In a major court development for the Singing River Health System failed pension, a judge removed attorney and former judge Steve Simpson from overseeing the finances of the plan.
The judge said Simpson created a conflict of interest when he joined the law firm of Wise Carter.
An attorney for about 200 of the SRHS retirees who are fighting the federal pension settlement presented evidence that Wise Carter advised Singing River, the county hospital system, on how to handle the pension plan.
Even though the connection between SRHS and Wise Carter came before Simpson joined the law firm, Circuit Court Judge James Bell said, “the connection is too close, with so many people’s pensions tied to this.
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“I’ve seen two exhibits that show a significant conflict of interest,” Bell said. And he removed Simpson without giving Simpson a chance to explain.
SRHS attorney Kelly Sessoms said they didn’t see that coming, but running the pension is no longer the focus of the county hospital system.
The pension has been frozen for the last three years with no money going into it. However, pension payments are still being made, while the courts decide on a federal class-action settlement.
Simpson’s fees, his attorney’s fees and the cost of the financial management of the plan have been charged to the pension fund as well. Simpson has been the special fiduciary, or overseer of the pension, for more than two years.
Earlier this year, Simpson’s fees were estimated at about $300,000, but it is not the cost of his overseeing the fund that was in question on Thursday. Judge Bell made it clear that he believed Simpson did a good job and that as he got better at overseeing the business of the pension, Simpson reduced his fees.
Simpson had no comment to the Sun Herald.
Bell was left with finding someone to take Simpson’s place. Money is an issue because there is no new money going into the pension fund.
The SRHS pension was set up for 3,100 employees of the county hospital system, some retired and some still working. SRHS is the second largest employer in Jackson County.
The pension was at $150 million when it was frozen and stands at about $125 million now. Even with a good year in the stock market, it is still being drained, county officials say.
Attorneys for the 200, Harvey Barton and Earl Denham, asked Bell to replace Simpson immediately and put in an interim, while they look for a replacement.
Attorneys for the federal settlement — Jim Reeves and Cal Mayo — asked Bell to keep Simpson in place as the pension overseer, while they wrangle for a replacement.
In an effort to help, Chancery Clerk Josh Eldridge — a from state auditor, a CPA and the county comptroller who is very familiar with the case — offered to be the overseer in the interim.
Eldridge said he’s a public servant already and there would be no need to charge the pension for his services.
“I don’t want any money from the plan,” he said.
Bell initially sided with Reeves and Mayo to keep Simpson, but after a short break, decided to take Eldridge up on his offer. However, he also decided to keep Simpson and pay him as co-counsel for the plan in the interim.
The retirees and County Supervisor Ken Taylor thanked Eldridge.
Bell, from Jackson, is a special appointed judge in the state SRHS cases.
Bell heard accusations between the attorneys on both sides on Thursday, but said he’s had enough of the “attacks.”
Bell postponed Barton’s request for depositions of Simpson.