GULFPORT, Miss. (AP) - A federal judge on Friday approved a south Mississippi hospital’s plan to settle a lawsuit over its financially troubled pension system, although opponents question whether the plan will work.
U.S. District Judge Louis Guirola Jr. on Friday ruled in favor of the plan for Singing River Health System to pay more than $156 million to its pension fund over 35 years.
The 5th U.S. Circuit Court of Appeals had ordered Guirola to re-examine the issue after opponents of the settlement had appealed. The legal battle has pitted retirees against Singing River, with retirees trying to hold onto their full benefit, or at least capture as much money as possible.
Singing River, which operates hospitals in Pascagoula and Ocean Springs, stopped paying into the system from 2009 to 2014 without telling employees and retirees. That decision was part of a financial crisis at the county-owned hospital system.
The pension plan is paying 725 retirees now, and covers 3,200 people, including employees who have yet to retire, as well as former workers who have left. Pension plan manager Traci Christian has reported that the $123 million now in the bank won’t last past 2025 without the settlement. Even with it, retirees might only get 59 cents on the dollar. Hospital officials have been pushing for the settlement in part because retirees have been getting full benefits during the case, reducing the fund more rapidly.
Those who object to the federal class action settlement say they don’t believe the pension will last as long as Singing River says, and question whether the hospital system can make the payments.
Guirola, though, found there was no evidence to support those claims.
“The objectors have been given their full and fair ’day in court,’” he wrote “In the opinion of the court, the parties have demonstrated that the best means of protecting the plan, the class, and the future financial stability of SRHS is to approve the settlement.”
Lawyers for 200 opponents of the settlement say they plan further appeals. Lawyer Harvey Barton said none of the payout models proposed would work based on the money available. Even with the settlement, “at some point, it will go broke,” he told the Sun Herald .
Barton said Guirola failed to satisfy the demands by the 5th Circuit for more information
Jackson County supervisors agreed to pay $13.6 million to the hospital by 2024 to support care for poor people and prevent the hospital from defaulting on a bond issue as a condition of the settlement.
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Information from: The Sun Herald, http://www.sunherald.com
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