STATE HOUSE – Rhode Island’s religious organizations may soon be required to regularly update people in their pension systems about the financial health of those pensions, following the House passage of legislation sponsored by Senate President Dominick J. Ruggerio (D-Dist. 4, North Providence, Providence) and House Majority Leader K. Joseph Shekarchi (D-Dist. 23, Warwick).
The bill (2019-S 0431Aaa, 2019-H 5287Aaa), already passed in the Senate, requires that any nongovernmental pension plans that are not covered by ERISA and have 200 or more members must comply with ERISA’s reporting requirement. The bill now goes to the governor.
The federal Employee Retirement Income Security Act of 1974 (ERISA) requires most private pension plans to send members a letter each year outlining the health of their plan. Pension plans administered by religious organizations claim exemption from both ERISA and GASB reporting standards. Members of these plans often have no ability to access information regarding the financial health of their pensions. Until they are required to provide this information, there remains a risk that other church-run pension plans could conceal vital financial information from plan members, according to a statement from the Legislative Press and Public Information Bureau.
“This is common-sense legislation that provides members of church-run retirement plans the same level of transparency afforded to members of private pension plans, to help them know how their pension funds are doing,” said Shekarchi. “Disclosure will help ensure that members’ retirement savings is not imperiled by mismanagement and that those in charge cannot easily obscure negligence or misconduct. People making investments should be entitled to know how their funds are doing, and this bill provides them that information regularly.”
The $85 million St. Joseph pension plan, which covers about 2,700 current and former employees of Our Lady of Fatima and Roger Williams hospitals, was left insolvent when contributions to it ceased following the sale of Fatima and Roger Williams to Prospect Medical Holdings in 2014. A pending lawsuit filed on behalf of plan participants alleges that hospital operators conspired to conceal from regulators and fund participants that they were vastly underfunding the pension fund for years.
“All Rhode Island workers and retirees deserve to know the truth about the health of their pension plan,” said Ruggerio (D-Dist. 4, North Providence, Providence). “Too many hard-working caregivers and health professionals, who spent their careers serving their communities, have been hurt by a lack of transparency. We must ensure that this never happens again.”
The two legislative leaders submitted the bill in cooperation with General Treasurer Seth Magaziner.