NACOGDOCHES, Texas (KTRE) – Nacogdoches Memorial Hospital retirees are raising concerns about their closed retirement plan.
On Friday, dozens of people filled the conference room at the Nacogdoches Memorial Hospital. Several people spoke during public comment before the board discussed terminating a closed retirement plan.
The defined benefit plan started in the ‘80s. It was closed in 2017 when the hospital switched over to a 401k plan.
A defined benefit plan is a retirement plan that promises a specific monthly benefit, a dollar amount, to an employee when they retire.
One employee expressed her concerns about the possible cancellation.
“Retirees without funds become a burden on the systems of our government, including this hospital district. The defined benefit is an obligation of the district and a benefit to the community as a whole,” she said.
Freddie Gipson said he worked for the hospital for 28 years. He wanted the board to think about the impact.
“To take this away from us, which we depend on. I think would be a travesty to this hospital respected and the people that are here. We worked here because we love being here,” he said.
The board went into executive session for nearly 30 minutes.
Board member Wesley McKnight believed disbanding the plan would be the fairest option. He explained if they were to terminate the plan, the money would be distributed to enrolled individuals. McKnight suggested to have the money roll over to an IRA or 401k.
“The plan is not keeping up. The more time goes by and the more people that start to retire and start taking more, receiving more money, the faster it is going to run out of money,” said McKnight.
Due to a conflict of interest, two hospital district board members, including the president sat out from the vote.
The hospital district will also begin paying overpayments from 2018 and 2019, to the Texas Health and Human Services Commission.
The new agreement presented by the Attorney General eliminates the balloon payment. The hospital district will pay $191,000/month for three years.
The original plan required monthly payments of $361,000 for eight months, with a final balloon payment of over $4 million due in December.
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