Wednesday, May 27, 2009

Vatican Raises Retirement Age to Make Ends Meet

In a sign the credit crunch is sparing no one, the Vatican is set to raise its staff retirement age by two years to help make ends meet.

From January 1, 2010, newly hired lay staff will retire at 67 instead of 65, while newly hired members of religious orders and priests (below the rank of bishop) will retire at 72 instead of 70.

"Even the Vatican is feeling the crisis and we need to be careful about spending like everyone these days," said the Rev. Ciro Benedettini, deputy director of the Vatican press office.

"Austerity budgets are required to survive," he added.

There is no change for bishops and cardinals working at the Vatican, who continue to retire at age 75, said Benedettini.

After three years in the black, the Vatican slid into the red in 2007, with reported income of about $372 million outweighed by expenses of $386 million.

The $14-million deficit reported was mainly caused by a fall in the value of the U.S. dollar. Most donations to the Vatican are in dollars while its expenses are mainly in euros.

On top of the current credit crunch, the Vatican is also struggling as its staff live longer after they have retired, swelling its spending on pensions.

"This measure takes into account the increased life expectancy of the population," a Vatican document outlining the changes stated.

Benedettini said Vatican staffers were not being forced to work longer without reward. "We raised wages last year, and as of next year the Vatican will make a larger contribution to the employees' regular pension payments," he said.
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