May 10, 2013 (PLANSPONSOR.com) – The Pension Benefit Guaranty Corporation (PBGC) will be taking responsibility for the pension plan of Noble Health Systems Inc.
The pension benefits cover more than 830 current and future retirees of the company, which operates Noble Hospital, a 97-bed acute-care facility in Westfield, Massachusetts.
The agency stepped in because the hospital cannot pay its pension obligations and remain in business. Noble Health's patient population has declined, leaving the hospital to cover its operating expenses with a patient base composed predominantly of Medicare or Medicaid patients, with the remainder composed of privately insured and self-pay customers.
PBGC will pay all pension benefits earned by the hospital's retirees up to the legal limit of $54,000 a year for a 65-year-old. Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.
According to PBGC estimates, as of April 15, 2011, the pension plan was 61% funded with $28 million in assets to pay $46 million in benefits. The agency expects to cover $17.8 million of the $17.9 million shortfall.