Pope Francis, who has imposed a series of cost-cutting measures across the cash-strapped Vatican, warned Nov. 21 that the city state’s troubled pension fund needs urgent reform to guarantee future obligations.Vatican employees responded by expressing concern that their compensation might be targeted in any further cost-cutting to shore up the pension system, and asked for the fund’s finances to be made public.
In a letter to Vatican department heads and cardinals, Francis said he had named a top economic adviser, Cardinal Kevin Farrell, as a special administrator for the fund, suggesting that decisive, immediate action was necessary. The letter was the latest evidence of the Vatican’s precarious financial situation, after years of mismanagement, financial scandals and budget deficits – all worsened by COVID-19 and the monthslong closures of a key source of revenue, the Vatican Museums.
Already, Francis has cut cardinals’ salaries by 10%, suspended some seniority bonuses, trimmed special stipends for Rome-based cardinals and begun charging some market-rate rents for their apartments. The pension fund has long been the source of particular concern, and in the new letter Francis acknowledged that the current analysis “indicates a serious prospective imbalance in the fund, the size of which tends to expand over time in the absence of intervention.” “In concrete terms, this means that the current system is unable to guarantee in the medium term the fulfillment of the pension obligation for future generations,” he wrote.
The Association of Lay Vatican Employees, the closest thing the Vatican has to a labour union, voiced alarm at Francis’ warning about their pensions, insisting that lay employees had already sacrificed enough in his cost-cutting initiatives and that the Vatican leadership should listen to workers’ concerns.