Archdiocese Responds to Former Chancellor

Sorry for all of the posts today.  The Archdiocese has now responded to the action by former Chancellor, David Smith, in the statement below.

Anyone reading this statement will note it still conveniently overlooks any mention of the $5 million still owed to the pension plan by closed parishes which Cardinal O’Malley promised in 2004 would be repaid from reconfiguration funds. Nor does it mention why $2.5 million of those reconfiguration funds was diverted to Trinity Academy in Brockton instead of being repaid to the plan.  Terry, next time you make a statement, could you comment on that?

(By the way, in case people are wondering, the person writing on pension-related matters for BCI is an independent voice here who is not an archdiocesan pension beneficiary and has no axes to grind. The person only has a desire for truth and integrity).

Here is the archdiocese’s statement, publicly accessible to anyone here.

The Archdiocese of Boston has been consistently and actively involved in developing and implementing a comprehensive plan to address the long-term stability of its defined benefit lay pension plan (the Plan).  The pension plan impacts approximately 10,000 current and former employees and beneficiaries of parishes, schools, and Archdiocesan-related agencies.   Due to extraordinarily difficult global markets, the Plan, once 100% funded, is now estimated to be 83% funded.  Like portfolios, pension plans and endowments in many sectors of society, the Archdiocesan Plan suffered greatly during the recent economic downturn.  Trustees of the Archdiocese pension plan are committed to addressing the financial problems the pension plan faces and continue to work towards the goal of full funding.  Neither commitments are new; both have been a matter of fact and practice for decades.   Despite the fact that since the inception of the Plan almost 50 years ago, benefits under the Archdiocese Pension Plan have not been guaranteed or insured, it is the goal of the Trustees of the Pension Plan and a priority of the Cardinal Archbishop to achieve full funding.

The Trustees for the Plan have been committed to a process that is transparent and inclusive while relying on the financial advice of experienced and reputable professionals in the industry.  Meetings regarding the changes to the plan, which include freezing the benefits for active employees at the end of the 2011, began in June 2010 with leaders of Archdiocesan entities.  Plan changes were then adjusted based on their feedback.  In the fall of 2010, letters went out to all 10,000 participants in the plan, and over 45 meetings and webinars were held with current employees.  Approximately 1,600 individuals attended those meetings. Additional meetings with current employees will be held in the fall, when they will become eligible for the lump sum or in-service annuity options.

In late February 2011, a detailed package of information was sent to approximately 1,800 former employees.  These individuals were being offered two voluntary options: those vested may elect to receive a monthly payment when they retire or a lump-sum payout reduced to reflect the plan’s underfunded status.   The average payment at age 65 for those receiving a letter is approximately $365 per month.  Information about the voluntary options was posted on and a dedicated telephone line was set up to answer calls.  Call volume was high right after the mailing and is now steady at 5-10 calls per day, many from financial advisors who represent eligible former employees.  All individuals offered the option were invited to attend one of 11 regional meetings and encouraged to bring a spouse or trusted advisor.  Approximately 100 people have attended the meetings to date.  The meetings include information from an independent financial education firm engaged to provide information about factors that should be considered in electing either option or doing nothing with the options today.  The Archdiocese has informed meeting attendees that the choice to take a lump-sum payment or remain in the pension plan would be a voluntary and individual one.  The Archdiocese has noted at the meetings and in prior correspondence that each person must consider his/her own life circumstances when making his/her decision.  The plan’s staff has also provided translators and held one-on-one meetings when requested.  Throughout these communications, the message that these options are voluntary has been consistent.

With regards to claims made by former Chancellor David Smith, a participant in the Plan and an individual currently eligible for a lump sum or monthly annuity payment, the Archdiocese and Plan Trustees deny unequivocally his claims, including that the choice to take a lump sum payment is an involuntary one.  The Plan Administrator and multiple Trustees have communicated directly with Mr. Smith via email, phone and in person since December 2010 to provide specific information in response to his expressed concerns.

Just as it would with any former employee who received a packet in February 2011 outlining his lump sum and monthly annuity option amounts, the Archdiocese has been responsive and thorough in responding to Mr. Smith’s questions.  Specific concerns he raised were addressed in two meetings he attended recently at the Pastoral Center with other former employees.

Mr. Smith notified the Archdiocese late last week that he had filed a document with the IRS several days earlier.  He was asked to provide a copy and to date has not done so.

The Pension Plan Trustee’s worked for over a year with several highly-respected consultants to develop the current voluntary options, all of whom had worked with Mr. Smith in the past when he was a Trustee and/or Plan Administrator – the Plan’s actuary; the law firm for the Trustees (Wilmer Hale); and the consultant for the Trustees (Towers Watson). Careful and considered thought, in additional to thorough legal and actuarial reviews, were completed before the options were announced.

