The Milwaukee Journal Sentinel reports that pension experts say 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. However, 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.
“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., according to the Journal Sentinel.
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.” She stated: “All benefits have been timely paid, and it is clear that the plans will continue to pay all benefits payable in the immediate future.”
The news report noted that the Milwaukee pensions are not covered by the Employee Retirement Income Security Act (ERISA) or insured by the Pension Benefit Guaranty Corp. As a result, the pensions are exempt from certain regulations requiring minimum funding levels or communication with the plans’ participants.
Wolf said the plans continue to be funded according to actuarial recommendations, and the archdiocese communicates regularly with vested participants.
Some dioceses around the country, including Boston, Cincinnati and Minneapolis-St. Paul, have terminated their defined pensions for less costly plans (see Boston Archdiocese to Offer 401(k)).
« SEC Letter Resolves Concerns about Fee Disclosure and SEC Rules