Expert in Diocesan Finances Has "Never Seen" Pension Move like LA Crosse's

By Peter Feuerherd
National Catholic Reporter
April 16, 2018

https://www.ncronline.org/news/accountability/expert-diocesan-finances-has-never-seen-pension-move-la-crosses

The facade of St. Joseph the Workman Cathedral in La Crosse, Wisconsin (Wikimedia Commons/Rabbet)

Jack Ruhl, an expert on diocesan finances, frequently wanders through the thicket of church financial disclosures, but has never seen anything like the dissolution of the Diocese of La Crosse, Wisconsin, lay pension plan.

La Crosse lay diocesan retirees and employees received word about their pensions in a letter dated Feb. 27 from Bishop William Patrick Callahan, who has led the diocese since 2010. In the letter, retirees were told they could expect more than 90 percent of the value of their pensions in a lump-sum payment that will be distributed this summer.

Ruhl, a professor of accountancy at Western Michigan University, has studied finance statements of U.S. dioceses since 2004, looking for the impact of sex abuse settlements and their effect on priest pension plans. That issue arose in the aftermath of the scandals that enveloped the Boston Archdiocese.

Meanwhile, he has also studied the impact of the crisis on lay pension plans. He has seen a number of examples, including massive transfer of funds to special independent projects, such as the building of Our Lady of the Angels Cathedral in Los Angeles, that protected diocesan funds from sex abuse settlements.??

But he told NCR he has never seen the approach taken by the La Crosse Diocese, which says it will not be able to meet its promised obligations to hundreds of retired Catholic school teachers, parish workers and custodians.

In 2011, the diocese established a separate corporation called St. Ambrose Financial Services, which handles its money issues and the administration of the pension plan. Ruhl said that St. Ambrose could be a vehicle to avoid paying out sex abuse settlement claims.

"I have never seen a diocese sweep all net assets (that is, assets minus liabilities) to a separate corporation and then say they are cutting pensions," he told NCR.

Ruhl said that St. Ambrose appears to have a single client, the La Crosse Diocese. By transferring all its assets to St. Ambrose, there is no evidence in the diocese's public statements that funds are available for lay or priest pensions, he said.

Laws protecting defined pension plans do not apply to dioceses, which claim a religious exemption. Ruhl said that the diocese's plans to cut pensions would normally be prohibited by federal law if the diocese were a secular corporation.