Special to The Dialog
As 33 parishes prepare for Wave II of the Sustaining Hope for the Future campaign, leaders of the $28 million drive stressed anew why the effort is necessary and the reasons why its success is vital not only to the Diocese of Wilmington, but to the parishes themselves.
Sustaining Hope for the Future aims to help the diocese get back on its feet following a 2011 bankruptcy court settlement in which the diocese paid $77.4 million to settle 150 claims of survivors of clergy sexual abuse, secure the lay employees’ pension trust, and honor claims of other creditors. The campaign seeks $10 million for the Lay Employee Pension Fund; $3 million for the Trust for the Welfare and Retirement of Priests; $2 million for diocesan ministries, and $11.2 million for individual parish projects. Wave II parishes begin their campaigns later this month to raise a combined goal of $16,435,000.
The bankruptcy agreement and clergy sexual abuse scandal led to many questions regarding Sustaining Hope for the Future during Wave I, in which 21 parishes pledged almost $7.25 million, or just under 80 percent of their combined target. Additionally, three parishes conducted their own campaigns raising more than $5 million, which included almost $1.5 million for Sustaining Hope for the Future.
The clergy sexual abuse scandal included “admitted, collaborated or otherwise substantiated allegations of sexual abuse of minors” by 23 diocesan priests; other cases in which the diocese was named as a defendant involved religious order priests. Most of the cases occurred in the 1950s, ’60s, and ’70s, with the last reported incident involving a diocesan priest in ministry occurring in 1986.
The following “frequently asked questions” address the major issues raised during Wave I.
Q. Why did the diocese agree to the bankruptcy settlement?
A. Bishop Malooly has stressed that two major factors led him to seek an umbrella settlement covering all parties in lawsuits filed against the diocese and 29 of its parishes: fairness to the abuse victims and survival of the 29 parishes named in the lawsuits.
“There could have been over 100 trials, stretching over years,” Bishop Malooly said. “Given the number of suits filed against the diocese and its parishes, in addition to the diocese’s finite resources, I believed that filing for bankruptcy would provide the fairest possible way to provide equitable compensation to all survivors of the crimes of sexual abuse by our priests.”
Had the settlement not been reached, Bishop Malooly believes many of those parishes would not have survived. One case that went to court before the agreement was reached, involving St. Elizabeth Parish in Wilmington, provides an example.
“In the one case that did go to trial against a parish, the jury verdict was $3 million, an amount that would have forced that parish into bankruptcy and threatened the existence of its schools,” the bishop said.
“Many of these parishes would not have survived lawsuits because they did not have sufficient assets to try the case and pay any judgments.”
Those parishes are more than half the total number of parishes in Delaware and on Maryland’s Eastern Shore.
The diocese’s bankruptcy petition also allowed the diocese a means to reassure lay employees covered by the pension plan, “who were fearful their pensions would be affected,” Bishop Malooly said.
Tom Cupples, who chaired the Wave I Sustaining Hope for the Future campaign at St. Elizabeth Ann Seton in Bear, had studied the bankruptcy settlement out of curiosity before becoming involved in the campaign. When some at parish meetings to explain the need for the campaign called the settlement “cowardly,” Cupples came to Bishop Malooly’s defense by pointing out the action not only provided something to each of the individual victims but also greatly aided the parishes involved. “The settlement absorbed all the liability for cases that those parishes may have faced,” Cupples said. “Settlement saved them from having to sell off assets which might have resulted in their closing.”
Q. Why is $10 million earmarked for the Lay Employee Pension Fund? Wasn’t it already funded? Were its funds mishandled, or perhaps used to help pay the bankruptcy settlement?
A. The $10 million set aside for the Lay Employee Pension Fund is a requirement of the bankruptcy agreement. It will cover diocesan contributions of $5 million to the fund in 2016 and 2017, as stipulated in the agreement. That is in addition to a $10 million payment at the time of the settlement, and additional funds each year until 2016-2017.
