In 2014 and 2015, most, if not all of the retirees and employees of the SRHS had some information and perhaps misinformation on the dire financial condition and instability of the retirement pension plan. It had become well known that the employer (SRHS) had failed to contribute to the pension plan for years and yet continued to collect and contribute to the plan and trust the employees’ 3% withholding. Both state and federal lawsuits were initiated and efforts to terminate the plan and trust were thwarted by attorneys acting on behalf of beneficiaries.
Upon the judicial removal of the acting plan trustees and my appointment as special fiduciary trustee, I undertook to fulfill the duties and responsibilities to administer, protect and manage the assets and investments to achieve the best benefit for all of the plan beneficiaries.
In light of the financial instability of the plan and trust and the enormity of the litigation that followed, I, on behalf of all the plan beneficiaries, intervened in the litigation and with the assistance of counsel, participated in the efforts to recover monies owed to the plan and trust. Most, if not all, are familiar with the volume of litigation work and challenges faced attempting to recover monies from SRHS and Jackson County.
The settlement agreement reached after months of negotiations and mediation by a retired federal bankruptcy judge, was subsequently approved by the United States District Court and that order is currently on appeal in the U.S. Fifth Circuit Court of Appeals. (The Settlement Agreement and District Court Opinion and Final Order are available for you review in the litigation document PDF folder). If affirmed by the Court of Appeals, the trust will receive $156,400,000.00 in annual payments scheduled through 2051. Over 5.2 million dollars had been paid on behalf and for the benefit of the plan and trust pursuant to the Settlement Agreement payment schedule and is being held in an escrow account pending a decision from the Fifth Circuit Court of Appeals.
The key to success of the settlement is the financial health of SRHS and its continuing ability to fulfill the payment obligations set out in the Settlement Agreement. A common criticism and concern is the lack of the guarantee of the payments by Singing River Health System, Jackson County or anyone else. The settlement has risks, however, years of state and federal litigation without any guarantee of recovery coupled with the absence of any future financial contributions to the trust from the employer or employees would almost certainly result in the financial collapse of SRHS and the ultimate termination of the pension plan and trust.
It is my commitment to continue the pension plan and trust and to conservatively manage and protects its assets to achieve the highest and best retirement benefit possible for all beneficiaries. From time to time, amendments to the plan may be necessary. The Settlement Agreement establishes a procedure for notice, proposed amendments to plan participants, public comments and requires court approval.
A committee consisting of retirees and employees is being formed to give advice and feedback to me, to inform me of the questions and concerns of plan participants and to help inform participants of the efforts going forward to sustain the pension plan and trust in the years to come.
Stephen B. Simpson
Special Fiduciary Trustee
