Click here for a short summary of the issue. Click here for a detailed timeline.
See also the Pension Rights Center website.
Click here for ex-St. Peter's CEO John Matuska's 2011 letter to the IRS.
Click here for ex-St. Peter's VP of HR Bruce Pardo's 2011 letter to the IRS.
Haga clic aqui para verun resumen del problema en español.

Saturday, June 22, 2013

2002 Tax Form Reveals... an ERISA Plan

A leaflet that has recently been distributed at the hospital (not created or distributed by us) reproduces a very interesting tax form filed by Saint Peter's in 2002. We understand the form was obtained under the Freedom of Information Act and is public.

In February 2002, Saint Peter's filed IRS Form 5300, "Application for Determination for Employee Benefit Plan." Saint Peter's had evidently made a change to the Plan document and submitted this form to the IRS along with the revised document. The form is a request for the IRS to issue a letter confirming that the revised plan still qualifies for favorable tax treatment; that is, that it complies with the requirements imposed by federal tax law, including ERISA.

Note that in answering Line 7, "type of plan," Saint Peter's bypasses all the special cases – including "nonelecting church plan (i.e. an election under section 410(d) has not been made)" – and selects "other." In other words, Saint Peter's, in 2002, states to the IRS that the plan is not what they now claim it has been since 1974. The form jibes with former Saint Peter's CEO John Matuska's statement that throughout his 24 years on the Retirement Plan Committee (1977 to 2001) the Plan was always considered – in fact was – an ERISA plan, never a church plan. It contradicts most recent statements by Saint Peter's management about the status of the Plan since 1974.

The hospital claims that all such evidence, and indeed their entire thirty-two-year history of managing the Plan as an ERISA plan, is not relevant now. Since they now claim to have always been effectively a church (for pension plan purposes only), and since they never submitted a document stating that the plan was a church plan which elected to comply with ERISA, they claim that the Plan has always been a non-electing church plan. In their view, it doesn't matter that the actual reason such a document was never filed is because the hospital never considered itself a church – until 2006, once the benefits consultants got their hooks in.

We continue to be disappointed by Saint Peter's management, who must hide behind lawyerly word-parsing to support their claims, rather than acknowledging objective reality and talking straight as people do. The pending class-action suit should help decide whether the Plan's long history as an ERISA plan can be erased by a slick argument. In the meantime, your IRS comment can help draw attention to this evasion.

A gentle reminder: your comment letter to the IRS must be submitted by June 28!