Singing River Health

Attorney says pension fund settlement looks like done deal

PASCAGOULA -- It's not a proposal, it's a settlement.

And the 2,600 to 2,800 employees and retirees of the county's Singing River Health System affected will soon need to decide whether they want to be part of it or not, said Jim Reeves, lead attorney in the federal lawsuit over the failed pension plan.

However, Jackson County, which has been cooperating in the cases, but is not a party in the suit, said nothing is settled until all involved sign off on it.

The settlement document is being circulated between Jackson County leaders and the hospital system for final wording and could be finalized by the end of the week, Reeves said. He said they had planned to make an announcement next week, but the document was "leaked" and he said that's fine. He addressed questions by the Sun Herald on Monday evening.

He said he could see no way to guarantee that retirees would get 100 percent of the pensions they were promised by the county hospital system.

Instead, he said actuaries went back to 2004, when the hospital last paid its full obligation to the pension plan, and calculated how much the hospital owed the plan and what that might have earned in interest.

"You can't make them pay more than they owe," Reeves said.

The settlement sets up that SRHS will pay $142 million into the pension over the next four decades, Jack

son County will pay $13.6 million over the next seven years and attorneys in the federal case will get $6.4 million by September 2018.

The pension money will be put into the plan and managed by Steven Simpson, who was appointed by the Chancery Court. The plan will continue making payments on the current schedule with no changes. However, Simpson can make changes to the plan in the future, as he sees a need, Reeves said. There will be a four-person panel to oversee hospital operations going forward.

Reeves told the Sun Herald that the hospital was in a pension contract with employees and could have altered the contract at any time had the administration followed the rules and done it correctly. If that had been the case, they wouldn't be in a lawsuit, he said.

Instead, the county hospital system quit making payments without telling employees and retirees and in fact hospital leaders told employees they were making payments when they weren't. Employees never stopped making their 3 percent contributions.

According to the settlement document, Reeves and SRHS will get together with hospital records and determine who is in the pension and eligible to receive payments -- employees before mid-2011.

The settlement is with Chancery Court, he said. The next step will be to petition the U.S. District Court to certify a class of employees and retirees for a class action.

If that happens, then everyone who is eligible will be added to the class without having to sue SRHS and the county. He said this will make it easier for employees who are still working at the two county hospitals and are afraid that joining a lawsuit to save their pension would get them fired from their jobs.

Reeves said that as far any potential criminal wrongdoing in the case, "We don't put anyone in jail. All I can do for my clients is recover the money that was owed to the plan.

"The FBI and the District Attorney are looking into this," he said. "If they can find anyone to prosecute, more power to them. I'll hand over my documents."

There is a group of clients, about 150, represented by attorneys in Pascagoula, including Earl Denham and Harvey Barton, who haven't joined the federal case. They are suing in Chancery Court and say they want uncovered who the hospital administrators were who failed the hospital system and how they did it. They want to know where money intended for the pension was spent and on what. They have picketed consistently for the past year asking the county to hold the hospital administrators accountable.

Meanwhile, the Jackson County Board of Supervisors meeting at times Monday was an uproar with a room full of people interested in the proposed settlement.

Attorney Barton, in hallway outside the meeting, told a group that the proposal isn't good. He said it lets the county off the hook for $13.6 million, and $6.4 million of that will go to attorney fees.

Inside, he told county supervisors his clients have been excluded from the deal, "a deal in which the only real money is the $13 million paid by the county, and once it's paid out, the county has absolved itself from any responsibility.

Reeves later said Barton's clients are invited to participate in the settlement. Or they can opt out and sue independently.

"You have to be careful when you tell people to opt out of a settlement," he said about the attorneys advising them. "You're saying, 'I can do better.' If I were the client, I'd get it in writing. They may think they can do better. They can try.

"This is a settlement in principal, contingent on a class certification, then there will be a final settlement," he said.

"I've been doing this a long time," Reeves said. "This is a good settlement. I anticipate the court will be receptive to it."

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