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Rhode Island Requires Religious Organizations to Provide Pension Fund Updates

Fiduciary Rules and Practices

Pension plans managed by religious organizations in Rhode Island now must provide regular updates to participants on the financial health of the plans. Gov. Gina Raimondo (D) signed a measure on July 2 setting that requirement into law.

House Majority Leader K. Joseph Shekarchi (D-Warwick) introduced 2019-H 5287 on Feb. 6, 2019; Senate President Dominick Ruggiero (D-North Providence) introduced the Senate version, 2019-S 0431, on Feb. 27. The new law requires that any nongovernmental pension plans that are not covered by ERISA and have 200 or more members must comply with ERISA’s reporting requirement under which most private pension plans must send members a letter each year outlining the health of their plan. Pension plans of religious organizations claim exemption from both ERISA and GASB reporting standards.

The catalyst for the legislation was the insolvency of the St. Joseph pension plan, which covered almost 3,000 current and former employees of Our Lady of Fatima Hospital and Roger Williams Hospital. Contributions to the plan stopped after the hospitals were sold to Prospect Medical Holdings in 2014, and a lawsuit alleges that the hospital operators conspired to conceal underfunding. Ruggiero and Shekarchi are concerned that similar plans could conceal information from their participants in the future.
“All Rhode Island workers and retirees deserve to know the truth about the health of their pension plan,” said Ruggerio in a press release.