Diocese of La Crosse Cuts Pension Plan | Chief Investment Officer

A letter from Bishop William Patrick Callahan has informed members of the Wisconsin-based Diocese of La Crosse Lay Employees’ Retirement Plan that they will be losing their pension benefits.

“After much analysis, discussions and prayers, it has been determined that it is necessary to terminate the Diocese of La Crosse Lay Employees’ Retirement Plan at this time,” Callahan wrote in the Feb. 27 letter, received over the weekend by plan members.

The plan has been underfunded for years; the letter notes that it was frozen in 2007 and was replaced with a 403(b) retirement plan, leaving increases for members’ accrued benefits in the cold after Dec. 31, 2006.

More than 1,000 members will lose their benefits, and the full magnitude of the plan termination won’t be felt until late May, as reported by the Eau Claire Leader-Telegram, who broke the story.

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Catholic school teachers, custodians, secretaries, rectory workers, and other Diocese employees affected by the closing will see all lay funds distributed as a one-time, lump-sum payment based on the ratio of available assets divided by total liabilities. According to the letter, each eligible individual will be impacted differently by this payment method.

Until the final payment is made in the summer, monthly pension payments will continue.

“People are very, very apprehensive, to put it mildly,” retired Regis High School teacher Howard Campbell told the paper. “The main thing is the very tenuous uncertainty hanging over their heads. That’s the frightening thing for a lot of people.”

Tags: Bishop William Patrick Callahan, Diocese of La Crosse, Lay Employees’ Retirement Plan, Pension

To help protect the benefits of multiemployer pensioners and future retirees, pension coalition Protect Our Retirees Earned Retirement (POWER!) has tapped former Florida Congressman Connie Mack to head the coalition as its national chairman.

“Millions of retirees and workers are staring at deep reductions in their pension benefits, while employers risk going out of business unless Congress and the President act swiftly,” Mack said in a statement. “We need all sides to come to the table to find a solution. The longer we fail to address the situation, the harder and more expensive it will be to solve it.”

POWER! involves employers, unions, workers, and retirees to work on resolving the crisis that face Multiemployer Pension Plans (MEPPs). A Joint Select Committee was recently formed in Congress to solve the crisis, with a November 30 deadline to issue a report.

While multiemployer pension systems cover 10 million Americans, failure of a Congressional reform could cause an estimated 100 multiemployer pension plans to fail. According to a news release, plan participants were paid out $241 billion in wages and pension payments in 2015, yet those same members also paid roughly $35 billion in federal taxes and $8.4 billion in state and local taxes.

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“If Congress and the President do not act, businesses in our industry will be forced to shut their doors,” said Steve DeHaan, president of the International Warehouse Logistics Association. “Many are second- and third-generation family-owned warehouse companies where withdrawal liabilities exceed their net worth.”

The group currently has seven advocacy campaigns on its website, which will send letters to Wisconsin, Ohio, New York, Indiana, Missouri, and Michigan, and Pennsylvania senators urging they get involved in restructuring policy for multiemployer pension plans.

“The time is now for the President and Congress to come together to find a solution to the MEPP crisis. We have to get beyond political rhetoric and work toward a compromise,” Nick Pyle, president of the Independent Bakers Association, said. “If this problem lingers, the solution will cost more and it will arrive too late for some of our members to sustain their businesses.”

Tags: Connie Mack, Pension, Protect Our Retirees Earned Retirement