Penny pincher

Retired Bikur Holim employees are facing a bleak financial future.

bikur holim 88 (photo credit: )
bikur holim 88
(photo credit: )
For the past few years Jerusalemites have watched the drawn-out death throes of the Bikur Holim Hospital as it succumbs to the after-effects of the financial mismanagement that led to enormous debt and eventual bankruptcy. Most of the attention has focused on whether or not the veteran institution, which serves some 65,000 patients every year, can pull back from the brink of closure that would deprive the capital of its only central hospital. Less attention has been paid to one group of former employees who are engaged in their own daily struggle for survival. Retired hospital staff are facing ruin because their pension funds were among the first casualties of the hospital's financial demise. The 175-year-old Bikur Holim hospital grabbed headlines in 2003 when it was declared bankrupt and unable to pay off debts to the government, which at the time ran into millions of shekels. Under the administration and ownership of the Bikur Holim Amuta (non-profit organization), decades of financial floundering finally had to come to an end. The Justice Ministry appointed an Official Receiver to replace the hospital's administration and take control of managing the hospital. Once bankrupt, and in accordance with the law, all debts and financial commitments owed by the hospital were nullified - leaving 270 pensioners without their retirement money. The format of the pension plans lies at the root of the problem. During the mid-eighties most of the country switched from a 'budgeted' pension system to 'accumulated' pensions. In the former, each institution allocates a portion of its annual budget to pay for active pensions. In the latter, monthly stipends are accumulated over the years of service to finance workers' pensions. At the time, the employees of Bikur Holim were offered their choice of pension plan. Whereas the doctors elected to go for accumulated pensions, the rest of the staff opted to remain with the budgeted pensions in the belief that when the time came an institute as large and well established as the hospital would have the required funds. However, when the Bikur Holim amuta went into receivership it took its budget with it, leaving the pensioners with no one to pay them their dues. For the pensioners, many of whom have decades of dedicated service behind them, the situation is almost incomprehensible . Over the course of 25 years Yardena Sasson, now 75, worked in the hospital's nursing school as an equipment instructor and in the late nineties took over as the school's administrator. Because she began working at the hospital during her middle age, Sasson says that she sometimes even asked the hospital's administrators about the status of her pension, and was always assured that she had nothing to worry about. "They told me I would get a pension just like all the other workers had in the past," she says. When the school closed in 2001 Sasson decided to retire. For two years, she received monthly payments, but then, in November 2003, her NIS 3,500 stipend suddenly stopped. "The whole health system was in trouble and everyone knew it but we never imagined that one day they would say that the amuta is dissembled and that we have no pension," says Sasson. "We, the pensioners, have become 'past debts' and there is no way to pay us." Caught between his official obligations and his moral sense of duty is Barri Bar-Zion, appointed by the Official Receiver in 2003 to administer the hospital. However, the future of the hospital is unclear. As final negotiations for a $20 million sale proceed, a big question mark hangs over whether or not the hospital will continue to be just that, a hospital. Bar-Zion explains that when the Receiver published a tender for the sale of the hospital there were two ideas under consideration. The first, to sell the site as real estate letting the buyers do with it what they please. The second proposal involved a commitment to continue operating the hospital as a medical center but at a reduced capacity. It is the second of these two options that is now being contested by two prospective buyers. The winner must commit to keeping the hospital's doors open for at least another five years as a general hospital, with the option to continue for another 13 years after that. As a general hospital the site will be required to maintain casualty, internal medicine, pediatric, surgery, and cardiograph departments as well as keeping two-thirds of the current staff and 120 beds. The impending reduction in hospital staff raises the specter of yet more pensioners who may swell the numbers to 500. Furthermore, once the sale goes through the staff will no longer have an address to turn to - it is far-fetched to even imagine the new owners will take upon themselves the burden of paying pensions. The pensioners have succeeded in garnering some official support for their cause. The Knesset Finance Committee under the chairmanship of MK Ya'akov Litzman has held several meetings to discuss the problem. The sorry plight of the workers has drawn much sympathy, and one way or another - between the Official Receiver, the Treasury, the hospital itself, campaigning by the Histadrut, pressure from the Knesset Finance Committee, and high profile demonstrations by the former staff themselves - funds did find their way into the pensioners' pockets, without any