PHILADELPHIA (PA)
Business Management

iThe Philadelphia Catholic Arch­­diocese has frozen a defined-benefit pension plan for its 8,500 parochial school teachers and support staff. The move comes as the archdiocese wrestles with a $150 million pension deficit.

The freeze means current participants will accrue no additional benefits. Those workers will be moved to defined-contribution plans to supplement retirement.

Without the weight of those accruing benefits, the archdiocese hopes to close the deficit over time by continuing to contribute 4.5% of each employee’s paycheck. Before the freeze, the archdiocese contributed 7.5% of payroll. Had the pension continued to pay the same benefits, even a 10% contribution would have left the plan with a $100 million shortfall in 30 years, according to the archdiocese’s chief financial officer.