What Gains Does Settlement Provide?

When Singing River voted to terminate the pension plan, that vote also contemplated setting up a new plan. The new pension plan would have:

1. Paid a fixed percentage average compensation multiplied by years of credited service
2. Credited service would stop at the date of the “hard freeze”
3. No “cost of living” increases or adjustments
4. No employee contributions
5. The choice to take benefits as a lump sum, or roll over to 403(b) plan, or to continue in the new plan

The termination vote also called for:

1. A committee and the pension plan actuary to determine a sustainable level of funding by SRHS
2. A committee and the pension plan actuary to determine a sustainable level of fixed payments
3. To account for changes in the stock market and other investments

Singing River proposed its 88% funding plan in June.  We imagine that the numbers, if decided in December, might have been the same.  As many have said, “this is all that Singing River can afford.”

The current settlement agreement doesn’t take into account any of the above. Even though there is a proposed payment plan in place, no one is willing to share with you the expected benefit amount.  Is it the same 88%?  Is it more?  Is it less?

The attorneys selling this might as well have Nancy Pelosi next to them saying “You have to accept the settlement, so you can find out what is in it.”

All it does it set out a fixed payment plan for Singing River.  If the stock market takes a dive, that will be on the backs of pension plan members.  Singing River has no duty to provide extra, even if they are profiting $5 million a year.

You have to ask yourself “what has been gained?”

• Over one year has passed
• No one has had to answer or account for their role in the demise of the plan  – nor will they ever have to
• $12 million has been drained from the fund in benefits
• Attorneys are now milking the fund for fees
• SRHS is only agreeing to pay in the amount they proposed in June
• Attorneys will now reap $6.4 million in fees thanks to the generous support of the taxpayers of Jackson County
• The county will contribute another $6.4 million to the pension plan
• Billy Guice now has an opportunity to sue KPMG and earn of an additional fee of $3 million

Winners?  Losers?   Looks like only the attorneys are the ones who are coming out ahead.  Then pension plan is in worse shape than it was a year ago. The plan has been starved of ANY contributions for the past 13 months. The attorneys will then be paid at a faster rate than the pension plan.

This settlement is not good enough. As we have  suggested before:

• Any settlement should include a provision for the pension plan to share in any SRHS surplus
• If the hospital is sold or leased, that any surplus above debt go into the pension fund – this would require some legal wrangling
• That if the benefits are reduced, those responsible must answer to their role in the pension plan failure
• The settlement gives SRHS and certain attorneys a big win; it is a loss for many retirees and employees

To quote from a local attorney in a previous article:

I believe a settlement is badly needed. Retirees/employees will get less than they deserve. That is true of all settlements. But if benefits are to be cut in the future, or greater risk placed upon retirees for market changes, then those actions and approval of a settlement have to be done in the most open manner possible. We are adults. We know life is not fair. We have all been disappointed by employers, friends, family, governments, etc. But if I am going to be screwed, I want to at least know why, how and when. So do the SRHS retirees/employees