Officials for the Boston archdiocese said that part of the reason for parish reconfiguration was to recover money for the pension fund for returned lay church employees. Note that this isn’t the priests’ retirement fund.
They also say that the problem isn’t unique to the archdiocese and they’re right. A lot of pension funds are experiencing similar difficulties, seeing that the stock market hasn’t returned as much on investment in the last few years, and considering that people are living longer. They expect to raise $20 million to $25 million.
Of course, this won’t help change some people’s minds that the only reason their parishes were chosen for closing is their real estate value. For the record, I don’t buy it. I think most people over-estimate both the relative value of the physical property of their parish as well as its spiritual health.
It’s not just stocks. I work in the retirement investment biz, and I know that defined benefit pension plans cannot invest too much in “risky” assets like stocks, and must put more into bonds, Treasuries, and the like. Interest rates have been dismally low over the last couple years, so that’s part of the cause for low returns.
As you note, as well, actuarial estimations for longevity have greatly increased over the past several decades. Let me look up my annuity tables from Social Security:
1950, the life expectancy for a 65-yr-old: 13 years (on average, 13 years til death) for male, 15 years for female
2000: 16 years for a male, 19 years for female
Those are just the averages. The extreme ages have extended much farther. And if you’re retiring well before 65, that’s even more for the plans to pay, even with a reduced benefit.
Some DB plans also had medical benefits attached – can you imagine? Private companies have been ditching these like crazy over the past several years, and for good reason.