The receiver for the insolvent St. Joseph Health Services of Rhode Island Retirement Plan is seeking to have the church plan reclassified and administered as if it had been covered by ERISA and to have the Pension Benefit Guaranty Corp. assume responsibility for it.
In an interim report to Rhode Island Superior Court Judge Brian Stern submitted Monday, receiver Stephen Del Sesto said that he asked the Department of Labor to have the plan covered retroactively to July 2017, before he became the receiver, and tendered an initial premium payment to the PBGC.
"However, there can be no assurance that PBGC will provide any coverage for pension fund shortfalls as a result of underfunding prior to (the receivership) or at all."
In an interview, Mr. Del Sesto said that he is not aware of a precedent for a church plan voluntarily electing to be covered by ERISA, which he contends should have always been the case.
"I have no idea whether this is going to help the plan," he said. "At the very least, I thought it was not only appropriate because it should have never been a church plan, but it certainly doesn't hurt to try to make the (ERISA) election."
The receiver is also overseeing several lawsuits against the plan sponsors and the Diocese of Providence in federal and state courts. Some are close to settlement, while another is scheduled for mediation next week.
According to the same report, plan assets were $73.9 million as of March 31. Mr. Del Sesto said the pension plan has no source of income.
The hospital operating company wrote in its 2017 receivership request that the pension fund is "unsustainable" and absent any judicial intervention, "will be terminated and its funds distributed in a manner that will result in current plan beneficiaries receiving about 60% of their accrued benefits and all others receiving nothing."
It also said it believes the pension fund will lose its church plan status on or before Dec. 31, and St. Joseph will be required to make minimum annual contributions and payments to the Pension Benefit Guaranty Corp., which it can't afford.