Nuns sue Boston Archdiocese over retirement funds

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Posted: Mar 21, 2011 3:57 PM
Nuns sue Boston Archdiocese over retirement funds

The highest court in Massachusetts is being asked to settle an unusual dispute between an order of Roman Catholic nuns and Boston Cardinal Sean O'Malley, trustee of a church-run pension fund.

The Daughters of St. Paul say they have tried for more than five years to withdraw from the Boston archdiocese pension fund so they could set up a separate, self-run pension plan for their U.S. lay employees.

In a lawsuit filed in December, the Daughters allege that the pension fund's 11 trustees, including O'Malley, have failed to give them a full accounting of their portion of the fund. They asked the Supreme Judicial Court to either order the trustees to give them those details or to rule that the nuns were never part of the plan and order the archdiocese to reimburse them for the contributions they made.

The Daughters of St. Paul is an international order with about 60 members in Boston and 75 more around the country. The group runs a publishing house called Pauline Books and Media, which publishes Catholic books, educational materials and music. The order has about 50 lay employees in the Boston area and 30 others around the country.

The nuns' lawyer, Michael McLaughlin, said they hesitated to sue the trustees, particularly O'Malley, but felt they had no other choice.

"This is not an action by the nuns against the cardinal in his capacity as cardinal. They are suing the trustees, of which he is one," said McLaughlin. "At first, we just thought there were some problems _ it's a big organization. As years went by, and very recently, it became clear that they didn't have the data."

Terry Donilon, a spokesman for the archdiocese, said the archdiocese has a good relationship with the Daughters of St. Paul and is confident the lawsuit can be resolved through mediation.

"We're happy to resolve this," he said. "We are trying to ensure that when they withdraw, that there's a plan, that they are going to continue to provide for the well-being of the beneficiaries of the fund. We don't think that is a lot to ask."

Donilon said there are three issues that must be resolved: the value of the nuns' portion of the fund, the timeline for the spinoff, and the Daughters' request for the archdiocese to pay its legal fees.

McLaughlin said the nuns believe they are owed $1.37 million, based on the value of the assets in 2007.

Neither Donilon nor Carol Gustavson, the archdiocese's director of benefit trusts, would say what they believe the nuns' assets are worth. Gustavson said that is a calculation that will be resolved through mediation.

The lawsuit was first reported by the blog Boston Catholic Insider and was the subject of a story in Monday's Boston Globe.

The archdiocese invited the order to join the Pension Plan and Trust of the Roman Catholic Archdiocese of Boston in 1989, McLaughlin said. The plan includes retirement money for archdiocese employees and other Catholic organizations.

The nuns claim in their lawsuit that the trustees did not keep separate records for the separate groups, which has complicated efforts to get a full accounting.

"The particular funds in question have been pooled with many, many, many other pools," McLaughlin said. "Our problem is seeing who gave what to that pool. ... We want the accounting or a determination that they were never part of it."

Gustavson said the nuns have been given the information they requested.

"We have provided employee-level detail, years of service, dollar amounts in the pool," she said. "We've given them all the information that we understood they were seeking."

She said the archdiocese "would like to get this promptly resolved for their benefit as much as for the pension plan's benefit."

The two sides are scheduled to go before a mediator March 29.

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Information from: The Boston Globe, http://www.boston.com/globe