The Memorial Commission met yesterday to discuss several thorny legal questions, among them what happens to the pensions of the 4,000 people employed at the three-hospital system.
The pension question will weigh heavily as the commission decides whether to sell Memorial Health System and to whom. If a for-profit company buys the hospital system, then employees will no longer be able to participate in the Public Employees Retirement Association pension fund.
Employees would not lose their benefits, but the new owner would incur additional costs.
“The company will have to pay a termination fee, determined by an actuarial and approved by the PERA board,” said City Attorney Pat Kelly. “That sum would pay for the PERA benefits paid in by employees when they reach retirement age. It’s designed to protect PERA’s future interests.”
If the hospital is sold to a nonprofit organization, then the PERA board has the option of letting the hospital employees remain in the system.