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  #571  
Old 10-02-2017, 05:03 PM
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MISSISSIPPI

https://www.seattletimes.com/nation-...-pension-plan/
Quote:
Judge removes lawyer from running troubled pension plan
PASCAGOULA, Miss. (AP) — A judge has removed a lawyer who was overseeing a troubled Mississippi hospital pension plan.



Spoiler:
Circuit Judge James Bell said Friday that Steve Simpson, a former judge and state public safety commissioner, had a conflict of interest. Simpson joined a law firm that once advised Singing River Health System on pension issues.


The Sun Herald reports Bell named Jackson County Chancery Clerk Josh Eldridge as the plan’s temporary overseer. Eldridge says he won’t charge the pension plan for work.

The plan covers 3,100 employees and retirees from two county-owned hospitals.

The pension has been frozen for three years with no contributions, as its balance dropped from $150 million to $125 million. Pensions are still being paid, while courts decide on a federal class-action settlement. About 200 retirees oppose the settlement.



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  #572  
Old 10-02-2017, 05:03 PM
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https://www.plansponsor.com/db-plans-far-eliminated/
Quote:
DB Plans Far From Being Eliminated
Aon shows only 6% of U.S. corporate DB plan obligations have actually been settled since 2012.

Spoiler:
While headlines have stated the disappearance of defined benefit (DB) retirement plans, a report from Aon shows only 6% of U.S. corporate DB plan obligations have actually been settled since 2012.

“While the number of closed and frozen defined benefit plans continues to increase, plan sponsors still have an obligation to fund these plans, which means they are far from being eliminated altogether,” says Rick Jones, retirement and investment senior partner at Aon. “Pension risk transfer is a trillion dollar market, and much more will be settled in coming years as corporate finance and insurance market environments allow. There is only so much bandwidth in both, but plan sponsor interest and market capacity continue to grow.”

Aon’s study, covering 100 U.S. plan sponsors totaling nearly four million participants and $400 billion in assets, found the majority of plan sponsors are continuing to look at settlement strategies to opportunistically shrink the size of their pension plans. Forty-three percent have implemented a lump-sum offer to former employees, and 39% say they are somewhat or very likely to implement this approach in the next 12 to 24 months. While just 8% have implemented an insured annuity buyout to date, the number of plan sponsors adopting this strategy could at least double within the next 12 to 24 months, Aon says.

“PBGC premiums are becoming a material drag on pension asset growth for underfunded plans,” says Ari Jacobs, global retirement solutions leader at Aon. “We’re seeing situations where expected PBGC premiums owed on behalf of some participants are even greater than the value of their expected benefits. Targeted annuity buyouts are capturing the interest of plan sponsors because these solutions can transfer higher-cost obligations to an insurer, where those benefits can be provided much more economically.”

Pension Benefit Guaranty Corporation (PBGC) premiums are one reason for a surge in corporate pension contributions. In addition to significantly increased usage of corporate debt, contributions are being financed by a number of other sources, with the predominant sources being operating cash flow (75%) and cash reserves (39%), Aon found.

“There are many reasons that plan sponsors are looking to increase cash contributions, including increased PBGC premiums, the prospects for tax reform, growing impatience with continued pension deficits and the expiration of legislated funding relief,” says Jones.



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  #573  
Old 10-03-2017, 01:52 PM
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ST. JOSEPH HEALTH SERVICES
RHODE ISLAND

http://www.golocalprov.com/news/1000...-fund-collapse

Quote:
1,000 St. Joseph Retirees Hear Horrors of Impact of Pension Fund Collapse

Spoiler:
An estimated 1,000 St. Joseph Health Services retirees attended a presentation by receiver Stephen Del Sesto, a host of other attorneys, and union officials at Rhodes on the Pawtuxet on Monday.
The crowd heard about the hideous impact of the fund's collapse on retirees.

Arlene Violet told the story of a 99-year-old retired nurse from St. Joseph's, who worked for the hospital for 50 years and earns in pension payments $209 dollars a month and now faces a 40 percent cut in her benefits.

“The bad guys have to pony up the money to make folks whole,” said Violet, who is the past has singled out the Diocese of Providence, Attorney General Peter Kilmartin, CharterCARE for failure to protect retirees and fulfill their responsibilities.

“Are we going to ask her (the 99-year-old) retiree to go back to work?” asked Violet.

