law shields churches, leaves pensions unprotected

[xchrom]

http://hosted.ap.org/dynamic/stories/U/US_UNPROTECTED_PENSIONS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-10-05-10-44-16




Armantina Pelaez, a former crisis counselor at St. Mary’s Hospital, in Paterson, N.J., stands in Paterson's Saint Paul's Episcopal Church, Monday, Sept. 23, 2013. In early 2011, St. Mary’s Hospital CEO told employees that the retirement plan's trust was severely underfunded, acknowledging the hospital had not put aside any money for their pensions in more than a decade. "I was very angry. I felt betrayed, not only by the health care system, but by the Sisters of Charity and I got betrayed by the church," said Pelaez, about St. Mary’s, which quietly converted its federally insured pension plan to an uncovered church plan in 2001. (AP Photo/Mel Evans)

PASSAIC, N.J. (AP) -- Working at St. Mary's Hospital was all about making do. When supply shelves emptied, respiratory therapist Lori-Ann Ligon made frantic calls to compatriots at nearby medical centers, arranging meetings on the fly to barter for blood gaskets. For a couple of years, she and other managers were told the endless budget squeeze left no room for raises.

But when St. Mary's outlasted two competitors to become this city's lone hospital, executives heralded a new era: "Not just health care. Human care."

That care, though, only went so far.

"Presently, the retirement plan's trust is severely underfunded," the CEO wrote to employees in early 2011, blaming investment losses and the hospital's decision not to put any money into one of its pension plans for more than a decade. "As a federally recognized church plan," he continued, St. Mary's had the right to do that - and there was no government pension insurance to fall back on.

The news angered many St. Mary's workers, but their situation is not unique. Pension shortfalls at some religiously affiliated hospitals, businesses and social service agencies are raising new alarms and spotlighting a largely overlooked gap in the law protecting Americans' retirement benefits.

[KoKo]

1. Recommend...!

[MineralMan]

2. Fark 6:1 - And Jebus Spoke unto the Church, saying:

"Take from the poor freely, and give unto the wealthy, who will reward you plentifully, for the poor are sheep to be shorn."

[SharonAnn]

3. "which quietly converted its federally insured pension plan to an uncovered church plan in 2001."

Anytime an employers changes a retirement plan, it's always worse for the employees.

BTW, when a federally insured plan is "overfunded", that is when investment returns are higher than expected or pool of retirees is smaller than expected, there are various ways the company can get back the "overfunded" onto the company books, even taking the funding down to the 80% level.

Interesting how a retirement plan will usually be at 80% funded or less. Never 100% or more.

This is something that occurs all during the employee's career but they don't notice until it's too late, when they retire.