Federal agency takes control of Forum Health pensions

By WILLIAM K. ALCORN

alcorn@vindy.com

YOUNGSTOWN

The Pension Benefit Guaranty Corp. says retired employees of recently-sold Forum Health will not miss any pension checks, nor should their still-working brethren when they retire.

The federal pension agency has started the process of taking over bankrupt Forum’s defined benefits pension plan, which officials said could take months.

In the meantime, Forum will administer the plan which has sufficient assets to cover payments to retirees until the federal takeover, according to PBGC.

Forum Health, which consists of Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland, and various pharmacy, lab and home health- care subsidiaries, filed for protection under Chapter 11 of the U.S. Bankruptcy Code on March 16, 2009. Efforts to reorganize, which is the goal under Chapter 11, were unsuccessful, and the hospital system was sold this month to Community Health Systems for $120 million. Final approval of the sale is pending a state review.

Community Health Systems is not liable for Forum’s pension obligations under its purchase agreement, said Tomi Galin, CHS vice president of corporate communications.

That leaves the pension in the hands of the PBGC, an unsecured creditor with a claim against Forum of $170 million, the amount the pension plan is underfunded.

Also, Forum was behind on its contributions to the pension plan when the hospital system was sold earlier this month, the self-funded federal agency said.

When Forum requested that PBGC take over its pension plan in July 2009, it covered about 7,132 working and retired employees. Forum’s quarterly pension-plan contribution was about $1.5 million. As of Dec. 31, 2008, the pension plan’s assets of $205,419,808 equalled only 63.7 percent of its $322,631,706 in projected benefit obligations.

At the time, maximum monthly PBGC pensions for those who retired that year ranged from $1,822 for a 55-year-old who wants payments for a surviving spouse to $7,470 for a 70-year-old who does not want surviving-spouse payments.

However, the PBGC did not move on Forum’s request as long as there was a chance Forum would be reorganized rather than sold and be able to maintain the pension itself, the agency said.

Read the full story Monday in The Vindicator and on Vindy.com