“Shame on those responsible.”

Receiver Del Sesto Gives Overview

The meeting began with an overview by Del Sesto who outlined the process and told the crowd that ultimately the different classes of retirees would need to separate into distinct groups.

Del Sesto outlined the process going forward and that the next milestone will be an October 11 court appearance before Judge Brian Stern. Del Sesto said, “Everyone in this room has been harmed.”

Then, Del Sesto heard from the audience, who fired questions ranging from the failure of the Diocese of Providence to properly fund the pension fund to why didn’t Kilmartin protect their interests.

A number of speakers pointed the finger at CharterCARE who is owned by for-profit healthcare giant Prospect. CharterCARE purchased St.Joseph in 2014 and in that transaction left the pension fund orphaned. The transaction was reviewed and approved under the Hospital Conversion Act and approved by Kilmartin.

Jack Callaci, Director, Collective Bargaining and Organizing for the United Nurses & Allied Professionals (UNAP) -- which is a regional healthcare union representing approximately 6,500 nurses, technologists, therapists, support staff, and other healthcare workers employed in Rhode Island, Vermont, and Connecticut -- said the group needed to be diligent in taking its message to the Diocese and CharterCARE and others responsible to "keep their promise."
CharterCARE refused to answer questions about the comments made by retirees.

The Diocese of Providence has repeatedly refused to answer questions about its role in the pension fund's collapse, but Bishop Thomas Tobin has announced that he is "praying" for retirees.


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  #574  
Old 10-03-2017, 01:54 PM
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INTERNATIONAL PAPER

http://www.reuters.com/article/us-in...-idUSKCN1C71CS

Quote:
International Paper unloads $1.3 billion in pension liabilities

Spoiler:
(Reuters) - International Paper Co (IP.N), a fiber-based packaging, pulp and paper producer, said on Monday it would transfer $1.3 billion in pension obligations to No. 2 U.S. life insurer Prudential Financial (PRU.N).

International Paper expects to take a pretax non-cash pension settlement charge of about $400 million in the fourth quarter. The deal will close Oct. 3.

Prudential will assume responsibility for pension benefits of around 45,000 former International Paper employees at the end of 2017, International Paper said. reut.rs/2xKJflj

U.S. insurers have been buying corporate pension plans at a record clip as rising interest rates and all-time high stock-market values give companies an opportunity to offload them.


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  #575  
Old 10-05-2017, 05:05 PM
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UNITED KINGDOM
ROYAL MAIL

https://www.ai-cio.com/news/royal-ma...nsion-changes/

Quote:
Royal Mail Workers Vote Overwhelmingly for Strike Over DB Pension Changes
Official dates to be determined at Thursday’s union meeting.
Spoiler:
Workers at the UK’s Royal Mail on Tuesday voted in favor of going on strike, continuing their pushback against the company’s plans to replace its defined benefit pension (DB) scheme. Of the 73% of workers who voted, 89.1% were in favor of the strike, according to the Communications Workers Union (CWU), which last month called on more than 100,000 of its Royal Mail-employed members to take industrial action.

In May, Royal Mail announced that its DB plan would close to future accrual at the end of March 2018, with a defined contribution (DC) plan taking its place. The CWU said the change would cost pensioners, on average, up to one-third of their future benefits.

Although official strike dates have yet to be announced, the timing could potentially cancel Christmas for parcel delivery companies, causing significant log jams and delayed orders for consumers and retailers alike. Other parcel businesses would be spread extremely thin trying to pick up the slack, David Jinks, Head of Consumer Research for parcel price comparison website ParcelHero told Reuters. According to Reuters, potential strike dates will be determined at a CWU meeting Thursday.

In a statement, Royal Mail said that it would push for an agreement to be reached, as industrial action would be “damaging” for the company.

“A ballot result for industrial action does not necessarily mean there will be industrial action. Royal Mail is committed to further talks as a matter of urgency, to reach agreement with the CWU,” Royal Mail said in a statement. “National industrial action means the current offer from Royal Mail, including on pensions, will be taken off the table,” the company added.
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  #576  
Old 10-06-2017, 05:23 PM
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http://www.latimes.com/business/laza...003-story.html
Quote:
Average CEO has to make do with $253,088 in monthly pension payments

Spoiler:

In 1998, about half of all private-sector employers in the United States offered newly hired workers a defined-benefit pension for their retirement.

