More than 1,100 former employees at St. Clare’s Hospital in Schenectady will receive either a reduced pension, or no pension at all since the corporation has apparently run out of money.
On Tuesday evening, the Schenectady County Legislature passed a resolution standing by the former employees, saying the Catholic Diocese has a moral responsibility to pay the pensions in full for those who deserve them.
A spokesman for St. Clare’s Corporation, the entity that manages the pensions of the defunct Catholic hospital released a statement to News 10.
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.
Bishop Edward B. Scharfenberger of the Diocese of Albany also released a statement to News 10.
To the pensioners of St. Clare’s Corporation, all those men and women who served many years – in some cases several decades – to provide quality healthcare in a Catholic setting, I want you to know I am deeply affected by the stories of struggle I am hearing from you related to the loss of or decrease in your much-needed pensions. I understand that for many of you this situation has left you in dire straits in what should be your retirement years.
To that end, I am recommending that the Roman Catholic Diocese of Albany offer to facilitate and mediate discussions between pensioners and the trustees of St. Clare’s Corporation in an effort to promptly provide a forum for open discussion. While there may be no easy answers, you should be afforded the opportunity to ask the questions that need to be asked and to be given the information and respect you deserve. We will provide the details and format.
As dedicated employees of the former hospital, you are members of our Church family, and we are hurting with you. Although we are advised the Diocese of Albany does not bear legal or financial responsibility for the actions of St. Clare’s Corporation – and does not have the resources to rescue the corporation – we are committed to doing whatever we can to help you move forward.