The Archdiocese of Philadelphia is ending its traditional pension plan for its 8,500 active lay workers.
The archdiocese can no longer continue its traditional pension plan, which is underfunded by about $150 million.
"The goal here was to fix the issue with the lay employees' retirement plan that was there, to fix the funding status of that and to do so without taking away benefits that people are receiving or they have earned," Gavin said. "And to realize that we want to help provide for folks in retirement."
Archdiocesan officials worked out a compromise to freeze the current plan as of June 30, 2014, and implement a defined contribution plan, Gavin said.
"It's initially estimated that the archdiocese will contribute 4.5 percent of each individual's salary into accounts on their behalf each year," he said. "It's not based on a match system, regardless what the employee will do with their accounts, the archdiocesan contribution would be 4.5 percent."
In addition to the active employees, the plan covers 4,700 retirees. Their pensions will not be affected.