Diocese sends message of support amid St. Clare’s pension crisis

Bishop repeats that diocese is not responsible for pension cuts and lacks money to fix crisis
St. Clare's Hospital in Schenectady as it looked during the early 1950s.
St. Clare's Hospital in Schenectady as it looked during the early 1950s.

ALBANY — The Roman Catholic Diocese of Albany on Tuesday offered a message of support to the 1,100-plus former employees of St. Clare’s Hospital who are facing reductions or outright loss of their pensions.

The diocese reiterated that it is not responsible for the crisis and lacks the money to fix it, but it also acknowledged the problem is real and pressing for those involved, and it offered to help bring them together for a discussion.

Bishop Edward B. Scharfenberger, in the statement issued Tuesday afternoon, said he has been “deeply affected” by accounts of the anger and anxiety felt by former workers of the now-defunct Schenectady hospital, which surrendered its operating license in 2008 as part of a state-ordered consolidation of New York healthcare facilities.

Many of these people are now near or beyond the end of their working years, and along with the surprise they feel about the pension cuts, they must figure out how to live on less income.

The number of those expressing angst has gown on Facebook, in traditional media such as The Daily Gazette, at meetings among the retirees, at Tuesday night’s meeting of the Schenectady County Legislature and through an online petition that had gained more than 2,300 signatures in less than three days.

Former St. Clare’s X-ray technician Lori Daviero of Amsterdam, an early organizer of retirees affected by the pension cuts, said she appreciated the tone of the bishop’s message, even if he offered no promise of financial relief.

“It was promising only because we got attention,” she said. 

The diocese has maintained it has no responsibility for creating or fixing the pension deficit, which is estimated to be in excess of $35 million. It explained that it never owned or operated the hospital, only affiliated with it and sponsored it. The Franciscan Sisters of the Poor was the organization that opened St. Clare’s in 1949, but the order of nuns was later replaced by a corporation. 

Many former St. Clare’s employees are now looking to the diocese for financial help, noting the close relationship between it and the hospital over the years. (Scharfenberger, until recently, sat on the board of the St. Clare’s Corporation, which was the successor entity to the hospital and administrator of its pension fund. His predecessor, Bishop Howard Hubbard, was chairman of the hospital’s board of trustees at the time of closure and approved the closure decision.)

It was certainly a close, long-term relationship between diocese and hospital, but the diocese and the corporation maintain there was never a formal link.

Despite its denial of responsibility, the diocese, on Tuesday, took a gentler tone in a prepared statement from Scharfenberger:

“To the pensioners of St. Clare’s Corporation, all those men and women who served many years — in some cases several decades — to provide quality healthcare in a Catholic setting, I want you to know I am deeply affected by the stories of struggle I am hearing from you related to the loss of or decrease in your much-needed pensions. I understand that for many of you this situation has left you in dire straits in what should be your retirement years.

“To that end, I am recommending that the Roman Catholic Diocese of Albany offer to facilitate and mediate discussions between pensioners and the trustees of St. Clare’s Corporation in an effort to promptly provide a forum for open discussion. While there may be no easy answers, you should be afforded the opportunity to ask the questions that need to be asked and to be given the information and respect you deserve. We will provide the details and format.

“As dedicated employees of the former hospital, you are members of our Church family, and we are hurting with you. Although we are advised the Diocese of Albany does not bear legal or financial responsibility for the actions of St. Clare’s Corporation — and does not have the resources to rescue the corporation — we are committed to doing whatever we can to help you move forward.”

It stands in contrast to the statement emailed to The Daily Gazette on Nov. 1, in which the diocese said only:

“The Roman Catholic Diocese of Albany was never involved in the governance or operation of St. Clare’s Hospital or St. Clare’s Corporation, including their assets, liabilities, and pension plan.

“We have no further comment beyond our statement. All questions regarding St. Clare’s must be directed to the St. Clare’s Corporation.”

Daviero, on Tuesday, released a short statement on behalf of The Peeps Committee, as the retirees call their informal leadership team:

“I feel that the statement from our bishop is promising and look forward to the outcome. Did the first statement from the Albany Diocese sound the same? No, it didn’t.

“I feel that the work of the committee — the ideas of our fellow coworkers and the community outcry — has triggered this statement. With our petition, that has over 2,200 signatures, along with the help of The Daily Gazette, we are being heard.”

St. Clare’s Hospital treated many underinsured and uninsured patients in its nearly 60-year lifespan, and for that reason was stuck with many unpaid bills. 

The financial problems only worsened over time. The hospital was not able to make the full recommended pension fund contributions in any of its last 10 years of operation and paid nothing at all in seven of those years. It also exited the federal pension insurance program as a cost-saving move, thus removing the only safety net for its employees in the event the pension fund should run out of money.

The St. Clare’s Hospital campus on McClellan Street was absorbed into what is now Ellis Medicine and is still used for medical purposes. As part of the consolidation process, the state provided $28.5 million in 2008 to shore up the St. Clare’s pension fund, but that money proved to be inadequate, due to actuarial miscalculations and the Great Recession.

A decade later, the fund holds $29 million in assets and has an estimated liability of $68.7 million to former employees. To make the money last longer, the St. Clare’s Corporation is reducing the amount of the monthly checks paid to 443 retirees by about 30 percent and canceling checks to about 661 younger retirees altogether.

Daviero, who turned 62 in September, falls into the latter category.

She got checks for October and November and expects to get one in December. After that, she will get nothing more for her 23 years at St. Clare’s — unless the situation takes a sharp turn for the better.

“I’m trying to stay optimistic and keep everybody else optimistic,” she said.

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