Final Report: Portability of Pension Benefits for Diocesan Lay Employees

Citation: 
National Conference of Catholic Bishops and the United States Catholic Conference. Final Report: Portability of Pension Benefits for Diocesan Lay Employees. November 1990.
Abstract: 

"Final Report: Portability of Pension Benefits for Diocesan Lay Employees" presents the findings of the study of diocesan pension plans conducted by Hay/Huggins Company for the National Conference of Catholic Bishops and the United States Catholic Conference, with funding provided by the Lilly Endowment. According to the report, 23% of diocesan lay employees have previously participated in another diocesan pension plan, and over one third of retiring diocesan employees have previously served in positions covered by pension plans other than the ones they are participating in at retirement. Such employees are vulnerable to "portability loss," or "the reduction in annual retirement income that will occur because an employee is covered by two or more pension plans during his or her working life." Those who suffer portability loss, says the report, lose an average of one quarter of their benefit. Hay/Huggins explored four possible options that dioceses should consider in their attempts to reduce portability losses for employees who move from one diocese to another during the course of their careers. These options include: 1) awarding credit for previous service in other dioceses 2) replacing traditional "defined benefit plans" with "defined contribution plans" 3) "indexing vested benefits" and 4) voluntarily participating in a national diocesan pension plan. The report cautions, however, that the advantages and disadvantages of these options must be considered very carefully because of possible drawbacks such as cost or adverse impact upon employees not vulnerable to portability loss. The Hay/Huggins report concludes with three recommendations for dioceses concerned about portability problems. First the report urges consideration of the ways in which each diocese can act individually to reduce portability losses by considering the options described above, extending coverage to all who meet the requirements, and providing information about other plans. Secondly, the report calls for discussion of a "national portability agreement" that would establish a method of transferring pension funds among dioceses. Finally, the report suggests that dioceses explore voluntary participation in a national pension plan.

Host Organization : 
National Conference of Catholic Bishops and the United States Catholic Conference
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