WASHINGTON — The Pension Benefit Guaranty Corporation (PBGC) is taking steps to assume responsibility for the St. Joseph Health Services of Rhode Island Retirement Plan (St. Joseph Pension Plan), which covers about 2,500 current and future retirees. St. Joseph Health Services was a not-for-profit corporation that operated a hospital in Providence, Rhode Island.
PBGC estimates that the St. Joseph Pension Plan is 35% funded with approximately $47 million in assets and about $135 million in benefit liabilities. The plan is underfunded by $88 million.
The sponsor of the plan, St. Joseph Health Services of Rhode Island, Inc., sold substantially all its operating assets in 2014, and in 2017, the St. Joseph Pension Plan was placed into state court receivership. The St. Joseph Pension Plan was originally established as a church pension plan and, as such, was not covered by PBGC insurance. The plan subsequently became covered by PBGC following the sale of the hospital, the appointment of a receiver, and a determination by the Internal Revenue Service that the plan was tax qualified as of 2017.
PBGC is now stepping in to take responsibility for the St. Joseph Pension Plan because St. Joseph Health Services has ceased operations and is liquidating. It has been unable to fund the minimum required pension contributions and the Pension Plan is significantly underfunded.
Retirees will continue to receive benefits without interruption, and future retirees can apply for benefits as soon as they are eligible. PBGC is working with the court-appointed receiver to execute a PBGC trusteeship agreement, at which point PBGC will become responsible for the plan and will pay the pension benefits earned by the St. Joseph Pension Plan’s current and future retirees up to the legal limits. Until that trusteeship agreement is executed, plan participants should continue to contact the receiver with any benefits-related questions.
For additional information, see Questions and Answers for Participants in the St. Joseph Pension Plan.
About PBGC
PBGC protects the retirement security of about 31 million American workers, retirees, and beneficiaries in both single-employer and multiemployer private sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is directly responsible for the benefits of nearly 1.4 million participants and beneficiaries in failed single-employer pension plans. The Single-Employer Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multiemployer Program is financed by insurance premiums and investment income. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.