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Distressed pension funds could take away benefits for hospital workers



St. Clare’s Hospital was everything to Jerry and Kathy Adach.

They married after meeting at the Schenectady, New York area hospital, where both worked, in the early ’80s. Their two daughters were born there. The couple, who devoted a combined 59 years of service to the facility, had expected to retire with a good pension from the hospital.

That is, until last year, when their former employer — which went out of business back in 2008 — delivered a gut punch: Its pension plan was in financial distress and wouldn’t pay a dime of their expected benefits.

For Jerry and Kathy, both 58, that means losing around $27,000 a year in planned retirement income — around a third of their combined income from the hospital.

“Last year, out of nowhere, they just said, ‘We’re done,'” said Jerry Adach, who works in information technology. “We wanted to retire at 62. We can’t now.”

“I banked on that pension,” he said. “We can’t make that up.”

The Adachs are among more than 1,100 former St. Clare’s employees suing to recover their money. (St. Clare’s closed in 2008, merging with two other area hospitals to form Ellis Medicine.) Hundreds of other employees at similar workplaces in states like Minnesota, New Jersey and Rhode Island have also sued in recent years to salvage their pensions.

Federal retirement law typically puts a backstop in place to prevent this sort of doomsday financial scenario for retirees and near-retirees.

However, St. Clare’s was affiliated with the Roman Catholic Church. Its pension, and those of other nonprofits throughout the U.S. with ties to religious entities, are beholden to different rules that could ultimately leave people empty-handed or with reduced benefits.

“We have seen estimates that it affects about 1 million people,” said Dara Smith, a senior attorney for the AARP Foundation representing many of the former St. Clare’s workers.

For families like the Adachs, who are near retirement with little time to make up for lost pension income, or retirees living on fixed incomes and unable to go back to work, the effect could be financially crippling.

I banked on that pension. We can’t make that up.

Jerry Adach

former employee at St. Clare’s Hospital

Around 661 former St. Clare’s workers — nurses, orderlies, lab technicians, clerical and housekeeping staff — were told they wouldn’t get any of their pension benefits, according to a court filing. Roughly 440 who were already receiving pensions had their benefits cut by 30% for life.

The Adachs estimated they’d have to save an extra $650,000 to make up for the lost income. While they will still get monthly Social Security checks once in retirement, they’ve had to live more modestly, downsize to a smaller house and forgo some vacations they’d have liked to take.

But the couple knows others who are worse off.

“They’re in a bad way, some of them,” Mr. Adach said. “There are people who are really financially strapped right now.”

Joseph Pofit, chairman and president of the board of St. Clare’s Corporation, the successor to St. Clare’s Hospital and associated to some degree with the Roman Catholic Diocese of Albany, declined to comment due to the ongoing litigation.

Other organizations in the crosshairs of litigation have argued in court that their nonprofits serve the needy and the potential financial liability for their pensions could be devastating.

Church plans have different rules

The Employee Retirement Income Security Act, a federal law, requires private-sector companies offering pensions to pay annual insurance premiums to the Pension Benefit Guaranty Corporation, which steps in to pay monthly benefits to retirees (up to a maximum amount) if a company can no longer make its promised payments.

The PBGC paid monthly benefits to more than 932,000 retirees in around 4,900 pension plans during the federal government’s last fiscal year.

The federal law, however, doesn’t apply to “church plans” — meaning they don’t have an insurance backstop in the event their pension goes belly up.

Even that backstop is at risk — it’s estimated the PBGC will run out of money by the end of 2025.

In 2017, the Supreme Court delivered a blow to workers in a similar situation to those at St. Clare’s. While such pension plans weren’t directly established by a church, the high court ruled that they are still considered “church plans” exempt from ERISA’s protections.

Former St. Clare’s workers are suing the Albany diocese and other defendants in New York state court to try to recoup money they say was guaranteed.

They claim the pension has assets of roughly $29 million, but owes workers more than $84 million — a shortfall of $55 million.

“We respect the rights of pensioners to do what they feel is necessary to secure recovery of their lost benefits,” said Mary DeTurris Poust, a spokeswoman for the diocese. “However, the Diocese of Albany never managed the St. Clare’s pension fund.

“St. Clare’s is a separate corporation,” she added. “Its pension was managed by the corporation, not by the diocese.”

‘Not a sob story right now’

Other workers are taking a similar approach.

Around 135 former employees of a hospital system in New Jersey sued the Roman Catholic Archdiocese of Newark in May last year, claiming it deprived plaintiffs of at least $2.7 million in lifetime pension benefits.

St. Joseph Health Services of Rhode Island settled a lawsuit with 2,700 pension beneficiaries last year for $14 million. The hospital, affiliated with the Roman Catholic Church, wanted to cut pension benefits by 40% across the board, according to a court filing.

The Publishing House of the Evangelical Lutheran Church in America, meanwhile, settled a case with around 500 people for $4.5 million in 2013.

Despite the financial pain, the Adachs are optimistic about the future. They plan to save as much as possible for the next six to seven years and hope to retire by 67.

