Personal Finance

Distressed pension funds could take away benefits for hospital workers

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St. Clare’s Hospital was everything to Jerry and Kathy Adach.

They married after meeting at the Schenectady, New York area hospital, where both worked, in the early ’80s. Their two daughters were born there. The couple, who devoted a combined 59 years of service to the facility, had expected to retire with a good pension from the hospital.

That is, until last year, when their former employer — which went out of business back in 2008 — delivered a gut punch: Its pension plan was in financial distress and wouldn’t pay a dime of their expected benefits.

For Jerry and Kathy, both 58, that means losing around $27,000 a year in planned retirement income — around a third of their combined income from the hospital.

“Last year, out of nowhere, they just said, ‘We’re done,'” said Jerry Adach, who works in information technology. “We wanted to retire at 62. We can’t now.”

“I banked on that pension,” he said. “We can’t make that up.”

The Adachs are among more than 1,100 former St. Clare’s employees suing to recover their money. (St. Clare’s closed in 2008, merging with two other area hospitals to form Ellis Medicine.) Hundreds of other employees at similar workplaces in states like Minnesota, New Jersey and Rhode Island have also sued in recent years to salvage their pensions.

Federal retirement law typically puts a backstop in place to prevent this sort of doomsday financial scenario for retirees and near-retirees.

However, St. Clare’s was affiliated with the Roman Catholic Church….



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