Hundreds of longtime church workers in the St. Cloud Diocese are staring down the possibility of deep pension cuts after diocesan leaders disclosed that the lay-employee retirement plan is short by about $35 million. Roughly 1,400 people who served in parishes, schools, and diocesan offices could see their monthly checks shrink, with participants estimating average cuts of around 42 percent. The diocese has frozen the plan effective Dec. 31, 2025, and says it will shift the money into a new, dedicated trust next summer.
Those numbers are coming from a participant group led by retired teacher Jeffrey Kaster, who says members first learned of the trouble through an October letter followed by a November webinar. Kaster told fellow participants that Christian Brothers had informed the diocese the plan was "underwater" by roughly $35 million and warned that benefits "are going to be cut on average by 42 percent," according to WJON.
In its public updates, the diocese confirms the lay plan is closed to new entrants and will be frozen as of Dec. 31, 2025. It says assets will be transferred from Christian Brothers to a new diocesan-managed trust in the summer of 2026, with USI Consulting advising on the transition, per the Diocese of St. Cloud.
Local retirees are not alone in their worries. The St. Cloud gap is one slice of a much larger shortfall at Christian Brothers Services, which has been reported nationwide to be underfunded by roughly $800 million, with assets covering only about two-thirds of promised benefits. That strain has already pushed several Minnesota dioceses and Catholic schools to weigh spinoffs, withdrawals or major catch-up contributions, as reported by the Star Tribune.
What legal protections exist?
Here is where the safety net starts to look pretty thin. Church pension plans generally are not covered by the federal Pension Benefit Guaranty Corporation (PBGC) unless a plan voluntarily elects that protection. For non-electing church plans, that means there is no federal insurance backstop if the plan cannot pay what it promised. The PBGC itself notes in its glossary that "church plans are not covered by PBGC's insurance program unless they elect to be covered," and a federal review has pushed for clearer communication so workers know whether their plans are insured, according to the PBGC and the GAO.
Participants push for answers
Faced with the potential for life-altering cuts, the participant group has laid out four concrete requests for diocesan leaders: a letter or video to be shared in parishes explaining the situation, participant representation on the pension task force, in-person listening sessions, and a diocesan capital campaign aimed at fulfilling pension promises. Kaster says he has spoken twice with Bishop Patrick Neary, but many participants feel official updates and specific action plans are rolling out too slowly, according to WJON.
What’s next for participants
The diocese says a pension task force is reviewing available options and that it remains committed to protecting benefits as much as possible while USI Consulting examines the technical and financial paths forward, according to the Diocese of St. Cloud. Elsewhere in Minnesota, some Catholic employers have already moved to spin off or withdraw from the broader Christian Brothers system to avoid a large fundwide catch-up bill, as detailed by the Star Tribune.
In St. Cloud, retirees and current staff will be watching the planned summer 2026 asset transfer and any future listening sessions closely, hoping that whatever fix emerges keeps those anticipated 42 percent cuts from becoming a permanent fixture of their retirement, per the Diocese of St. Cloud.
