Last updated on October 15, 2019
On October 15, 2019, the Pension Benefit Guaranty Corporation took responsibility as trustee for two defined benefit pension plans sponsored by Verity Health System. The Verity Health System pension plans ended as of April 30, 2019. Together, the two plans cover nearly 8,000 workers and retirees of Verity Health System.
PBGC will update the following questions and answers about the Verity Health System pension plans as more information becomes available.
PBGC is a federal agency created by the Employee Retirement Income Security Act of
1974 (ERISA) to protect pension benefits in private sector defined benefit plans - the
kind that typically pay a set monthly amount at retirement. If your pension plan is
insured by PBGC and it ends without sufficient money to pay all benefits, PBGC's
insurance program will pay you the benefit provided by your pension plan up to the
limits set by law.
PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums,
investment income, and assets and recoveries from failed single-employer plans.
Yes. Both Verity Health System pension plans are covered under Title IV of ERISA. However, because neither pension plan has been covered by PBGC’s insurance program for five years, pension payments will be affected by the legally-required five-year phase-in limit on PBGC’s benefit guarantee for new and newly covered plans that begins with the date of coverage.
No. The Verity Health System Supplemental Retirement Plan is an individual account
savings plan, specifically a 401(a) plan. It is not covered by PBGC’s insurance.
No. The Verity Health System pension plans remained ongoing and under the
responsibility of Verity Health System until April 30, 2019, the date the pension plans
were terminated. While underfunded pension plans often terminate during bankruptcy
proceedings, a company’s bankruptcy filing by itself does not terminate a pension plan.
However, the date of the bankruptcy filing does affect the amount PBGC guarantees.
Please see below.
Workers, retirees and beneficiaries covered by the Verity Health System pension plans
should direct all pension benefit communication to:
John Hancock Service Center
PBGC will update this site and notify you in writing when contact information changes.
When an underfunded pension plan is terminated and transferred to PBGC, we notify
plan participants and beneficiaries and provide information about their plan and about
- If you are already receiving a pension from Verity Health System, your payments
continue, without interruption, in the annuity form you chose at retirement. In
several months, we will adjust benefit payments to an estimate of the amount
required by law. PBGC will notify retirees about 45 days in advance of adjusting
To update mailing address, electronic deposit information, report a death, or
adjust your tax election, please call the John Hancock Service Center at 1-800-
- If you are not yet receiving a pension, we will pay you an estimated benefit when
you become eligible and apply for pension benefits. About four months before
you are ready for your pension benefits to begin, please call the John Hancock
Service Center at 1-800-294-3575. to request for an estimated calculation.
Yes. Our preliminary analysis shows that almost all people covered under the Verity
Health System pension plans will receive reduced benefits because the pension plans
were insured by PBGC for less than three years when Verity Health System entered
into bankruptcy, August 31, 2018.
PBGC pays retirees estimated benefits while we complete the auditing, actuarial and
legal work necessary for us to determine exact benefit entitlements under the law.
In order to limit overpayments, we adjust retirees’ estimated monthly benefits when we
are confident in the quality of our information. We notify retirees in writing about 45 days
in advance of adjusting estimated monthly payments because of legal limits on PBGC’s
When we have completed our review of your plan:
- If you have received estimated benefit payments that are too high, we will adjust
your future monthly payments to the correct amount, further reduced normally by no
more than 10% until the overpayment has been repaid.
- PBGC does not charge interest on overpayments.
- If we have paid you an estimated benefit that is too low, we will make up the missed
amounts in a single payment with interest.
No. You cannot earn additional pension benefits under your plan after the date the plan
Note: The Verity Health System froze benefit accruals for most participants in 2008 and
2011. By 2019, the only participants still earning additional benefits were certain
members of the California Nurses Association. Active participants continued to earn
service after the freeze date toward vesting, eligibility for early retirement, and certain
forms of payment. However, on April 30, 2019 (Date of Plan Termination), all service
accruals ceased. Please keep in mind, PBGC’s guarantees are based on service
earned as of the date Verity Health System entered into bankruptcy, August 31, 2018.
PBGC follows “working retirement rules” regarding whether employees can begin pension benefits while working.
- If I have reached Normal Retirement Age (65), can I receive my retirement benefits?
Yes – When you reach age 65 you may receive your benefits while you are working,
regardless of whom you are working for.
- If am under age 65, can I receive my retirement benefits?
Generally, yes. However, PBGC cannot pay early retirement benefits to participants
who are still working for the company that sponsored the pension plan or for a
The Verity Health System Retirement Plan A covers nearly 7,000 people and is 52%
funded. The plan is underfunded by $306 million. A separate plan, the Verity Health
System Retirement Plan B, covers about 1,000 people and is 74% funded. Plan B is
underfunded by $2.8 million.
PBGC stepped in to become responsible as trustee because the company’s two
pension plans would be abandoned following the sale of Verity Health System’s assets.
Some pension plans offer their participants lump sum payments for the full value of their
pensions, but PBGC generally does not. PBGC pays benefits in monthly payments for
life. However, if the total value of your benefit payable by PBGC is $5,000 or less when
the plan terminates and you have not started receiving monthly payments, you can
receive a lump sum from PBGC.