A onetime top official of the Archdiocese of Boston is blasting the church's oversight of pensions for retired lay church workers, five years after the same official defended the archdiocese's management of clergy pensions against similar criticism.
The unusual development comes shortly after an order of nuns, the Daughters of St. Paul, sued the archdiocese in an effort to extricate the retirement accounts of the nuns' lay workers from archdiocesan control.
Today's critique, by former archdiocesan chancellor David W. Smith, makes public long-simmering tension between Smith and his former employer, the Archdiocese of Boston. Smith said he would meet today with the offices of Secretary of State William Galvin and Attorney General Martha Coakley, asking them to look into the pension funds, and that he would also ask the IRS to investigate.
Smith also said he plans to meet today with a group he has provocatively dubbed "Boston Pension Abuse Victims.'' He plans to hold a news conference in Newton this afternoon.
Smith was in charge of the financial management of the archdiocese between 2001 and 2006, and in that capacity was a trustee of the archdiocese's pension plan. Cardinal Sean P. O'Malley then replaced him, as chancellor and as pension plan trustee, with a former banking executive, James McDonough, who on Friday was appointed to a second five-year term.
Smith says the archdiocese, which is in the process of freezing its pension plan for lay employees and transitioning to a 401(k)-style plan, is trying to get past and present employees "to choose to forfeit their pension benefits in exchange for a grossly inadequate one-time payout."
Terrence C. Donilon, a spokesman for the archdiocese, reacted angrily to Smith's criticisms.
"It's outrageous -- when David Smith was chancellor, we were running annual deficits and we are now running a balanced budget,'' Donilon said. "If he wants to get into a give and take about his performance as chancellor, which included serving as a trustee of the plan, I'm sure a lot of people would like to do that. But we have prepared a good plan to address the lay pension plan for the future."
The church's pension plan, which was more than fully funded in 2007, was only about 83 percent funded last year. Employees vested in the plan are supposed to receive a monthly payment when they retire. But the church is now offering vested employees the opportunity to cash out of the plan early by taking a lump-sum payout at a discount, reflecting the plan's underfunded status.
The move is intended to allow the church to reduce its liability and wind down the fund earlier. But a pension specialist interviewed by the Globe last year said the deal is a bad one for employees, unless they have been diagnosed with a terminal illness and know they won't be around to accept the monthly payments when they retire.
Donilon said the lump sum offer was voluntary.
"The options were presented to people, and it's been done with a good deal of thought and professional input, and with the sole purpose of serving the beneficiaries to the best of our abilities," he said.
In a news release, Smith said his letter to the IRS was written by the same pension law specialists that the Daughters of St. Paul engaged. The nuns and the archdiocese are scheduled to go to mediation tomorrow.
Lisa Wangsness can be reached at email@example.com.
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