Retired employees of the Roman Catholic Diocese of Fresno face an uncertain future with their retirement benefits.
Bishop Joseph Brennan sent a letter to members of the diocese in August explaining how the diocese is working to establish a retirement plan under its own purview following major issues with Christian Brothers Services, which operates plans for many dioceses across the nation.
Driving the news: Christian Brothers was reportedly facing an $800 million shortfall in its pension fund last December.
The nonprofit firm operates retirement benefits for many Roman Catholic dioceses and schools.
The Fresno diocese has made all of its contributions that were required by the plan.
The big picture: Brennan told members of the diocese that the issues with Christian Brothers are not related to the Diocese of Fresno filing for bankruptcy last year.
The diocese filed for bankruptcy to deal with over 150 claims of sexual abuse by clergy.
With the financial issues of the Christian Brothers plan, the diocese initially planned to spin off from the nonprofit’s plan to create its own plan. But Christian Brothers requested the diocese to indemnify itself for any claims of wrongdoing associated with underfunding the plan, which the diocese could not agree to.
Instead, the diocese will seek bankruptcy court approval to withdraw from the plan and create its own 403(b) plan.
State of play: All benefit accruals under the Christian Brothers plan were frozen on June 30, meaning active employees are not accruing any additional benefits after that date.
What we’re watching: The diocese said it is hopeful that it will be able to fund the 403(b) plan with contributions comparable to the level and percentage of pay contributed to the Christian Brothers plan.
The diocese said retirement benefits will ultimately be reduced in any scenario, but by how much is yet to be determined.
What they’re saying: “Given the current financial condition of the Fresno Diocese, we do not have the ability to fully fund all benefits that have accrued to this date,” Brennan wrote in the letter.
Brennan said the diocese will add each employee as a potential creditor in the bankruptcy case.
“Our goal is to provide the best benefits that we can, given the unfortunate circumstances surrounding the Plan and our present financial condition, and to provide benefits that will be secure going forward,” Brennan wrote.