Diocese to cease its contributions to lay employees' pensions Date: 11/2/2010 Nov. 1, 2010
By Debbie Gardner
Assistant Managing Editor
SPRINGFIELD -- The Diocese of Springfield recently notified its lay employees that it would stop making contributions to its employee pension plans effective Dec. 31.
This pension plan, which is separate from the non-profit organization's individual employee-funded 403-b retirement savings plan, has always been entirely funded through contributions from the Diocese, according to Mark Dupont, chief executive officer of Catholic communications for the Diocese of Springfield.
This pension change does not include priests and other religious, who, according to information provided by the Diocese, are compensated under a different structure. This group had their salaries frozen and pensions adjusted at an earlier date.
Acknowledging that this move -- which follows recent layoffs and job downsizings at the Diocese -- is "not good news," Dupont said the Diocese's decision to institute this freeze was commensurate with the actions other local non-profits have been forced to take recently.
"What effects us all is the fluctuations in the [stock] market and our liabilities going forward and what I'm talking about is pension payments going forward," Dupont explained.
Dupont said the Diocese has employed analyses that make projections 10 and 20 years out to keep "on top of" of its pension obligations.
"We know our employees and our demographics and we know what's going on," he said. "Rather than reduce those [pension] payments, which would be a terrible hardship on retired Diocese employees, we have elected to currently freeze, starting at the end of this year, contributions into the pension plan."
"We are, at least, in a position where we can honor the payments as they are being made," he noted of the decision to make this change by year's end.
Dupont said all eligible employees will still receive their pensions at retirement and will still accrue Diocese contributions through the end of the year, but that those pensions will not increase in value after Dec. 31 "until such time as further action is taken."
"This will be a matter that will be under constant review by Diocesan leadership," he added.
Dupont said the Diocese is keenly aware of how this change in compensation will affect its employees, especially its dedicated Catholic school teachers, "many of whom are tremendously underpaid."
"This is just another burden they will have to endure while we try to right our fiscal course," Dupont said.
He acknowledged the move might see the Diocese lose some teachers when the economy begins to rebound and higher-paying jobs open up with other school systems.
The cost of maintaining the Diocese's former Catholic education system -- some $40 million over the past decade -- was, Dupont said, in many ways a contributing factor in the Diocese's current fiscal difficulties.
As a cost-saving measure, in 2009, the Diocese closed the five Catholic elementary schools in Springfield and combined them into a single entity, St. Michael's Academy, which provides pre-kindergarten through eighth grade education at three campuses located in the East Forest Park section of the city.
He pointed out that this newest fiscal adjustment is another move toward reestablishing financial heath for the Diocese of Springfield.
"It's a sign that we're trying to right our financial ship so we can keep our ministries, including our schools, going," he said.
On Nov. 2, we received the following statement from Mark Dupont, chief executive officer of Catholic communications for the Diocese of Springfield:
"I want to clear up a mis-statement on my part in the Nov 1 story on the freezing of Diocesan lay pensions. The Diocese will continue to make contributions into our pension program, however those funds will be used to stabilize pension reserves for payments going forward into the future. Unfortunately given our current fiscal challenges this will not allow for the growth in projected pension payments based on income after Dec. 31, 2010."
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