Catholics Face Crisis on Retirement Funds

Roman Catholic religious orders are between $2.5 billion and $3.5 billion short of funds to finance even modest retirement programs for aging nuns and brothers, a church-sponsored study made public here Friday says.

The situation is “a national crisis that has been coming for the last 10 years” and is forcing some religious orders to sell property or seek public assistance for retiring nuns, said Msgr. Daniel Hoye of the National Conference of Catholic Bishops.

During the last two decades, as fewer young people have entered religious orders, the financial burden of caring for the increasing numbers of elderly and infirm members has fallen on a shrinking pool of those earning enough to contribute to retirement reserves, church leaders said. The problem, they added, involves cash flow and long-range needs, rather than immediate bankruptcy or hungry, homeless individuals.

“This is a situation that has developed due to many complex factors. We’re talking about nuns who served in schools, hospitals and social service agencies 20 to 30 years ago. We were not prepared in the past to think of the time when medical costs would be so astronomical,” said Sister Mary Oliver Hudon of the School Sisters of Notre Dame.

Salary Hikes

Hudon will head a two-year project aimed at helping the religious communities with retirement funding by increasing workers’ salaries, which would expand their Social Security benefits and ability to contribute to retirement programs; establishing larger reserves; selling properties, and consolidating some orders and dissolving others. The plan resulted from a retirement needs survey last year of 534 Catholic religious institutions.

The church-commissioned survey, conducted by the Arthur Andersen & Co. accounting firm, found that $2.5 billion would be needed in order to support retirement costs of present members of religious communities, even if the orders are able to raise $1 billion by selling land, school buildings, residences and other property.

The problem has worsened since the 1960s, as nuns and brothers--including thousands of religious sisters who worked for years in church schools at relatively low wages--have become old men and women with little or no personal means of support, the study says. The financial pinch is particularly acute for women’s orders, according to the study, because of a sharp decline in the numbers of women entering professional religious vocations and the fact that nuns tend to live longer after retirement than do males in religious orders.

Take Vows

Members of Catholic religious orders customarily take vows of poverty and pool their earnings to support the overall needs of the community. Simple life styles, coupled with a steady influx of young, new members, made the system workable in former times, officials said, even though many communities had no formal pension plans and their workers, until 1972, were forbidden to receive Social Security benefits.

Earlier this week, the Official Catholic Directory showed that the number of U.S. nuns declined from a high of 181,421 in 1966 to 113,658 currently in more than 360 orders. The median age for American nuns is 62.5 and increasing by one year annually; the median age for religious order men is 54.5.

Average annual retirement cost is $8,292 for men and $8,556 for women, the survey found. Average annual Social Security benefits was $2,500, leaving the balance to be funded by the church community’s operations or outside funds.

News Report

In response to a question, officials said they had not investigated recent news reports of nuns clipping food coupons to save money, barely scraping together money needed for funeral costs and receiving government food stamps.

“There isn’t a sister in America . . . who will ever be truly without food and shelter,” Hudon said.

Lou Fintor reported from Washington and Russell Chandler from Los Angeles