The New York Times - 12.09.2019

Retirement should be carefree for Ralph and
Rosemarie Bryden in their 500-square-foot
bungalow in rural Rhode Island. They gar-
den and bowl, but financial worries loom.
The Brydens feel angst since learning
both of the pensions they’ve lived on for a
decade may soon disappear. The couple
worked for St. Joseph Health Services,
which failed to put enough money into the
pension plan to pay retirees. Now, about
2,700 beneficiaries face reduced or elimi-
nated payments.
“We used to go traveling,” said Ms. Bry-
den, 69. “Since things started, we stopped
with a lot of other frivolous things.” Buying
clothes and eating out are rare.
“It’s a double whammy,” said Mr. Bryden,
70.
The betrayal has set off a holy war of sorts
— the organization accused of failing to fund
the pensions is the Roman Catholic Church.
It is not the only case of its kind, and what
is happening to thousands in Rhode Island
could be a harbinger of a much larger pen-
sion crisis looming in the United States, ex-
perts said.
At issue is a law passed by Congress in
1974 that exempted religious organizations
from federal laws that regulated and guar-
anteed pensions. Decades later, the effects
of that lack of oversight are surfacing.
The number of pensioners at risk is un-
known, but the potential count could be sub-
stantial. The law affects more than just pas-
tors and church organists — religious orga-
nizations own vast numbers of businesses,
including shopping malls and media compa-
nies, and are best known for hospitals,
schools and universities.
“It’s estimated to be about a million,” said
Dara Smith, senior attorney for the AARP
Foundation, which advocates for older
Americans, and “that one million figure’s es-
timated to just be Catholic-affiliated organi-
zations.”
Ms. Smith said the religious exemption
waives funding requirements and the man-
date for insurance from the Pension Benefit
Guaranty Corporation, which pays retirees
when there is a shortfall.
“You don’t have to get P.B.G.C. coverage
to guarantee people up to the typical levels,”
Ms. Smith said.
The AARP said that’s what happened at
the former St. Clare’s Hospital in Schenecta-
dy, also once part of the Catholic Church, and

1,100 beneficiaries lost their full pensions.

On Tuesday, the AARP Foundation and

other legal advocates filed a lawsuit against

the Diocese of Albany and its agents on be-

half of more than 100 former St. Clare’s em-

ployees seeking damages for failing to pay

promised pensions.

In Rhode Island, those impacted are

what’s locally referred to as “the salt of the

earth,” working-class people already living

modestly. The Brydens worked for four dec-

ades, he in food services and she as a nurse.

Combined, their pension totals $2,200 per

month, the same as their Social Security.

Many St. Joseph pensioners said that

during their careers they accepted lower

paychecks relative to others in their fields

because of their religious beliefs — they

were doing God’s work.

“They told us that because we were a

Catholic institution, we received less

money,” said Carol Faufaw, 75, a laboratory

technician for 45 years.

The promise of the pension was an entice-

ment to accept that.

Six St. Joseph retirees interviewed for

this article each talked about an identical

phrase they said managers used to describe

the pension: “hidden paycheck.”

Marilyn Horan, 75, was in nursing for 40

years. “Every year that they could not give

us a raise, the administrators would always

say, but remember, remember, the hidden

paycheck that you are covered for your re-

tirement,” she said.

Eugenia Levesque, who worked 46 years

as a dietary supervisor, said that argument

was used one year to justify a raise of 1 cent

per hour.

“I said, ‘A penny? A penny.’ I said, ‘You

know what? Take that penny and go feed

the hungry with it,’ ” Ms. Levesque said.

The St. Joseph pension needs an estimat-

ed $125 million to pay beneficiaries. Absent

a solution, the fund will be drained in five

years, by some estimates.

Pensioners have placed their hopes in a

lawsuit against the diocese and other par-

ties. It is a battle that involves the state’s

highest-ranking Catholic, Bishop Thomas J.

Tobin of Providence, versus Arlene Violet, a

former nun of the Sisters of Mercy who was

elected Rhode Island’s attorney general in

1984 — the first woman elected attorney

general in the United States.

Bishop Tobin declined, through a spokes-

woman, to discuss the matter, citing litiga-

tion, but Ms. Violet, who represents about

100 retirees pro bono, has no such vow of si-

lence.

“Bishop Thomas Tobin stopped putting

the regular payments that he was supposed

to be making into the pension fund, and he

had stopped doing that for some years,” Ms.

Violet said, adding that there’s been “no offi-

cial response from Bishop Tobin as to why he

stopped.”

Ms. Violet is one of several lawyers repre-

senting pensioners in complex lawsuits in-

volving a lengthy list of defendants accused

of failing to protect the pension. Addition-

ally, the church sold entities of St. Joseph

Health Services several years ago to

Prospect, a health care corporation.

Once a nonchurch business became in-

volved, federal pension regulations might

apply. While fhiddenthat dispute is pending,

pensioners are being paid, Ms. Violet said.

Company officials declined to be inter-

viewed, citing the litigation, but said in a

statement, “The alleged underfunding of the

pension plan commenced years before”

Prospect’s involvement.

Ms. Violet said concerns about the separa-

tion of church and state persuaded Congress

to exempt religious-affiliated pensions in

1974 when it passed the Employee Retire-

ment Income Security Act, better known as

ERISA. Ms. Violet said that religious groups

reasoned, “If you control our purse strings,

you could potentially control us.”

But the religious exemption has long been

debated, and in 2017 went before the United

States Supreme Court. AARP argued, in an

amicus brief, that entities like hospitals “are

businesses, not churches.”

The Supreme Court unanimously ruled

that the religious exemption law was being

followed as lawmakers intended, although

Justice Sonia Sotomayor suggested that

Congress might revisit the law.

Any change is unlikely, said Marcia S.

Wagner, a lawyer and leading expert. “It has

proven difficult to enact pension legislation

that appears to have widespread bipartisan

support,” she said in an email.

In the absence of federal action, some

states are intervening. Rhode Island re-

cently passed legislation requiring pension

fund transparency, and Gov. Andrew Cuomo

of New York has promised to examine St.

Clare’s.

The actions come too late for many. In

Rhode Island, the most Catholic state in the

nation, the pension crisis has raised doubts

about the church, with some saying that

they no longer donate at mass. Faith, howev-

er, endures.

“I still believe in God,” said Mr. Bryden.

“That’s a given,” Ms. Bryden said.

Religion’s Pension Crisis

A 1974 federal law may hurt pensioners

around the country.

By SCOTT JAMES

The effects of a lack of

oversight are surfacing

as funding falls short.

JEAN-MANUEL DUVIVIER

THE NEW YORK TIMES, THURSDAY, SEPTEMBER 12, 2019 NY F7

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