Lay Pension Information

TO: All Active Employees in the Diocese of Paterson
FROM: Rev. Msgr. James T. Mahoney, Ph.D.,Vicar General and Moderator of the Curia
DATE: March 14, 2016
SUBJECT: Upcoming Retirement Program Changes

Over the past year, the Trustees for the Pension Plan for Lay Employees (the Pension Plan), along with the Lay Pension Board, Human Resources, and our consulting professionals have been evaluating how to best structure our retirement plan program in light of an ever-changing workforce and various financial challenges. We believe it is our responsibility to be good stewards of our resources, and to balance that with our responsibility to provide a meaningful retirement program to our employees.

The retirement program evaluation process:

The evaluation process was led by our Trustees and consulting professionals with participation from representatives of diocesan offices, parishes, and agencies. Also included throughout the process were dedicated volunteers with professional and financial expertise who gave their time and input.

Our goal was three-fold:

• To ensure that benefits under the current Pension Plan which have been earned as of June 30, 2016 are sufficiently funded, so that funds are available for current Plan participants upon retirement.
• To continue to provide a meaningful, sustainable retirement plan program to current and future employees.
• To enable our Diocese to continue its religious and social ministries well into the future.

How the retirement program will work:

As a result of our year-long evaluation, we believe we can best meet these goals by restructuring our retirement program, as described below.

The Pension Plan will be frozen effective June 30, 2016.

Current Pension Plan accruals will be frozen as of June 30, 2016 for all current participants in the Pension Plan. This means that no additional benefits will be earned after June 30 and no more employees will be enrolled in the Pension Plan. Current Pension Plan participants received a Pension Statement last fall showing their accrued benefit as of June 30, 2015. They will receive another pension statement after June 30, 2016 showing the amount of their frozen accrued benefit payable when they retire.

This change will not result in any loss of benefits already earned. In addition, your employer will provide some additional benefits under the new Plan (see below) for current Pension Plan participants whose combined years of Lay Pension service plus age meet certain thresholds.

A new Retirement Savings Plan for Lay Employees will be available effective July 1, 2016.

The Diocese of Paterson Retirement Savings Plan for Lay Employees (the Plan) will be offered to employees of Diocesan parishes, offices, and agencies. The new Plan will be effective July 1, 2016 for active employees on and after that date. The new plan is voluntary, and employees contribute by payroll deductions. In this new plan, you will have choices regarding how your money is invested and decide how much of your salary you contribute (up to annual IRS contribution limits).

You may receive an employer matching contribution.

The Diocese is committed to helping you save for the future and is pleased to offer an employer matching contribution for active, full-time employees. While the Diocese expects to make the matching contribution each year, it is a discretionary contribution. This means the Diocese decides each year whether to make the matching contribution and the amount of the contribution, when made. For 2016, the expected matching contribution will be 50 cents for every dollar you contribute to the Plan, up to a certain percentage of your pay.

For more information:

We will be sharing additional information as it becomes available, so you know what is happening and how it affects you. Attached are some Frequently Asked Questions that provide additional background and information about the upcoming retirement plan program changes. We have also established a dedicated email address ([email protected]) you can use to send comments and questions you may have. Also, be sure to visit this webpage: www.LayPension.org to access additional information about the plan changes as they are finalized.

Finally, we will hold informational meetings at various Diocese locations so you can learn more about the new plan and ask any questions you have about the retirement program changes. In the meantime, if you have any specific questions or concerns, please contact Dennis Butler in Human Resources at [email protected] or 973-777-8818 x241.

Rev. Msgr. James T. Mahoney, Ph.D.
Vicar General and Moderator of the Curia