Facing a multi-million-dollar pension debt, one set of Philadelphia teachers has agreed to make fundamental changes to their retirement plans.
In the wake of recent audited financial statements, the Archdiocese of Philadelphia decided to take action to address a pension shortfall of $150 million. At the end of June, they will freeze current defined benefit pension plans for teachers and other non-clergy employees.
Under that plan, the archdiocese contributes 7.5 percent of salaries with no employee contribution. In its place, the archdiocese will implement a defined contribution plan, similar to the 401(k) plans that are now commonplace in the private sector.
This shift affects 8,500 lay employees across five counties, including 650 high school teachers and several thousand elementary school teachers.
The Association of Catholic Teachers represents the lay teachers employed in the archdiocese’s 17 high schools. Their president, Rita Schwartz, has closely monitored the situation since discussions began about pension reform.