Pope orders changes at Vatican pension fund
Pope Francis has issued new statutes for the Vatican pension fund which provide for the fund’s president to be appointed directly by the Pontiff himself, and for the inclusion of laity on the board of directors.
The pension fund had net assets of €477.7m as at end-December 2014, with its portfolio estimated to be worth €504m at the end of 2015.
The changes have been introduced by a motu proprio, a document issued by the Pope on his own initiative.
They form part of an ongoing shake-up in Vatican finances prompted by the Pope since his election in 2013.
The latest move means that the pension fund’s president will be chosen by the Pope from among three candidates nominated by the Council for the Economy – which sets policy guidelines for the Vatican’s economic activities – and who could include members of the laity.
Up till now, the role has normally been held by the president of the Administration of the Patrimony of the Apostolic See (the Vatican’s Treasury), the current incumbent being Cardinal Domenico Calcagno.
In future, the pension fund president will serve for a five-year term, which can be renewed once.
Furthermore, the pension fund’s board of directors will include four external members with experience of insurance and pension fund management, also appointed by the Council for the Economy.
However, according to press reports, Father Federico Lombardi, director, Vatican press office, said no changes are planned for the pension fund’s investment policies in the immediate future. Its new board of directors will have the power to advise the pension fund president on investment strategy.
Last February, the fund’s board and auditors issued a press statement in response to “alarmist information” in the media, relating to the fund’s sustainability. For the first time, financial data – including the size of the portfolio and annual income figures – was published.
The press statement also said there was a “substantial balance” between available resources and commitments to current and future employees, and that the funding ratio was 95%.
Contributions have been increased to a rate of 26% on taxable income, while retirement ages have been raised by two years, to 67 for lay staff, and 72 for clergy.
Recently, a number of prominent industry professionals have come on board to support the Vatican’s push for improved financial management.
At the same time, the Council for the Economy set up a technical committee to recommend changes to strengthen the pension fund’s sustainability.
The committee included industry veterans Antoine de Salins, deputy general manager and chief investment officer, Groupama; Andrea Lesca, general manager, Intesa Sanpaolo Previdenza; and Nino Savelli, professor of risk theory at the Catholic University of Milan and a member of EIOPA’s insurance and reinsurance stakeholder group.