COURT APPROVES $150 MILLION SINGING RIVER HEALTH SYSTEMS PENSION SETTLEMENT
By: Jon Coxwell, Lagniappe
Published: June 8, 2016
A nearly $150 million settlement was approved last Friday to resolve claims on Jackson County Mississippi’s Singing River Health Systems beneficiaries. A pension crisis has been brewing in the hospital for over a year leaving more than 3,000 employees and retirees skeptical about their pension plans.
As of now nobody has missed a pension payment, but in 2014, SRHS announced that there hasn’t been a contribution made to the Singing River Health System Employees’ Retirement Plan and Trust since 2009. In an effort to recover the missing contributions, law firms Cunningham Bounds, LLC and Reeves & Mestayer, LLC were the first to file a class action lawsuit.
Cunningham Bounds committed to extensive investigation and even hired experts in forensic accounting. After grueling research and negotiations with attorneys from 12 different law firms the terms of agreement were finalized, and ultimately approved by the court.
After the settlement, SRHS agreed to pay $149,950,000 to the trust over time, a number calculated to be the present amount of missed contributions to the trust between 2009 and 2014.
Also as part of the settlement, Jackson County will pay $13.6 million through 2024 to go toward indigent care and prevent default on any outstanding bonds.
The court stressed in its order approving the settlement that the missing pension funds need to be restored as well as Jackson County’s primary health care provider remain economically sound for the benefit of the community.
The order states: “In the best interests of all proponents as well as objectors, elected and appointed officials, and importantly, all the citizens of Jackson County, to make every reasonable effort to protect and nurture the hospital system upon which they depend for their critical care needs.”
Cunningham Bounds attorney Steve Nicholas feels that it is a good settlement and it set out to do what they intended it to accomplish.
“We recognize they had the right to terminate, but they didn’t have the right to terminate having not paid for five or six years … the focus of the litigation was to make sure they paid back the money that was due before they froze it and tried to terminate it in November 2014, and that’s what we accomplished. We got all of that money back,” Nicholas said.
The recession starting in 2008 put a strain on the hospital as well as all of the tension on the health care industry in recent years led to financial problems at SRHS.
“We are thrilled that our determined efforts have resulted in the restoration of the six years of contributions to the pension plan that the hospital should have made, but didn’t until we got involved,” said Cunningham Bounds attorney Lucy Tufts.