Almost one year after a nearly $7 million federal tax lien revealed Auburn Memorial Hospital had failed to fund its pension plan, the same government entity has filed a second lien against AMH.
According to a hospital press release, the Pension Benefit Guarantee Corp. filed a $7.2 million lien with the county clerk's office late last month, bringing the amount owed to a total of roughly $13.8 million for missed payments and contributions to retirement plans.
The corporation had filed an initial, $6.7 million lien in late April.
Robert Bergan, the president of AMH's board of trustees, assured that Pension Benefit guarantees the hospital's pension plans.
“In 2006 we converted three of our four pension plans from defined benefit plans to defined contribution plans, which will be beneficial to us in the future,” read his statement.
A Pension Benefit spokesperson explained that liens are automatically generated when a missed pension plan contribution exceeds $1 million.
“What happens to make the liens increase is further miscontributions,” said Gary Pastorius. “Additional lien notices account for unpaid minimum funding contributions that came due after Jan. 15, 2006,” he added, explaining that the liens filed last April accounted for minimum funding contributions due up until that point.
Last year, the hospital applied to the Internal Revenue Service to obtain a waiver permitting it to extend a timeline to make payments. That application is still pending.
AMH's interim chief financial officer, John Baran, echoed Pastorius and said the new liens indicate “that the federal government is following their own internal procedures.” Until recently, he said, AMH had been sharply focused on turning around its sinking finances and practices for cost-effectiveness.
“We're getting that behind us, and now we need to get this behind us,” Baran said, adding that AMH has been in negotiations with Pension Benefit over the past couple of weeks, as well as meeting with attorneys “to come up with a fair and effective solution to this.”
Last week, the hospital established an internal 4-8 week time-frame to resolve the issue. Next Thursday, the hospital will hold a conference call with a pension consultant, as well as meet with the county Legislature's designated liaison, David Pappert. The federal lien falls second to a prior mortgage lien covering the real property held by Cayuga County, which has been working with AMH to reverse financial problems.
Meanwhile, Pappert asserted the county's support of the hospital and its efforts toward solvency.
“The county is committed to working in partnership with the hospital to negotiate an acceptable long-term pension solution with PBGC,” he said in a statement.
Should the hospital continue to miss minimum pension funding contribution installments as they become due, Pension Benefit may file additional lien notices to secure those contributions.
Created by the 1974 Employee Retirement Income and Security Act, Pension Benefit Guarantee Corporation is a federal corporation that insures the pensions of more than 34 million workers and retirees in its single employer program, and 9.9 million in its multi-employer system.
Staff Writer Olivia Goldberg can be reached at 253-5311 ext. 235 or at olivia.goldberg@lee.net
The corporation had filed an initial, $6.7 million lien in late April.
Robert Bergan, the president of AMH's board of trustees, assured that Pension Benefit guarantees the hospital's pension plans.
“In 2006 we converted three of our four pension plans from defined benefit plans to defined contribution plans, which will be beneficial to us in the future,” read his statement.
A Pension Benefit spokesperson explained that liens are automatically generated when a missed pension plan contribution exceeds $1 million.
“What happens to make the liens increase is further miscontributions,” said Gary Pastorius. “Additional lien notices account for unpaid minimum funding contributions that came due after Jan. 15, 2006,” he added, explaining that the liens filed last April accounted for minimum funding contributions due up until that point.
Last year, the hospital applied to the Internal Revenue Service to obtain a waiver permitting it to extend a timeline to make payments. That application is still pending.
AMH's interim chief financial officer, John Baran, echoed Pastorius and said the new liens indicate “that the federal government is following their own internal procedures.” Until recently, he said, AMH had been sharply focused on turning around its sinking finances and practices for cost-effectiveness.
“We're getting that behind us, and now we need to get this behind us,” Baran said, adding that AMH has been in negotiations with Pension Benefit over the past couple of weeks, as well as meeting with attorneys “to come up with a fair and effective solution to this.”
Last week, the hospital established an internal 4-8 week time-frame to resolve the issue. Next Thursday, the hospital will hold a conference call with a pension consultant, as well as meet with the county Legislature's designated liaison, David Pappert. The federal lien falls second to a prior mortgage lien covering the real property held by Cayuga County, which has been working with AMH to reverse financial problems.
Meanwhile, Pappert asserted the county's support of the hospital and its efforts toward solvency.
“The county is committed to working in partnership with the hospital to negotiate an acceptable long-term pension solution with PBGC,” he said in a statement.
Should the hospital continue to miss minimum pension funding contribution installments as they become due, Pension Benefit may file additional lien notices to secure those contributions.
Created by the 1974 Employee Retirement Income and Security Act, Pension Benefit Guarantee Corporation is a federal corporation that insures the pensions of more than 34 million workers and retirees in its single employer program, and 9.9 million in its multi-employer system.
Staff Writer Olivia Goldberg can be reached at 253-5311 ext. 235 or at olivia.goldberg@lee.net