When the pension plan that covers current and former employees of St. Joseph’s and Our Lady of Fatima hospitals was sent into receivership, the roughly 2,700 people it covers were immediately faced with the prospect of losing a significant portion, if not all, of their retirement income. The simple reason for the plan being declared insolvent was the fact that since Prospect Medical Holdings Inc. and CharterCare Community Board purchased St. Joseph Health Services of Rhode Island Inc. in 2014 and formed Prospect CharterCare Health Partners, they did not take on the obligations of the pension plan, leaving it without any new income even as retirees were being paid owed benefits. A one-time payment of $14 million from Prospect brought the plan at the moment of the sale up to 90 percent funded, but since then, a poor investment performance and a lack of any new revenue from the company or current employees has done nothing to bolster its financial standing.
Both CharterCare and the Diocese of Providence have expressed concern but have not offered any monetary assistance. And Attorney General Peter F. Kilmartin, whose office approved the sale despite the pension fund’s looming predicament – something that the receiver said should have been obvious at the time of the sale – only says that the deal was approved because it met the “limited scope” of requirements required by the Hospital Conversions Act, although he has expressed concern that the plan deteriorated so quickly.
One potential solution to the issue calls for two-thirds of the plan participants to receive 60 percent of their benefits in a lump sum, while the other one-third would receive nothing.
Given all this, should any of the entities not directly tied to the pension plan today contribute to it in order to help the current and future retirees receive something close to what they were promised?