By 2015, that percentage dropped to just 5%, according to the consulting firm Willis Towers Watson.

Nearly all private-sector workers now make do with a 401(k) plan — and the average 401(k) balance is roughly $95,000, which comes nowhere close to what the typical American will require in their sunset years.

By the age of 65, experts say, someone making $75,000 annually should have at least eight times their annual salary socked away, or a minimum of $600,000.

Which brings us to Richard Smith, 57, the former chief executive of credit agency Equifax who is scheduled to testify before Congress on Tuesday about the security breach that exposed the personal information of about 145 million consumers to hackers.

Smith “retired” last week with a more than $18-million pension.

In other words, you may be looking over your shoulder for the rest of your financial life thanks to Equifax. The company’s former boss never has to work again.

And Smith’s not alone. Many CEOs of large companies have pensions coming their way as part of their compensation packages.

The Institute for Policy Studies estimates that the top 100 CEOs of Fortune 500 companies can expect an average pension check of $253,088 monthly.

Let’s underline that: Almost a quarter of a million dollars. Every month. For the rest of their lives.

“The optics of this can be pretty tough to explain,” said David F. Larcker, an accounting professor at Stanford University who studies executive compensation. “To the typical worker, this seems pretty unfair.”

With good reason. Aside from their gravy-train pension plans, most CEOs of big companies pull down an average $15.6 million a year in salary and stock options, according to the Economic Policy Institute. That’s a whopping 271 times what average workers make.

Why such a sweet deal? Obviously it’s no easy task running a major corporation, so a commensurately meaty paycheck is to be expected.

“If you talk to CEOs, and I do, they feel justified in what they’re getting,” said Robert Wiseman, associate dean of the Eli Broad College of Business at Michigan State University. “They feel they’re held to a higher performance standard than other employees.”

But that’s not the whole story. The bigger picture is that executive compensation is a rigged system, with all concerned focused on maintaining a status quo that keeps everyone’s pockets full.

It starts with the execs themselves, most of whom have high-power agents to negotiate the heftiest, most luxurious pay packages possible.

Seriously. CEOs have agents, just like movie stars and pro athletes. Is it any wonder they expect — and receive — first-class treatment?

On the other side of the fence are the boards of directors that ostensibly are looking out for shareholder interests and resisting these extravagant pay plans. But they hide behind consultants who routinely say that if you don’t offer gobs of money and a pension, you’ll lose your celebrity CEO to some other firm.

Wiseman said it’s not much of a stretch to call this “collusion.”

“The board gives the senior executives what they want, and in return the senior executives maintain pay levels for board members,” he said.

Equifax, for example, gives each board member an annual retainer of $80,000, plus up to $25,000 more for chairing a board committee, according to the company’s 2017 proxy statement.

They also get a one-time allotment of $175,000 worth of stock, along with $150,000 worth of additional shares annually, as well as reimbursement for “customary and usual expenses.” Most Equifax board members made close to $250,000 last year.

The bulk of Smith’s pension at Equifax comes from what’s known as a “supplemental executive retirement plan,” which is a way for companies to pack fat stacks of extra cash into an ordinary retirement program.

He also received an additional boost from being credited with serving 17 years at the company even though he really served 12. The intent was to compensate him for pension benefits he gave up when he departed his previous employer, General Electric.

This is called making an executive “whole,” because God forbid he’d be like the rest of us poor schmucks and have to forfeit certain benefits when moving from one workplace to another.

“If you’re forfeiting and someone wants to hire you, they have to make you whole,” said George Paulin, chairman of FW Cook, a leading executive-compensation consulting firm.

He said firms are focusing nowadays on performance-based stock grants, as well as those supplemental executive retirement plans, or SERPs, that allow a company to throw additional funds into a CEO’s 401(k).

“There are SERPs out there that are like a turbo charger for your car,” Paulin said of some executive retirement plans.

I’m not saying that the guy — and it’s typically a guy — in the corner office isn’t deserving of big bucks. There’s a lot of risk in running a company, and there should be reward.

What sizzles my bacon is the huge gap between what CEOs make compared with rank-and-file workers.

The Harvard Business Review published a study a few years ago showing that the average American CEO made 354 times what ordinary workers made — significantly more than the Economic Policy Institute’s calculation of 271 times.

