The future of a pension plan for non-union employees at Niagara Falls Memorial Medical Center may rest on a decision from a federal regulatory agency.
Memorial’s Vice President of Human Resources Benjamin Baia said last week the hospital is still awaiting approval for a temporary contributions waiver it requested last year from the Pension Benefit Guaranty Corp., a federal agency that monitors employer contributions to retirement accounts.
The request made last January called for a waiver of payments to the hospital’s retirement plan for the years 2006, 2007 and 2008 and included provisions for the health care facility to resume making regular pension fund contributions this year. Baia said the hospital has been told by federal regulators to expect a decision on the waiver request in about two months.
“The assets of the plan are held in trust but the plan is still in an underfunded status, a situation that has been exacerbated by the steep declines in the stock market,” Baia said.
A federal tax lien notice filed by the PBGC and recorded with the county clerk’s office Nov. 25 lists the amount of contributions due to the retirement plan of Niagara Falls Memorial Medical Center as $3.48 million as of
Oct. 15.
Baia said that figure is based on calculations made by the IRS and the hospital’s independent actuary believes the outstanding pension fund contribution figure to be lower. Baia said the latest figure available from the actuary reflects a $2.37 million deficit as of
Dec. 31, 2007.
Liens are filed as legal claim to property for the purposes of securing payment of tax debts. A notice of federal lien tells creditors that a claim has been filed against the owner of a property. Under federal law, the PBGC is allowed to file a notice of federal tax lien in cases where employers fall behind in their pension fund contributions by $1 million or more.
Baia said he’s hopeful the PBGC will approve the hospital’s waiver request.
If not, he indicated it’s possible the plan could be subject to “distressed termination,” a classification that would result in all pension liabilities being assumed by the federal agency.
Baia expressed confidence that under such a scenario employees covered by the pension fund would be compensated in full for what they are owed.
“There is no loss of benefits to the plan participants if they do take it over,” Baia said.
Memorial announced a series of cost-cutting measures last year in an effort to address financial concerns that hospital officials say were partly the result of the high level of uncompensated care provided by the facility to uninsured and under insured patients in the community.
Baia admitted that the hospital’s finances – like most enterprises these days – have been impacted by current economic conditions.
“The situation we are in since we made our application in January has certainly not improved,” he said.
Kristin Anderson, Memorial’s chief financial officer, said the hospital is now preparing its year-end audit and, as a result, is not yet prepared to disclose specific information about the facility’s finances.
“Our preliminary, unaudited numbers reflect an operating loss but show a significant improvement over a year ago,” she said.
Contact reporter Mark Scheer at 282-2311, ext. 2250.
Local News
Related Photos
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TAXING SITUATION: Patients and staff come and go at Niagara Falls Memorial Medical Center on 10th Street on Friday. A federal tax lien notice filed by the Pension Benefit Guaranty Corp. lists the amount of contributions due to the retirement plan of Niagara Falls Memorial Medical Center as $3.48 million as of Oct. 15.
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on the job: Rural Metro EMT’s Chris Sherman, left, and Jordan Collins pack up after bringing a patient to Memorial’s emergency room.
MEMORIAL MEDICAL CENTER: Pension pain
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