CROOKSTON — Lay employees of the Diocese of Crookston may see a lapse in funding to their pension plan, according to a letter distributed by the bishop’s office on Oct. 24.
The letter, sent to current and former employees, said the defined benefit pension plan, managed by an organization called Christian Brothers Services, is “significantly underfunded” and would require the diocese to pay $24.6 million over 25 years to resolve the shortfall.
“We have grave concern to care for our past employees,” Bishop Andrew Cozzens told the Grand Forks Herald. “We’re going to be doing everything that we can to make sure that they receive the benefit that they count on and need.”
The Diocese of Crookston includes 65 parishes and eight Catholic schools across 14 counties in northwest Minnesota, according to the diocese’s website.
Christian Brothers Services, of Romeoville, Illinois, provides financial services to Catholic organizations like dioceses and schools and helps those organizations manage and administer benefits such as like health care plans, retirement plans and risk management and coverage programs.
Cozzens said the diocese was notified by Christian Brothers Services earlier this summer that the diocese’s payment rate for the pension plan was going to increase, which was the first time the diocese became aware of the plan’s lack of funding.
“We were notified the amount of rate change that was proposed, and that’s where we discovered that there was significant underfunding in the pension,” he said.
He estimated that roughly 500 employees, past and present, will be impacted by the plan’s underfunding.
According to the letter, the funding issues with the pension plan will not affect the 403(b) retirement funds administered through The Standard, a different insurance company.
Cozzens said the diocese was never told by Christian Brothers Services that its plan was underfunded until earlier this year.
“It may be the case that they weren’t charging enough to keep it up to funding, but then they should have told us that, right?” he said.
Cozzens also said there are 180 other organizations with finances managed by Christian Brothers Services — many of them small dioceses like the one in Crookston — that have reported that their plans are underfunded as well. He declined to name any specific organizations.
“There was a lack of transparency on the part of Christian Brothers,” he said. “As far as I’ve talked to, other organizations have experienced the same.”
A Christian Brothers Services spokesperson declined to comment, telling the Grand Forks Herald that the company can not provide information about its plans.
The diocese has established a committee to begin discussing the next steps regarding the pension plan, with members including diocese Finance Officer Chad Ryan and Chancellor and Chief Operating Officer Janelle Gergen. The diocese is also working with actuarial and benefits consultants, investment managers and legal counsel.
“These people have given their lives in service to the church, and they count on this pension, and so we’re going to be doing everything we can to fulfill that obligation, because we see it as a matter of justice,” Cozzens said.
Jordan Rusche is the government reporter for the Grand Forks Herald.