County lawmakers are now stepping in to help former hospital employees who were told they won’t receive their full pensions.
Former employees of St. Clare’s Hospital were notified in a letter last month they would only be receiving part of their pensions, or in some cases nothing at all. On Tuesday night, the Schenectady County Legislature passed a resolution in support of those affected. Majority leader Gary Hughes called the situation an injustice.
“We’re sending our resolution to all of our legislators, to the Governor, to the Bishop, and to the Cardinal,” said Hughes.
News 10 reached out to the Governor’s office, the Albany Diocese for comment on this resolution and did not receive a response.
St. Clare’s Corporation responded to further questions with the following statement:
The board recognizes the desire of the County Legislature that all plan participants be provided with their full pension benefits. We, too, would like nothing more than for all participants to receive those payments, but unfortunately there are simply not enough assets in this plan to do so.At no time since the closure of St. Clare’s Hospital in 2008, and for some years prior to the closure, has the Plan had sufficient assets to meet its liabilities. This information is not new; it has been presented in the actuarial reports posted to the plan’s website and has been communicated in letters to each participant since 2014.In seven of the 10 years before St. Clare’s Hospital closed (1998-2008), the hospital was unable to contribute to the plan. In one of the three years when it made a partial contribution, it was a nominal amount — $100,000, far less than the actuary’s recommended contribution of $2.2 million. St. Clare’s simply did not have the financial resources to provide sufficient funding to the plan because its resources were dedicated to caring for so many uninsured and under-insured patients.When St. Clare’s closed in 2008, New York State provided $50 million to St. Clare’s Hospital and Ellis Hospital to cover closing costs, $28.5 million of which was paid directly to the St. Clare’s pension plan. But shortly after the New York State funds were deposited into the pension plan, the world’s financial markets collapsed and the economy entered the Great Recession. That was followed by an unprecedented run of historically low interest rates. During the recession, the Plan saw a reduction of 18 percent in asset value.Since 2008, the plan has paid out $22.6 million to participants.The plan currently holds assets of $29.0 million. Its current liabilities – what the plan is projected to owe participants over time — are estimated at $68.7 million.The pension fund is — and always has been — managed by professional investment fund managers. The current assets are conservatively invested in bonds; the goal is to protect the principal, and thereby preserve the assets for the beneficiaries.