Rules Are for Schmucks: The Shoplifting Nun

Some people thought the headline was funny. Most people thought it was sad: “Religious Sister Charged with Shoplifting Coffee, Soap.”

The nun, Sr. Agnes Pennino, lives at the Saints Cyril and Methodius Convent in Danville, Pennsylvania. She is seventy-eight years old. A video clip shows her slipping items into her purse and then running out through the door, taking $23 worth of snacks, coffee, soap, and shampoo with her. State police interviewed Pennino and say she is of sound mind. This isn’t the first time such a thing has happened. The New York Daily News reported on a store video in 2012 showing a nun stealing bottled water and beer.

We don’t know whether Sr. Agnes Pennino has any sort of mental condition compelling her to steal. My guess, from the articles she took, is that she’s simply in desperate financial straits. She may well be a victim of the shocking pension abuses that the Catholic Church and other religious organizations have been able to get away with, legally, for the past forty years. Even if she’s not, plenty of others are.

In 1974, Congress enacted the Employee Retirement Income Security Act, or “ERISA,” to assure employees of private employers that pension promises could be relied upon. Plans had to be adequately funded so that promises could be kept, accurate disclosures had to be made to employees regularly, vesting periods were shortened, pension insurance was created, and shenanigans of companies raiding pension plan funds for their own purposes were forbidden.

Except for employees of religious organizations. The God lobby won sweeping exemptions from these common sense rules. And their aged former employees are now paying a brutal price.

For example, in one pending case, the Franciscan Sisters sponsored a pension plan at the St. Anthony Medical Center in Illinois. When money ran short, they summarily shut down the pension plan, cutting the benefits employees had earned over their careers by 30 to 40 percent. Poof! It’s gone.

A similar thing happened to the employees of Augsburg Fortress Publishers, the publishing house of the Evangelical Lutheran Church in America. Five hundred employees and retirees had the benefits they had already earned slashed to pennies on the dollar. The Lutheran Church could have bailed out the employees but decided not to.

More such disasters appear to be imminent. A 2013 suit against Catholic Health East alleges that its pension plan is underfunded by $438 million. A suit filed just last month alleges that Cincinnati’s St. Elizabeth Medical Center underfunded its pension by $204 million. Another suit brought on behalf of the 8,800 employees of the Daughters of Charity Health System alleges that as of December 31, 2014, their pension plan was underfunded by some $229 million. Charity for whom, one might ask?

Most pension plans pay premiums to have their benefits protected by the Pension Benefits Guarantee Corporation. But church plans, like the ones at St. Anthony and Augsburg Fortress, are able to save a few bucks by opting out of PBGC coverage. So when the plan goes bust, the employees get no insurance coverage at all.

Does this come from the Bible? “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven.” From this point of view, all these ripped-off retirees are a bunch of whiners.

Other unconscionable changes can be inflicted as well. ERISA, for example, has an absolute maximum retirement age of sixty-five; no employer can deny a nickel to any employee who stops working after reaching that age. Since this rule doesn’t apply to church plans, though, the Archdiocese of Boston decided to squeeze work out of its priests until they were seventy. Until 2009, that is, when they summarily raised the age to seventy-five. Can you imagine working until age sixty-nine, planning for how you will relax once the grind finally ends in a few months, and then being told one day “Sorry—six more years in the trenches for you, pal!” Reuters estimated last fall a Catholic pension funding shortfall of over $2 billion—just for direct diocesan employees, not counting hospitals, etc. The figure is particularly stunning in conjunction with the fact that half of all priests are expected to retire by 2019.

None of this could have happened it church employers had to follow the same rules as every other private employer in America, for-profit and nonprofit alike.

The amount of money employers can save by screwing employees out of the retirement they’ve earned is so staggering that the natural economic tendency is for as many companies as possible to try to squeeze themselves through the loophole. Hospitals, in particular, that “affiliate” with a church attempt to benefit from the church pension exemption. Dignity Healthcare, just one of these outfits, has a pension plan underfunded by $1.2 billion. Now, though, the court system is having its say. In two circuits, appellate courts have essentially said, “We don’t care whether IRS called this a church plan or not. It’s not a church plan, and it needs to comply with ERISA.” In the one contradictory case where the church plan status prevailed, even the judge called the existence of church plans “an irrational distinction,” but said his hands were tied by the language of the law.

Pope Francis, gunning hard for the title of “Most Pathetic Hypocrite of All Time,” lectures the rest of the world that “every worker … has the right to fair remuneration, social security, and a pension.” Every worker, that is, except those employed by the church he runs. A survey last year showed that a majority of US Catholic dioceses plan to freeze their pension plans. Why? Well, as a 2012 Economist article pointed out, “Everything from renovations to St Peter’s Basilica in Rome to the Pontifical Gregorian University, the church’s version of West Point, is largely paid for with American money.” So every dollar squeezed out of an American retiree’s pocket is a dollar more for Rome.

The real villain here isn’t the pope or the church employers who allowed their plans to become so horrifically underfunded. The real villain is the United States Congress, which caved in to pressure from the God lobby and permitted this unconscionable loophole to exist for over forty years now. Real justice would involve hunting down everyone who has served in Congress over that time period and making them pick up the tab for all these shafted workers.