The Diocese of Rockville Centre, one of the biggest employers on New York's Long Island, is changing its retirement benefits plan, eliminating its defined benefit pension plan in favor of a 401(k)-style retirement plan for workers with fewer than 30 years of service, church officials announced this week.
The move affects everyone from teachers to parish workers, Catholic Charities employees and others who work in the diocese.
The new 403(b) plan, which is the equivalent of a 401(k) for nonprofits, will take effect Jan. 1.
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"It's something most companies have already done," said spokesman Sean Dolan. "We think we have done everything we can to try to be more compassionate … than many companies."
The switch to 403(b)s is becoming very common among Catholic dioceses across the country, according to economics professor Charles Zeck, director of the Center for the Study of Church Management at the Villanova University School of Business.
He said that industry has moved away from defined pension plans wherever they can and now churches are following suit.
Dolan said the employees who have worked for 30 years or more will be able to continue with the defined benefit pension plan, in which the diocese pays them a fixed monthly sum from retirement until death.
Under the 403(b) plan, the diocese will put the equivalent of three percent of an employee's salary into an investment account and will match up to one percent if the employee contributes to that amount as well.
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