St. Joseph Pensioner Quinn Worked 34-Years and Now Facing Cuts to Her $500 a Month Payment
Monday, October 30, 2017
Quinn was one of about 75 retirees, dressed in purple shirts who traveled by school bus to attend yet another hearing at Providence Superior Court. The purple T-shirts read, “Save Our Pensions!
Quinn, who uses a walker, said she is “heartbroken” and so disappointed with the Diocese of Providence for its lack of action and communication.
Latest for St. Joseph's
At Friday’s hearing before Judge Brian Stern, Quinn and others heard the news that receiver Stephen Del Sesto would be made permanent and that the group of 2,800 plus retirees would be carved into subgroups.
The proposed 40 percent across the board cut, that was made when the pension fund was thrust into receivership in August, is on hold. They are told cuts are coming in 2018, but don't know how much she may be impacted.
Older retirees -- those in their 80s and 90s -- have signed on with former Rhode Island Attorney General Arlene Violet, who has taken on about 300 or so in the group and is working for them pro bono.
The union will represent those union members that are still working. Other “classes” will likely be determined and then a committee will be created to advise Del Sesto. Some may be cut more than others.
In the meantime, Quinn and her other fellow pensioners live with the daily stress of not knowing — not knowing how much will their pensions be slashed.
They are frustrated that key players in Rhode Island’s largest pension collapse are “lawyered up” and refuse to give answers — key decision-makers like Bishop Thomas Tobin who historically had never seen a press microphone he did not want to run to, and is now, mute.
Or, Rhode Island Attorney General Peter Kilmartin who was the regulator in charge of reviewing the sale of St. Joseph/CharterCARE to Prospect of California — like Tobin has issued one statement on the collapse and refuses to explain how thousands of pensioners could face this fate.
Now, Quinn and others have to wait. Wait for a brutally long and stressful legal process to play out and to spend days worrying about how 34 years of service and her $500 a month pension payment could have been treated with so little respect.
Quinn and the others will be at the next hearing. Quinn will wear her purple T-shirt and use her walker. She will have to fight for what she rightfully deserves and hoping and praying that this time people will do the right thing.
Related Slideshow: 10 Things to Know About One of Biggest Pension Failures in RI - St. Joseph Bankruptcy
Biggest Pension Failure Ever in Rhode Island?
There is not a record book, but according to a number of top bankruptcy attorneys, the failure of the St. Joseph Health Services Pension Fund impacts the most individuals and the adverse financial impact will be the highest percentage impact to the retirees' monthly payments in Rhode Island history.
In Central Falls, by 2014 then-Governor Lincoln Chafee signed legislation that upped police and fire beneficiaries to 75 percent of their benefits. The cost of the legislation — post-Central Falls bankruptcy — was $4.8 million.
Kilmartin’s Role in the Hospital Conversion Act
Attorney General Peter Kilmartin won’t answer questions about his role in the approval of the Hospital Conversion of St. Joseph Health Services to CharterCare. GoLocal has repeatedly reached out to Kilmartin to answer questions, without response.
As part of the review of the deal, Kilmartin, as Attorney General, had the responsibility to review and approve the financial viability of the transaction. The Hospital Conversion law is very specific to the responsibilities of Kilmartin and his office.
"The department of attorney general [is] to preserve and protect public and charitable assets in reviewing both hospital conversions which involve for-profit corporations and hospital conversions which include only not-for-profit corporations.”
The bankruptcy of St. Joseph Health Services pension fund will impact between 3,600 and 3,800 existing or future pensioners — and the loss of pension payments may be 40 percent, according to court-appointed receiver Steven Del Sesto, a partner at Donoghue Barrett & Singal.
However, Del Sesto said the plan for winding down the pension fund is only in the preliminary phase.
How Many Are Presently Receiving Benefits
According to the receiver, attorney Stephen Del Sesto, there are 1382 active/vested who have reached retirement date; 639 active/vested who reached early retirement, for a total of 2,021.
On average, retirees are receiving just $425 between the two classes. The retirees are facing a 40 percent reduction — thus, the average retiree would receive just $255 per month.
Kilmartin Called the Plan "Best Interest of...Employees"
At the time of the agreement in 2014, Kilmartin said, “The transacting parties have worked diligently to provide regulators with the necessary documentation and information throughout this review process to make this decision, a decision I believe is in the best interest of Rhode Island’s healthcare marketplace, the community, the employees, and most importantly, the patients.”
Kilmartin said in his statement, “Conducting a hospital conversion review requires the commitment of a substantial amount of resources for the Office of Attorney General. I commend my staff for the time and careful consideration put into this review process.” Kilmartin's office has refused to respond to questions from GoLocal regarding the collapse of the fund.
How Much Will the Receiver be Paid?
Stephen Del Sesto, the receiver for the St. Joseph Health Services Pension Fund, said he will be paid $375.00 per hour -- which is more than the average retiree will receive per month after the 40 percent cut in benefits.
“My fees will not be paid from the plan assets,” said Del Sesto in an email to GoLocal.
Role of the Diocese of Providence
According to to the document filed with the court seeking bankruptcy protection, the fund or petitioner “has been affiliated with the Catholic Church — “as an affiliate of the Catholic Church, the Plan Qualified as a 'church plan,' which is exempt from the provisions of the Employment Retirement Income Securities Act of 1974 (ERISA) governing defined benefit pension plans.”
And, as a “church plan” the fund and the Diocese were not required to make a minimum contribution to the Plan, or “make pension insurance payments to the Pension Benefit Guaranty Corp."
Will the Receiver Seek a New Actuarial and an Independent Audit?
Stephen Del Sesto, the receiver, said he does not know yet if he will seek an independent actuarial and call for a forensic audit.
He is less than a week in his role and told GoLocal that he would need the court's approval to move forward with both steps.
The big date for this case is October 11 -- at that time the receiver Stephen Del Sesto will present the full plan of action.
Payment levels and payment dates will continue at present level, "nothing will change until October 11," said Del Sesto.
The biggest question swirling over the sale of St. Joseph's to CharterCARE and the bankruptcy is how could Attorney General Peter Kilmartin approve the sale with the only condition relating to the pension fund was a one-time $14 million payment in 2014 as part of the approval process -- and then just three years later -- the fund collapses.
The present fund has a balance of approximately $85 million. According to court documents filled as part of the bankruptcy petition, the actuarial claims the fund has a shortfall of $43 million.
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