Archdiocesan officials say they are making the move for the same reasons that many corporations have replaced traditional pensions with “defined contribution’’ plans, such as 401(k)s, in which employees set aside part of their salary, often with an employer match, and control their own investments. People are living longer and drawing more benefits over time, ratcheting up the cost of pension plans to employers. The volatility of the financial markets in recent years has also made employers wary of taking on too much risk. “This is not a situation that is unique to us — there are very few defined pension plans that aren’t stressed today, and I think in many corporate settings and in many not-for-profit settings the same discussion is taking place,’’ said James P. McDonough, chancellor of the archdiocese. “We are just trying to tackle this head-on.’’ Charles Zech, an economics professor and director of the Center for the Study of Church Management at Villanova University, called the 401(k)-style plan “the wave of the future’’ for US dioceses. Many dioceses have already begun the transition, he said, including Brooklyn, N.Y., Detroit, Dallas, and Phoenix. “Every diocese in the country is suffering financially right now,’’ Zech said. “If they want to keep up their ministries, where are the cuts going to come? This is not necessarily a cut, but here is one way to . . . make sure they are not bearing all the risk themselves.’’ But some beneficiaries of the pension plan are unhappy with the change. Cathy Minkiewicz, the former director of adult faith formation and lay ministry formation for the archdiocese, was laid off in 2005; at 65, she is already receiving her pension and probably will not be affected by the change. But she is concerned for others.
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2010 Media Report Villanova School of Business