Was everyone excited to have
endured heard the launch of the Catholic Appeal this past weekend? Did your parish announce their individual goal publicly? Naturally, each parish has a goal, but the overall goal for Jack Connors’ crack fund-raising team is nowhere to be heard, so nobody knows if they succeeded or failed. That is part of the “accountability” and integrity of the Archdiocese of Boston in fundraising.
Speaking of accountability and integrity, an alert reader commented on our last post that the biggest fundraiser of his tenure Cardinal O’Malley kicks off this week is not actually the Catholic Appeal–rather it is the “attempt to intimidate thousands of former employees out of their pension money.” We will have a lot more to say about this topic, but will cover a few points today.
First, BCI wonders how many people are aware that this is not the first time that Cardinal O’Malley and the Archdiocese of Boston have reduced the employee pension plan benefits. A few years back, they cut out the cost of living allowance (COLA). So, this is actually the second cut to pension benefits.
Second, with the new round of communication that the Chancellor and his minions are undertaking and all of the memos and PR flying around about the pension plan cuts, the average person would probably assume that the RCAB has done extensive research about how other dioceses are handling their pension obligations. Just like one would reasonably expect for employee compensation, one would also expect they have spoken to other large archdioceses like New York, Chicago, Los Angeles, and presumably ones in the northeast, like Worcester, Hartford, Fall River, Philadelphia, and maybe the likes of Cincinnati or Detroit. Not necessarily. Sources tell BCI that when someone working for the Boston archdiocese in employee and retirement benefits in recent years took the initiative to speak to some other dioceses to ask about their plans, they were told by one of the powers-that-be (which means Chancellor McDonough or Carol Gustavson) to basically cease and desist. Maybe work had already been recently done, and they were just saving the duplicate effort. We know in years past, before the current regime, the financial management of this diocese surveyed other dioceses on such matters. But sources tell BCI that in recent years there had not been any kind of competitive study done for either benefits or compensation programs. Of course, we already knew that no one at 66 Brooks Drive or on the Finance Council cares about making sure compensation in this archdiocese is comparable to other dioceses. Why should they? They can pay a retired multi-millionare banker $1.25M over five years and pay a retired lawyer and retired school administrator nearly$1M each over 3 years, while claiming they didn’t have the cash to fund pension plans, and everyone basically lets them get away with the breaches of fiduciary responsibility and trust.
Tip for the day: Try writing to Carol Gustavson today (firstname.lastname@example.org, email@example.com) and ask her to email a competitive assessment report performed no later than 2010 of the pension/retirement benefits in other dioceses. Let us know what you hear back.
Lastly, former employees of the diocese who paid into in this pension plan need to understand that a lump-sum payment is not a good idea except in certain circumstances. Re-read the Boston Globe article from December 12, “Archdiocese to end lay pension plan”
Those workers can choose to receive their benefits in a single lump sum, or to begin receiving annuities while they continue to work. But the early payments would be reduced to reflect the plan’s unfunded liability and, in the case of the annuities, to reflect the younger age at which the employee receives payments.
If, for example, an employee who has earned $30,000 in benefits chooses the lump-sum option and cashes out and the plan has been 80 percent funded, on average, during the previous year, she would receive $24,000.
The more employees take advantage of these opportunities, the faster and cheaper it will be for the church to reduce its risk and eventually end its obligations under the plan. But pension experts say both deals are poor ones for employees, unless they have a terminal illness, because it guarantees that they will receive a smaller amount of money than they have earned.
“It’s really ugly, trying to get people to make bad financial decisions to save the Catholic Church some funding,’’ said Norman P. Stein, an authority on pension law and a professor at the Earle Mack School of Law at Drexel University.
He said corporations, unlike religious organizations, are prevented by law from discounting lump-sum payments to reflect a pension fund’s underfunded status. He said the payouts can be tempting, particularly for the unemployed, but financially unwise. “People sometimes have a hard time looking very far into the future.’’
By the archdicoese coercing you into taking a lump-sum now, they are reducing their obligation to pay the pensions to lower-paid past employees, so when the plan becomes fully funded again in a few years, they can take that full-funding and offer full benefits under the new plan to the likes of Jim McDonough, Beirne Lovely, Kathleen Driscoll, Mary Grassa O’Neill, John Straub, and everyone else making $200K+ a year. A better solution would be to uphold prior commitments made by ensuring the plan is fully-funded for those people who worked for years at low salaries in service to the church and were already vested–and then reduce benefits on a going-forward basis to current employees who are not yet reliant on those pension funds.
It increasingly appears there is no plan for a much-needed changing-of-the-guard in the financial management of the archdiocese, so the wasteful spending of donor money and rule by Archbishops Connors, McDonough, and Kaneb will continue. More and more, BCI is becoming convinced that it will take an uprising of lay Catholics and priests–and perhaps even the threat of lawsuits–to stop this fast-moving train before more harm is done. Lay-people telling pastors they are not giving to the Catholic Appeal and pastors telling the archdicoese they will not support the Appeal is the first step.
What do you think?