House approves bill to require religious organizations to provide pension fund updates
Bill is response to the St. Joseph pension insolvency
STATE HOUSE – The House today approved legislation sponsored by House Majority Leader K. Joseph Shekarchi to require pension plans managed by religious organizations in Rhode Island to send regular updates on the financial health of the pensions to their plan participants.
“This common-sense legislation will ensure members and retirees of all Rhode Island pension plans have information about the health of their pension plans,” said Majority Leader Shekarchi (D-Dist. 23, Warwick). “It is the members of these pension plans, many of whom have spent decades serving their community, who are directly impacted. Members and retirees have a right to know about the health of their plan.”
The federal Employee Retirement Income Security Act of 1974 (ERISA) requires most private pension plans to send members a letter each year outlining the health of their plan. Pension plans administered by religious organizations claim exemption from both ERISA and GASB reporting standards. Members of these plans often have no ability to access information regarding the financial health of their pensions.
Until they are required to provide this information, there remains a risk that other church-run pension plans could conceal vital financial information from plan members.
The bill (2019-H 5287Aaa) now goes to the Senate, which voted May 7 to approve companion legislation (2019-S 0431Aaa) sponsored by Senate President Dominick Ruggerio (D-Dist. 4, North Providence, Providence).
The $85 million St. Joseph pension plan, which covers about 2,700 current and former employees of Our Lady of Fatima and Roger Williams hospitals, was left insolvent when contributions to it ceased following the sale of Fatima and Roger Williams to Prospect Medical Holdings in 2014. A pending lawsuit filed on behalf of plan participants alleges that hospital operators conspired to conceal from regulators and fund participants that they were vastly underfunding the pension fund for years.
Majority Leader Shekarchi sponsored the bill in cooperation with General Treasurer Seth Magaziner.
“There are thousands of Rhode Islanders, including more than 2,700 current and retired employees of St. Joseph’s and Our Lady of Fatima hospitals, who have been kept in the dark regarding the health of their pension plan because of this loophole,” said Treasurer Magaziner. “Church plans should be required to be transparent with their members, just like other pension plans.”
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903