Lawsuit alleges new problems with Singing River Health System pension settlement

Lawsuit alleges new problems with Singing River Health System pension settlement
Singing River Health System retirees are back in court. And just like a few years ago, they’re demanding full payment of their pension funds. (Source: WAVE 3 News)

PASCAGOULA, Miss. (WLOX) - Singing River Health System retirees are back in court. And just like a few years ago, they’re demanding full payment of their pension funds.

The lawsuit filed Wednesday by attorneys Jim Reeves and Matthew Mestayer alleges fraud, false representation and gross negligence.

You may remember back in 2016 Singing River Health System settled the case against it, agreeing to a settlement where they would pay the retirement fund trust $149 million over the next 35 years. This new lawsuit claims Gary Brown and 270 other Singing River Health System retirees are not getting paid 100% of the benefits they were awarded in that 2016 settlement.

At the heart of the newly filed 13 count claim is this statement: “Defendants’ negligence masked the Plan’s underfunding status, and had Defendants acted within the standard of care, SRHS would have known about the Plan’s underfunding sooner and could have acted sooner to ensure the financial stability of the Plan.”

“The people involved with the pension plan were given the short end of the stick and have been mistreated as much as anybody I have ever represented,” attorney Jim Reeves said. “These were hard working people. They have worked for 20 or 30 years counting on this retirement and they have had to scrape by with far fewer benefits than they were entitled to. We are going to do everything we can to make sure that is fixed and that these companies pay what they owe.”

The defendants are Transamerica Retirement Solutions and KPMG. According to the suit filed in Jackson County Wednesday, those companies “had a fiduciary relationship to Plaintiffs and promised to ensure that the Plan was adequately funded so that Plaintiffs would receive all retirement benefits due to them.”

But the civil suit contends what was supposed to be $149 million in payments over 35 years quickly disappeared.

By 2018, the suit says a judge reduced the payments by 25%, and suspended the cost of living payment promised to the retirees. And the special fiduciary overseeing the payment plan determined the plan “was still less than 28% funded and would be depleted by the year 2025.”

“KPMG performed audits annually, for both the pension plan and the hospital system,” Reeves explained. “Those audits were giving the pension plan a clean bill of health and misleading the hospital in what was going to be collected in terms of future revenues. Once that was reconciled, the underpayments were so overwhelming - over $50 million in the hole - that they couldn’t be made up and the pension plan basically was in a disaster position at that point.”

The suit alleges breach of contract and lack of good faith and it asks a jury to award the Singing River Health System retirees the full amount of what a previous court case awarded them.

WLOX News reached out to both Transamerica Retirement Solutions and KPMG for a response to the allegations. KPMG said it doesn’t have a comment, and Transamerica said it doesn’t comment on pending litigation.

Read the full 13 count claim here>> https://bit.ly/3dN88zR

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