SCHENECTADY — St. Clare’s Hospital pensioners and their advocates are newly optimistic about long-stalled efforts to regain some piece of what they lost when their pension fund ran short of money.
State Sen. James Tedisco, R-Glenville, on Thursday said the state Attorney General’s Office has updated him its investigation of the pension crisis, hinting at positive developments in the long-running crisis.
More than 1,100 former employees of the long-defunct Schenectady hospital were given short notice in late 2018 that their monthly pension checks would be reduced or eliminated. This caused problems or even emergencies for them, as many are near or past retirement age and many lack the savings to make up for the pension loss.
It's not clear where money would come from to restore the pension payments.
“I don’t know but it’s the best thing I’ve ever heard about this from a state office,” Tedisco said Thursday.
He said an aide to Attorney General Letitia James told him “it’s not absolute but by the end of this month we should have an announcement on the direction we can take to help the pensioners.”
Mary Hartshorne, a former St. Clare’s sonographer who’s now leading the pensioners’ fight to regain their benefits, said she’s optimistic: “There’s light at the end of the tunnel, in my opinion. I feel good about it.”
St. Clare’s was absorbed into what is now Ellis Medicine in 2008 as part of a statewide effort to streamline the healthcare industry. It was a safety-net hospital, with many uninsured or under-insured patients who didn’t pay their bills, and had been struggling financially for years. As a cost-saving move, it had opted out of federal pension insurance in the mid-1990s, and had made minimal or no payments into its pension fund each year of its last decade.
By 2018, the pension fund was critically short of money, leading trustees to make the cuts. With no federal insurance on the pension, the pensioners had no safety net.
Efforts to help the pensioners in the last year and a half have focused on two potential sources of a bailout: The Roman Catholic Diocese of Albany, which was very closely associated with the hospital before, during and after its operation, and the state of New York, which in 2008 provided a $28 million pension fund bailout that proved to be only half of what was needed.
Since late 2018, Tedisco has been hammering at the idea of state responsibility for fixing the pension crisis, arguing that the state created the mess by ordering the closure and underfunding the bailout. That argument gained traction in late 2019, when Tedisco obtained circa-2007 documents showing that the state knew $47 million was needed for a bailout.
The Attorney General’s Office, which serves as a watchdog over the state’s nonprofits, was already reviewing the attempted dissolution of the St. Clare’s Corporation, and took new interest in the origin of the pension crisis, Tedisco said.
This, and the fact that James is a former Schenectady resident who says she understands the human impact of the pension crisis, gives him optimism.
But as a Republican in an entirely Democrat-controlled government, he doesn’t have much influence where the next step is decided — the legislative and executive branches. The state is facing a significant budget deficit and requests for additional funding from all quarters.
Hartshorne said the pain of the cuts continues through the legal maneuvering.
“That’s the part that’s not so good,” she said. “People are not only having trouble with heating. We just received word that another one of our pensioners is seriously ill. I think people need to know what a dire issue this is right now.”
Nonetheless, she added, “We need hope and I feel that’s what we got today.”
Meanwhile, civil litigation in the matter proceeds slowly. Three pensioners are fighting to keep the St. Clare’s Corp. — administrator of the pension fund — from dissolving and fighting to remove the pension fund’s trustees. More than 100 pensioners are suing the corporation and the diocese, which has steadfastly maintained it did not cause the crisis and is not responsible for fixing it.
The pensioners disagree, pointing to decades-long involvement of the church, with multiple bishops sitting on the St. Clare’s Hospital Board of Directors and, until recently, the St. Care’s Corp. board.
The two legal matters are before the same judge and are moving slowly through motions and counter-motions, said Victoria Esposito of the Legal Aid Society of Northeastern New York, one of eight attorneys involved in various roles on the pensioners’ side.
There have been no real legal setbacks, Esposito said, aside from the fact that each passing month is another month with reduced income for an aging and in some cases ailing group of plaintiffs.
That said, she remains optimistic for progress.
“Obviously we would never have brought this case if we didn’t feel it had a great deal of merit and we weren’t appalled” by the treatment of the pensioners, she said.
is awaiting the attorney general’s finding.
“The pensioners have been just phenomenal as a group,” she said. “They’re so good at holding each other up, so good at holding us at times.”