What is Resurrection's pension?
Resurrection Health Care calculates a pension benefit of 5 percent of an employee's yearly salary, along with interest at a rate of 1 percent plus the Treasury bill rate for the year before. Upon retirement, employees may receive their pension money in a single lump sum payment or get regular, fixed payments called annuities.
What is the funding status of my Resurrection pension?
According to the bond rating agency Fitch, the RHC pension is currently just 40% funded, meaning that the current value of the assets equals only 40% of the funds needed to pay its obligations to participants. Under the law, a pension is considered "at risk" if it falls below 80%.
Aren't pensions protected by the government?
Most pensions are protected by the Employee Retirement Income Security Act (ERISA). Plans that are covered by ERISA are subject to strict legal requirements designed to make sure that participants have important information, that employers manage pension funds wisely and that plans have sufficient funds to pay their obligations.
But Resurrection has applied to be exempt from ERISA, exploiting a loophole that was originally designed to allow flexibility for plans covering clergy and laypeople employed by religious institutions.
What does it mean if my Resurrection pension isn't protected by ERISA?
Because the Resurrection pension is not protected by ERISA, Resurrection is NOT required to:
- Maintain any particular level of funding
- Provide employees regular and current information
- Guarantee that funds will be there in the future
What information is Resurrection required to provide employees?
Under ERISA, employees covered under pension plans must receive regular, up-to-date statements about the status of their personal pension, and employees have access to the overall pension's funding status. Because they've opted out of ERISA requirements, Resurrection is not required to provide any information to employees.
Can Resurrection afford to fully fund our pension?
Yes. In 2010 the value of Resurrection's overall cash and investments equaled over $773 million dollars, while the amount of its pension shortfall equaled $247 million.
Additionally, Resurrection has always found money to pay high priced anti-union attorneys and consultants.
For more detailed information on Resurrection's financial information, click here.
Will the pension situation change if Resurrection and Provena merge?
Since Provena hasn't filed any annual reports on its pension with the Department of Labor, which a requirement of regulated plans, we believe it is probably an exempt-church plan.
How Can we address these issues when we organize with AFSCME Council 31?
When we win our union with AFSCME, management will be legally obligated to negotiate with us over a wide range of issues-- including pensions. Also, we can insist on receiving detailed pension information that we have not been getting because we are unorganized.
What is a defined benefit pension? How is it different from a 403b (or401k)?
A defined benefit pension plan guarantees retirees a fixed monthly income for life. These defined benefit plans are usually funded by employers through tax-exempt contributions and automatically cover all qualified employees.
403b and 401k plans are defined contribution plans, which means that the employee contributes a fixed amount to the plan each year and the employee contribution is "matched" up to a certain point by employers. The returns on the individual employee's investments determine the retirement income of the employee. Defined-contribution plans shift the investment risk and responsibility to individual workers and typically reduce corporate costs.
OLR management says that AFSCME is spreading rumors about the RHC pension. Is that true?
It's a fact that Resurrection's pension is only 40 percent funded. The shortfall between the amount Resurrection has put aside and the amount of their obligation equaled $247 million according to 2010 financial statements. If you look closely at their "Fast Facts" leaflet, you'll notice that Resurrection never bothers to dispute these facts.
OLR management says that AFSCME members' pensions are in "danger". Is that true?
In Illinois, the municipal employees' pension is funded at 86.4 percent. The state employee pension funds provide legally-guaranteed benefits, include union representatives on their governing bodies and provide easily accessible information. In contrast, Resurrection's plan is not protected by any laws or regulations.