Former archdiocesan official blasts church’s pension plan oversight

It is shaping up to be a mighty interesting week here in the Archdiocese of Boston.  If you have not yet read our post from this morning, “Dishonest Diocese,” give that a read when you can.

Meanwhile, our email is abuzz with the headline in a news story at Boston.com: “Former archdiocesan official blasts church’s pension plan oversight.”  Here are a few excerpts from the article, which describes how the previous chancellor, David Smith, is blasting the church’s oversight of pensions for retired lay church workers:

Today’s critique, by former archdiocesan chancellor David W. Smith, makes public long-simmering tension between Smith and his former employer, the Archdiocese of Boston. Smith said he would meet today with the offices of Secretary of State William Galvin and Attorney General Martha Coakley, asking them to look into the pension funds, and that he would also ask the IRS to investigate.

Smith also said he plans to meet today with a group he has provocatively dubbed “Boston Pension Abuse Victims.” He plans to hold a news conference in Newton this afternoon.

Smith says the archdiocese, which is in the process of freezing its pension plan for lay employees and transitioning to a 401(k)-style plan, is trying to get past and present employees “to choose to forfeit their pension benefits in exchange for a grossly inadequate one-time payout.”

Terrence C. Donilon, a spokesman for the archdiocese, reacted angrily to Smith’s criticisms.

“It’s outrageous — when David Smith was chancellor, we were running annual deficits and we are now running a balanced budget,” Donilon said. “If he wants to get into a give and take about his performance as chancellor, which included serving as a trustee of the plan, I’m sure a lot of people would like to do that. But we have prepared a good plan to address the lay pension plan for the future.”

Comments from Terry Donilon like this make our blood boil here at BCI. Feels like our first Code of Conduct policy violation for failing to uphold the “highest Christian ethical standards and personal integrity.”  BCI was obviously not blogging back during the tenure of Chancellor David Smith, but it does not take a brain surgeon or relative of the politically-powerful Donilon family to remember how donations to the Cardinal’s Appeal (later renamed the Catholic Appeal) had plummeted in the wake of the clergy sexual abuse crisis of 2002 and calls by people like Jack Connors to hold back on donating. But, Terry conveniently neglected to mention that as a contributing cause for the previous annual deficits. There is more

To get to what Terry is calling a “balanced budget,” the archdiocese is coincidentally leaving out about $200 million in debt they have not figured out how to repay, and whose annual cost could and should be treated as a debit/expense that would make the current budget “unbalanced”:

  • The Cardinal is breaking his own written promise to repay $5M to the lay employee pension plan from closed parishes and the archdiocese is leaving that pension plan underfunded in total by $70M.
  • They are technically in default of a payment of $5M due January 1, 2011 to St. Johns Seminary and have no plan for how to repay the other $36M owed.
  • The clergy retirement fund is down by around $95 million at last count.
  • And no explanation has been given for how the 2011 budget–that was “balanced” assuming they raised a minimum of $14 million from the  Catholic Appeal–will make do with just $12.5 million apparently raised in 2010. Oops, I forgot, they do not want to tell us about the 2010 results despite the pledges to operate fundraising and fiscal operations with “accountability” and “transparency.”

We will have more to say about this in a subsequent post.  We hope the next time mainstream reporters talk to Terry, they will ask him about these details, and whether he considers his deceptive comments to be consistent with “highest Christian ethical standards and personal integrity.”

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3 Responses to Former archdiocesan official blasts church’s pension plan oversight

  1. [...] Plan by Massachusetts Attorney General and Secretary of Commonwealth In follow-up of our last post with excerpts from the Boston Globe’s article on this same topic, BCI has obtained a copy of the statement released by David W. Smith, Retired Chancellor of the [...]

  2. [...] Tensions are escalating over the employee pension fund, and if you did not notice from the statement by the former Chancellor, David Smith and subsequent response by the archdiocese, there was a bit of a war of words going on yesterday.  [...]

  3. [...] archdiocese is claiming they have a plan for a “balanced budget”; however, as we wrote here, no provision has been made for the annual expenses needed to pay back the $41 million debt to St. [...]

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