NEW ORLEANS, LA (WLOX) - Singing River Health System retirees are right back where they were in 2014 when the health system admitted its pension fund was in trouble. They don't know how much pension money they should be receiving.
The Fifth Circuit Court of Appeals did not approve the settlement between Singing River Health System and members of its failed pension plan. The settlement will now go back to U.S. District Court Judge Louis Guirola for reconsideration.
In the 29-page ruling filed on Thursday, a three-judge panel ruled that, "There is no assurance in the record that the Plan will not run out of money to pay the class members' claims well before 2051."
The settlement negotiated by attorneys from both sides had Singing River Health System paying $149,500,000 back into the plan from 2016-2051. However, the appeals court determined, "The class members, especially current retirees, were owed something more than legal provisions enabling a speedy Chancery Court judgment for failed SRHS Settlement payments and a vague statement that changes in Plan distribution terms would be subject to notice and hearing. Money judgments are worthless if they cannot be enforced."
Attorney's representing 245 SRHS retirees who objected to the settlement filed an appeal in November 2016 after Judge Guirola approved the financial agreement. They argued it wasn't fair, reasonable, or adequate.
The appeals court found four reasons why Judge Guirola's decision should be vacated and the case should be heard again. Those reasons focused on the effect of the settlement on current retirees, future SRHS revenue projections, legal costs, and attorneys fees.
The appellate court justices concluded, "The terms of the Settlement Agreement as they affect Plan participants should have been more thoroughly examined prior to the court's approval. It was improper for the court to limit its consideration to the hospital's ability to pay while ignoring a transparent explanation of the settlement's consequences for the class members."
Matthew Mestayer was one of the attorneys who negotiated the settlement.
"Class Council is considering all options but remains confident in the Settlement Agreement and its ability to pay the retirees 100 percent of their benefits. Quite frankly, we're looking forward to returning to court as quickly as possible to further develop the record," said Mestayer.
SRHS CEO Kevin Holland released this statement Thursday afternoon: