CALLED TO SERVE CHRIST

THE CAMPAIGN IN DETAIL CALLED TO SERVE CHRIST as A campaign for our PRIESTS, SISTERS & FAMILY OF FAITH

Greetings in the Lord, Jesus! Many of you by now have seen the Case Statement outlining Called to Serve as Christ, our Archdiocese s fundraising campaign to provide for our retired priests and women religious. It s a noble campaign, but also a complex one, because retirement for anyone in this 21st century is not a simple matter. It s natural to have questions. That is why we created this Campaign Detail booklet. It s an attempt to address those important questions especially for those of you who by training or time of life already have experience with retirement issues. Just as priests and sisters are called to serve as Christ, all of us, disciples of Jesus, are called to serve. Seeing to the secure retirement of priests and women religious is our honor and privilege after their lifetimes of service to us. Over the years we have made great strides toward the goal, and this brochure details the next steps. Of course, if you have further questions or comments, I urge you to contact me or our Stewardship and Development Office at 206-903-4620 or email at campaign@seattlearch.org Sincerely in Christ, J. Peter Sartain Archbishop of Seattle TABLE OF CONTENTS The Campaign Funds...pg. 2 The Campaign for our Sisters...pg. 6 The Campaign for our Priests...pgs. 3-5 Annual Catholic Appeal...pg. 7 THE CAMPAIGN S FUNDS ACCOUNTABILITY The Archdiocese of Seattle will deposit all funds raised into a separate bank account held by a nonprofit corporation controlled by the Archbishop and an appointed board. The separately appointed Called to Serve as Christ Campaign Fund (the Fund ) exists solely to receive campaign contributions, to pay the expenses of the campaign, and distribute funds received through the campaign to the specific campaign initiatives: priest pension and medical accounts, designated communities of religious women, and parishes. The Fund will not distribute these funds for any other purposes. The Fund will be audited annually by independent accountants. CAMPAIGN COSTS Six percent of the funds are earmarked for the estimated costs necessary to carry out the campaign. These include the design of marketing materials, printing, postage, professional counsel, grant writing, travel, meals, event expenses and contingencies. ARCHBISHOP S GUARANTEE Campaign funds will not be used for anything beyond what is set forth in this document. Any funds raised over the $100 million goal, not designated to a specific program, will be allocated by the Archbishop and the Called to Serve as Christ Campaign Fund to the campaign s area of greatest need. If the funds raised do not reach the $100 million goal stated in the campaign case folder, proceeds will first be allocated to campaign costs and the parish share. The other needs will be funded proportionally from the remaining net proceeds. 2

THE CAMPAIGN FOR OUR PRIESTS WHY ARE WE MAKING CHANGES TO THE FUNDING MODEL? Over the years the Archdiocese has taken many steps to improve the funded status of these plans: Increased to $1.6 million per year the amount from the Annual Catholic Appeal designated for the priest pension and retired priest medical plans Increased billings for the priest pension to the plan by $600 each year since 2008 Raised the age of eligibility for benefits from 65 to 70 depending on year of birth Increased full pension vesting schedule from 25 to 30 years, depending on year of birth Eliminated a three percent extended service benefit However, these changes were not enough to provide a sustainable path for the future. Through independent actuarial studies we know that if we continue the pay-as-you-go approach, amounts billed to our parishes will continue to increase for the foreseeable future. A much better approach is to properly fund the plans with adequate capital so that present and future generations of priests will have a secure retirement plan and the burden on our parishes will be reduced. HOW WAS THE GOAL FOR THE PRIESTS PENSION PLAN ESTABLISHED? ASSUMPTIONS 110 priests are eligible after the age of 70 Monthly benefit maintained at $1,943 6 percent investment returns $8.5 million already in Priest Pension Plan investments increases to $46.5 million Allocation of $2 million campaign proceeds to Religious Orders of priests serving the Archdiocese The Archdiocese estimates a $38 million increase in Priest Pension Plan assets will yield an adequate return to fund payments of pension benefits to 110 senior priests and administrative costs of the plan (the combination of benefit payments and administrative costs are estimated to be $250,000 per year). Investment returns larger than the 6 percent target could be used to provide modest inflationary increases in benefits. For parishes historically served by priests of Religious Orders, a portion of the campaign proceeds from those parishes will be shared with the Orders. The estimated $2 million allocation to the Orders will depend on the individual results of these parishes. HOW WAS THE GOAL FOR THE SENIOR PRIESTS MEDICAL PLAN ESTABLISHED? ASSUMPTIONS 110 priests are eligible upon retirement from a full-time assignment Monthly medical plan costs per senior priest of $800 5.8 percent investment returns $3.5 million already in Priest Medical Plan investments increases to $18.5 million The Archdiocese estimates a $15 million increase in assets will yield an adequate return to fund payments of medical program costs for 110 senior priests. Investment returns greater than the 5.8 percent target could be used to provide modest inflationary protection against the rising costs of medical care. 3

