New York Attorney General Letitia James is suing the Roman Catholic Diocese of Albany over the St. Clare’s Hospital pension shortfall. She made the announcement Tuesday outside Ellis Health Center in Schenectady.
James, a Democrat, announced the lawsuit on behalf of 1,100 former St. Clare's Hospital employees who lost some or part of their pensions after the hospital merged with Ellis Hospital and the 60-year-old pension fund was terminated in 2019.
"650 retirees who lost all pension rights. And 450 retirees who received only a single payment equal to 70% of the value of their pension," said James.
The fund had been decimated in the 2008 recession. New York state did pay St. Clare's $58 million to cover transition costs including $28.5 million to cover the pension fund's anticipated needs. A move to drop federal pension insurance protection in the 1990s doomed the fund. St. Clare’s Pensioner’s Committee Chair Mary Hartshorne says the group includes retired nurses, lab technicians, social workers, EMTs, orderlies and housekeepers.
"When you worked at St. Clare's Hospital, you were there with friends and family because everybody became family," Hartshorne said. "So when we were told each year that we had to give up our raise, in order for these people to not be laid off, we did it because we were told we had a pension. And that would make up for it. Never did we think that we were going to lose it in such an abrupt and inhuman way. The pensioners are suffering terribly. They're such a great group, they don't complain. But it's very difficult. We've lost homes, we've lost careers. And now we're going through, we had gone through a pandemic and now in a terrible inflation."
James noted that on average, pensioners worked between 10 and 50 years, and they trusted that their employer, St. Clare's Hospital and the Catholic Diocese would care for them in return.
"Instead, the Diocese would intentionally break and ignore the law and in the process deny them their hard earning savings that they were depending on during their late years in life," James said. "These New Yorkers deserve justice, and more importantly, they deserve the money that they are owed, and they rightfully worked for. In this lawsuit we outlined years of negligence by the Diocese, the St. Clare's Corporation, and other leaders of the church, which violated multiple state laws. And they include violating their fiduciary and their legal responsibilities to the St. Clare's Corporation, the entity tasked with managing the hospital and pension. They are responsible for removing the pension plan from the protections available under federal law known as ERISA, which stands for the Employees Retirement Income Security Act.”
James argues that the Diocese’s breaches in fiduciary duty led to its failure to properly administer the pension that was entrusted to their care. Defendants named in the $55 million lawsuit, filed in the New York State Supreme Court of Schenectady County, include the Roman Catholic Diocese of Albany, the St. Clare's Corporation, Bishop Emeritus Howard Hubbard and Bishop Edward Scharfenberger. James says she's seeking full restitution: holding the defendants accountable for all debts owed to pensioners.
The Diocese issued a statement, which says in part "We are sympathetic to the plight of the St. Clare’s pensioners and want to see these hardships resolved as soon as possible. We respectfully disagree with the attorney general’s decision to file this lawsuit." The diocese also claims James' suit will "lead to more protracted proceedings which will further delay resolution of the case."