“We’re not a sob story right now,” Mr. Adach said. “We’ll survive without the St. Clare’s pension.

“But it won’t be as comfortable as it would’ve been.”



These high-income taxpayers are getting a visit from the IRS




The IRS will soon start make house calls to high-income individuals who didn’t submit a tax return.

Starting this month, the agency will send its revenue officers to visit people with income in excess of $100,000 and who failed to file Form 1040 in 2018 or in previous years.

“These visits shouldn’t come as a surprise to the taxpayer because the IRS has contacted these individuals multiple times regarding their tax issues prior to their cases being assigned to an IRS revenue officer,” said Hank Kea, director of field collection operations, small business/self-employed division, at the federal agency.

Kea discussed the new measures on a phone call with reporters on Wednesday.

So far, the IRS anticipates making about 800 in-person visits to these high-income non-filers in the first two months, he said. Thousands more will follow through the year. The agency anticipates sending additional revenue officers out as it identifies more cases of noncompliance.

“When you look at the tax gap, there’s a significant amount of revenue lost to individual high-income non-filers, and it literally does measure into the billions,” Kea said.

The visits are taking place at a time when taxpayers enjoy reduced odds of an audit by the IRS. During the fiscal year 2019, only 0.45% of taxpayers were audited.

Third-party data

The IRS can sniff out unreported income and earnings through third-party reporting sources, including your employer, your bank or brokerage, and small businesses that pay you.

When those entities detail your wages on your Form W-2 or report payment on a Form 1099, a corresponding report goes out to the taxman.

The IRS flags returns in which taxpayers’ returns fail to match those third-party reports.

By the time a revenue officer has been dispatched to your home or office, the IRS has already been in touch with you via snail mail several times to address your obligations.

“When clients of mine get a visit from the IRS, they get a little note posted to the door, saying to call this person at the IRS,” said Laurie Kazenoff, partner at law firm Moritt Hock & Hamroff LLP.

“In my mind, the visit serves two purposes,” she said. “It jolts the taxpayer into compliance and the second reason is to gain information about the taxpayer — see where the taxpayer lives and the vehicles they drive.

Bear in mind that the IRS doesn’t initiate contact with taxpayers through unsolicited calls or e-mails. Be wary if someone claiming to be from the IRS calls you out of the blue and demands payment; it’s probably a scammer.

File and pay on time

The Internal Revenue Services offices in Washington, D.C.

Adam Jeffery | CNBC

If you’re dreading filing your tax return because you have a large sum due, always take the first step of at least submitting your Form 1040.

The IRS tacks on steep penalties for those who fail to file.

In that case, you’re responsible for 5% of the unpaid taxes for each month or part of a month that the return is late.

While you can file for a six-month extension to submit your 2019 tax return, you have until April 15 to pay whatever sums you owe.

More from Smart Tax Planning:
What Trump’s tax overhaul extension plans mean for you
One in 5 fear they’ll owe the IRS money this spring
How to protect yourself from tax scams this season

The failure-to-pay penalty is equal to 0.5% of the taxes owed after the due date for each month or part of a month the liability goes unpaid.

In a dire situation, you could file your return on time and work out a payment plan with the IRS.

Options include a 120-day installment plan with no set-up fees; however, penalties and interest will accrue until you’re fully paid.


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China Expels Three Wall Street Journal Reporters




China revoked the press credentials of three Wall Street Journal reporters based in Beijing, the first time in the post-Mao era that the Chinese government has expelled multiple journalists from one international news organization at the same time.

China’s Foreign Ministry said the move Wednesday was punishment for a recent opinion piece published by the Journal.

Deputy Bureau Chief Josh Chin and reporter Chao Deng, both U.S. nationals, as well as reporter Philip Wen, an Australian national, have been ordered to leave the country within five days, said Jonathan Cheng, the Journal’s China bureau chief.

The expulsions by China’s Foreign Ministry followed widespread public anger at the headline on the Feb. 3 opinion piece, which referred to China as “the real sick man of Asia.” The ministry and state-media outlets had repeatedly called attention to the headline in statements and posts on social media and had threatened unspecified consequences.

“Regrettably, what the WSJ has done so far is nothing but parrying and dodging its responsibility,” Foreign Ministry spokesman

Geng Shuang

said in a daily news briefing Wednesday. “The Chinese people do not welcome those media that speak racially discriminatory language and maliciously slander and attack China.”

The three journalists work for the Journal’s news operation. The Journal operates with a strict separation between news and opinion.

Wall Street Journal Publisher and Dow Jones CEO William Lewis said he was disappointed by the decision to expel the journalists and asked the Foreign Ministry to reconsider.

“This opinion piece was published independently from the WSJ newsroom and none of the journalists being expelled had any involvement with it,” Mr. Lewis said.

“Our opinion pages regularly publish articles with opinions that people disagree—or agree—with and it was not our intention to cause offense with the headline on the piece,” Mr. Lewis said. “However, this has clearly caused upset and concern amongst the Chinese people, which we regret.”

Dow Jones is owned by

News Corp.

