The Boston Archdiocese has admitted that, within two years, it won't have the money to pay for the care and housing of its elderly and sick priests, unless major changes are made to those benefits.
An outside study says a combination of factors, including poor management, has brought the fund that supports retired priests to the brink of insolvency. As a result, starting Wednesday, retired and sick priests are having their benefits cut.
Joe D'Arrigo is a consultant hired by the archdiocese to put the clergy fund on sound footing. He said the fund was managed by priests with little financial experience who didn't see the problem coming. "A combination of retiree health care, the housing costs and the increasing number of retiring priests over this last eight years or so just acted like a locomotive and the cost just overtook the fund," he said.
An outside accounting firm concludes the fund was losing money because more priests are sick or retired, their benefits were increased in 2001 and the cost of health insurance has gone up. It says it found no evidence the funds were used to pay sexual abuse settlements, but it couldn't state that conclusively because of the scope of the study.
The report also confirms that, for 17 years, the annual collections for priests' retirement were diverted to the other clergy funds. And nearly $16 million from the retirement fund was used to pay benefits to priests placed on administrative leave because they were accused of misconduct with a minor.
The diversion of funds is outrageous, said Peter Borre, chairman of the Council of Parishes, a group that supports lay Catholics fighting parish closings. "Taking $16 million directly out of a trust fund that is earmarked for the benefit of good serving priests who've retired in good order," he said. "That, for many of us — for me and for thousands of Catholics in Boston — goes a bridge too far."
Some of the $16 million went to third parties on behalf of priests, but it doesn't say how much or who the third parties were. And the study says there were insufficient financial records to determine whether priests accused of misconduct were paid out of the clergy benefits funds before 2000.
Father Richard Erikson, vicar general of the archdiocese, defends the practice as something other organizations do. "Any priest who is on administrative leave for accusations of abuse, that priest is innocent until proven otherwise," Erikson said. "While there are civil and canonical investigations, that priest is on paid leave."
Now priests on administrative leave are supported by a separate fund with money from the sale of the church headquarters in Brighton. But the disclosure that so much money went from a fund devoted to retired priests upset Father Bill MacKenzie, who is on disability and works weekends at a parish in Amesbury.
"I think I'm rather outraged by exactly what happened," MacKenzie said. "I think there are a lot of things the clergy fund was never intended to do, it was never intended to support priests on administrative leave."
The result of the dire financial situation means the archdiocese is changing the way it pays for housing retired priests. Monsignor Dennis Sheehan, who was on the official committee that came up with the plan, said the changes ensure that there will be funds for retiring priests. "Before, everyone was dealt with in the most generous manner possible and there were no limitations put on the expenditure of money," he said.
Now there will be a limit. The majority of the 275 retired or disabled priests live on their own, and their monthly stipend and housing allowance of about $1,900 doesn't change. Those priests housed in assisted-living facilities will be encouraged to move into Regina Cleri, the priest retirement home in Boston.
Monsignor Sheehan said the plan will be phased in and no one will be forced to move immediately. The most radical change in payment comes for the 15 priests who live in long-term skilled nursing homes. They must now contribute their own funds or go on Medicaid. "We are simply coming into line with the practice of the Catholic church across the United States," he said.
Sheehan said dioceses of comparable sizes already rely on Medicaid to pay for priests in nursing homes. But he understands that priests will be worried about the changes. "This kind of change brings apprehension and fear," he said. "The only thing we can do is reassure no lack of place or resources for them to live on or no lack of medical care for them to live on. And no lack of adequate medical care for them."
The new policy is unsettling to some priests, including Father MacKenzie, who doesn't think his situation will change now, but he's concerned about the future. "When they started this clergy fund, the priests were going to be taken care of — the priests would be taken care of from the day they were ordained until they died," he said. "Now they are saying, 'If you go to a nursing home, you're on your own, you have to pay it yourself.' "
To shore up the retirement fund, the church has taken up an additional collection for retired priests with good results, and it's planning a major fundraiser in the fall that celebrates the fact the Pope proclaimed 2009 the "Year for Priests."
This program aired on June 30, 2009. The audio for this program is not available.