In response to the collapse of the St. Joseph Health Services of Rhode Island pension fund, state Treasurer Seth Magaziner is calling for new transparency requirements for pension plans managed by religious organizations.
Magaziner said he will seek legislation in the 2019 state general assembly session that would require pension plans managed by religious organizations in Rhode Island to send regular updates on the financial health of the pensions to their plan participants.
Magaziner made the announcement flanked by retired members of the St. Joseph pension plan, which went into state receivership last year, leaving current and retired workers to face a loss of benefits. Approximately 2,700 current and former workers of St. Joseph’s and Our Lady of Fatima hospitals belonged to the plan.
“What the employees and retirees of these hospitals are going through is unacceptable,” said Magaziner. “All workers and retirees deserve to know the truth about their health of their retirement savings.”
The federal Employer Retirement Income Security Act (ERISA) requires most private pension plans to send members a letter each year outlining the health of their plan. However, church pension plans are exempt from ERISA, which has drawn criticism over a lack of transparency.
“Church plans should be transparent with their members just like other pension plans,” said Magaziner.
Last month, class-action lawsuits were filed against the Roman Catholic bishop of Providence and hospital operator Prospect CharterCare, accusing them of conspiring to mislead state regulators and commit fraud. The suits said that over the last 10 years 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 to regulators and participants.
“Many people knew that this pension fund was unsustainable without continued financial support,” said Chris Callaci, legal counsel for United Nurses and Allied Professionals (UNAP), “and they said nothing to the 2,700 members of the plan.”
The Roman Catholic Diocese of Providence, which founded the plan, disputed the charges.
“The Diocese of Providence strongly disagrees with the allegations asserted against it in this very long and complex lawsuit,” it said, according to the Providence Journal. “The Diocese will respond appropriately to these claims and we are confident that our position will prevail.”