The average German CEO, meanwhile, made 147 times what workers made. The average British CEO made 84 times more. The average Japanese CEO made 67 times more.

I’m also a big fan of leading by example. Thus, lawmakers eager to reshape the U.S. healthcare system should be required to have the same coverage as everyone else.

By the same token, CEOs should have the same retirement plans as their subordinates. If they feel like a 401(k) with limited annual contributions doesn’t provide sufficient security, well, get in line, bub.

“This whole business of treating executives like rock stars is completely out of kilter,” said David Lewin, a professor at the UCLA Anderson School of Management. “It just pushes us further down the road of inequity.”

And unlike the boss, most of us won’t see a quarter-mil in monthly pension payments at the end of the line.

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  #577  
Old 10-06-2017, 05:23 PM
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BRAZIL
POSTALIS
https://www.reuters.com/article/braz...-idUSL2N1MF0JN
Quote:
UPDATE 3-Brazil intervenes in fraud-hit Postalis pension fund

Spoiler:

BRASILIA, Oct 4 (Reuters) - Brazil’s pension oversight body Previc ordered a 180-day intervention in Postalis Instituto de PrevidÍncia Complementar, the pension fund for post office workers, for breaking rules on reserve requirements and investments, the regulator said on Wednesday.

Postalis, Brazil’s largest fund by number of participants, has amassed billions of reais in losses over the past decade due to risky bets and has run a deficit every year since 2011. Prosecutors in May charged eight people, including the fund’s former president, with tax fraud and money laundering.

Previc took over management of Postalis for 180 days and ordered suspension of all the fund’s executives and the freezing of their assets. A spokesman for the fund said the intervention “took us by surprise” and had no immediate comment.

Postalis oversees 10.2 billion reais ($3.25 billion) in savings for 155,400 contributing members.

Last year, a police investigation of fraud at Postalis and the pension funds of state-run banks Caixa Econůmica Federal, Banco do Brasil and oil company Petroleo Brasileiro SA uncovered alleged illegal operations and kickbacks paid to politicians in the midst of Brazil’s biggest corruption scandal.

The funds controlled 280 billion reais in assets and have been an important source of investment in a credit-starved economy, but political connections at the funds raised questions about undue influence on their decisions.

Brazil’s Federal Audit Court (TCU) separately found that fraudulent operations had caused 1 billion reais in losses at Postalis. In May, prosecutors charged eight people with defrauding the fund with overpriced investments between 2006 and 2011.

The head of the pensions industry trade group ABRAPP said the intervention in Postalis was an “exception” and no threat to Brazil’s pension fund system that is solidly capitalized.

Last year, Reuters reported that the fund was trying to offload 2.2 billion reais worth of bad loans after a planned sale collapsed amid management changes and feeble demand.

Postalis extended loans to companies for years, a type of transaction that was increasingly used by state-controlled pension funds during the leftist Workers Party’s 13 years in power. Some borrowers issued bank credit notes - known in Brazil as CCBs - that Postalis fully subscribed.

The pension fund’s accounts turned red with the deterioration in corporate creditworthiness and capital markets activity in Latin America’s largest economy as it slowed down and slid into recession. ($1 = 3.1366 reais) (Reporting by Anthony Boadle; Editing by Susan Thomas, Andrea Ricci and David Gregorio)

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Old 10-06-2017, 05:24 PM
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ST. JOSEPH HEALTH SERVICES
http://www.golocalprov.com/news/dioc...ension-payment
Quote:
Diocese, RWMC and CharterCARE All Failed to Make Millions in Pension Payments to St. Joseph

Spoiler:

The St. Joseph pension fund was in a dire financial situation going back as early as 2007, according to actuarial documents secured by GoLocal.
Moreover, each of the three organizations that controlled the hospital over the decade ignored directives from the actuarial as to the amount needed for contributions to properly fund the pension fund.

In 2014, during the sale of St. Joseph to CharterCARE, the actuarial identified that the contribution needed to "reach 100% funding level projected to the end of the plan year” was $29,573,536, but CharterCARE's contribution was just $14 million.

“But, clearly a hospital like St. Joseph that was dealing with financial distress - you clearly know that if not funded properly, the retirees would be impacted adversely,” said Stephen Del Sesto, the receiver for the pension fund.

Retirees are now facing a 40 percent cut to their benefits.

