ST. PETER'S TO REPLACE PENSION PLAN BY 2013

In a letter, released on Friday afternoon to minimize media coverage, Saint Peter's Healthcare System CEO Ronald Rak announced a plan to end the existing Saint Peter's Healthcare System Retirement Plan in 2013. The letter can be viewed here. In this letter Rak made several statements that are false and/or contradict statements made by St. Peter's management in December 2011 town-hall meetings. Specifically:

• Rak claims, multiple times, that the plan has never been subject to Federal ERISA law. In this he cites the hospital's outside benefits consultants and attorneys, but the claim ignores actual documented history.
• Directly contradicting statements made by COO Pat Carroll and CFO Garrick Stoldt in December, St. Peter's will seek refunds of PBGC insurance premiums. (We can assume that, also contrary to claims made by the hospital in December, the pension benefit will not be insured going forward.)

The hospital plans to replace the current plan with a new plan, the details of which will not be announced, but rather divulged only in discreet individual and small-group meetings. St. Peter's deems this tactic more "appropriate" but, like the Friday letter, it seems designed to limit exposure and discussion of the details by a large constituency or the media. It's unknown whether the new plan will be another defined-benefit plan, a retirement savings plan (401(k)) or some combination. Presumably the new plan will be cheaper to implement, and thus will return more than the annual PBGC insurance premium to the hospital's bottom line. It's safe to say the St. Peter's employees, ex-employees and retirees who are participants in the pension plan at the very least feel confused and dismayed at the deviousness displayed by hospital management.

We will have more on this news in coming days. In the meantime please tell your friends and your co-workers, past and present, and subscribe or visit the blog for the latest.

(Note: This post was edited on 2/27 to add more information and to dial back some language that may have been unduly harsh.)

Article in Home News Tribune

Middlesex County's Home News Tribune today published a front-page article on the St. Peter's "church plan" crisis. Read it here. Big thanks to Larry Kaplan for ensuring that this article got published!

Besides giving much-appreciated exposure to the issue, the article serves as a reminder of a few things:

• The IRS has no timetable for deciding on St. Peter's application for "church plan" status. When St. Peter's submitted their application, the IRS had a moratorium in force on granting such applications; now St. Peter's is one of the first institutions being considered for such status since the moratorium was lifted. A decision either way is far from automatic. This means that pressure brought to bear by, for example, contacting Congress can still have a big impact.
• Back in December, St. Peter's CEO Ronald Rak promised to share by the end of February the hospital's strategy "to protect your retirement dollars, with the help of new outside experts." The hospital has three weeks to make good on that promise.

Keep in mind that outside retirement industry consultants helped get us into this mess in the first place. Note also that the chairman of the hospital's board of trustees, Donald Daniels, heads a benefits consulting firm with a specialty in Catholic hospitals.

Win, lose, or draw, we'll be here to help in any way we can.