Pension Benefit Guaranty Corporation Announces Takeover of St. Joseph’s Health Services of Rhode Island Pension Plan
Pierce Atwood attorney Stephen F. Del Sesto, in his role as court-appointed receiver for the orphaned St. Joseph’s Health Services of Rhode Island Pension Plan announced that the Pension Benefit Guaranty Corporation (PBGC) plans to terminate the Plan issued under the Employee Retirement Income Security Act of 1974, as amended (ERISA), and appoint a statutory trustee to cover the Plan and pay promised benefits to Plan participants.
PBGC’s decision represents a monumental win for the Plan’s pension holders, as it finally provides the certainty that the Plan’s thousands of pension holders have been waiting and hoping for since Del Sesto was appointed as receiver in August 2017.
By issuing its Notice of Determination, the PBGC has committed to cover and guarantee payment of benefits under the Plan. The Notice did not indicate the level of statutory coverage that will be provided by the PBGC, but Del Sesto expects them to provide that information in the coming days. The effective date of the Notice of Determination is November 30, 2024.
Del Sesto’s efforts as receiver, as well as the receiver’s Rhode Island Special Counsel Max Wistow, Esq., the receiver’s Washington D.C. Special Counsel Jeffrey Tawshunsky, Esq., and Alan Tawshunsky, Esq. along with the oversight and actions of state and federal courts, have produced a result never before accomplished, and one that guarantees benefits payments to pension holders who expect and rely on in their retirement years.
The PBGC has published an online “Questions and Answers” page on its website. In addition, as the trusteeship process proceeds, participants should continue to direct questions about their benefits to Stephen Del Sesto at Pierce Atwood LLP, One Citizens Plaza, 10th Floor, Providence, RI 02903 or stjosephretirementplan@pierceatwood.com.
Background relevant to Release:
The Plan, whose predecessor was established on July 1, 1965, was intended to provide retirement benefits for certain employees of St. Joseph’s Health Services of Rhode Island, Inc. a/k/a St. Joseph’s Hospital (“St. Joseph’s Hospital”). The Plan was orphaned as part of the sale of St. Joseph’s Hospital assets in 2014 and, since the sale, has had no ability to meet the minimum funding standards required under the Internal Revenue Code and ERISA. As of 2014, and at all times thereafter, the Plan was significantly underfunded. This left the thousands of employees who relied on the Plan for their retirement benefits at a high risk that the Plan would be unable to pay all promised benefits when due.
On August 18, 2017, St. Joseph Hospital petitioned the Superior Court for the State of Rhode Island Plan to place the Plan under receivership protection (Case Number PC-2017-3856) and the Court appointed Stephen Del Sesto, Esq., as Receiver for the Plan. Subsequent to his appointment, Receiver Del Sesto sought and received the Court’s approval to retain Max Wistow, Esq. and the law firm of Wistow Sheehan & Loveley, PC as the Receiver’s Rhode Island Special Counsel to investigate and, if appropriate, pursue litigation against any and all parties responsible for the failure of the Plan. The Rhode Island Special Counsel’s investigation resulted in the filing of Federal and State lawsuits against fourteen defendants. Multiple settlements negotiated with the defendants and approved by both the State and Federal Courts resulted in recovery of approximately $50 million for the benefit of the Plan and allowed Receiver Del Sesto to maintain benefits payments at 100% during the receivership proceeding. Receiver Del Sesto also sought and received the Court’s approval to retain Jeffrey Cohen, Esq. and Alan Tawshunsky, Esq. and the Tawshunsky Law Firm, PLLC as the Receiver’s Washington D.C. Special Counsel to navigate the complexities of and lead discussions with the Internal Revenue Service and PBGC.