Vatican: Employees" Pensions Are Not at Risk

Vatican Insider
February 20, 2015

http://vaticaninsider.lastampa.it/en/the-vatican/detail/articolo/vaticano-vatican-39283/

“We feel safe as far as pensions are concerned.” These were the words used by the Holy See spokesman, Fr. Federico Lombardi to sum up a detailed statement issued by the Vatican Pensions Fund, which claims there is no risk of a possible “default” as suggested by analysts on the basis of some (misinterpreted) interviews given by the Vatican’s super-minister of finance, Cardinal George Pell, who told the Catholic Herald: “Apart from the pension fund, which needs to be strengthened for the demands on it in 15 or 20 years, the Holy See is paying its way, while possessing substantial assets and investments.”

In its statement the Fund revealed that “since for some months, and amplified by press reports, alarming data has been circulating regarding the situation of the Vatican Pensions Fund and on the sustainability of honouring the commitments undertaken towards present and future subscribers, the Managing Board of the Fund and the College of Auditors consider it opportune to officially communicate the actuarial situation, assets and income of the aforementioned Fund, as it appears in the actuarial Technical Financial Statements drawn up by the actuary and the Financial Statements regularly approved by the Secretary of State.”

“With regard to the actuarial aspect,” the statement reads, “there is a substantial balance between available resources and commitments to current and future employees, due also to interventions (approved by the Secretary of State following proposals by the Managing Board) both in terms of contributions (increase of rates throughout the years up to the current rate of 26% on the total of taxable income) and in relation to performance (increase of two years of working life, raising the age of retirement to 67 for laypersons and 72 for clergy and persons religious. The working Statements also show, throughout the years, the solidity of the assets and financial structure of the Fund itself. The funding ratio of the Pensions Fund is 95%.”

“From a strictly income-based perspective, the economic and financial situation of the institution records a gradual increase of financial and real estate resources both in terms of capital resources which, from 1993 to 2013 increased on average from ˆ 22,256,196 per year, and in terms of the upward trend in net profit, which during the last 6 years has passed from ˆ 23,583,882 to ˆ 26,866,657, sums sufficient to cover the current costs of pensions.”

“To complete the picture,” the statement ends by saying, “the Fund’s assets on 31 December 2014 were recorded at ˆ 477,668,000. Adding the budget surplus for 2015, estimated to be around ˆ 27,140,000, a net worth by 31 December 2015 of over 504 million euros may be hypothesised, confirming the real solidity of the Fund, which has progressed from an initial budget of 10 billion of the old Italian lire in 1993 to over 500 million euros in little more than twenty years”.