“Chapter may jeopardize all of the work to shore up the (pension) plan,” mentioned Julie Pinkham, government director of the Massachusetts Nurses Affiliation and a trustee of the nurses’ retirement plan. “Till we see how issues fall out for the hospitals, we simply do not know.”
The way forward for the pensions — whether or not employees can rely on them for the lengthy haul — is certain up with the destiny of hospitals that serve largely low-income neighborhoods and communities from Dorchester and Haverhill to Brockton, Taunton, and Fall River.
A lot is on the road for many who spent a long time caring for sufferers. Retirees like Karen Kravitz, 72, who labored 46 years as a nurse at St. Elizabeth’s Hospital in Brighton beneath Caritas and Steward, depend upon pension earnings to get by in high-cost Massachusetts.
“If I did not get my pension,” mentioned Kravitz, who continues to be paying off a mortgage on her residence in Stoughton, “I do not understand how I may reside.”
The brand new pension jitters differ from those who prompted the Boston Archdiocese to promote its Catholic hospitals to Steward greater than a decade in the past. The pension plan was underfunded then and Steward, backed by a personal fairness agency, was the one potential purchaser prepared to imagine the legal responsibility and put money into the retirement plan. As we speak, the plan is independently managed, federally insured, and financially sound.
Steward, against this, owes about $9 billion to its landlords, lenders, contractors, and repair suppliers, in response to a tally of money owed the corporate offered at a Could 7 chapter listening to. The pension plan will want new hospital operators to guarantee its long-term viability.
For now, pension funds proceed as earlier than. on the listening to, Decide Christopher Lopez issued an order permitting Steward, which filed for chapter Could 6, to maintain paying wages and advantages. That features the corporate’s contributions to the pensions of about 2,500 lively nurses lined by labor contracts on the Steward hospitals.
Contracts between Dallas-based Steward and the nurses union comprise so-called successorship clauses requiring any operators buying the hospitals to honor the contract phrases, together with pension obligations. However these protections will not maintain if Steward cannot discover patrons.
Steward has agreed to promote its Massachusetts hospitals by the top of June. The corporate mentioned it is acquired letters of curiosity, however no bidders have been disclosed. If new homeowners cannot be discovered and a few hospitals shut, that would scale back income flowing into the pension fund, making it extra susceptible to the volatility of market investments.
“With out new homeowners, there is no new contributions to the fund,” Pinkham mentioned. “And that might be doubtlessly devastating.”
A spokeswoman for Steward declined to debate the pensions’ future however mentioned that Steward is leaving the plan in fine condition. “The present plan is totally funded and backed by the PBGB,” she mentioned, referring to the federal company that insures and protects retirement plans.
Pensions aren’t a high concern of the US Chapter Courtroom in Houston, the place Steward’s lenders and collectors are haggling over who receives a commission, and the way a lot. However nurses who devoted their careers to serving sufferers at Steward hospitals see the pensions as a matter of equity, earned one thing on the job and in powerful contract negotiations.
“We fought for the pensions, for all of us,” mentioned Joan Ballantyne, 67, a long-time Norwood Hospital and St. Elizabeth is a nurse who’s pondering retirement.
The historical past of the pension plan mirrors that of the state’s Catholic well being care system. The unique plan, referred to as the Caritas Christi Retirement Plan, dates again a long time, masking not solely nurses however secretaries, kitchen staffers, upkeep employees, and even some docs. Many labored within the Caritas hospitals, others at church-run nursing colleges, nursing properties, and different amenities, a few of which have closed.
By the point Caritas put its hospitals up on the market, the pension plan had been frozen, that means Caritas had stopped making contributions. The plan was underfunded and uninsured; due to a spiritual exemption, the Catholic system didn’t should pay into the federal Pension Profit Warranty Company, which thus could not assure funds to beneficiaries if there wasn’t sufficient cash within the plan.
The answer was to transform to a so-called Taft-Hartley pension plan, an insured multi-employer plan masking employees from totally different firms. Below an settlement struck with the nurses union simply earlier than the sale to Steward, the hospitals agreed to place pension contributions for lively nurses in an escrow account till the brand new plan was fashioned.
Steward and the union in the end opted to affix an current fund for employees represented by the Teamsters at funeral parlors and different industries in New York. On Dec. October 15, 2015, they deposited pension and escrowed property into what was renamed the Nurses and Native 813 IBT Retirement Plan. It swimming pools funds from the legacy Caritas Christi plan with cash put aside for lively nurses and about 1,800 Teamsters.
By merging with established Taft-Hartley plans, unions looking for to pool their assets “have the benefit of not having to begin from scratch and cope with all the executive bills,” mentioned Gene Kalwarski, chief government of Cheiron in McLean, Va., which gives actuarial providers to private- and public-sector pension funds.
On the similar time, Kalwarski mentioned, multi-employer plans are susceptible to the identical long-term tendencies as different pension plans. Many employers have stopped contributing to pensions, older industries that provided pensions are shrinking, and child boomers are retiring. There are sometimes extra retirees gathering advantages than employees paying into the system.
As a result of Steward would not disclose its funds to regulators, there is no public file of when the corporate injected money into the pension plan. On the finish of 2014, 4 years after it promised to fund the Caritas plan, the pension legal responsibility was $368 million, in response to a 2015 state lawyer normal’s report. However on the finish of 2015, data offered by the nurses union present that Steward had transferred $605.3 million into the brand new plan to fund the legacy Caritas Christi worker pensions.
The next yr, Steward offered the land and buildings on which its Massachusetts hospitals sit to Medical Properties Belief, an Alabama-based actual property firm, leaving the hospitals with multimillion-dollar lease funds. In March, it agreed to promote its nationwide docs community, Stewardship Well being, to the Optum unit of UnitedHealth.
Steward has mentioned it plans to exit the Massachusetts market, however its employees — and their hopes for a safe retirement — will stay.
With the asset gross sales clouding the way forward for Steward hospitals and complicating their gross sales, the nurses say patrons can nonetheless rely on them and different staff to come back to work and deal with sufferers on daily basis.
“We’re probably the most invaluable asset,” mentioned Pinkham.
Robert Weisman might be reached at robert.weisman@globe.com.
