I am extremely proud of the fact that my Mom, Sister, and daughter are all nurses, so it was disturbing to read about the nurses and other hospital workers at St. Clare’s Hospital in Schenectady, N.Y, many of whom have lost their pensions completely. A minority of workers there are “fortunate” to have seen only significant benefit cuts.
St. Clare’s, which was founded by the Catholic Church, suffered financial troubles and as a result it was forced to merge into a larger hospital system in 2008. At the time, employees were told that there pensions would be fine, but 10 years later they were informed that there was no money left to provide the promised benefit. Sinful!
Regrettably, the St. Clare’s of the world are not unique. Because of a loophole, many religious organizations are not covered by a federal guarantee (the PBGC) that protects most other workers’ pensions, so the workers can get left with nothing. By one estimate, more than 1 million workers and retirees from religious organizations lack this federal protection.
The AARP Foundation wants people to be held accountable for this disturbing collapse and they have filed suit on behalf of the more than 600 workers who lost everything against the Roman Catholic Diocese of Albany and the pension fund’s board of trustees. I realize that most Americans don’t have a DB pension plan these days, but for those that were promised one and are counting on it for the bulk of their retirement, this development is shocking. It is unfortunate that religious organizations were not mandated to fund the insurance pool necessary to protect pensions from a collapse. Incredibly, a Supreme Court decision in 2017 made it easier for religious organizations to opt out of the government sponsored insurance pool.
One can only imagine how many of the roughly 1 million workers at these religious institutions are in plans that are in difficult straits. Although St. Clare’s had the opportunity to opt out, they should still have responsibility to the employees who were promised a benefit. It will be interesting to see what transpires with the AARP Foundation lawsuit and whether it will spur those institutions that have opted out to seek alternative insurance protection. More to come.
in one word—-PONZI