ST. FRANCIS — All employee benefits have been paid on a timely basis and pension plans will continue to pay all benefits in the immediate future, the archdiocese assured pension recipients and contributors in a “media clarification” issued Oct. 26.
The archdiocese issued the clarification in response to an Oct. 25 story in the Milwaukee Journal Sentinel stating that pension funds operated by the Archdiocese of Milwaukee “have unfunded liabilities totaling $41.8 million, according to documents filed as part of the archdiocese’s bankruptcy proceedings.”
“As has been historically the case, all employee benefits have been paid on a timely basis and it is clear that the plans will continue to pay all benefits payable in the immediate future,” Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, said in the clarification emailed to pension investors and posted on the archdiocesan website, archmil.org. “The archdiocese intends to continue the retirement plans and continue making payments in the years to come. Thus, we believe that there is no current cause for concern for employees.”
In the response, the archdiocese said the plans have significant assets because of regular contributions, including additional funding to address the underfunding.
Topczewski noted that assets in the lay pension plan, the one in which parish and school employees participate, have increased by more than $36 million in the 12 months that ended in June 2011 but the third quarter of 2011 likely showed a decrease due to the poor performance of the stock market.
“Likely, so far in the fourth quarter, again because of investment performance, the plan assets have probably increased again,” he explained in an email to your Catholic Herald.
“The Archdiocese of Milwaukee is just one of about 200 employers in the multi-employer pension plan, which is the plan for lay employees,” Topczewski said. “If you are the principal of XYZ school, then XYZ school is your employer and XYZ school is the participant in the multi-employer plan.”
Topczewski said the calculation of current pension rates is based on an actuarial calculation at a specific moment in time. The calculation would change daily if it were done daily because of the fluctuation of the plan’s investments.
“Due to poor investment experience in the last few years, many, if not most, defined benefit pension plans across the country are underfunded,” said Topczewski. “It is an issue that must be addressed in the long term, but does not affect any plan participants in the near term.”
Topczewski said actuaries make recommendations each year on the adjustments needed on the amount of the annual contribution to ensure the plan’s performance on a long-term basis.
“Long-term means decades because people coming into the plan today will not realize a pension benefit for decades,” Topczewski said. “People who will need to receive them decades from now and, with projections on plan payments, investment income, make sure the plans are funded to the levels necessary to meet these payments. Thus, a small adjustment today, through investments and compounded interest, will have a large impact on total fund assets 50 years from now.”
The Catholic Herald reported on Jan. 26 that besides the archdiocese, employees of Catholic Charities, Saint Francis Seminary, the Milwaukee Catholic Press Apostolate, archdiocesan cemeteries, parishes and schools also contribute to the multi-payer plan.
John Marek, chief financial officer for the Archdiocese of Milwaukee, said it’s difficult to determine the future of the current pension plan because there is no “crystal ball” to foresee regulations.
“Circumstances can change, laws can change,” Marek said. “We are currently maintaining and supporting the plan.”
|To read the complete
archdiocesan response, go to http://tinyurl.com/44lwl58
Comparing the lay pension plan in the Milwaukee Archdiocese to plans in other dioceses is not an accurate gauge, Marek said, because a situation in one diocese doesn’t mean the same thing for others.
“Every diocese doesn’t have the same plan and the same investments,” Marek said.
The recent volatility on Wall Street does affect pension plans, he said.
“The stock market goes up 10 points, that means investments held by the pension plan are probably going to have more value today than they did at the end of yesterday and if it goes down, it’s going to go the other way,” Marek said. “Every day there is going to be a new value.”
After the Journal Sentinel reported the underfunding of the pension plans in a Jan. 21, 2011, article, your Catholic Herald reported that the archdiocese’s central offices received emails and phone calls from those who invested in the multiple-employer plans wondering whether their pensions were safe.
Following the recent Journal Sentinel story, Julie Wolf, director of communications for the Archdiocese of Milwaukee, said there’s been no feedback from pensioners and contributors.
“I know that our office hasn’t received any phone calls and I don’t believe that any other office has received phone calls; if they have, I haven’t heard about them,” Wolf said.
Wolf said the archdiocese sent out an email in early 2011 and another one on Oct. 26 to those who were receiving pensions about the bankruptcy not having an immediate impact on their pensions.
“Upon receiving that, I actually got responses saying ‘Thank you,’” Wolf said. “We have very minimal response, very minimal concern because of the information that we got out to our folks who would be recipients of the pensions or (would) be participants in the plan. I think that information was adequate to allay their fears.”
The media clarification issued by the archdiocese also corrected a line in the Journal Sentinel story which read that “creditors have until Feb. 1 to submit claims against the estate of the archdiocese.” Claims from general creditors were due Oct. 17. Only abuse survivors have until Feb. 1, 2012 to submit a claim against the archdiocese in Chapter 11 proceedings.