Secretary of State

Mike Pompeo

criticized China’s action, saying: “The United States condemns China’s expulsion of three Wall Street Journal foreign correspondents. Mature, responsible countries understand that a free press reports facts and expresses opinions. The correct response is to present counter arguments, not restrict speech. The United States hopes that the Chinese people will enjoy the same access to accurate information and freedom of speech that Americans enjoy.”

China is battling a fast-spreading coronavirus, as well as questions from Chinese citizens and some global health experts about Beijing’s handling of the epidemic, which has included the lockdown of much of Hubei province, with a population of nearly 60 million. Public anger at a perceived lack of transparency surrounding the coronavirus has exploded online, overwhelming the country’s censorship apparatus.

In August, the Chinese government didn’t renew press credentials for Chun Han Wong, a Beijing-based correspondent who co-wrote a news article on a cousin of Chinese President

Xi Jinping

whose activities were being scrutinized by Australian law-enforcement and intelligence agencies.

Mr. Xi’s private life and those of his relatives are considered sensitive by Chinese authorities. The Foreign Ministry had cautioned the Journal at the time against publishing the article, warning of unspecified consequences.

Mr. Wong was the first China-based Journal reporter to have his credentials denied since the newspaper opened a bureau in Beijing in 1980.

Beijing has taken a more combative stance with the foreign media in recent years, as Mr. Xi’s government has exerted greater control over information and reasserted the Communist Party’s influence over citizens’ lives.

It has declined to renew the credentials of several reporters, but it is rare for it to expel a credentialed foreign correspondent.

China hasn’t expelled a credentialed foreign correspondent since 1998.

Chinese authorities expelled two American reporters simultaneously in the aftermath of the 1989 Tiananmen Square massacre, though they worked for different news organizations.

John Pomfret

was a correspondent for the Associated Press while

Alan Pessin

was Beijing bureau chief for Voice of America.

The simultaneous expulsions of Wall Street Journal reporters Wednesday marks “an unprecedented form of retaliation against foreign journalists in China,” the Foreign Correspondents’ Club of China said. “The action taken against The Journal correspondents is an extreme and obvious attempt by the Chinese authorities to intimidate foreign news organizations by taking retribution against their China-based correspondents.”

Censorship has been more strictly imposed on domestic news outlets and social media, and authorities have strengthened internet firewalls designed to keep Chinese people from accessing foreign reporting that Beijing deems objectionable.

On Tuesday, the U.S. State Department said it had decided to identify the U.S. operations of state-run Chinese news outlets as foreign missions akin to embassies or consulates, the latest in a series of moves designed to pressure China’s Communist Party into loosening controls on diplomats and foreign media. Employees of those news organizations will now be required to register with the State Department as consular staff, though their reporting activities won’t be curtailed, U.S. officials said.

Mr. Geng, the Foreign Ministry spokesman, called that change “totally unjustified and unacceptable” and warned of unspecified repercussions.

The phrase “sick man of Asia” was used by both outsiders and Chinese intellectuals to refer to a weakened China’s exploitation by European powers and Japan in the late 1800s and early 1900s, a period now described in Chinese history textbooks as the “century of humiliation.”

The Journal’s use of the phrase in a headline, on an opinion column by Hudson Institute scholar

Walter Russell Mead

that referred to the coronavirus epidemic in China, sparked waves of angry commentary on Chinese social media.

The three Journal reporters are based in Beijing.

Mr. Chin, 43 years old, has worked for the Journal in various roles since 2008 and in recent years covered cybersecurity, law and human rights. A team he led won a 2018 Gerald Loeb Award for its coverage of the Communist Party’s pioneering embrace of digital surveillance.

Ms. Deng, 32 years old, joined the Journal in 2012 and has reported out of Shanghai, Hong Kong and Beijing. Her recent areas of focus included China’s economy and finance, and the trade war between the U.S. and China. Ms. Deng is currently reporting in Wuhan, the central Chinese city where the coronavirus epidemic originated late last year.

Mr. Wen, 35 years old, started at the Journal in 2019 and has been reporting on Chinese politics. He co-wrote the article with Mr. Wong on the cousin of Mr. Xi whose activities were being scrutinized by Australian law-enforcement and intelligence agencies.

All three have reported on the Chinese Communist Party’s mass surveillance and detention of Uighur Muslims in the country’s far western Xinjiang region.

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


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Main opposition UFP floor leader hits on gov'ts past 3 years in policy speech



심재철 교섭단체연설, 文정권, 헌정•민생•안보 실적 지적

In the South Korean parliament today, the floor leader of the newly formed main opposition party took to podium for a policy speech..
Shim Jae-cheol, the floor leader of the United Future Party, used his speech to criticize the Moon administration’s record over the last three years in terms of the economy, diplomacy and the constitution.
He brought up a few items in particular the big increases in the minimum wage, the relationship between Seoul and Washington and its policies on North Korea.
Shim claimed none of these initiatives have brought the changes they sought to achieve.
The floor leader also called for improving the country’s disaster management system.
He vowed to raise the budget for dealing with infectious diseases and called for the ruling party to adopt a resolution on banning the entry of foreigners from China.

#policy #election #speech

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