The Pension Benefit Guaranty Corporation (PBGC) said it stepped in because the underfunded Amsterdam Memorial Hospital Employees Pension Plan failed to meet minimum funding standards and would be unable to pay benefits when due.
Additionally, the plan would be without a sponsor following the hospital’s sale to a competitor. The transaction did not include the retirement plan, the agency said. The agency will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended on April 30, 2009. The PBGC became trustee of the plan on May 26, 2009.
The PBGC said in March, Amsterdam Memorial and its affiliate Mohawk Health Alliance Inc. signed an acquisition agreement with its rival St. Mary’s Hospital, also located in Amsterdam. As part of the transaction, the PBGC negotiated with the two hospitals and the New York State Department of Health for $7 million to be transferred into the pension plan for the benefit of its participants.
The PBGC estimates that the plan is 60% funded, with assets of $13.6 million to cover benefit liabilities of $23 million. The agency will be responsible for $9.2 million of the $9.6 million shortfall. Participants in the pension plan are subject to the limits in effect on April 30, 2009, which set a maximum guaranteed amount of $54,000 for a 65-year-old.
Amsterdam Memorial Hospital was founded in 1889 and provides inpatient rehabilitation services, outpatient treatments and skilled nursing services in Montgomery and Fulton Counties in New York State.
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