Jackson County taxpayers should be on the hook if county-owned Singing River Health System is unable to cover retirement checks promised to thousands of employees, two attorneys for SRHS retirees argue.
Attorneys Earl Denham and Harvey Barton, who represent more than 200 retirees, are petitioning the full 5th U.S. Circuit Court of Appeals to decide whether a court-approved settlement should be rejected.
They also want the full appeals court to consider whether Jackson County should be released from liability if SRHS is unable to pay $150 million into the failed pension plan over 35 years.
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The panel directed Guirola to make sure SRHS can meet its pension obligations before signing off on the class-action settlement, which would apply to all 3,000-plus pension-plan members.
Denham and Barton were displeased with the panel’s decision because it also releases Jackson County from any liability beyond the $13.5 million it agreed to pay SRHS so the health system can meet its pension obligations.
Barton said the county should be liable for pension payments if SRHS is unable to make them.
“There’s truly not another case in the country like this,” he said. “We’re making new law. If this is allowed to stand unchallenged, it will be a blue print for other government agencies to walk away from their pension liabilities.”
Private pensions are protected under federal law. Governments with pension plans can raise taxes to cover payments if pensions fail. SRHS, although county-owned, operates as a separate entity.
Denham and Barton believe the courts need to establish that a government entity would still be responsible for payments when one of its organizations or agencies has a pension failure.
SRHS hopes the 5th Circuit rejects the request for a rehearing and the three-judge panel’s ruling stands.
“Singing River Health System believes that resources are better spent responding to the Fifth Circuit’s request,” SRHS attorney Kelly Sessoms said.
“Toward that end, SRHS looks forward to appearing before Judge Guirola at the district-court level. A request for reconsideration at the Fifth Circuit only leads to further delay and expense, which serves neither the interests of the retirees, employees or the System.”