Rhode Island’s general assembly has passed a bill that requires nongovernmental pension plans with 200 or more members that are not covered by the Employee Retirement Income Security Act of 1974 (ERISA) to comply with ERISA reporting requirements.
The legislation is intended to close a loophole that prevented church pensions from having to provide financial information to plan members. The bill now goes to Gov. Gina Raimondo.
ERISA requires private pension plans to send members a letter each year outlining the health of their plan. However, pension plans administered by religious organizations are exempt from ERISA and Governmental Accounting Standards Board (GASB) reporting standards. As a result, many members of so-called church plans complained they were often unable to access information regarding the financial health of their pensions.
The legislation was sponsored by Senate President Dominick Ruggerio, and House Majority Leader K. Joseph Shekarchi.
“All Rhode Island workers and retirees deserve to know the truth about the health of their pension plan,” Ruggerio said in a statement. “Too many hard-working caregivers and health professionals, who spent their careers serving their communities, have been hurt by a lack of transparency. We must ensure that this never happens again.”
The legislation was in direct response to the collapse of the St. Joseph Health Services of Rhode Island pension fund, which went into state receivership in 2017, leaving approximately 2,700 current and retired workers of Our Lady of Fatima and Roger Williams hospitals with a loss of benefits.
The workers filed class-action lawsuits that accused the Roman Catholic bishop of Providence and hospital operator Prospect CharterCare of conspiring to mislead state regulators and commit fraud. The suits said that Bishop Thomas Tobin and the operators of Our Lady of Fatima Hospital vastly underfunded the hospital’s pension plan, and then conspired to conceal that fact from regulators and participants.
“This is common-sense legislation that provides members of church-run retirement plans the same level of transparency afforded to members of private pension plans, to help them know how their pension funds are doing,” said Shekarchi. “Disclosure will help ensure that members’ retirement savings is not imperiled by mismanagement and that those in charge cannot easily obscure negligence or misconduct.”
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