THE CAMPAIGN FOR OUR PRIESTS HOW WILL A SUCCESSFUL CAMPAIGN IMPACT OTHER EFFORTS THAT ASSIST SENIOR PRIESTS? Following a successful campaign, the Archdiocese plans to: Eliminate the $1.6 million of Annual Catholic Appeal assessments designated to priest pension and senior priest medical expenses each year. Significantly reduce parish billings for the priest pension plan and stop the annual increases. Current annual billings designated for the priest pension plan total more than $950,000 an average of $9,142 per parish. A significant reduction in these billings will bring great relief to parish budgets. If the Archdiocese did not move from a pay-as-you-go model, the estimated increase of the pension billings would have been an additional $600 per parish per year for the foreseeable future. Provide the next generation of parishioners a method to support senior priests by continuing a special collection for priest retirement. This annual Fall collection raises approximately $200,000 per year and will help maintain the plans for the future. WHO IS COVERED BY THE PRIEST PENSION PLAN? All priests who have been incardinated into the Archdiocese of Seattle are covered by the plan. Religious Order and extern priests receive pension benefits from their individual Order or home diocese. WHO IS COVERED BY THE SENIOR PRIEST MEDICAL PLAN? The plan covers medical expenses for Archdiocesan senior priests who have retired from a full-time assignment. Religious Order and extern priests receive medical benefits from their individual Order or home diocese in their senior years. WHO OVERSEES THE PLANS? The plans are governed by the Priest Pension and Health Plan Board of Trustees who are appointed by Archbishop Sartain and advised by independent lay investment advisors, consultants and attorneys. Each year, the plans are audited by an independent, outside CPA firm with oversight from the Archdiocesan Finance Council. 2017-18 Priest Pension & Health Plan Board of Trustees: Very Rev. Anthony E. Bawyn (Chair) Rev. Joseph F. Altenhofen Rev. Oliver F. Duggan Rev. Mark M. Kiszelewski Rev. Jacob M. Maurer Ms. Mary E. Santi Mr. Nick Schoen, representing the Vicar for Clergy, ex officio DID YOU KNOW The Chancery, Priest Pension Plan and Priest Health Plans are all independently audited annually. 4

WHAT DO PRIESTS EARN DURING THEIR MINISTRY? Archdiocesan priests receive a modest annual salary that depends on several factors including years of service, office held, size of parish, and whether a parish has a school. Typically, annual salary is in the range of $25,000 - $35,000. Since assigned priests are usually provided housing by the parish, in addition to food, transportation and other allowances, their taxable income is sufficient for their personal expenses. While archdiocesan priests do not take a vow of poverty like Religious Order priests, they are encouraged to live a life of simplicity. DID YOU KNOW the average, full pension payment is $1,943 per month. Currently this benefit is static and not tied to inflation. In King County, the cost of a one-bedroom apartment and utilities is $2,098 per month. In Pierce County, it is $1,709. In Snohomish County, it is $1,888. DO PRIESTS PAY INTO SOCIAL SECURITY? Yes, the IRS classifies priests as self-employed for purposes of Social Security tax. Therefore, priests pay their own social security on their income and allowances. DID YOU KNOW senior archdiocesan priests pay for their own housing, utilities and transportation. DO PRIESTS HAVE ANY ADDITIONAL RETIREMENT INCOME? In 1995, the Archdiocese began a 403(b) Thrift plan. Much like a traditional 401(k) employer plan, priests can make tax-deferred contributions to invest in their own retirement. The Archdiocese matches 20 percent of every dollar contributed up to a maximum of $2,500 per year. All priests are strongly encouraged to participate in the program to ensure their financial security later in life. BY THE NUMBERS January 1, 2018 111 Archdiocesan priests currently receiving pension payments 45: still work full time in parishes 40: still help out on a part-time basis offering Mass and doing weddings, funerals and serving as chaplains in hospitals 65 Minimum age to receive priest pension benefit if born before 1963 70 Minimum age to receive priest pension benefit if born after 1963 54.4 Average age of all active, archdiocesan priests 35 Currently assigned archdiocesan priests expected to reach senior status by 2027 If you have additional questions on the priest pension and retirement medical plans please contact the Archdiocese of Seattle s Stewardship and Development Office at 206-903-4620. 5

