Key Trust Document Shows Bishop of Providence Has Oversight of Failed St. Joseph Pension Fund
Friday, December 08, 2017
GoLocal has secured a key Trust document for the failed St. Joseph Health Services pension fund which shows that the Bishop of Providence has sweeping powers over the operating trust of the fund and has unfettered power over the appointment of the board.
The Trust document flies in the face of pronouncements asserted by Bishop Thomas Tobin that claim he and the church have no legal or moral responsibility.
“We, for six or seven years now, have been no more involved in the oversight of pension funds than we have been in the renovation of a lobby. So it’s a little bit frustrating, I think, and unfair for people to be asking what has the diocese been doing during this time,” said Tobin in an interview published in the RI Catholic, the newspaper of the Diocese.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTTobin has refused repeated requests for comment on the St. Joseph pension fund collapse.
The Trust was established in 1995 and the power is directly tied to the position of Bishop of the Diocese of Providence — at that time Bishop Louis Gelineau held the appointment.
The Trust document was amended only once in 2000, but it was a non-material amendment. The amendment was signed by then Bishop Robert Mulvey. Tobin became Bishop of Providence.
Del Sesto tells GoLocal that the Plan is governed by two documents:
The St. Joseph Health Services of Rhode Island Retirement Plan which was effective as of July 1, 1965, and amended and restated July 1, 2016 (I have not yet received the original 1965 Plan document or any amendments, if any, prior to July 1, 2016 – we have requested from St. Joe’s); and the Trust Agreement dated September 27, 1995, as amended on August 4, 2000.
"Those two documents are read together to govern the pension plan and its assets. The Plan governs the terms of the Plan as it pertains to beneficiaries, benefit accruals, payments and other administration issues and the Trust holds, manages and invests the assets for the benefit of the Plan and its beneficiaries," said Del Sesto.
It seems impossible that Tobin is unaware of the structure. The pension fund was forced into receivership on August 17 and the incident has been mired in legal battles since. At hearing earlier this week, Tobin was represented by four partners of the firm Partridge, Snow and Hahn. It seems unlikely that the downtown Providence firm complete with four partner-level attorneys has not briefed the Diocese on the basic legal structure of the pension fund. The firm refused to answer questions on the Trust document.
Documents Undermine Tobin's Claims
“Under my reading of the Trust document, only the Retirement Board (whose members are appointed by the Bishop) and the Bishop for the Diocese of Providence each have equal, full power to direct or authorize the Trustee, Bank of America, to act. Therefore it would follow that if the Retirement Board is inactive or has no appointees, the Bishop for the Diocese of Providence is the only person with full authority and power under the Trust to direct or authorize the Trustee to act,” said the court-appointed receiver Stephen Del Sesto.
In contrast to the Trust document and Del Sesto’s comments are Tobin’s claims.
“I don’t remember during my time on the board of St. Joseph Health Services, or since then, when these transactions took place — beginning six or seven years ago, and then three years ago," said Tobin in the RI Catholic article. "I don’t remember one serious conversation about the status of the pension fund.”
Tobin and the Diocese have been trying to block and limit the scope of the subpoena issued by special investigator Max Wistow.
READ ABOUT SUPERIOR COURT JUDGE BRIAN STERN'S DECISION ON TUESDAY.
Tobin’s claims are inconsistent with the documents and the Bishop of Providence has ultimate powers over the operation of the fund. “…my interpretation of the Trust, the Bishop, either through the Retirement Board that he appoints or individually has full power to require or authorize the Trustee to take any action,” said Del Sesto.
With less than two months before the pensioners' will see their benefits slashed there is growing urgency for Wistow to complete the investigation and to determine who has responsibility for the pension fund collapse and to pursue recovery.
Related Slideshow: 10 Things to Know About One of Biggest Pension Failures in RI - St. Joseph Receivership
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