the pensions? Simple. The pension is an unsecured claim in the bankruptcy case---the same as the claims of the victims of child sex abuse by priests.
In the Wilmington (Delaware) case, the pensioners formed their own creditors committee and had their own lawyer to represent them in the bankruptcy proceedings. The current and former employees of the Archdiocese of Milwaukee who participate in the pension plan need the same legal representation.
The Pension Rights Center in Washington is fighting to change the regulations that govern church plans. Read about it at www.pensionrights.org.
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