By Hank Russell
A group of employees from Northwell Health joined a class action lawsuit against the New Hyde Park-based health care system, claiming that their employer kept them in the dark about significant retirement benefit cuts when it created a “cash-balance” plan in 1999. This complaint targets actions taken at North Shore University Hospital, Glen Cove Hospital, Forest Hills Hospital, Plainview Hospital, Syosset Hospital, and their affiliates.
Nelson Thomas, a partner at Thomas & Solomon PLLC, in Rochester, New York, the firm representing the employees, filed the lawsuit on April 15 at New York State Supreme Court for the Eastern District of New York.
According to Thomas, the facts are similar to those of a United States Supreme Court case in which the Court ruled that pension plans violate federal law when they create a cash-balance plan and mislead future retirees about the benefit cuts hidden in those plans. When pension plans do so, the Supreme Court instructed courts to order that the terms of the retirement plan be changed to give the retirees increased benefits.
Thomas said the health system told its employees that they would see bumps in their retirement funds from the additional funding from Northwell, but that never happened. “The problem was that the [alleged] amount [contributed to the plan] did not reflect the true amount of money [given] to the defined benefit plan.”
In addition, Northwell Health failed in its “fiduciary duty” in protecting its employees’ benefit plans as required by the Employee Retirement Income Security Act (ERISA) and “never notified their employees” about the benefit cuts. “They should have told [the employees] the truth,” Thomas said of Northwell.
Employees have sued a number of pension plans for committing that violation. The employees have consistently won, receiving hundreds of millions of dollars in increased benefits in retirement. Northwell is described in the class action complaint as another example of this illegal conduct and it asks the Court to provide the same relief as is done in these cases.
“Here, Northwell slashes its retirement benefits for its hardworking employees and never tells them what it is doing. Moreover, Northwell had the gall to brag to those same employees that it is actually ‘pleased’ that these changes will be ‘assisting you toward financial security in your retirement years,’” Thomas said. “It sounds like a bad memo out of the TV show The Office.”
Long Island Life & Politics has reached out to Northwell Health. In an email, Northwell spokesperson Michelle Pinto wrote, “While we are currently reviewing the details of this matter, we do not comment on pending litigation. Northwell wants to reaffirm our strong commitment to all our team members – those currently employed and our alumni. Our investment in their welfare and our dedication to ensuring fairness and equity remain steadfast. We will continue to uphold these values in all our practices and policies.“