20 Questions about Pensions

Our last posts about the deception surrounding the cuts to the employee pension plan have resulted in a lot of emails coming in to BCI.  If you are just catching-up on the pension plan issue, be sure to check out “Boston Archdiocese Sued Over Pension Plan” , “Pension Consternation” and our earlier posts like “Lay Pension Plan: Can You Trust the Anonymous Trustees?” .

With information meetings scheduled at the Pastoral Center for lay employees tonight at 7pm, and this coming Saturday at 10am and 1pm,  we thought we would share common questions people are asking below of the archdiocese.    We started out with 20 questions as the goal (so we left that in the title of this blog)  but the list quickly grew.

  1. Isn’t this just the largest capital campaign ever conducted by the Archdiocese in disguise?
  2. Why are the trustees coming after former employees and not the employers who owe them the money to pay us?  It seems that you should go after the debtors before you try to compromise with those who are due benefits.
  3. Why should former RCAB employees, who often worked at low wages to serve the Church, believe the archdiocese is committed to upholding pension commitments made to them when the archdiocese is so willing to pay excessive salaries to people like Mary Grassa O’Neill, Jim McDonough, Beirne Lovely and others? Over a five-year period, the archdiocese is paying  just 3 lay employees–Jim McDonough, Mary Grassa O’Neill, and Beirne Lovely $4.3M in combined salaries, not including benefits, while previously promised pension benefits are being cut.  Their salaries cannot be justified under the premise of attracting the “best and brighest” because the searches were tainted by conflicts of interest, and no other archdioceses pay at these levels.  Have these people–some multi-millionaires and all of whom are retired from their 25+ year prior careers–been asked to return several million in excessive salaries to help fund the pension plan?  If not, why not?  What steps are being taken to slash today’s excessive salaries in order to better fund the pension plan?
  4. Isn’t it a huge conflict of interest for the Cardinal who owes us the money to have absolute control over the trust that they owe money to?  Why doesn’t he turn this plan over to an outside unbiased trustee who will act justly to protect all involved?  Shouldn’t the courts simply stop this whole thing until it gets unbiased review?
  5. The Boston Globe said that the only people who should consider this offer are those that are terminally ill.  Do you agree?
  6. Many people have left your meetings with the feeling that they have, in effect, been told that if they don’t cash out now they may get less or even nothing later.  Is it you intent that they get this feeling and, if so, are you selling this through intimidation and coercion?
  7. Is the Archdiocese or the Pension Plan considering bankruptcy to avoid their obligations to provide us the pensions we are do?
  8. Is the Church committed to fully fund the plan?
  9. Why was the offer not made to all beneficiaries of the plan?  Don’t we all face the same issues?
  10. Why were groups that are fully funded, like the cemetery association, lumped in with particularly underfunded groups like the central administration and the Parishes?  Should they not get their full benefits?
  11. Why did the Archdiocese promise additional service credit to employees to retire when they knew that the plan was underfunded and while they were plotting this low ball offer?
  12. The parishes owe the fund some $30 million.  Why not turn the vigil parishes over to the pension trust in partial satisfaction of this debt, before you calculate your offer?
  13. When you say the buyout is based on 83% you don’t mean that we are being offered an amount equal to 83% of what we are owed do you?  Because for me to get 83% of what I am owed I would need to get a 6.5% return on my investments.  I checked and insurance companies are paying about 3% on annuities.  For example, a hypothetical 61-year-old former employee would get only 61.5% of what the trust owes him if he took your offer and bought an annuity.  I understand that younger folks would get even less.
  14. This is the second time that the Cardinal has cut our pensions.  When he first arrived he tool away our COLA allowance knocking away about 30% of our pension value.  Now he wants another cut.  When will he stop taking sexual misconduct costs out of our pensions?
  15. What was the total cost of benefits management in 2005 before Jim McDonough, Carol Gustavson, and others took over?  What are the total costs today?
  16. What goals are the vendors of the trust given?  Who sets those goals?
  17. With proven members of the investment community on the Investment Advisory Committee of the Archdiocesan Finance Council, why has it taken so long for a rebound of RCAB investments?  How often do they meet specifically to review the investments and returns on the pension fund?  How are they adjusting the investment strategies? How has this fund performed over the past 24 months vs the market?
  18. Given that the stock market has gone up 115% in the two years since, why is the RCAB saying their fund went down over the same period?  Ordinary investors have gained at least 50% on shares bought in 2009, and anyone who just plain held on is about where they were before the slide. What is it about Chancellor McDonough’s management and oversight of this fund that leaves us in this situation today?
  19. How many millions of dollars has the RCAB retained over the past 20 years as fee income from the investment returns for some other purpose or Corporation Sole expense?  How much could premiums be reduced if the RCAB did not retain those $X million?   How can the RCAB, as an unlicensed financial advisor, be entitled to fees? Since RCAB charged these fees without license, why should the RCAB not have to make up all losses?
  20. Why does the archdiocese refuse to identify the names of fund trustees in all communications?
  21. Why are pension plan documents not signed by trustees and the Cardinal?  Do you consider them legally binding with no signatures?
  22. What qualifies Carol Gustavson, Exec. Dir of HR and benefits, to be running the separate company, the Benefits Trust?  She is trained as an attorney and did labor relations for a newspaper before working for the Archdiocese. From where did the Ms. Gustavson gain the benefits expertise and experience for this job in the Catholic Church?
  23. Is the compensation for Carol Gustavson (estimated at $125K/year or more) appropriate for this role in a Catholic archdiocese?  Isn’t this more like an $80-90K/year job?  Are we paying some premium salary for a non-practicing attorney that would otherwise not be necessary for a benefits specialist?
  24. How is plan administrator, Carol Gustavson, discharging her fiduciary duty exclusively for the good of the beneficiaries of the trust?
  25. We understand plan administrator, Carol Gustavson, has a documented history of monitoring emails of people who work under her without legal cause and without their prior knowledge.  How much time does Ms. Gustavson spend monitoring emails of employees and for what purpose?  Is it appropriate for any valuable fund resources to be consumed by this practice?
  26. Who else’s salary besides Ms. Gustavson’s is paid in whole or in part by the investment returns on the fund?  Is she and/or are others paid by both the trust and RCAB?
  27. Who are the vendors of the trust (investment and program managers)?  How are they compensated? When do they meet with the trust leadership?
  28. How was the vendor for the trust chosen?  What is or was the objective criteria used for selection? Who else was evaluated?  Why that vendor?
  29. Is a written agreement in-place that forbids Carol Gustavson from receiving any benefit from the vendor(s) employed for the trust?  Is she legally foresworn from later being employed by any one of them or a related entity?

