EDITORIAL: Diocese Cheats and Wins on the St. Joseph Pension Fund, Now We All Pay
Friday, September 01, 2023
For decades, the Diocese of Providence owned St. Joseph Health Services and was responsible for millions of dollars of contributions to the pension fund of the nurses and staff of the hospital.
For years, under the direction of the then-Bishop Thomas Tobin, the Diocese failed to make proper pension contributions.
Now, it looks like it will be a federal government corporation that will be footing the bill under a proposed new agreement that takes the Diocese nearly 100% off the hook for the failed plan.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTSt. Joseph’s was sold twice, once to CharterCARE by the Diocese in 2010 and then to Prospect of California in 2014.
The employees were overwhelmingly Catholic and overwhelmingly devoted to the institution.
By 2017, the pension fund for 2,800 employees failed and was placed in receivership. It was the biggest pension fund failure in Rhode Island history.
It was determined that the pension shortfall was approximately $120 million.
As the effort began to recover monies from the different players, the Diocese lawyered up and worked to block nearly every legal effort of the court-appointed receiver.
Former Rhode Island Attorney General Arlene Violet said in 2019, "Tobin and the church not only are not putting any monies in, but they are actively objecting to every effort to recover money even when they are not economically involved.”
The Diocese continued to drag its feet year after year.
“When Bishop Tobin and the Roman Catholic Diocese of Providence allegedly failed to properly fund their own nurses and health care workers’ pension system for a decade, they did more than financially mismanage an asset – they jeopardized the financial future of the very workers who selflessly served the Church and their patients for decades,” said Lynn Blais, R.N., President of the United Nurses and Allied Professionals in 2022.
The Diocese's lawyers used legal motions to delay the case, said receiver Stephen Del Sesto in 2022.
“I guess I will say the crafty lawyering that can be done on the side of the Diocese, that this could go on for three-four maybe even five years in litigation and you know that's not because [federal court Judge William Smith] is not moving things along or we're not,” said Del Sesto in a Zoom call to the retirees on January 10, 2022.
“It's just the process by which things happen and with all of the complex issues that are going on, that's just about how long it will take,” said Del Sesto.
“[As the] Diocese typically does in their litigation, they do not usually fold up their tent and walk away earl they usually fight it until the end,” said Del Sesto.
In 2017, GoLocal wrote about Kathy Quinn, who was like many of the 2,800 former and present St. Joseph Hospital employees.
She worked 34 years as a medical secretary and a host of other roles at the hospital, and she now receives a monthly pension benefit of $500.
On Wednesday, the parties announced they had reached an agreement. Despite the Diocese's years of failures and cover-ups, the new agreement has them paying $2.5 million -- a fraction of what they were responsible for.
The amount is probably less than what they paid their lawyers over the past six years since the receivership to delay and block court action.
The delay, delay, delay strategy worked oh-so-brilliantly for the Diocese's legal team.
And now, all the lawyers involved in negotiating the final deal are asking all to hold your noses, choke back your vomit, and accept this agreement.
If it is approved by the court and the federal Pension Benefit Guaranty Corporation (PBGC), the federal PBGC will pay the gap. Yes, the government-backed financial corporation will fill the $120 million gap. The Chair of the PBGC is appointed by the President of the United States, and the board is comprised of the U.S. Secretaries of Labor, Commerce, and Treasury.
The Diocese will have pulled off the trifecta -- cheated their most loyal employees out of millions, leveraged lawyers to delay justice for years, and then paid just a fraction of what they should have.
PBGC may now pick up the bill.
Who says crime doesn't pay?
Apparently, only God can answer that.
An editorial is the opinion of a publication — specifically, the ownership.
While based on facts and news reporting, it is an opinion intended to discuss critical community issues. Often, the opinion is written with the intention of positive change.
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