Kilmartin Approved

The CharterCARE payment of less than half of what was needed for that year was approved Attorney General Peter Kilmartin as part of the sale of the hospital. “I do not know how it could be approved,” said Del Sesto

“It was an issue that had to be looked at and it was looked at, but I can’t say (to what detail by the Attorney General)," said Del Sesto.

Kilmartin has repeatedly refused to be interviewed regarding the collapse of the pension fund.

“As I previously wrote to you when you last requested an interview, the receivership is on-going, the Court recently appointed a special counsel to review the issue, and the Office is closely monitoring this ongoing process. As is standard policy, given these set of facts, we have no further comment at this time,” said Kilmartin’s spokesperson Amy Kempe in an email to GoLocal.

From 2007 to 2015, contributions were made only in two years. Despite the fund needing tens and tens of millions of dollars annually, contributions were made only in the years in which St. Joseph was being sold.

In 2010, when the Diocese merged St. Joseph into Roger Williams Medical Center — that year a $1.5 million contribution was recorded. The other contribution was the $14 million in 2014.
…..
Diocese for Years Failed to Make Payments
On Monday night, nearly a thousand retirees attended a meeting with the group of attorney’s involved in the receivership.

Arlene Violet told the story of a 99-year-old retired nurse from St. Joseph, who worked for the hospital for 50 years and earns in pension payments $209 dollars a month and now faces a 40 percent cut in her benefits.

“The bad guys have to pony up the money to make folks whole,” said Violet on Monday, who is the past has singled out the Diocese of Providence, Attorney General Peter Kilmartin, CharterCARE for failure to protect retirees and fulfill their responsibilities.

In the records secured by GoLocal, the Diocese was shown to have failed to make payments in 2007 to 2009, then Roger Williams Medical Center made a payment of $1.5 million in 2010, but failed to make another payment.

CharterCARE made the one payment in 2014 and then the fund was orphaned and in August of 2017 filed for receivership.

http://www.providencejournal.com/opi...ension-debacle
Quote:
My Turn: Bernard A. Healey: Bishop blameless in pension debacle

Spoiler:

Blessed Pope Paul VI taught: “If you want peace, work for justice.” However, neither peace nor justice can be found without the truth. The truth about the St. Joseph Hospital pension issue has been clouded with misunderstanding. If a just resolution is to be reached, it is crucial to keep some essential facts in mind while this issue plays out on the Commentary pages (see “Church has duty to pensioners,” Sept. 28, by nurses Lynn Blais and Marilyn Horan).

It is untrue and unfair to suggest that Bishop Thomas Tobin is not living up to his “moral obligation” in this situation. The impetus for the CharterCARE transaction was to save a failing community hospital that was losing millions of dollars per year. The bishop’s intent and great hope was that the hospital would stay fiscally viable and continue to fulfill its vital mission to the community.

The effort to save the hospital was motivated purely to ensure the ongoing sources of charity care, one of the sole providers of care to the underserved and the poor in the community, and the continued employment of hard-working nurses and staff who had dedicated their careers to the community and Catholic health care.

The truth about the CharterCARE transaction is that, for the same reasons that the bishop supported it, there was widespread and enthusiastic public support from the nurses union, the Rhode Island attorney general, the Rhode Island Department of Health and others involved at the time.

Another truth often neglected in this situation is that after the CharterCARE transaction was complete in 2009, the only role for the diocese and the bishop was to ensure the Catholic identity of St. Joseph’s and Fatima Hospitals: that the chapels were maintained, that pastoral counseling was readily available, and that health-care services provided were consistent with Catholic teaching. Indeed, even before the CharterCARE transaction, the St. Joseph Health Services of Rhode Island pension plan was managed and funded by St. Joseph of Health Services of Rhode Island Inc., an independent non-diocesan corporation.

The 2014 sale of the hospitals was between CharterCARE and Prospect Medical Holdings, the for-profit health-care corporation. The structure of that sale — including what happened to the pension plan — was not in the control of the bishop or the diocese. The bishop’s only role at that time was to continue to preserve Catholicity at the hospitals.


And if truth be told, many parties who now criticize the bishop expressed their full support for the Prospect Medical Holdings takeover in 2014 — including for the resolution of the pension issue. In fact, the United Nurses and Allied Professionals union leaders highlighted this in their February 2014 newsletter.

