MKE Archdiocese faces pension shortfall

The Archdiocese of Milwaukee is coming up short in three separate pension funds for priests, lay employees and unionized cemetery workers, according to an article by the Milwaukee Journal Sentinel.

However, the Archdiocese posted a rebuttal to the Oct. 25 article on its website stating beneficiaries of the archdiocese’s pension plans are not at risk of losing their funding. 

The archdiocese said poor investment experience and a volatile stock market prior to last year were part of the problem resulting in what looked like underfunding of the plans.

The Journal Sentinel reported a total of $41.8 million in unfunded liabilities for the archdiocese. The amount of lay workers’ pension liability is at $37.4 million, while 45 percent of cemetery workers’ pensions are unfunded.

The Rev. Steven Avella, Marquette professor of history, said pension funding issues stem from the current economy and not an error on the part of the archdiocese.

“All obligations (of the Archdiocese) are being met and will continue to be met,” Avella said. “Most pension funds have unfunded liabilities these days — largely because of the uneven performance of the market.”

When asked to comment, Julie Wolf, spokeswoman for the Archdiocese, pointed the Marquette Tribune in the direction of the rebuttal, saying the information published by the Journal Sentinel was inaccurate.

“The evaluation made in the Milwaukee Journal Sentinel article that states that the pension is underfunded is based upon the assumption that the pension fund is shut down immediately and no additional contributions made, and the Archdiocese would still pay out – over time – to plan participants,” the statement reads.

According to the statement, all employee benefits have been historically paid on time and those who either contribute to a pension plan or are in a position to receive benefits from a plan will continue to receive timely payments in the future.

Currently, 200 employers are participants with annual contributions being split among all participating employers.

“The Archdiocese intends to continue the retirement plans and continue making payments in the years to come,” the rebuttal said. “Thus, we believe that there is no current cause for concern for employees.”

The Journal Sentinel article said creditors in the church’s Chapter 11 bankruptcy made claims against the Archdiocese’s assets totaling $123.4 million.

While the Archdiocese’s reaction piece did not respond to the statistics, it said there were $36 million in increased plan assets over the past 12 months to counteract the numerous reasons for the underfunding.

Because it has a religious affiliation, the Archdiocese is not covered by the Pension Benefit Guarantee Corporation (PBGC). If the archdiocese does not reach its quota, it cannot receive support funds from the PBGC to pay off any shortcomings.

Ralph Anzivino, Marquette Law School professor, explained the situation.

“When a private employer goes bankrupt and has a shortfall in their pension obligations, the (PBGC) takes over the liability for operating the plan and in many cases will make up the shortfall,” Anzivino said in an e-mail. “But religious pension plans are not covered by PBGC, so those folks for the most part will be treated like any other creditor in the bankruptcy and will receive whatever the reorganization plan proposes to pay them. In light of the already existing tort claims that may be little to nothing.”