Attorneys say in a brief filed with the Fifth Circuit Court of Appeals that a settlement reached over Singing River Health System’s failed pension plan is not reasonable or fair because their clients don't know how much in benefits they will receive or for how long.
Jackson County attorneys Earl Denham and Harvey Barton are asking the appeals court to reject the settlement approved in June by U.S. District Judge Louis Guirola, or at least allow their clients to opt out.
Denham and Barton maintain the pension fund, which guaranteed lifetime payments, is likely to run out of money even with annual payments the settlement obligates SRHS to pay. The plan has had no regular contributions since 2009 from SRHS and none from employees since late 2014, earning money only from investments and continuing to pay administrative fees.
Denham and Barton represent 245 plan members, including about 200 who objected to the settlement. Guirola approved the settlement after certifying more than 3,000 pension-plan members — including current and former employees and retirees — as a one group, or class, to whom his decision would apply.
Attorneys who filed lawsuits on behalf of 17 plan members, led by Jim Reeves of Biloxi, were appointed to represent the class. They negotiated the settlement with SRHS, which pays them $6.4 million in legal fees.
Denham and Barton say the class attorneys are receiving the only “definitive payment” laid out in the settlement.
“The vast majority of the objectors are current retirees who rely upon the pension payments to make house notes, buy groceries and pay for their medications,” the attorneys say in their appeal brief. “Most of them live retirement check to retirement check; many are ill; most are old. Without their promised retirement funds, many of these retirees would become paupers.”
In the settlement, SRHS pledged to pay $150 million into the pension over 35 years. The amount represents the $55 million SRHS failed to pay from 2009 to 2014, when plan members thought the county-owned health system was making the contributions, plus interest amortized over the payment period.
Nobody has been able to say, Denham and Barton argue, whether the pension will be able to meet its obligations, even with these annual payments.
“The reality is,” their brief says, “the payments have been spread out over so many years, the funds to pay retirement benefits will expire long before pension obligations are extinguished.”