PROVIDENCE, R.I. (WPRI) — At the age of 74, Marilyn Horan never thought she’d be back on the picket line.
The retired nurse joined other St. Joseph’s and Our Lady of Fatima Hospital retirees in protesting a proposed cut to their pension benefits, after the orphaned fund has become insolvent.
“We never, ever, ever thought this was going to happen,” Horan said. “Never.”
Horan worked full-time at St. Joseph’s as a nurse and a nursing school instructor for 40 years, now retired and living off her pension. She and more than 2,700 other pension holders don’t know how much of their benefits they’ll be receiving in the coming years.
“There are 3,000 of us who gave our lives for this hospital,” she said. “Through blizzards and hurricanes…we gave our lives.”
The St. Joseph’s Health Services of Rhode Island Retirement Plan was orphaned in 2014 after Fatima’s parent company CharterCARE transferred its hospitals to California-based Prospect Medical Holdings. But the retirement plan wasn’t included in the sale, leaving it with no contributions while retirees continue drawing down the account. Prospect did agree to make a one-time $14 million contribution to the plan, but no other payments have been made.
Payments to retirees currently stand at $850,000 per month, according to court-appointed receiver Stephen Del Sesto, leading him to believe the $86 million fund will run out of money in the next 10-15 years unless benefit payments are cut.
At a hearing Wednesday, Del Sesto asked a judge to cease consideration of a previous proposal to cut the payments by 40%, but it doesn’t necessarily mean pensioners won’t see that reduction. Instead, Del Sesto said he plans to sit down with the various groups representing the pensioners to come up with a solution. Either way, Del Sesto said, payments will likely need to be cut. He wasn’t able to say if the cut would be higher or lower than the original 40% proposal.
Attorney Max Wistow has also been hired as a special counsel to look into whether any institutions are responsible for causing the pension fund to become insolvent, and whether any of those entities may need to pay money into the fund. He told Eyewitness News on Wednesday that he’s at the very beginning stages of that probe.
CharterCARE, Prospect and the Diocese of Providence, which founded the pension fund, have all denied responsibility for funding the retirement plan.
“The Diocese of Providence has not been involved in the administration or management of the hospitals for over 50 years. The Diocese of Providence did not create this problem and we are not able to resolve it,” stated an email from the Diocese on Wednesday. A spokesperson did not respond to requests for interviews.
The pensioners disagreed with that assessment, insisting the Diocese knew the fund would fail when the hospital sale went through, and holding signs outside the Diocesan offices bearing the face of Bishop Thomas Tobin. Some signs asked: “What would Jesus do?”
“We get rhetoric from the Diocese…no one’s at fault. No is culpable,” said Laura Tedeschi, a registered dietitian. “They’re trying to take our pensions that we earned.”
“I am completely convinced that they knew,” said Horan, referring to the Diocese. “It was as plain as the nose on your face that they were losing money, and they weren’t funding the pension.”
Rev. Timothy Reilly from the Diocese still sits on the pension plan’s three-member board.
In an email to employees back in August, CharterCARE’s CEO also denied any responsibility to the pension fund.
“It is important to note that the pension fund is not connected to either CharterCARE Health Partners or Prospect,” John Holiver wrote. “The Pension was not transferred to the purchaser when the transaction with Prospect was completed three years ago. Neither CharterCARE Health Partners nor Prospect have any oversight or control of the Pension.”
Del Sesto said he expects to know by February how much pension payments could be cut in order to keep the fund solvent. The cut would need to be approved by a judge.
Meanwhile, he said Wistow is being paid $375 per hour during the investigative phase to determine if any claims can be made against any entities. The money to pay the special counsel is coming from funds held by St. Joseph’s Health Services of Rhode Island, now a shell corporation that doesn’t own any hospitals.
Retirees say they are demanding to be kept whole, and many said Wednesday they don’t plan to accept a cut.
“I was so depressed about this when it first happened. I cried the entire weekend,” said Horan, who said she would lose $600 per month if the original 40% cut proposal comes to pass. “And then on Monday morning, I said ‘you know what Marilyn, put those tears to action.'”
Senate President Dominick Ruggerio has also called for an investigation into what caused the pension fund to become insolvent.Ted Nesi contributed to this report.