Five Major Developments in St. Joseph Pension Fund Collapse
Thursday, October 12, 2017
SLIDES: READ THE 5 MAJOR DEVELOPMENTS BELOW
Then, Wednesday's hearing by receiver Stephen Del Sesto before Judge Brian Stern addressed a number of critical points and set the stage for the next steps. Third, the retirees and UNAP union got active and took their message to Bishop Thomas Tobin and the Diocese of Providence.
Related Slideshow: Five Major Developments in St. Joseph Pension Fund Collapse
Retirees Get Active
Scores of frustrated participants in the St. Joseph Health Services of Rhode Island pension plan gathered and picketed outside Providence Superior Court on Wednesday and then protested outside the Offices of the Roman Catholic Diocese of Providence.
"Bishop Tobin's silence on this issue speaks volumes about the lengths to which he and Church leaders will go to avoid accepting moral and legal responsibility for the thousands of lives that could be devastated by an unexpected and dramatic reduction in pension benefits," said Lynn Blais, RN, president of UNAP Local 5110 at Our Lady of Fatima Hospital.
"Church leaders were warned that the pension fund was in trouble and yet they said nothing. That silence now has the potential to hurt people -- many of whom remain active members in Catholic parishes. The Church's silence has real consequences, and we intend to keep fighting to hold Bishop Tobin and his subordinates accountable."
No Role for AG in Receivership
Judge Brian Stern ended Wednesday’s hearing with a clear message to the Attorney General’s Office — they will not play a role in the receivership.
Kilmartin, who had a regulatory responsibility under the Hospital Conversion Act, claimed that he represented the interests of the parties and the assets, but just three years and three months after the sale of St. Joseph to Prospect of California, the pension plan which had been orphaned with Kilmartin’s approval was placed in receivership.
Stern told the court that Kilmartin’s office and any other agency could investigate independently as they see fit.
Kilmartin continues to refuse to answer questions or sit down for an interview.
“The receivership is on-going, and as was stated before, our office is in contact with the receiver and monitoring the ongoing process to see where the Office has legal standing to intervene. As is standard policy, given these set of facts, we have no further comment at this time,” said Kilmartin spokesperson Amy Kemp on August 30 in an email to GoLocal. Kempe has refused three subsequent requests for interviews.
Diocese, Roger Williams Medical Center, and Charter Care All Failed to Make Payments
As GoLocal unveiled on Tuesday, the St. Joseph pension fund was in a dire financial situation going back as early as 2007, according to actuarial documents secured by GoLocal. And, the distress probably started much earlier.
Moreover, each of the three organizations that controlled the hospital over the decade ignored directives from the actuarial as to the amount needed for contributions to properly fund the pension fund.
In 2014, during the sale of St. Joseph/CharterCARE, the actuarial identified that the contribution needed to "reach 100% funding level projected to the end of the plan year” was $29,573,536, but CharterCARE's contribution was just $14 million.
“But, clearly a hospital like St. Joseph that was dealing with financial distress - you clearly know that if not funded properly, the retirees would be impacted adversely,” said Stephen Del Sesto, the receiver for the pension fund.
Wistow Gives a Discount, Violet Goes Pro Bono
The lawyers joining the effort to recoup funds for the St. Joseph pension fund are among Rhode Island's most talented and accomplished.
Max Wistow of 38 Studios and Station Fire fame has joined the effort of receiver Stephen Del Sesto.
For the investigative phase, Wistow and his firm will receive the same hourly rate as receiver Del Sesto of $375 per hour.
Wistow’s firm will receive 10 percent of any funds recovered prior to litigation and his firm will receive 23 1/3 percent of all funds recovered via litigation.
The blended rate is substantially lower than his traditional rate of 33 to 40 percent, and is likely to be lower than the 16 percent he received in recovering over $60 million in the 38 Studios case — Wistow received approximately $11 million.
Former RI Attorney General Arlene Violet has taken on the cause of representing more than 300 of the oldest retirees. Violet is working pro bono.
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