That is all we have time for today.  Feel free to add your additional questions or reactions in the comments section.

11 Responses to 20 Questions about Pensions

  1. mary says:

    I am a retired public school teacher with a fully funded pension. This makes me very sad that my colleagues who chose to teach “in the Faith” were not only compensated at a lesser amount over the years (yes, they knew that going in) but now are treated so disrespectfully. Our Father in heaven is NOT pleased!

  2. Former Caritas Christi Employee says:

    Can I add question #30? What exactly is the ongoing responsibility of the Archdiocese of Boston for Caritas pensions? I understand that Cerberus/Steward did not actually take over all of the pension responsibilities as was reported widely in the media. Supposedly, there were several different plans, and the Archdiocese still has some responsibility for one of those plans for 3 years after the transfer of Caritas to Cerberus/Steward. What exactly is going on with this situation?

  3. Retired Catholic School Teacher says:

    Mary, Not only are the Catholic teachers not being compensated for their years of teaching in their faith. They have watched their former coworkers be pushed out of their jobs as the “reform” of the Catholic school system continues. The pension is just another in a long line of disrespectful and unjust treatment.

  4. Nicholas J Spring says:

    Now that the issue of pension administration is out in the open can you tell me if any former employees, past 4 years feel that RCAB broke their promises to retirees that when eligble they can start to collect their pension and if they choose to continue working they added work years would be added to their account when retirement becomes final. If you have knowledge please advise. I know of one case where and individual was asked to stay and work while on pension, he did so and worked for an additional three years yet the pension/insurance administration refuses to properly adjust the due pension. It is peanuts to the numbers of the present regime but in this case it amount to slightly over $110 per month for over the past three years.

    If you can help please advise, I am counseling an attorney within the week to help the individual recover what has been illegally withheld from him.

    Thank you and keep up the good work and reporting.

  5. Tom T says:

    Has anyone considered looking at this pension problem as a violation of the Employee Retirement Income Security Act of 1974 (ERISA)? Under ERISA fiduciaries who do not follow the required principles of conduct can be held responsible for restoring losses.

  6. anonymous says:

    This is not an ERISA plan.

  7. […] 20 Questions about Pensions – Boston Catholic Insider […]

  8. ex-employee says:

    Our pension is a “Church Plan” as such it is not covered by ERISA.

  9. Lost Soul says:

    Serious problem. There must be other reasons as to why the lay pension fund is hurting. Are all the members of the lay pension trust paying in as they should? Are there other liabilities impacting the fund that only RCAB knows exist?

  10. […] we asked in “20 Questions About Pensions,” what has become of the many millions of dollars the RCAB has retained over the past 20 […]

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