THE CAMPAIGN FOR OUR SISTERS DOES THE ARCHDIOCESE PROVIDE HEALTH AND RETIREMENT BENEFITS TO SISTERS? No. Each community of women religious is responsible for its own health and retirement needs. If circumstances justify, the religious communities can receive support from the National Religious Retirement Office (NRRO). Currently, sisters employed by the Archdiocese do receive regular compensation for their work. Additionally, the Archdiocese provides $50,000 annually from the Annual Catholic Appeal to the NRRO for the retirement needs of women religious nationally. HOW WILL FUNDS BE DISTRIBUTED BETWEEN THE INDIVIDUAL ORDERS? Campaign funds given to religious communities will be used to meet the needs of their pension (retirement) and medical plans. Strengthening individual communities plans will allow them the financial freedom to focus on their critical mission work across Western Washington. Seven legacy communities of women religious will receive $3 million each. Expanded ministry congregations will receive the remaining $3 million. Legacy communities: Adrian Dominican Sisters (Edmonds Dominicans) Dominican Sisters of Tacoma Sisters of the Holy Names of Jesus and Mary Sisters of Providence Sisters of St. Benedict St. Placid Priory, Lacey Sisters of St. Francis of Philadelphia Sisters of St. Joseph of Peace Expanded ministry communities: Sisters of Charity of the Blessed Virgin Mary Sisters of Notre Dame de Namur Sisters of St. Mary of Oregon Note: Additional communities may be included as their participation is confirmed by the women religious leaders committee. BY THE NUMBERS WOMEN RELIGIOUS 7 Legacy communities 3 Mission orders serving in the Archdiocese and participating in the campaign as of Jan. 1, 2018 300+ Number of women religious currently serving in the Archdiocese as of June 30, 2017 WHO WILL MANAGE THESE FUNDS? Each community will maintain a structure of religious and lay personnel to manage its needs and assets. 6

THE CAMPAIGN & THE ANNUAL CATHOLIC APPEAL SEPARATE, BUT TOGETHER TO STRENGTHEN OUR SERVICE The Annual Catholic Appeal provides critical operating support to our important ministries, offices, and programs each year. The Appeal will continue during the Called to Serve as Christ campaign. In addition, parishes retain amounts realized from the Appeal in excess of their appeal goals. In 2017, this amount was $3.5 million. How is the Annual Catholic Appeal different from the Called to Serve as Christ campaign? The Appeal provides the funds which allow our archdiocesan-wide ministries to continue to do good work year to year. The Called to Serve as Christ campaign focuses on long-term, strategic priorities that can only be addressed through an extraordinary effort. Where do the Annual Catholic Appeal funds go? The Annual Catholic Appeal directly supports various ministries and services throughout the Archdiocese of Seattle. This is just a sampling of the many people, programs, and projects involved in making our Archdiocese a witness to our faith and a vibrant part of our larger community: Pastoral care & outreach ministries Prison and Hospital Chaplaincy Immigrant & Refugee Ministry Seafarers Ministry Inclusion Ministry Mental Health Ministry Catholic schools 63 Elementary/Middle Schools 11 High Schools More than 22,000 Students Missionary Discipleship Institute Catholic Newman Centers Youth & young adults Catholic Youth Convention & Rally CYO Athletics & Camps Youth & Young Adult Retreats Holy Thursday Pilgrimage Missionary Discipleship Formation Program Faith formation Catechist Certification Program Parish & School Faith Formation Christifideles Program Northwest Catholic Magazine Catholic Community Services Emergency Shelter Programs Affordable Housing Meals Program Senior Home Care Family & cultural ministries V Encuentro of Hispanic/Latino Ministry Share the Journey Initiative Cultural Celebrations Masses in 15 Languages 7

ARCHDIOCESE OF SEATTLE PO Box 14964 Seattle, WA 98114-9919 206.903.4620 campaign@seattlearch.org