The retirement plan of thousands of Memorial Health System employees and retirees could loom large in discussions about whether the city-owned enterprise should be sold.
City Attorney Patricia Kelly told the Citizens Commission on Ownership and Governance of Memorial Health System on Tuesday that selling Memorial to a for-profit entity would end the hospital system’s affiliation with the Colorado Public Employees Retirement Association, affecting Memorial’s estimated 4,100 current employees.
The acquiring for-profit entity would have to pay PERA an unspecified actuarial amount that would be due to retirees and their survivors, inactive members who once worked at Memorial and current employees for the rest of their lives, she said.
An actuary would have to calculate the amount, Kelly said.
“I’m not even going to guess” what the amount would be, she said afterward.
The rights of retirees would be protected if Memorial were sold, she said. But a sale would affect current employees because the plan would be closed to them after the ownership transfer, she said.
“The PERA board is instrumental in what happens in your recommendations,” Kelly said. “They will always take the position that is most constructive and protective of PERA, not Memorial, not city employees. That’s the way PERA works because it’s a trust fund.”
PERA is a public pension plan that covers about 450,000 teachers, state workers and other government employees, including Colorado Springs’ city employees.
It’s unclear how many retirees and current employees of Memorial belong to PERA. Efforts to reach a PERA spokesperson were unsuccessful late Tuesday.
Kelly also told the commission that if it recommends making Memorial a nonprofit, the PERA board would control that decision, too. But she said the board is likely to approve the change if the nonprofit commits to funding the pension plan at the same rate.
“These are just laws that I wanted you to be aware of in your thinking because they impact whatever decisions you make,” she said.
The council-appointed commission is responsible for leading a community conversation about health care and also recommending whether to change Memorial’s ownership and governance.
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