Pascagoula, Miss.-based Singing River Health System reached a proposed settlement over its failed pension plan in June 2016. As part of the settlement, the health system agreed to pay $150 million into the pension over the course of 35 years and was released from liability. But this week the Fifth Circuit Court of Appeals failed to approve the proposed settlement, sending it back to U.S. District Court Judge Louis Guirola, reports WLOX.
The ruling, filed Thursday, states, "The fiscal doubts about payments even in the relatively near term heightened the need for an inquiry into the sufficiency of plan assets to make promised payments to plan beneficiaries because they come due over, say, the coming 10 to 15 years. 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 ruling continues, "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. Without foreknowledge of the possible timing of payment crises, and the possible results in the event of payment defaults, class members have no way to plan their futures."
Thursday's ruling comes almost a year after attorneys for nearly 250 SRHS retirees appealed Judge Guirola's approval of the proposed settlement, according to the report. But now the case will head back to Judge Guirola for reconsideration.
Matthew Mestayer, an attorney who negotiated the proposed settlement, told WLOX, "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." He added, "Quite frankly, we're looking forward to returning to court as quickly as possible to further develop the record."
WLOX also obtained a statement from SRHS CEO Kevin Holland, who said, "Upon initial review, the Fifth Circuit's decision ... is not a rejection of the proposed settlement, but rather a road map for successfully approving it with more detail and clarity on the terms of the agreement and how it will impact beneficiaries. The court outlined four areas of concern to be addressed in cooperation with all parties to the settlement. We still feel strongly that this settlement agreement provides the very best opportunity for the ongoing financial stability of not only the pension plan, but also our entire health system."