Fall of a nonprofit?

Falling interest rates would seem to be a nice thing for some. The cost of owning a home has rarely been within reach of so many (omitting of course that little no-money-down-abysmal-credit-score-buying-a-$700k-house fiasco from a few years back), refinancing is now an attractive option for existing homeowners, and the cost of capital is lower than it’s been in years. Unfortunately, those same low interest rates can cause massive headaches for organizations whose obligations are pinned to them.

This has been the problem for BH1, the entity that was formed by the sale of Baptist Hospital and administers the pension fund of the institution’s retirees. Thanks to historically low interest rates, designed to stimulate the nation’s economy, it has struggled with a rapidly increasing pension liability — nearly $30 million according to 2009 documents — which climbs as interest rates remain low.