UPDATE on Important Stories: Failed St. Joseph Pension Fund Takes a Hit

UPDATE on Important Stories: Failed St. Joseph Pension Fund Takes a Hit

The saga of the failed St. Joseph pension fund continues in state and federal courts, but the biggest threat to the depleting funds is the value of the fund's investments tied to the falling stock market.

The pension, which funds 2,700 members, already faced a shortfall of more than an estimated $118 million prior to the economic downturn.

The fund was thrust into receivership in August 2017.

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“The market value of the Plan’s assets as of March 31, 2020, is $69,329,244.88,” said receiver Stephen Del Sesto.

The fund’s balance includes the more than $13 million that was transferred to the fund since the bankruptcy recaptured by Del Sesto and special investigator Max Wistow.

“As we discussed, in early to mid-2019 I re-adjusted the investment allocation for the Plan’s assets from 65%(equities)/35%(fixed income) to 50%/50%...this re-adjustment has given the Plan some protection, in that the market is down about 25%, but the impact on the Plan has been adversely impacted about 10%-12%,” said Del Sesto.

In early May, Del Sesto took the unprecedented action of moving the St. Joseph Health Services pension fund to the control of the federal Pension Benefit Guaranty Corporation (PBGC).

This action will force the fund to be treated under the Employee Retirement Income Security Act of 1974 (ERISA) — the federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.