Many current and former church employees could lose retirement money because of a little-known loophole in federal pension protections, says National Public Radio.
For example, when the Catholic Diocese of Wilmington, Del., had to file for bankruptcy as a result of sex-abuse lawsuits, the diocese’s lay employees and retirees learned that their pension plan was underfunded and isn’t protected like corporate pension plans.
According to bankruptcy filings, the diocese had set aside less than 15 percent of the amount it needed to meet pension obligations, and now some of the pension funds are caught up in the bankruptcy.
3 Responses to Church Pensions in Danger After Sex-Abuse Lawsuits Bankrupt Many Catholic Diocese
ppcllc - May 27, 2010 at 2:08 pm
That’s the two-edged sword of exemption from federal oversight. The churches asked for it, so they don’t have pension protection.But church employees are innocent parties that, ironically, put their faith in the church’s promise to fulfill their obligations. The individual denominations indisputably have a moral obligation to fulfill the promises made by their “chartered” entities, including schools and churches.In the case of the Catholic Diocese of Wilmington, unless the Vatican taps an infinitessimal portion of its vast wealth to make good on the pensions, it can hardly have any moral authority to criticize anyone on any matter.
cdowpensioners - May 27, 2010 at 10:31 pm
Let this be a “wake-up call” to all who work for and serve on boards of religious/church-affiliated organizations. It was certainly a shock here in Delaware. If the diocese had not filed for bankruptcy, employees would never have known about the extreme mismanagement of the pension fund. The status of the plan can to light in a financial document filed for the bankruptcy proceeding.Ask your benefits/human resources department about your pension plan. Do you receive an annual report of its funding status? How well funded is it? What are the terms of the plan? Is it covered by the Pension Benefit Guananty Corporation or has your organization taken advantage of the “church plan” exemption? Visit http://www.pensionrights.org for information on pension plans and the questions to ask. The Pension Rights Center is working hard to change the laws on church plans. They need our support. To follow the Diocese of Wilmington pension case, visit http://www.facebook.com/profile.php?id=100000870145647 and make a “friend” request.
recovered_cathlick - May 28, 2010 at 10:00 am
You say: the Catholic Diocese of Wilmington, Del., had to file for bankruptcy as a result of sex-abuse lawsuits…Correction: the Catholic Diocese of Wilmington, Del., had to file for bankruptcy as a result of the church not responding pastorally (or otherwise) to sex-abuse victims who had no choice but to file lawsuits…Let’s not continually blame the victims.