Retirement should be carefree for Ralph and Rosemarie Bryden in their 500-square-foot bungalow in rural Rhode Island. They garden and bowl, but financial worries loom.
The Brydens feel angst since learning both of the pensions they've lived on for a decade could 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 eliminated payments.
"We used to go traveling," said Rosemarie Bryden, 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 Ralph 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 pension crisis looming in the United States, experts said.
At issue is a law passed by Congress in 1974 that exempted religious organizations from federal laws that regulated and guaranteed pensions. Decades later, the effects of that lack of oversight are surfacing.
The number of pensioners at risk is unknown, but the potential count could be substantial. The law affects more than just ministers and church organists -- religious organizations own vast numbers of businesses, including shopping malls and media companies, 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 1 million figure's estimated to just be Catholic-affiliated organizations."
Smith said the religious exemption waives funding requirements and the mandate for insurance from the Pension Benefit Guaranty Corporation, which pays retirees when there is a shortfall.
"You don't have to get [corporation] coverage to guarantee people up to the typical levels," Smith said.
The AARP said that's what happened at the former St. Clare's Hospital in Schenectady, N.Y., also once part of the Catholic Church, and 1,100 beneficiaries lost their full pensions.
On Sept. 10, the AARP Foundation and other legal advocates filed a lawsuit against the Diocese of Albany, N.Y., and its agents on behalf of more than 100 former St. Clare's employees seeking damages for failing to pay promised pensions.
In Rhode Island, those affected are what's locally referred to as "the salt of the earth," working-class people already living modestly. The Brydens worked for four decades, 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 enticement 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 retirement," 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,' " Levesque said.
The St. Joseph pension needs an estimated $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 parties. It is a battle that involves the state's highest-ranking Catholic, Bishop Thomas 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.
Tobin declined, through a spokesman, to discuss the matter, citing litigation, but Violet, who represents about 100 retirees pro bono, has no such vow of silence.
"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," Violet said, adding that there's been "no official response from Bishop Tobin as to why he stopped."
Violet is one of several lawyers representing pensioners in complex lawsuits involving a lengthy list of defendants accused of failing to protect the pension. Additionally, the church sold entities of St. Joseph Health Services several years ago to Prospect, a health care corporation.
Once a nonchurch business became involved, federal pension regulations might apply. While that dispute is pending, pensioners are being paid, Violet said.
Company officials declined to be interviewed, citing the litigation, but said in a statement, "The alleged underfunding of the pension plan commenced years before" Prospect's involvement.
Violet said concerns about the separation of church and state persuaded Congress to exempt religious-affiliated pensions in 1974 when it passed the Employee Retirement Income Security Act, better known as ERISA. Violet said 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 U.S. 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 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 recently 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, however, endures.
"I still believe in God," said Ralph Bryden.
"That's a given," Rosemarie Bryden said.
Religion on 09/21/2019