At this point in time, Prospect Medical Holdings, a billion-dollar for-profit corporation, is the only entity that can improve the condition of the pension fund. The truth of the matter is that any “moral obligation” is to be found in California with Samuel Lee, CEO and chairman of the board of Prospect Medical Holdings, and its Board of Directors.

While the fallout from the pension issue continues to play out publicly, we continue to hope and pray that the receiver comes to a fair conclusion for the pensioners and their families. We desire only peace and justice for those who served the hospital and community so well for so long. Such a peaceful and just resolution, however, can only be found when the truth is recognized and accurately represented.

The Rev. Bernard A. Healey is director of the Rhode Island Catholic Conference.

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Old 10-11-2017, 10:58 AM
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ST. JOSEPHS HEALTH SERVICES

http://ripr.org/post/hospital-worker...pport#stream/0

Quote:
Hospital Workers’ Pension Plan On Life Support

Spoiler:
Across the country, millions of employees have entrusted their retirement savings to unregulated pension plans known as church plans. Many of these plans are run by church-affiliated schools, nursing homes and hospitals.

And when church plans run into financial trouble, as happened in Rhode Island, the beneficiaries' retirement savings have no government safeguards.

Mary Grivers devoted 36 years of her life to caring for other people. She worked as a registered nurse -- first at St. Joseph Hospital, in Providence, and later at a an affiliate, Our Lady of Fatima Hospital, in North Providence. And she embraced the mission of St. Joseph’s founders: the Roman Catholic Diocese of Providence.

“From the time we started, it was always a family atmosphere. But because it was the Catholic sponsorship it was always implied that there was an extra level of ministry.”

Grivers retired in 2007. Now 63, she lives in Cumberland and cares for her husband, Michael, who has Parkinson’s disease. And she counts on her monthly pension checks from the hospitals’ parent company -- St. Joseph Health Services of Rhode Island -- to help pay their mortgage and other bills.

“When we made our pension decisions about beneficiaries,’’ Grivers said, “when we made our life plan, it was under the assumption that we would always have these to fall back on.”

In a hallway of Superior Court, Providence, Grivers waits to hear about her pension. The company she worked for -- St. Joseph Health Services -- was sold three years ago to a California-based hospital chain. And the pension plan for Grivers and some 2,700 other current and former hospital employees is running out of money.

Judge Brian P. Stern explains a petition from St. Joseph Health Services to place its pension plan in receivership - a process similar to bankruptcy. St. Joseph Health Services has asked the court to approve an immediate 40 percent cut in benefits.

Dorothy Willner, a retired hospital receptionist, said her full pension is $183 per month.

“My husband has the beginning stages of dementia,’’ Willner said. “I cannot work because of that. I need my full pension.

Grivers, the retired nurse, wonders why nobody told them sooner that their pension plan was in trouble. “We’ve all been wronged,’’ Grivers said. “You know, we’ve been insulted. We’ve been disrespected. And we’ve been lied to.”

From his Providence law office one recent afternoon, receiver Stephen F. DelSesto returned calls from retirees like Grivers and Willner.

“And that’s the difficult thing,’’ he tells one caller, “is that, you know, the plan, as it stands right now, in order to make it work there has to be a cut. I’m looking to see how deep a cut does that needs to be.”

DelSesto has been making a lot of these calls. He said his voice is getting strained from all the talking. “They don’t know why this happened,’’ he said. “And they want answers. They’re looking to me, obviously to try to get those answers.”

So how did St. Joseph’s pension plan run into trouble?

One place DelSesto is looking for answers is the hospital company’s sale in 2014. At the time, the buyer -- Prospect Medical Holdings -- contributed $14 million to the pension plan.

That was supposed to ensure that the plan was well funded -- or so the union official who represents hospital workers said they were led to believe.

Christopher Callaci, general counsel for the United Nurses & Allied Professionals, or UNAP, points to documents filed by state regulators at the time of the sale that said the $14 million dollars would increase the plan’s funding to more than 90 percent.

“And there’s something horribly amiss,’’ Callaci said, “when you go from a 90- or 92-percent funded plan three years ago, in this economy, to having it be in the hole. It doesn’t add up…”

Norman P. Stein, a law professor at Drexel University's Thomas R. Kline School of Law in Philadelphia, Pa., reviewed the report on the pension fund prepared by the plan’s actuary. Stein said it was clear that $14 million only would have kept the plan 90 percent funded until the deal closed. In fact, he said, the $14 million contribution was less than half of what was needed to fully-fund the plan until all 2,700 plus beneficiaries were paid out.

