Further Delays in $4.5M in Funds to St. Joseph Failed Pension Fund Members

Further Delays in $4.5M in Funds to St. Joseph Failed Pension Fund Members

On Friday morning, a dozen and a half members of the failed St. Joseph Health Services pension fund traveled to Providence to sit in on yet another hearing relating to fund’s collapse and receivership.

The members of the plan who attended the hearing — almost all women in their 60s and 70s --  were told after nearly an hour of waiting that there would be no hearing Friday. 

The members of the depleting pension fund had hoped to hear Superior Court Judge Brian Stern make a final approval on a $4.5 million settlement of a portion of nearly $9 million in charitable funds that had been transferred to the Rhode Island Foundation. The issue was not on the court's docket. The issue would be delayed for a few more weeks.

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The battle over these funds goes back over a year. The Rhode Island Foundation tried to block the distribution of the funds, as GoLocalProv reported in February.

The Rhode Island Foundation was then hit with a subpoena in the ongoing investigation.

As GoLocal first reported Wednesday, after more than two years, the retirees of the St. Joseph Health Services pension fund have received an award approved by the federal court of more than $11.1 million and, more importantly, provides the receiver with a 15 percent ownership of Prospect’s CharterCare — the company the owns and operates Roger Williams Hospital, Fatima and St. Joseph Hospitals in Rhode Island.

This is the first transfer of assets to the depleting pension fund that has been in receivership now for years. 

"Latest" in Pension Fund Collapse

In 2014, Rhode Island officials approved the sale of CharterCARE to Prospect of California — as part of that deal the pension fund of St. Joseph Health Services was orphaned and left with more than a hundred million in unfunded pension liabilities and no source of further contributions. Despite the shortfall Attorney General Peter Kilmartin sought and received court approval of the transfer of $8.2 million in charitable assets to be transferred to the RI Foundation.

The subpoena, served by Special Investigator Max Wistow’s firm, was issued on February 9, 2018 was met with resistance from lawyers for the RI Foundation and receiver Stephen Del Sesto, who at the time voiced frustration by the lack of urgency and the legal machinations of the Foundation’s lawyers.

The $8.2 million is now nearly $9 million and Del Sesto has reached an agreement with the CharterCare Charitable organization to avoid litigation and provide $4.5 million to the receiver for the members of the fund.

The resolution of these dollars has taken an endless route between state and federal courts and are now back to Stern for resolution and requires sign off of the agreement by RI Attorney General Peter Neronha.

The initial order to transfer the charitable dollars must be modified or vacated by Stern.

Del Sesto tells GoLocal that with Neronha’s approval this matter could be approved by Stern in the next month. “We hope that this can be resolved and the transfer of these funds can be completed,” said Del Sesto.

But, this resolution has twice been opposed by lawyers for the Diocese of Providence.

Both in January and in August, Diocese attorneys filed opposition to the transfer of the $4.5 million settlement.

EDITOR'S NOTE: The $4.5 million settlement which has been approved in federal court by Judge William Smith was again delayed for consideration in RI Superior Court.