The exterior of the McRaith Catholic Center, which is the pastoral center for the Diocese of Owensboro, is seen in this file photo. ELIZABETH WONG BARNSTEAD | WKC
Diocese of Owensboro to leave Christian Brothers retirement program, will move into single-employer pension plan
Decision follows Christian Brothers’ $800 million shortfall announcement impacting multiple dioceses across U.S.
BY ELIZABETH WONG BARNSTEAD, THE WESTERN KENTUCKY CATHOLIC
On March 18, 2026, Bishop William F. Medley informed all priests and Catholic school principals of the Diocese of Owensboro that the diocese plans to leave the Christian Brothers Employee Retirement Program (CBERP), following the 2025 announcement that the CBERP was facing a serious underfunding.
The bishop explained that as of July 1, 2025, the diocese’s pension plan was underfunded by approximately 42%, or $30 million.
The date that the diocese leaves, also known as “spinning off of” the program, has yet to be determined. However, Bishop Medley stated that retirees will continue to receive their pension payments, and those who retire in the future who have accrued benefits will receive their pension payments upon their retirements.
This decision follows several months of discussions following CBERP’s July 2025 announcement to its more than 180 clients that it was facing a shortfall of $800 million. The Diocese of Owensboro is among those CBERP clients that has used its services to provide a pension to its employees of Catholic schools, parishes, and other diocesan entities.
According to a December 2025 story in the National Catholic Register, Christian Brothers Services – which is a nonprofit company sponsored by the De La Salle Christian Brothers – had asked its clients to dramatically boost their contributions to make up the difference, which many clients said they could not afford.
“The firm blames the shortfall on changes in the financial climate and an increase in the ratio of retirees to active employees,” reported the National Catholic Register, explaining later in the story that Christian Brothers also cites “what it described as reckless investments by a German investment management firm, Allianz Global Investors, which led the Christian Brothers Employee Retirement Plan to sue Allianz Global in federal court in September 2021.”
The Register reported that the lawsuit was settled in February 2022 with undisclosed terms, so it is unclear how much of its losses Christian Brothers recouped.
In his March 18 letter, Bishop Medley expressed his gratitude to those who participated in the diocese’s listening sessions across the diocese on Dec. 1, 2025, at St. Thomas More Parish in Paducah; Dec. 2, 2025, at Holy Spirit Parish in Bowling Green; Dec. 3, 2025, at Sts. Peter and Paul Parish in Hopkinsville; and Dec. 11, 2025, at St. Pius X Parish in Owensboro.
“It has been beneficial to hear from so many of you,” wrote the bishop.
“In addition to the listening sessions, I also consulted with the priests of the diocese, the Diocesan Finance Council, the Priests’ Council, other bishops who are in similar situations as ours, and a group of financial professionals that I invited to study the issue and offer counsel,” he wrote.
The bishop wrote that after the diocese leaves the plan at a date to be determined, it will move into a “single-employer pension plan and will seek a manager for that plan that will provide continued pension payments to retirees and payments to future retirees who have accrued benefits.”
He said the diocese will create a defined contribution 403(b) plan for every eligible employee and will make contributions to each 403(b) at a rate to be determined, as well as continuing to pay down the underfunded liability of the spun-off defined benefit plan. The employees may make contributions at a rate allowed by the IRS.
The Western Kentucky Catholic inquired about employees who had not yet been vested in the plan and may not have yet accrued benefits, and was informed by diocesan administration that this level of detail has yet to be determined.
According to the diocese’s employee handbook, “Employees who have worked 4 years and 9 months will be vested in the Diocese’s retirement plan.”
The WKC was informed that it is likely that a cross-section of management and employees will work on a plan design to address the question of non-vested employees.
The WKC also inquired whether paying off the unfunded liability costs required in “spinning off” will present an additional cost to general diocesan operations, and was informed that paying this off will be shared by all diocesan employers in this situation, and that diocesan operations are not expected to be impacted.
“Many of the details involved in moving to a defined contribution plan are yet to be determined,” the bishop wrote in his letter. “My purpose here is to offer my thanks to you for your input and your patience, to inform you of our next steps, and to offer assurance to you.”
“As we move forward in implementing these changes, you will be hearing more from the diocese,” he added. “I am grateful to each of you for the role you play in carrying out the mission of the Church. Be assured of my prayers for you and of my continued commitment to honoring promises made to you.”
Originally printed in the April 2026 issue of The Western Kentucky Catholic.
