Archdiocese of Philadelphia reports bigger loss in fiscal 2017
Despite a larger core operating loss in the year ended June 30, the Office for Financial Services of the Archdiocese of Philadelphia reported that it made significant progress toward meeting long-term pension obligations of the archdiocese. It also said it expected to break even this year.
The Archdiocese of Philadelphia on Monday reported a $1.7 million core operating loss in the year ended June 30, up from a comparable figure of $300,000 the year before, but the church's Office for Financial Services said it made significant progress on fulfilling long-term obligations.
Besides establishing a surplus in priests' retirement plans, the central office for financial matters said the deficit in the lay employees retirement plan fell to $111 million on June 30, down from $185 million the year before, thanks to a $30 million contribution in December 2016 from Catholic Health Care Services and other Catholic entities.
In a commentary on the fiscal 2017 financial results, Timothy O'Shaughnessy, chief financial officer for the archdiocese, said savings from fully funding the priests' pension and an increase in assessments paid by parishes "should allow us to achieve break-even operating results in the near-term."
Archbishop Charles J. Chaput's financial restructuring of the archdiocese started in fiscal 2012 with a $17.6 million operating deficit and $354.4 million in long-term liabilities for a self-insurance fund, pensions, and a deposit-and-loan program — essentially a private bank for parishes and other archdiocesan entities — that had been used to fund shortfalls under Cardinal Justin Rigali.
In addition to the $111 million deficit in the pension plan for Catholic school teachers and other lay employees (which was frozen on June 30, 2014), there remains a $36.7 million deficit in the deposit-and-loan program. Two properties that are for sale have pledged to cover that deficit.
One of the properties, a 200-acre-plus Marple Township location behind Cardinal O'Hara High School, had been under an agreement of sale to a developer for $47 million. That deal fell apart after the developer ran into local opposition to his plans. The second property is in Chester County.
The days of the deposit-and-loan fund may be numbered. As of last February, the fund no longer opens new accounts, accepts deposits, or makes loans. In addition, the fund distributed $38 million of parish cemetery perpetual care funds and endowment funds to parishes, "so that those balances could be more appropriately invested," according to the financial services office's audited statement.
"A wind down is a real possibility, but a final decision regarding that matter has not been made," O'Shaughnessy said. "A wind down would also take quite some time as it requires collection of the outstanding loans."
As of June 30, the fund had $36.9 million in loans outstanding.