The Trustees have made audited financial statements for the Plan available online back to FY2005 on the Archdiocese website (  A new benefits website ( was launched in early 2010 to encourage sharing of information to employees and employers.  Notice of the new website was sent to employees.  Detailed information about the Pension Plan, including recent financial statements and valuation reports, is available on the website and has been for nearly a year.

To date, 190 beneficiaries have elected the lump sum payment, 14 have waived participation and 22 have elected a monthly annuity.  The first round of payments will be mailed first week of May 2011.


Terrence C. Donilon
Secretary for Communications
Archdiocese of Boston
Work:  617-746-5775
Cell:  401-480-0171

Pastoral Center
66 Brooks Dr
Braintree, MA  02184

29 Responses to Archdiocese Responds to Former Chancellor

  1. Anonymous says:

    You couldn’t make this stuff up!

    Somebody at RCAB is getting paid by the word… otherwise they could just say, “He’s right,” or “He’s wrong.”

    Methinks old Terry doth protest too much!

  2. Christine says:

    Good grief: It’s so difficult to stick up for our religion with our ex-Catholic friends and family when such unbelievable DRIBBLE comes from Archdiocesan employees being paid at least 6 times more than I earned as a parochial school teacher.
    Terry – the info from the Archdiocese made it sound like we had better take our money and run, because it could be WAY less in the future.
    Now I’m sorry that I was such a naive ex-employee to believe I was ONLY going to go away with 83% of what I was owed, not way less. Wish I’d waited to respond until BCI reported the truth!
    Well … maybe if there are another 189 of those gullible ex-employees like me who opted for a lump-sum payment, there will be more cash to move around to pay off the Daughters of St. Paul in their very legitimate lawsuit mediation scheduled for tomorrow, March 29.
    Just cook the books some more, because I’m sure the Archdiocese wants to squelch the publicity about the good nuns being denied the pension funds they deserve. Too much bad national press!
    I’m so glad the ex-chancellor has called for a state probe of this mess.

  3. anonymous says:

    Typical terry Donilon non answer. DUH!

  4. anonymous says:

    Why is the Archdiocese asking the employees to foot the bill for their lack of fiscal management in funding the pension.

    Pay out at 83% to try to fix their problem. Why not at least split the difference?

  5. ex=employee says:

    I do not see what the problem is. For those who think the Lump Sum option is wrong all they have to do is NOT TAKE IT. The lump Sum is just one added option. The paper work I received last month made clear that the monthly payment option would still be there. I am an adult and I know my situation and if the lump sum now being offered works for me, it is up to me and me alone to decide if I wish to take that option. No one is being forced to take the lump sum. Again if you feel that taking the lump sum at 83% does not work for you than stick with the monthly payments. Let the rest of us make up our own minds based on our individual situations.

    • Another former employee says:

      You obviously did not attend the meeting I attended in which Carol Gustavson said that the goal is to fund the plan but there are no guarantees but they certainly hoped to fund the plan for those that did not take the 83% lump sum. It left me feeling like I had no option but to take the money and run.

      • Albert says:

        If you take the time to research a Church Plan you will see that the IRS requires that those in the plan be told that the plan is not insured. That is what was told to us at the meeting. It made people nervous, but they are required to tell us.

      • Albert says:

        Also I agree take the money and run while there is still some money to take.

  6. Mack says:

    But according to Mr Smith, the lump sum is really not 83%, but 64%, so there’s some funny math going on. That’s the point about it being dishonest–you’re not getting the full story, if Mr Smith is right.

    • ex=employee says:

      If I recall correctly Mr. Smith did nothing to stop The Archdiocese from busting the teacher’s union for the Central Catholic High Schools. This happened on his watch. I do not believe or trust Mr.Smith. He does not speak for me. I am a former president of BATA. The Boston Arch. Teachers Assc.

      • Mack says:

        Well, whatever he did or didn’t do has no bearing on the math. Are his figures correct or not?

  7. anonymous says:

    The teacher’s union wasn’t busted. Each High School was made an individual corporation and made independent.

    Give all the facts ex-BATA

    • ex=employee says:

      The union was busted. I have all the facts. We tried to take them to court, but the courts would not hear our case because of seperation of church and state. The contract clearly stated that we had the right to enter into contract talks with a successor body or bodies, which would be each of the newly independent schools. They refused!!! We spent thousands of dollars that we did not have on legal fees only to be told the courts would not hear our case. The National (NACST) payed most of our legal bills and in the end we had no money. That is why I find it hard to believe that David Smith cares about the employees and the ex employees now. When he was in a position to do something he did NOTHING!!

