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Diocese tightens pensions for clergy

Finances force cuts in stipends, benefits

PENSION POLICY Cardinal Sean P. O'Malley's 'decree of promulgation' is raising concerns among some sick priests, who fear a loss of benefits. PENSION POLICY
Cardinal Sean P. O'Malley's "decree of promulgation" is raising concerns among some sick priests, who fear a loss of benefits.
By Michael Paulson
Globe Staff / May 26, 2009
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The Archdiocese of Boston, facing a clergy pension system that will run out of money in 2011 without a financial rescue, is now taking its first concrete steps to limit benefits and raise revenue to shore up the fund.

Cardinal Sean P. O'Malley has mailed to all priests a legalistic 17-page "decree of promulgation" that is raising concerns among some sick priests because it says that they will receive only 60 percent of their stipend, in addition to their healthcare coverage, if they are on health leave. Also in some cases it will require them to submit medical and tax documents to the archdiocese in order to "demonstrate need."

The policy also requires priests on health leave for more than six months to seek state and federal government assistance, such as Social Security Disability Insurance, which is a break from past practice.

The policy affects only the 40 priests who are currently "unassigned" because they are sick, disabled, or on a leave of absence, but it signals the archdiocese's willingness to make difficult and unpopular decisions as it attempts to address its most serious financial challenge.

Two priests on health leave expressed concerns about the policy in separate interviews last week, but neither would allow his name to be used, citing fears that the archdiocese would limit their benefits.

"The archdiocese sees priests with health issues as a burden," said one of the priests. "It's clear they don't want us."

The other priest expressed a similar concern, calling the policy an "injustice," and saying "we have a tacit agreement to be supported for our lifetime, and this really seems to pull the rug out from under us, and pushes people who are retired back into service."

But Monsignor Dennis F. Sheehan, a Newton priest who helped the archdiocese develop its new policy, defended the changes.

"You have to realize that for years the archdiocese was very generous with everybody in odd situations, so that people who were off duty for one reason or the other got full salary and benefits, and we're probably the only institution in the United States that does that without limit," he said. "But now, we find ourselves with limited resources, and the challenge is to be equitable with limited resources and to preserve the resources for the future."

Sheehan said sick priests will continue to receive "very generous" healthcare benefits, but will have a reduced stipend, and said the requirement that they submit documents to verify their illness and assets "is no more than any other American citizen is asked to do."

The Archdiocese of Boston has 480 active priests, of whom 26 are over age 75 and five are over age 80. The archdiocese also has 275 priests who do not work full time because of age or infirmity.

Priests are paid between $25,000 and $35,000 a year, depending on their years of service, and receive $600 a month for housing if they do not live in a rectory. Pastors must offer to retire at age 75, but priests often continue to say Mass as long as they are able. Retired priests are given a $1,288 monthly stipend plus $600 for housing if they do not live in a rectory.

The archdiocese asserts that its benefits compare favorably with those of other Catholic dioceses around the country. And many private companies have been scaling back on support for retired workers.

The subject of clergy benefits has proven to be controversial in the archdiocese, in part because some priests and laypeople have questioned how well the archdiocese has managed the funds, and in part because, despite the abuse scandal, the idea that the church might reduce its commitment to retired and sick priests has troubled many Catholics.

O'Malley first proposed a set of benefits cuts to reduce the costs of the clergy pension plan four years ago, but quietly withdrew it after allegations, fueled by the archdiocese's own mailings to priests, that the church had failed to set aside years of Christmas and Easter contributions made by Catholics who were told those collections would support their retired clergy.

The archdiocese has repeatedly insisted the funds were properly used, but also agreed to hire an accountant to do a report on the history of the funds in an effort to assuage the concerns. That report is supposed to be published in June or July.

Archdiocesan chancellor James P. McDonough has said that there is no indication of any criminal wrongdoing. But the report is nonetheless likely to draw criticism of the archdiocese from those who believe church officials exercised too much latitude in using funds donated for retired and sick priests. Among other uses, the funds are believed to have been used in the past to support priests accused of sexual abuse. The archdiocese says that, going forward, it plans to set up a separate account to provide for accused priests, and that the account will be funded through a portion of the proceeds of the sale of the former archdiocesan headquarters property in Brighton to Boston College.

The archdiocese, in its most recent annual financial report, described the clergy pension fund as "our largest liability and most significant financial concern." The document describes the plan as underfunded by $114 million, and warns that it will run out of money in 2011 unless it is restructured. The archdiocese currently brings in $5.4 million a year from Christmas and Easter collections to support the plan, but spends $15 million a year on benefits.

"The economic realities of the day and the realities of the current fiscal position of the archdiocese have forced us to reevaluate how we address the health, welfare and retirement needs of the priests of the archdiocese," the document mailed to priests said. ". . . Health-care costs have increased exponentially; there has been an ever-declining number of vocations; while at the same time, there has been a continual and rapid increase in the average age of priests."

The new policy governing benefits for priests who are unassigned, is the first of three stages in the archdiocese's latest plan to control benefits. The next two stages will concern housing and benefits for retired priests.

At the same time that the archdiocese is trying to rein in spending on clergy benefits, it is also trying to raise money to support the benefits. The archdiocese plans next month to launch a third annual collection, in addition to the Christmas and Easter collections, to benefit the clergy funds. Also, later this year the archdiocese plans to launch a major gifts campaign to benefit the funds. And the archdiocese has appointed a new board of trustees to oversee the plan.

"We need to secure our clergy fund and make sure we meet our commitment to the health needs of our priests and our senior priests for generations to come," said the Rev. Richard M. Erikson, vicar general of the archdiocese. Erikson said the new policies are being developed after "an unprecedented process of consultation" with priests, and he said the goal is to have policies and procedures "that are fair and respect and honor the commitment of our priests in the archdiocese."

Michael Paulson can be reached at mpaulson@globe.com.

Cardinal Sean P. O'Malley's "decree of promulgation" is raising concerns among some sick priests, who fear a loss of benefits.

PENSION POLICY