When questioned if money from the Lay Pension Fund was used in the bankruptcy settlement, Bishop Malooly stated, “Let me be clear; no money was used from the Lay Pension Fund to pay for the settlement of the priest abuse claims. The $10 million to be raised through the Sustaining Hope for the Future campaign is not to replenish any funds used to compensate survivors. Rather, this additional $10 million will help ensure that the employees vested in the diocesan employees’ pension plan will receive their full benefits once they achieve retirement age.”
Bishop Malooly addressed the question about the diocese’s ability to manage its finances, especially in relation to the Lay Employee Pension Fund. “This perception probably developed because our Lay Employee Pension Fund was underfunded,” he said. “However, it is quite common for pension funds of both nonprofit and for-profit institutions alike to be underfunded since the beneficiaries of the fund retire over a period of many years.”
He also noted last year that “the average return during the past 20 years on our investment is 8.8 percent,” offsetting any question of fund mismanagement.
Q. Who receives lay pensions from the diocese?
A. Most of those who now receive or will receive pensions from the Lay Employee Pension Fund work in parishes and their schools, or at diocesan schools. A relative few work in diocesan offices and ministries.
As Bishop Malooly put it, they are “the men and women who serve in our parishes as secretaries, maintenance workers, directors of religious education, directors of liturgy and music, parish managers, and housekeeping staff. They are our teachers, administrators and support staff in both parochial (parish) and diocesan schools. They are diocesan directors of ministries, support personnel, Catholic Charities personnel and cemetery workers.”
The Lay Employee Pension Fund was frozen in 2011, following the bankruptcy agreement.
Currently, 260 former employees receive pension benefits, and some 1,300 others are eligible to receive benefits in the future. Those who receive or are eligible to receive benefits had to work a minimum of 1,300 hours per year and work continuously for at least five years.
The diocese and many parishes now offer employees 403(b) plans for retirement.
Q. Some parishioners are not offered pensions through their employment in the private sector. Why should they support the diocesan employee pension fund?
A. Bishop Malooly believes it is a matter of keeping the diocese’s word to those employees, “many who have worked for the diocese or parish for decades, [and] were promised a pension at the time of their employment. The diocese, therefore, has an obligation to its employees to make good on that promise.”
Diocesan officials also point out that many diocesan workers receive “a lesser salary than they would receive in the for-profit business sector.”
Q. Sustaining Hope for the Future also seeks $3 million for the Trust for the Welfare and Retirement of Priests. Doesn’t that, in addition to the concerns over the Lay Employee Pension Fund, indicate problems in how the diocese has managed retirement accounts?
A. The need for additional funds for priests’ retirement and welfare arises from a question of aging, not a question of financial management. There are 37 retired priests receiving pensions at present; that number is anticipated to grow to 58 by 2020.
The average age of diocesan priests is 64. They are eligible to retire at age 70 with 25 years’ service and must file for retirement at age 75, though the bishop may opt to allow a priest to continue in active ministry past that age.
Several other factors make strengthening the Trust for the Welfare and Retirement of Priests a priority. The trust was set up with one major gift; parishes and ministries in which the priests serve have not paid into the trust. The trust’s assets dropped by 30 percent during the recession that began in 2008 while more priests began drawing pensions from the trust. The trust’s assets have recovered from that drastic drop, but the trust still lost anticipated growth on that 30 percent of assets.
Q. How can we be sure the money raised through Sustaining Hope for the Future will go toward the specified purpose, and not be used for other reasons?
A. Bishop Malooly instructed that a separate trust fund be established for Sustaining Hope for the Future, which “will ensure that all contributions to the campaign will be used for their intended, specified purposes.” Such a trust is legally binding.
Q. What’s in it for my parish?
A. Each parish will receive 40 percent of its target once the goal is met. Should a parish receive pledges of between 100 and 120 percent of its target, 60 percent of the additional funds will go to the parish. Anything pledged over 120 percent of target will return to the parish.
These funds will go toward projects determined at the parish level.