PAWTUCKET, R.I. (WPRI) – The owner of Memorial Hospital is promising that a pending deal to sell the money-losing facility will include a “solution” to the problem of its heavily underfunded pension plan.
Care New England, which bought Memorial in 2013, is working to sell the long-struggling Pawtucket hospital to Prime Healthcare, which already owns Landmark Medical Center in Woonsocket. The deal still needs to win regulatory approval.
The health of Rhode Island’s hospital pension plans is drawing new scrutiny after a fund covering employees at Fatima Hospital in North Providence was placed into receivership last month. The Fatima plan’s troubles stem in part from the fact it was left out of a 2014 takeover deal that saw the hospital transferred to a new owner, leaving the plan with no source of future revenue.
Asked whether the Memorial pension system could face a similar fate, Care New England spokesman Jim Beardsworth downplayed the possibility.
“Although we can’t disclose details yet, the transaction will address a solution for Memorial’s pension,” Beardsworth told Eyewitness News in an email. He declined further comment.
When Care New England took over Memorial four years ago, as part of the deal the company took on the burden of the hospital’s pension plan. Annual reports show the plan’s shortfall has grown from $65 million in 2012 to $76 million as of last September, while annual benefit payments and other expenses have roughly doubled from $3.9 million to $7.6 million over the same period.
Care New England contributed $4.3 million to the Memorial plan last fiscal year and expects to contribute $7 million this year, according to its annual report. The plan was frozen for non-union employees in May 2012 and for union employees in June 2013, meaning enrolled workers could no longer earn additional benefits from that point forward. The employees were shifted into a so-called 403(b) plan at that point.Ted Nesi (firstname.lastname@example.org) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook