Tuesday, July 27, 2010

Priest pay in San Jose

Published: July 27, 2010

Priest pay in San Jose
Basic stipend to stay at $35k; endowment tapped to help fund pension plan

Priests in the Diocese of San Jose won’t be getting a pay raise for the 2010-2011 fiscal year, and diocesan contributions to their retirement fund will drop by 7.8%, a diocesan memo reveals.

The July 15 memo from diocesan chief financial officer Bob Serventi was addressed to pastors, principals, administrators, bookkeepers and finance councils under the subject heading, “Final Budget Guidelines for FY 2010-11.”

While the memo covered a wide range of positions and expenditures, of most interest was priest compensation, which totals $84,041 a year when all the elements are added together.

The breakdown of a priest’s compensation package for the upcoming fiscal year in the Diocese of San Jose is as follows:

Basic stipend -- $35,041 (no change)
Annual Retreat Week Cost -- $600 (no change)
Clergy Study Week Cost -- $700 (increase of 17%)
Retirement Contributions -- $14,400 (decrease of 7.8%)
Priest Counseling -- $440 (no change)
Comprehensive Benefits -- $8,676 (decrease of 1.9%)
Housing Allowance -- $23,260 (no change)
Sabbatical Fund -- $924 (no change)

The decrease in diocesan contributions to priests’ retirement represents a trend over the last few years because of losses suffered from investments used to fund the pensions. But the diocese is making up the difference by relying on infusions of cash from a private, non-profit endowment called the Catholic Foundation of Santa Clara County.

According to the diocese’s 2008-2009 summary financial statement (the latest posted on its website), “The Clergy Retirement Funds decrease in net assets of $1,800,000 during FY 2009 was $286,000 larger than the decrease in FY 2008 because the decrease in the market value of assets of the funds by over $1,200,000 in FY 2009 and the increase of the unfunded pension liability of $638,000 were only partially offset by increases in revenues and by the $1,200,000 of distributions from the Catholic Foundation. The Catholic Foundation distributions were applied to the Supplemental Retirement Fund, and with the distributions received subsequent to fiscal year end, that Supplemental Fund is now fully funded. This will enable a $1,225 per priest, or 8%, decrease in the clergy pension cost for FY 2010-11.”

According to its website, “The Catholic Foundation of Santa Clara County was founded in 2004 as a 501(c)3 Not-for-Profit Foundation and charged with the management, investment, and distribution of endowment monies and other gifts and bequests placed in its care… It is a legal entity separate from the Diocese of San Jose and not controlled by the Diocese.”

“As a means of initial growth, the Catholic Foundation embarked on a $100 million campaign in 2005 called ‘Rooted in Faith Embracing our Future,’” says the Foundation’s website. “The majority of the funds raised by the Campaign will be for Endowments to ensure a continuing source of funding for the case elements. The Case Elements include education tuition assistance, Catholic Charities programs, parish programming, maintenance and repair, and various pastoral ministries. Also included are non-endowed funds to enable the acquisition of property for the establishment of new parishes in the Diocese as called for in the Pastoral Plan and for the reduction of debt of the Diocese to improve its liquidity and enable it to continue to provide for its ministries.”

As of March 2010, the Foundation had collected $53 million. Of that amount, according to financial information of the Foundation’s website, it had disbursed $1.5 million to “Clergy Retirement.”

By way of comparison, the basic stipend of priests in the Diocese of Sacramento is $27,600 a year, plus room and board, according to a June 8 memo to Sacramento diocesan pastors and administrators. But the Sacramento diocese is facing financial hardships as well. Sacramento Bishop Jaime Soto earlier this year instituted a mandatory, unpaid furlough program for “all employees and priests working in the Pastoral Center.”

In a May 4 letter addressed to pastors, parish administrators and parochial vicars, Bishop Soto wrote, “I have made the difficult decision to institute a ‘work furlough’ program for the 2010/2011 fiscal year. The Pastoral Center will be closed on the first Friday of each month beginning July 2010.” ?

The furloughs will result in a 4.6% annual pay cut for employees and priests who work at the Pastoral Center, said Bishop Soto in the letter. “The work furlough is a step that I had hoped would not be necessary,” said the bishop. “However, in light of the persistent difficult economic circumstances and the significant impact on the diocesan budget, I feel this step is now necessary and prudent in order to protect diocesan resources and limit the amount of staff lay-offs.”

© California Catholic Daily 2010. All Rights Reserved.

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