Pension Struggle for Former St. Clair Employees
SCHENECTADY, N.Y. – On Thursday, closing arguments were presented in a lengthy trial concerning former employees of St. Clair University who are seeking to reclaim their pensions.
Approximately 1,100 pensioners allege mismanagement of the pension fund, which collapsed in 2018. The lawsuit was initiated by the New York State Attorney General’s Office alongside the AARP Foundation.
The defense contended that St. Clair Hospital had been in financial distress for years prior to its closure in 2008. Defense attorney Brian Whiteley noted the hospital struggled to maintain staff and basic operations, stating the board failed to include mandatory contributions in the pension plan.
Furthermore, Anthony Cardona, another defense attorney, attributed the issues to conditions that predated Bishop Edward Scharfenberger’s tenure beginning in 2014. He indicated that the state’s Burger Commission, through a 2006 report, had pointed out the need to enhance health care efficiency and suggested merging St. Clare with Ellis Hospital under a unified governance.
Cardona asserted that the Department of Health had no plans to assist St. Clare financially, leading to the merger with Ellis.
“The state, not the bishops, controls this entire process. All subsequent events, including the financial collapse and pension deficit, stem from that decision,” he stated.
As part of the merger, the hospital received state funding. Prosecutors aimed to hold the Department of Health liable for $28.5 million, which they recognized was insufficient to cover the pension fund’s deficit, which reached nearly $43 million by 2006.
St. Clare closed its doors in 2008.
Monica Connell, representing the attorney general’s office, argued that the Board of Trustees had numerous opportunities to address the pension plan’s impending bankruptcy. She claimed that then-Bishop Howard Hubbard and the board disregarded crucial warning signs, understanding that full funding would not be achieved.
Connell pointed out that Hubbard did not engage with the board between 2001 and 2005, describing it as a “breach of duty.”
Moreover, she mentioned that the leadership at the hospital failed to inform pensioners about the serious underfunding of the plan or any potential changes.
“Without warnings, pensioners cannot prepare for the future,” she noted.
Connell also highlighted that a potential solution had been presented by the pension company, but the board chose to overlook it.
As the day unfolded, closing arguments were still in progress, with a jury possibly reaching a decision as early as Friday.
