Rhode Island is poised to require religious organization-run pension programs to disclose their finances to plan participants, in the wake of a scandal surrounding a broke church-related plan where the beneficiaries didn’t know how bad things were.
The plan, for employees of St. Joseph’s and Our Lady of Fatima hospitals, was exempt from standard disclosure rules for pension recipients.
The state’s House of Representatives this week passed the disclosure measure, previously approved by the state Senate and awaiting the governor’s expected signature. It calls for regular updates on the financial health of church and other clerically managed funds.
“Any member of a pension plan, no matter who administers the plan, should have access to information about their pension,” said Rhode Island Treasurer Seth Magaziner. “This must never happen again in Rhode Island.”
The fund was acquired in 2014 when the California-based Prospect CharterCare bought St. Joseph and the hospitals it owned.
Diocese Lay Employees Retirement Plan members discovered it was insolvent in 2017.
Evan England, Magaziner’s director of communications, told CIO some involved in the sale tried to help the ailing plan, but that their efforts went “into a black box.”
“It ought to have been sustained,” he said.
The transparency bill was passed swiftly in both chambers.
The Rhode Island faith-based fund, which has been in the Pension Guaranty Benefit Corporation’s oversight since last year, will now be subject tothe same guidelines as the Employee Retirement Income Security Act (ERISA), which requires broad transparency to plan participants.
“Essentially this legislation requires that they annually mail their members just basic information about the health status of their plan,” said England.
Religious plans currently claim exception from ERISA and other reporting standards, such as those mandated by the Governmental Accounting Standards Board.
All that’s left is for Governor Gina Raimondo to sign, which is believed to be inevitable by all parties.
Neither Magaziner, the churches, nor the governor could be reached for comment.