Private or Public? Building a Fiction

In yesterday’s Sun Herald, Karen Nelson quoted John McKay:

 “We cannot pass a tax increase to support the pension plan. We can pass one to help the hospital in some ways, but we can’t raise taxes to support” a private plan.

A “private” plan? Is that how he really described it?  A few hours later McKay confirmed and posted to the article:

He states it again and reiterates it in the same sentence. Singing River Health System is organized under Mississippi’s community hospital statutes and is owned completely by Jackson County. Over and over SRHS has asserted in court that it was not subject to ERISA regulations due to the pension plan being a governmental plan.

ERISA regulations provide pension safeguards for employes of private companies, both in terms of transparency and future viability of a plan, and in termination, through the Pension Benefit Guarantee Corporation. SRHS, as a government-owned entity, was able to escape compliance with these provisions.  The exemption is allowed because the Federal government expected that any public pension plan failure costs would be borne by the respective government and any budget shortfalls made up by its ability to tax.

Jackson County is a public entity. Singing River Health System is a public entity. The pension plan is organized under statues for governmental pensions. There is an effort by the Board of Supervisors, especially McKay, to create a fiction that Singing River is somehow private and the county has only some tangential role in its governance. This is demonstrated in the “Memorandum of Agreement” that was billed as being the only way the Board of Supervisors could get any information on Singing River’s finances. It came with the added bonus of a legal framework to shield the public view of those finances.

The State Auditor has recommended that Jackson County audit Singing River numerous times.  What basis would there be for doing so if the accounts and records of SRHS are “private”?  In terms of Jackson County’s finances, one former insider termed SRHS “too big to fail.”

It’s time for the Board of Supervisors to end this fiction, and start letting out the facts.

No tax increase to save the pension plan, supervisors say” Karen Nelson, The Sun Herald, June 15, 2015

3 thoughts on “Private or Public? Building a Fiction

  1. In his January 2015 order sending the Almond case back to state court, federal judge Louis Guirola said about the pension plan: “the Court is not compelled at this time to determine whether the defendants’ plan is or is not a governmental plan since the defendants [i.e. SRHS], who bear the burden of establishing federal question jurisdiction, have clearly stated that ERISA does not govern their plan, because it is a governmental plan.”

Leave a Reply

Your email address will not be published. Required fields are marked *