Rhode Island state Treasurer Seth Magaziner plans to propose legislation requiring church-affiliated private pension plans exempt from federal pension law to disclose information regarding their health and status to participants, said Evan England, spokesman for Mr. Magaziner's office.
The proposed transparency requirements were spurred by a recent class-action lawsuit filed by participants against the $85 million St. Joseph Health Services of Rhode Island Retirement Plan.
More than 2,700 current and retired employees of St. Joseph and Our Lady Fatima hospitals are facing benefit cuts due to the pension plans' poor conditions, and recent reports suggest other church-affiliated pension plans in Rhode Island might also be facing financial challenges, a news release from Mr. Magaziner said.
Because church-affiliated plans are allowed to be exempt from the federal Employee Retirement Income Security Act, participants never received an annual notification letter with vital information on the health and status of the plan.
"These members were told last year that their plan was insolvent, and it had been the first time they heard there was a problem," Mr. England said in a phone interview. "They were told the plan was 90% funded in 2014."
Mr. Magaziner plans to seek legislation in the 2019 General Assembly session to require pension plans managed by religious organizations in Rhode Island to send regular ERISA-quality updates to plan participants.
The Roman Catholic Diocese of Providence issued a statement on Tuesday saying the Rhode Island Catholic Conference "agrees that transparency and disclosure to pension plan participants about non-ERISA plans is a responsible practice," and that the diocese "has demonstrated such transparency by annually providing each pension plan participant (of the Lay Employee Pension Plan) a yearly estimate retirement benefit statement."
Mr. England said, however, that the yearly estimate retirement benefit statement issued by the diocese is not within the ERISA standard, as Mr. Magaziner's proposal would require.
Mr. Magaziner oversees the Providence-based Rhode Island State Investment Commission, which manages the assets of the $8.3 billion Rhode Island Employees' Retirement System, also based in Providence.