Bold claim: Catholic dioceses and schools are confronting an $800 million pension crisis that could reshape how religious institutions fund retirements—and this is just the beginning. And this is the part most people miss: the stakes aren’t limited to numbers on a spreadsheet; they affect real people who dedicated their lives to the Church and now face difficult financial choices about benefits they were promised.
A major Catholic financial services firm, Christian Brothers Services, manages retirement plans for roughly 40,000 employees and around 180 member organizations. It has requested substantially higher pension contributions from its clients to cover an $800 million shortfall in the fund that covers thousands of current and former workers. The shortfall has left many institutions weighing painful options as they strive to honor commitments while staying fiscally viable.
Take the Diocese of New Ulm in Minnesota, which stated that Christian Brothers Services is asking the diocese to contribute more than $2 million annually for the next 25 years. That level of funding is described as infeasible by diocesan leaders, illustrating the tension between honoring pension promises and maintaining essential church operations.
Public documents and statements show the problem is widespread. Christian Brothers Services reports about an $800 million gap between assets (roughly $1.55 billion) and liabilities (roughly $2.35 billion) as of July 1, 2025. The firm attributes the shortfall to shifts in the financial environment and a higher retiree-to-active-employee ratio, leaving the fund with around 66% funded status—well below the commonly cited 80% benchmark for a healthy pension fund, though some experts argue that 100% or more would be ideal.
Experts like Sam Hartmann of Quantum Pensions Solutions note the demographics at play are real: more participants rely on the fund than contribute to it. He highlights that several schools are facing two-to-threefold increases in required contributions over the next 25 years, with some facing year-over-year jumps that escalate dramatically by 2028. In some cases, schools have faced 178% increases this year, with a projected 250% increase by 2028.
With limited options, many schools are left with tough choices: contribute far more now while hoping for unexpectedly high investment returns, or reduce future pension benefits for retirees. A few institutions have spun off their own pension plans as a potential solution, but this is far from a simple or desirable path for most.
Context matters: Christian Brothers Services, founded in 1960 by a De La Salle Christian Brother near Chicago, has long provided pension plans to Catholic institutions in addition to health plans and risk management services. From a peak where the plan was overfunded in the early 2000s, the combination of the 2008 financial crash and other market movements dramatically reshaped the funded status. The firm has pointed to external headwinds such as the Great Recession and demographic shifts as ongoing challenges, while acknowledging some past investment losses.
Actuarial data provided to employers indicates roughly 40,072 participants in the plan: 15,111 active employees, 7,717 separated or disabled participants, and 17,244 retirees or beneficiaries. Active participants—those contributing to the plan—represent only about 38% of the total, while promised future benefits for active employees account for about 27% of the plan’s liability.
Saint Mary’s University of Minnesota, one of the affected employers, received formal notices in July and August regarding the plan’s funding status. The university has outlined three options: stay in the current Christian Brothers Services pension plan with higher contributions, withdraw (which would incur substantial fees), or spin off a separate, independent pension plan. A decision is expected in mid-2026, with no current plans to cut benefits while a comprehensive assessment is completed.
Lewis University in the Chicago suburbs faces a parallel situation and has engaged a consulting firm to guide potential actions. Employee Q&A sessions—both in person and online—are being offered to address concerns and explain options.
What can employees do? Legal protections in church-sponsored plans differ markedly from private-sector pensions. Because ERISA applies to most private plans but provides an exemption for religious organizations, church plans aren’t covered by the federal insurance provided by the Pension Benefit Guaranty Corporation (PBGC). In practice, this means that if a church pension plan underfunds, participants generally rely on state-law remedies or negotiate with sponsors, and even successful lawsuits may not guarantee a payout given limited resources. Experts emphasize that this environment makes legal recourse challenging and costly, with uncertain outcomes.
As this situation unfolds, the central dilemma remains clear: how to fulfill long-standing promises to retirees while maintaining the financial health of the institutions that serve communities today. The coming months will reveal which schools and dioceses can weather the funding storm and which may need to redefine retirement benefits for newer generations of church workers.
If you are an employee or retiree affected by the Christian Brothers Services pension situation, your input matters. Sharing experiences or questions in the comments can help illuminate the real-world impact behind the numbers and spark solutions that work for communities and individuals alike.
