SRHS reveals proposed plan to save troubled pension fund - WLOX.com - The News for South Mississippi

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SRHS reveals proposed plan to save troubled pension fund

(Photo source: WLOX) (Photo source: WLOX)
JACKSON COUNTY, MS (WLOX) -

The Singing River Health System Board of Trustees has pieced together a three-tiered plan it believes will save the company's underfunded pension plan while protecting the long-term future of the hospital system.

SRHS says it has the proposal ready to present to the courts currently overseeing the pension plan, and it will not move forward without their approval.

“With the court's support, we believe we can restructure the plan in a way that maximizes benefits to our current and future retirees without bankrupting the health system,” said CEO Kevin Holland. “We've taken this as far as we possibly can without any taxpayer support from the county and we hope that we can resolve this issue soon for the sake of everyone concerned.”

The board of trustees says the proposed plan will serve three purposes: To maintain a monthly benefit for retirees, to reinstate the health systems funding for the plan at a sustainable rate and to implement new measures for accountability and oversight of the plan.

SRHS officials say the proposal is for a restructuring of the existing plan that will pay current retirees 88 percent of the original benefit. It will also include an annual Cost of Living Adjustment payment at the same 88 percent rate.

For active employees, the plan proposes the same 88 percent monthly benefit upon retirement, but it will not include the annual Cost of Living Adjustment payment. The plan also calls for the target retirement age to be raised to 67.

Former employees with more than 10 years with the company will receive a monthly benefit similar to that of active employees. For those with less than 10 years with the company, SRHS will refund their contributions to the pension plan, plus interest.

The proposal claims SRHS will once again contribute to the plan with a target of $143 million in additional contributions to support it over the next several decades, beginning in 2016.

Holland said the company's ability to fund the proposed plan rests with a few key factors.

“Resolving the pension issue is contingent upon getting this plan approved, settling our court cases and continuing to execute our financial turnaround plan with strong operational and financial performance,” Holland said. “Failing to do so is not in the best interests of our retirees, our employees who hope to receive a future retirement benefit, or our patients who count on us to be here for them. SRHS must survive to fund the plan and continued litigation, if not resolved, will severely complicate these efforts.”

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