Bold reality: Catholic dioceses nationwide face an $800 million pension shortfall, and many cannot absorb the sudden spike in contributions demanded by Christian Brothers Services. And this is where the story gets complicated—and controversial.
Across the United States, several dioceses and hundreds of Catholic employers are grappling with a funding gap in a pension plan run by Christian Brothers Services, a nonprofit tied to the De La Salle Christian Brothers. The shortfall, estimated at about $800 million as of July 1, 2025, threatens thousands of current employees and retirees who depend on these benefits.
Christian Brothers Services has asked client institutions to dramatically increase their annual payments for the next 25 years to cover the deficit. For some dioceses, that escalation would mean multi-million-dollar yearly contributions. The Diocese of New Ulm in Minnesota, for example, said the company is pressing for more than $2 million per year—an amount that the diocese considers unfeasible.
The fund serves roughly 40,000 employees, and more than 180 member organizations are affected. Saint Mary’s University of Minnesota and Lewis University (both tied to the De La Salle Brothers) are among the affected institutions, with others spread across Minnesota, the Southeast, the Midwest, and the West Coast.
Why is this happening? The fund’s assets were about $1.55 billion against liabilities of roughly $2.35 billion, leaving it with roughly 66% funded. While some benchmarks suggest 80% as a healthy minimum, others argue that 100% or more would be better, complicating the debate over what constitutes adequate funding.
Pension expert Sam Hartmann of Quantum Pensions Solutions notes the demographic reality: more retirees and fewer active workers contributing to the plan create a growing funding gap. But he adds that the problem isn’t solely about demographics. The sustained decline in the share of active participants has been building for years, and some schools are now asked to triple their contributions over a 25-year horizon, with projections showing jumps as high as 178% in a single year and total increases reaching 250% by 2028.
Institutions have limited options: keep funding at dramatically higher levels with uncertain investment returns, reduce benefits for retirees, or consider spinning off their own solo pension plans. A few clients have already begun creating independent plans, while others weigh the feasibility of retreating from the current arrangement altogether.
Christian Brothers Services traces part of the problem to historical missteps and market downturns. The plan was fully funded around 2007, but the 2008 crash dramatically reduced funded status. The firm also highlights a separate, earlier episode in 2020 involving investment losses by Allianz Global Investors, though it says these losses are not the primary driver of the current shortfall. The latest numbers show a combination of poor investment outcomes during the crisis and shifting demographics driving up the cost to maintain promised benefits.
As of 2024, the plan comprises 15,111 active employees, 7,717 separated or disabled participants, and 17,244 retirees or beneficiaries, totaling 40,072 participants. Active employees constitute roughly 38% of that total, and promised future benefits to active workers represent about 27% of the plan’s liabilities.
Saint Mary’s University has been explicit about the consequences. A detailed briefing notes three routes: stay in the Christian Brothers plan with much higher contributions, withdraw at a substantial cost, or spin off an independent pension arrangement. A decision is not expected until midwinter or spring, with a firm deadline in May 2026. The university emphasizes that no plan to cut benefits has been decided and that an external valuation is underway to assess plan design, contribution history, and performance against benchmarks.
Other institutions, including Lewis University, are pursuing similar reviews and hosting information sessions for staff. In the broader legal landscape, church pension plans fall outside ERISA protections. They do not participate in the Pension Benefit Guaranty Corporation (PBGC), and there are limited recourses for participants beyond state-law actions against employers. Legal avenues, if pursued, can be costly and may not guarantee payouts, especially when the sponsor’s resources are limited.
What does this mean for employees and retirees? The short answer is uncertainty, with real impacts on long-term retirement security. The questions facing these institutions are complex: how to stabilize funding without crippling operating budgets, whether to move to independent plans, and how to communicate risk and options to the people whose futures depend on these promises.
If you are a current employee or retiree affected by this situation, your perspective matters. How do you weigh the need for stronger funding against the immediate financial pressures on your school or diocese? Share your thoughts and experiences in the comments.