official body accepting responsibility for their future. However, in October the fragile conduit fell apart amid a spat between the Treasury and the Official Receiver over who should be paying how much toward the pensions. The Treasury claims that the Official Receiver reneged on a July agreement, according to which the Treasury would pay two-thirds of the costs of the pensions and the Receiver the rest. Since then the pensioners have not received any money at all and now, two months later, many are down to their last funds. "We are on the brink of disaster. What has happened to us is beyond belief," moans Sasson who survives on the wage her working husband brings home, which, she says, makes her "very lucky". "There are others who have nothing to eat," she adds. One 70-year-old former worker at the hospital now cleans stairwells in buildings to put food on his table, she says. "People built their lives believing that they will have that NIS 3,000 to live off," says a bitter and dejected Sasson. "For some of them they might be better off going to the world where everything is good." Although blaming the hospital's previous administration for the situation, the pensioners also point a finger at the Treasury and the Interior ministry. According to Sasson, the Interior Ministry's Registrar, which is responsible for annual approval of each non-profit organization, should have intervened. "The Treasury knew they owed NIS 200 million and did nothing over all those years," she complains. Today, the Registrar's function is part of the Justice Ministry, so the Interior Ministry is distancing itself from involvement, while former Bikur Holim director Yosef Cohen declined to talk to In Jerusalem about the circumstances that led to the hospital's troubles. Although implicating the Interior Ministry for its passive role in the mess Sasson says there is no point in wagging a finger or throwing out accusations. Now all the pensioners want is money, and when it comes to cash all paths lead to the Treasury. "We blame the Interior Ministry but the Interior Ministry has no money either," she concedes. "The only one who can solve the problem is the Treasury." Sasson contends that although the hospital was a private institute, its public service record made it for all intents and purposes a public institute and therefore a government responsibility. "They [the Finance Ministry] are talking about the battle against poverty, but in another month we will be poor if we don't get the money." The sum required to cover the pensioners' needs is a total of NIS 250 million or NIS 700,000 a month. "That small amount will save many people," Sasson says. However, at a Knesset Finance Committee meeting earlier this month things took a different course. Veering away from the pensioners' plight, the committee meeting focused instead on the hospital as a whole and concluded with a call for Jerusalem's other hospitals to step up and take control of Bikur Holim for a period of one year until a permanent solution is found. For the pensioners, some of whom attended the meeting, the outcome was a bitter blow. Speaking after the meeting, Sasson, on the verge of tears, spoke of her deep disappointment. "I was at least hoping for band-aid today," she said. Yet others welcomed the committee's recommendation, among them Dr. Effie Halperin, head of the Bikur Holim Doctors' Committee. Halperin, a veteran campaigner on behalf of the hospital's staff during the recent years of turmoil, believes that the solution to all the hospital's woes lies in guaranteeing a secure and stable future for the hospital. Once that is achieved, he believes all the other pieces will fall into place. However, Halperin concedes that whereas he has time to play with for a prolonged campaign, the pensioners don't. "My strategy might be better in the long run, but they don't have that long that they can wait around, so they are using [short-term] tactics and I understand that," he says. "They [the Knesset committee] didn't solve the problem for the pensioners and right now they need money." Bar-Zion, however, criticized the Knesset committee strategy, saying it was only pushing off the issue. "The problem of the pensioners should be solved without any connection to the future of the hospital, and as soon as possible. You can't keep 500 families in suspense without knowing what will be their future," he says. The Histadrut has also lent a hand by hiring attorney Ofir Ronen to represent the workers. Ronen hopes to inject the pensioners into the conditions pertaining to the sale of the hospital and is seeking a court injunction that will see all of the money from the sale of the hospital turned over to the pensioners with the government providing the missing NIS 150 million. Later this month the High Court will review the proposed sale, and Ronen is posed to make his bid. "The pensions have not been wiped out; the question is how to pay them in the current situation," he says. When a business goes into general receivership, all standing debts are assessed to establish a pecking order for whatever funds become available following a sale or liquidation of assets. Of all the contenders, the tax authorities are always first in line, he explains. "The state will get [from the sale of the hospital] half the NIS 200 million that the hospital owed," Bar-Zion says and adds, "Emotionally speaking it is true that the pensioners should be first in line, but that is not what the law says."