The Diocese of La Crosse announced it will end its pension plan for lay employees.
All funds in the plan will be distributed as a one-time lump sum payment to eligible participants based on the ratio of available plan assets divided by total plan liabilities, according to news reports citing a letter to employees from Bishop William Patrick Callahan. The diocese said it anticipates that the plan’s termination payouts will be “in the mid-90 percent range of the plan’s total actuarially equivalent value of benefits.” Monthly payments will continue until the final distribution, set for this summer.
Callahan’s letter notes that the pension plan was frozen in 2007 and replaced with a 403(b) defined contribution (DC) plan. The diocese continued to bill parishes and allocate funds from the Diocesan Annual Appeal to help make up for the shortfall in the underfunded pension, but the efforts weren’t enough to fully fund it.
The diocese said the decision to close the plan is aimed to avoid the distress of continued market volatility and funding shortfalls “and best preserve all employees’ retirement funds.”According to information about the diocese’s 403(b) plan, employees who were between the ages of 50 and 64 as of December 31, 2006, received an additional contribution—called a transition contribution—as of the January 1, 2007, effective date of the 403(b). The contributions are discontinued as of the earlier of the employees’ termination from service or December 31 of the year when the employee reaches age 65.