Benefits May 8, 2007

Chicago Archdiocese Boards the DB to DC Transition Train

May 8, 2007 (PLANSPONSOR.com) - The Roman Catholic Archdiocese of Chicago plans to move about 10,000 lay employees from a defined benefit pension into a 403(b) plan.
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The archdiocese will freeze its DB plan on July 1, 2007 but beneficiaries will keep getting checks and employees will remain entitled to accrued benefits, the Chicago Sun Times reported.

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According to the news report, the archdiocese plans to auto enroll affected employees and direct contributions into a target-date retirement fund appropriate for the employee’s age.

Archdiocese officials said the change will allow them a better handle on long-term funding liabilities, but is not expected to cut the current annual $20-million employee retirement expense, the Sun Times reported.

Called the “share plan,” the new system applies to archdiocese employees such as schoolteachers and parish employees. Carol Fowler, director of personnel services for the archdiocese, said only about a third of those workers currently participate in its voluntary savings plan.

Not covered by the plan are priests and employees of Catholic Charities and cemeteries, all of whom are eligible for separate coverage. The archdiocese, covering Cook and Lake counties, employs about 15,000 and ranks 13th largest among the Chicago area’s private employers, according to a 2005 survey by Crain’s Chicago Business.

Booklets about the changeover have been mailed to employees and several meetings have been scheduled around the diocese. Beginning in 2007, the archdiocese assigned management of its retirement accounts to MassMutual Financial Group, the news report said.

Administration May 7, 2007

Strong Returns Help WVA Pensions Funding Gap

July 29, 2005 (PLANSPONSOR.com) - Funding gaps in West Virginia's pension plans were slightly narrowed by greater than expected investment returns for the year ended June 30, 2005.
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The Associated Press reports that all six state pension plans that invest in the stock market realized double digit returns during the budget year.   The Teachers Retirement System enjoyed a 10% return, and both the public employees and judicial pension plans realized a 10.7% return.   The estimated return for all plans was 7.5%.

The strong returns are welcome help after the state’s proposed legislation to sell $5.5 billion in bonds to help fund the plans was rejected by voters (See  West Virginia Governor Vows Door Knocking Campaign for Pension Bond Initiative ).  

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West Virginia’s judicial pension plan has a $22 million unfunded pension liability, the state troopers’ unfunded pension liability is over $344 million, and the state’s Teachers Retirement System (TRS) has a shortfall of over $5 billion.  

The TRS is reported to be the worst-funded state plan in the country.   Earlier in the year, a measure was approved to close the teachers’ defined contribution plan, established in 1991 due to funding problems of the TRS defined benefit plan, and restore the DB plan (See  Proposal for West Virginia DC to DB Conversion Passes House Panel ).

According to the Associated Press, the funding growth attributable to the strong investment earnings for the year include $311 million for the Public Employees Retirement System and $205 million for TRS.

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