Moore: State Should Rescue St. Joseph’s Pensioners
Monday, August 21, 2017
Imagine the shock and anguish felt by the roughly 3,600 current and future pensioners of St. Joseph Health Services when GoLocal broke the news that the fund had reached a point of insolvency.
These people have made their retirement plans based on the reasonable assumption that their employer would keep their word and make sure that their retirement fund was secure and safe.
Now, according to Steven Del Sesto, the court appointed receiver for the bankruptcy, those retirees could see a 40 percent reduction in their expected retirement benefits--through absolutely no fault of their own. That means the pensioners would receive just 60 percent of what they were planning on receiving.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThere are many questions surrounding this story that will need to be answered moving forward. But one thing is certain, the workers who are expecting pensions aren’t to blame in this situation, and they shouldn’t be hung out to dry.
The first question is why the sale of St Joseph's to CharterCARE in 2014 was approved. At the time, Attorney General Peter Kilmartin approved the plan contingent that CharterCARE make a $14 million contribution to the pension fund to bring the fund from 90 percent to fully funded.
Called To Account
Yet just three years later, the pension fund is insolvent and in receivership--despite the fact that the stock market has boomed over that time period. Clearly, something just doesn’t add up. Obviously, there needs to be a forensic audit of the pension system to explain why the numbers ceased to add up and so quickly. Was there a drastic accounting error that took place?
The fund currently has somewhere between $80-90 million, but a shortfall of $43 million. It doesn’t take a pension expert to see that that’s a big problem.
The Roman Catholic Diocese of Providence, which managed the fund before the sale, needs to explain what happened to the fund and why it’s been reduced so quickly. CharterCARE also needs to explain what has happened.
We should expect more questions to develop as more of the answers begin to trickle in.
The whole situation begs the question as to whether or not large institutions should be trusted, or even allowed to manage the retirement plans of individuals.
It's Only Fair
How could anyone forget the Central Falls receivership that began in 2010? In that instance, pensioners were slated to receive cuts of roughly 55 percent of their expected benefits. The state stepped up and did the right thing--it kicked in money to allow pensioners to receive 75 percent of what they were expecting.
That’s not ideal by any stretch of the imagination, but it does help. Given that the Central Falls pensioners were aided by state taxpayers and saw their pensions increased up to the 75 percent mark it’s only fair and logical that the state should also help the St. Joseph’s pension beneficiaries also retire with some level of dignity.
When size of the benefit cut is finalized, it seems incumbent on the state to come forward and, to some extent, lessen the blunt of these pension cuts to these individuals similar to the way it did for the Central Falls employees. If the final reduction brings the pensioners benefits to less than 75 percent of what they were expecting, the state should make up the difference.
It’s only fair to help out these folks. We did the same for Central Falls retirees.
Russell J. Moore has worked on both sides of the desk in Rhode Island media, both for newspapers and on political campaigns. Send him email at [email protected]. Follow him on twitter @russmoore713.
Related Slideshow: RI Pension System’s Highest Paid Investment Firms
Below are the highest paid investment firms by the state pension system. Two types are listed: hedge funds and private equity firms. Firms are listed in order of least to highest rate of pay. Firms at the same rate of pay are ordered according to the amount of the payment they received, from least to greatest. For each firm, the name, type, management and performance fee rates, and the amounts paid for each are shown, along with the total. In instances where a firm had more than one fund, information is provided for each individual fund. Data are from a newly published online report of investment expenses for the state pension system. Note that the Treasurer’s office has declined to disclose information for 18 private equity firms due to confidentiality clauses.
2013.png)
2013_80_80_c1.png)
Related Articles
- Moore: Assange Prosecution Would Eradicate Press Freedom
- Moore: Time to Enact Paid Sick Leave
- Moore: Community Safety Act is a Solution In Search of a Problem
- Moore: 2018 Race for Governor Heating Up Early
- Moore: Revenue Shortfall Benefits Speaker Mattiello
- Moore: Muksian’s Outrageous Severance Package
- Moore: Magaziner Must Embrace Filippi’s Pension Proposal
- Moore: 38 Studios Investigation Shows Legislators Lack Courage
- Moore: Hotel Tax Hike is a Bandaid on a Gunshot Wound
- Moore: Politifact’s Media Narrative Towards Russia Showed Bias
- Moore: Ruggerio’s Opportunity to Foster Compromise
- Moore: RI Should Transfer the Lottery to the Pension Fund
- Moore: The Pawsox Battle Rages On
- Moore: Siedle Award Underscores His Credibility
- Moore: What Happened to American Exceptionalism?
- Moore: Democrats “Better Deal” Rings Hollow
- Moore: National Grid Rate Hike Results From Bad Policy
- Moore: Is Siedle Smooth Enough To Get Elected?
- Moore: Rhode Islanders Yawn Over Legislative Summer Stalemate
- Moore: Time for a 38 Studios Special Counsel
- Moore: Twin River’s Labor Strife Highlights Obamacare’s Weakness
- Moore: Rhode Island’s Budget is Bloated
- Moore: Magaziner’s Back to Basics Strategy Paying Dividends
- Moore: State Should Rescue St. Joseph’s Pensioners
- Moore: After Providence Scandal, Muksian Returns to Cranston