“I mean it looks like…that that would have been inadequate even given the actuarial reports that were done in those years,’’ Stein said. “So they weren’t even fully funding the pension plan.’’

And by law, St. Joseph Health Services didn’t have to fully fund the pension plan. Pension plans are regulated under the Employee Retirement Income Security Act, or ERISA, a federal law that sets funding levels and requires regular contributions to private pension plans. The law also requires the plans to be insured, with one major exception: church plans.

Under any other private-sector pension plan, if something happened and a pension went bust, generally speaking, their pension plan and their pensions would be guaranteed by the federal private pension insurance program,’’ said Karen Friedman, executive vice president of the nonprofit Pension Rights Center, in Washington, D.C. “If you’re in a church plan you don’t these federal protections.”

The government’s hands-off approach to church plans reflects lawmakers’ concern at the time the law was enacted, in 1974, that requiring the government to review a church’s books could be construed as violating the separation of church and state. And legal experts say lawmakers believed churches would stand by their pension plans.

There are millions of church plans around the country, Friedman said, including hundreds of thousands run by hospitals and other church-affiliated groups.

“There’s no federal backup for these plans,’’ she said. “So the workers and the retirees end up taking the hit in this.’’

With no federal protection for St. Joseph’s pension plan, whose job was it to look out for the plan’s beneficiaries? When the hospital company was sold, state regulators had to approve the deal. The union supported the sale. St. Joseph’s board of directors oversaw the pension plan. And none of them alerted the plan’s beneficiaries that there was any reason for concern -- even though St. Joseph’s board had skipped their annual contributions to the plan for at least three years prior to the sale.

“God certainly wasn’t running these plans,’’ Stein, the Drexel law professor, said. “Somebody was running them.”

Stein, a senior policy advisor to the Pension Rights Center, said that what happened with St. Joseph’s pension plan raises ethical concerns as well as legal ones.

“There are two questions: who’s morally responsible? And who’s legally responsible?” Stein said. “If you look at the people who failed these employees morally I think everybody body you named has played a role…from the Diocese to the hospital company to the regulators who approved this at the state level.”

Rhode Island Attorney General Peter F. Kilmartin is one of the state regulators who reviewed St. Joseph’s sale. He declined an interview for this story but his spokeswoman, Amy Kempe, said in an e-mail that the attorney general is very concerned and has questions about what happened.

Retiree Mary Grivers wonders why the Providence Diocese hasn’t stepped in to help.

“For me it goes back to the church, that’s where I started,’’ she said. “The Diocese was overseeing my pension. And I don’t know how you separate that now.”

The Dioceses has a representative who sits on the board that oversaw the pension plan. Bishop Thomas J. Tobin declined an interview. But Tobin said in a statement that he’s praying for St. Joseph’s pensioners. Since the sale of St. Joseph Health Services, however, Tobin said, the Diocese has had no more oversight of the pension funds than it has in “renovation of lobby.”

That doesn’t satisfy Mary Grivers.

“I went to Mass on Sunday,’’ Grivers said, “and I open the bulletin….. and it’s a request for second collection for the priests who are retired in the Diocese….And while I’m not a priest I do feel that there was some kind of a spiritual end to the care that gave. I did the best that I could. We all did…You know, these were Catholic institutions. And I feel that we’ve been let down by them.”

A Superior Court judge has appointed Providence lawyer Max Wistow to help the receiver investigate what happened to the pension fund and why. A decision on the proposed cuts to the pension benefits is expected early next year. In the meantime, Grivers and other beneficiaries will be back in court this week with their lawyers.
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Old 10-11-2017, 01:38 PM
StillCrazed StillCrazed is offline
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St Joseph's had an actuarial evaluation in 2011 that showed the plan was about 50% funded. Here's a link to that report:
https://emma.msrb.org/EA478611-EA371117-.pdf

The interest rates ranged in the realistic 4.5 to 5.5 range. But inflow of contributions was about $3 m vs $5m of payouts. Excess earnings from the rising equity market since 2011 just cannot rise enough to make up the deficit. The sponsor should have a moral and possibly legal obligation to pay for the liabilities, IMO.
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