Mary Rich

As a Registered Nurse and Healthcare Executive who devoted 25 years of her work life to one acute care hospital in northern NJ, I feel compelled to share the story of over 950 employees who lost essential Pension Benefit Guarantee Coverage (PBGC) protection just one year prior to the closure of the organization.  The Hospital Center at Orange (HCO) served an urban inner city community for over 100 years as a secular hospital located in Orange, NJ.  In 1998, the hospital became an affiliate of a Catholic  faith based organization, Cathedral Healthcare System.  Without notice to the employees, the system applied for and was granted an IRS ruling converting the pension plan to a church plan, which subsequently eliminated stringent compliance requirements and the PBGC protection.

Over the past 2 years, the Cathedral Healthcare System closed two other hospitals, transferred ownership of the last remaining hospital to another system, and is no longer in the acute care hospital business.  To make matters worse, there has been no formal notification from the system to the pension participants, therefore not all affected employees are aware of the impending benefit loss.  The HCO built a legacy for employing a large number of loyal staff who devoted most of their entire careers to working in this one institution.  During periods of financial struggle, these same devoted employees gave up their personal days, did not receive annual pay raises for many years, and worked far below market wages, but were secure in the knowledge that the pension plan was protected and regarded as an important compensation benefit.

In closing, I must share that not only did I devote more than half my working life to this organization, but so did my husband.  Thus the unjust loss of this pension benefit will be doubly difficult for our future financial security in retirement.  The nurse who asked the innocent pension question never expecting the unprotected response is also married to a nurse and as a couple, they both worked for more than 25 years each at the hospital.  As a long term HCO employee, I earned a pension that was supposed to be insured by the PBGC.  The pension plan protection should not have been removed one year prior to the closure of the hospital.  All HCO employees deserve the right to a receive a pension benefit that was not only well earned, but also promised in written documents distributed over many decades.

While the legal interventions of the HCO employees have brought attention to this egregious church plan practice and resulted in a moratorium on current rulings, the IRS needs to withdraw the ruling, “unchurch” this pension plan, and reinstate PBGC protection before it is too late.  At the very least, the IRS should require restoration of pension protections for the HCO participants for all the years that the plan was not a church plan and paid annual PBGC premiums.  This is morally, ethically, legally, and  principally the only right thing to do.