In a letter, released on Friday afternoon to minimize media coverage, Saint Peter's Healthcare System CEO Ronald Rak announced a plan to end the existing Saint Peter's Healthcare System Retirement Plan in 2013. The letter can be viewed here.
In this letter Rak made several statements that are false and/or contradict statements made by St. Peter's management in December 2011 town-hall meetings. Specifically:
- Rak claims, multiple times, that the plan has never been subject to Federal ERISA law. In this he cites the hospital's outside benefits consultants and attorneys, but the claim ignores actual documented history.
- Directly contradicting statements made by COO Pat Carroll and CFO Garrick Stoldt in December, St. Peter's will seek refunds of PBGC insurance premiums. (We can assume that, also contrary to claims made by the hospital in December, the pension benefit will not be insured going forward.)
The hospital plans to replace the current plan with a new plan, the details of which will not be announced, but rather divulged only in discreet individual and small-group meetings. St. Peter's deems this tactic more "appropriate" but, like the Friday letter, it seems designed to limit exposure and discussion of the details by a large constituency or the media. It's unknown whether the new plan will be another defined-benefit plan, a retirement savings plan (401(k)) or some combination. Presumably the new plan will be cheaper to implement, and thus will return more than the annual PBGC insurance premium to the hospital's bottom line. It's safe to say the St. Peter's employees, ex-employees and retirees who are participants in the pension plan at the very least feel confused and dismayed at the deviousness displayed by hospital management.
We will have more on this news in coming days. In the meantime please tell your friends and your co-workers, past and present, and subscribe or visit the blog for the latest.
(Note: This post was edited on 2/27 to add more information and to dial back some language that may have been unduly harsh.)