Pope Francis Warns of ‘Serious Imbalance’ in Vatican’s Pension Fund

Pope Francis has raised concerns about the Vatican’s pension fund, describing it as facing a “serious imbalance” that could necessitate structural changes. In a letter addressed to cardinals and leaders of Vatican offices, the pope emphasized the need for collective sacrifices and adjustments.

Leadership and Financial Actions

Cardinal Kevin Farrell, who has led the Vatican’s office for family issues since 2016, has been appointed as the fund’s new administrator to address the challenges.

The pope’s message follows his recent focus on the Vatican’s financial difficulties. Over the past three years, he has ordered multiple reductions in cardinals’ pay and has pushed for a “zero deficit” budget strategy.

Budget Concerns

The Vatican’s financial struggles include a significant budget deficit. A 2022 estimate placed the net liability of the pension fund for post-employment benefits at €631 million ($664 million).

The Catholic Church’s central operations comprise the Holy See and Vatican City, which manage separate budgets. Revenue from Vatican City, including the popular Vatican Museums, has frequently been used to offset the Holy See’s deficits, which reportedly reached €83 million ($87 million) in 2023.

Future Changes

The pope indicated that addressing the pension fund’s imbalance will require difficult decisions, urging sensitivity and cooperation from all involved. The Vatican has not issued a comprehensive budget statement in recent years, heightening concerns about its financial transparency and stability.