PANAMA CITY — Legislation putting a local hospital pension in an irrevocable trust is moving ahead full-steam.
The Bay County Commission fears the pension, which belongs to former Bay Medical Center employees, could cost taxpayers a lot of money if it ever went belly up and the county had to cover the liabilities.
The pension is closed to new members, and the now-private Bay Medical Center Sacred Heart Health System does not manage it; the Bay Health Foundation does.
A local bill (HB 913) in the state House would unequivocally place the pension in an irrevocable trust, definitively stating the pension is “not the responsibility of a governmental unit.”
Though the House bill sponsor has suggested the legislation might prove unnecessary, Commissioner George Gainer said he hasn’t wavered “at all” in his resolve to make sure the legislation passes.
A separate local bill (HB 915) would allow the County Commission more control over its foundation appointment. The commission has only one appointment, but approves all nine board members. The bill would allow the commission to remove its appointment at any time without cause.
Changes to the pension and board must run through Tallahassee because the Legislature created the hospital district, which governs the foundation.
Foundation chairman Don Connor said the irrevocable trust measure was “almost immaterial” because the pension is already in a trust, so it doesn’t really matter.
“It’s not going to affect anything,” he said.
Connor said, however, if the county can insulate itself from the pension liability and the fund goes bankrupt, then one group still loses.
“The people who would suffer would be the pensioners because they’d have nothing, and that would be horrible,” he said. “I really wouldn’t want to see that happen.”
Connor is the commission’s appointment to the foundation board and could be removed if the second bill passes, but he said he wasn’t worried about that, confident the commission won’t pull him.
Chairman Guy Tunnell said he doesn’t want to remove Connor. His focus is on the pension, which he called a “pretty significant liability” for the county and ultimately the taxpayers.
Tunnell said if the bill becomes law the county would be protected from a pension default.
“That’s what I’m being told by the experts,” he said.
Tunnell also pointed out how separate actuarial analyses can lead to significantly different numbers. The foundation projects the unfunded pension liability at about $12.5 million, but a county-hired actuary put the number at $17 million, before adjustments for actuarial cost methods.
State Rep. Jimmy Patronis, who sponsored the bills in the Legislature, also spoke of the actuarial complexities and how both sides are reviewing the pension.
“Two very competent actuaries could come up with two very different scenarios over the solvency of a retirement plan,” he said.
Patronis, R-Panama City, also repeated what’s become his mantra on the pension bill, saying it’s a “belt and suspenders approach” — an extra layer of protection. And he’s more than happy to withdraw it if the commission changes its mind.
“I don’t necessarily like putting more laws on the books [just] to put more laws on the books,” he said.