      • Angry Parish Council Member says:

        It sounds like you’ve got an axe to grind over the union issue. We all know their are two sides to a union negotiation, and I’m with Mack on this. Whatever Smith did or didn’t do on the union issue is water over the dam and has no bearing on the math and pension issue.

        Do you believe the archdiocese is treating former employees fairly on the pension or don’t you? As far as I’m concerned, the information presented here at BCI makes a compelling case that the RCAB is cheating former employees of what’s due to them.

      • Suzanne says:

        While this issue is not pertinent to the topic at hand, the posting from “ex=employee” is by no mean factual.

      • Catholic School Teacher says:

        I’m also familiar with this situation and agree with Suzanne, Mack, and “anonymous.” The BATA situation was not exactly as described by “ex-employee” and is not pertinent here anyway.

        But for anyone interested, here’s a Globe article about the situation:

        Note, the schools were completely restructured, as individual, independent corporations as “anonymous” said. And the courts did actually hear the case and dismissed it on the basis that §301 of the Labor Management Relations Act (LMRA) did not apply to church-operated schools.

      • With all due respect to those who want to comment about the teachers union issue, please keep future comments to the topic of the employee pension plans. BCI believes there is more than enough on the pension plan topic to keep readers plenty busy.

  8. Cardinal O'Connell says:

    So, TD says that DS was given all the facts and info requested. Yet, for some reason, DS is paying lawyers to review the offer of the Archdiocese, and is having press conferences positively stating that the Archdiocese is not coming forward with the facts and information. The pattern we see here is the very same one alleged to have occurred in the case of the Daughters of St. Paul. Hmm. Could TD be dissembling? Possibly he is misinformed. BCI reports, you decide.

  9. FR B says:

    I think the old saying,”There is no honor among theives” is most appropriate in this situation OR the other saying, “what a tangled web we weave when first we practice to deceive.”

    R.I.C.O. cann’t be far away …

  10. Anonymous says:

    None of the persons involved knows more about the pension plan than DS. You van take what he says in this issue as gospel.

    The archdiocese is trying to “fund” the plan by conning a lot of former employees into accepting 64 cents on the dollar instead of honoring their commitment to provide the pension as promised.
    What else would you expect from this organization?

  11. FR B says:

    Watch carefully … see how the RCAB / Corp. Sole retaliates with former Chancellor David Smith … Their hubris knows no bounds!

    Pray for Mr. Smith, his family + the Daughters of St. Paul … targets for the revenge of Corp. Sole!

    Their legal defense funds are wothy receivers of donations!

  12. Pssst ! says:

    In the interests of full disclosure, I’ve never been a big fan of David Smith. He played fast and loose with income and liabilities when he was running things, too.

    But he was/is a babe in the woods in comparison to the current occupant of that office. For all of his arrogance, David Smith doesn’t come close to the arrogance and hubris of Jim McDonough, who really believes that what he does is right and just simply because he did it. And McDonough has no problem whatsoever with using bullying and intimidation to silence all opposition.

    It will be interesting to see how this all plays out: the little guy with the Napoleonic complex playing “chicken” with David Smith, who has a good relationship with Bill Galvin and who knows “where all the bodies are buried.” I’ll bet that when Jim McDonough and Carol Gustavson started this “cry poormouth” strategy, they never even considered that David Smith would be one of the former employees to whom they’d have to pitch their scheme.

    My prayers are with David and his family, because hell hath no fury like McDonough scorned.

    • Cardinal O'Connell says:

      Well, my body is still buried on the Sacred Acre, in a small mausoleum adorned with poison ivy, and no Chancellor is ever going to move me out!

    • Objective Observer says:

      Wow, whoever you are, you speak the absolute truth.

      David was no angel, but he could not have dreamed up the breaches McDonough has perpetrated. Neither one was recruited by MENSA, but McD has a hijinx savant streak that puts him in another class entirely.

      It seems that Jack was happy to let McD get up to some shenanigans, just as long as he delivered the goods Jack ordered. Problem is, the felonious shell game McD has gotten up to has yielded a lot of losers who are priests, donors and former employees.

      And now, what will the AG do?

  13. […] 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.  As one might expect , the Archdiocese […]

  14. A Priest says:

    You know how to tell when Terry, Jim et al are lying?

    Their lips are moving.

  15. FR B says:

    Is Cradinal Sean home or elsewhere ??

  16. FR B says:


  17. Former Employee says:

    I never received anything about regional meetings and I know I am vested.

    I also know they have my address, I got a letter pushing me for a lump sum payout.

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