Officials at Lakeside Health System have filed a request with the Pension Benefit Guaranty Corporation (PBGC) to terminate the Lakeside Memorial Hospital, Inc. Retirement Plan, effective February 19, 2013.
Lakeside CEO Hugh Collins says those affected are being notified and that the move is part of Lakeside’s financial turnaround efforts.
“The decision to terminate the plan was a difficult step,” Collins says, “but essential to our efforts to bring expenses in line with revenues. We value our current and former employees and will work with the PBGC to make sure that there is as little disruption as possible.”
He adds that the action is being taken to continue Lakeside’s long-term commitment of service to the community, according to a press release.
Lakeside officials say that if the PBGC grants the termination request, it will take over the Plan and make sure that current and future retirees of the Plan receive their pension benefits, up to the applicable PBGC guaranteed amounts. Preliminary calculations indicate that all Plan benefits should be fully covered by the PBGC, although the PBGC will make the final determination.
In April 2004, the Board amended the Plan to “freeze” benefit accruals, meaning that no one could join the Plan or increase his or her benefit entitlement under the Plan on or after that date, officials say.
They say that although the Plan has continued to provide pension benefits to those individuals who earned pensions prior to April 15, 2004, Lakeside Health System unfortunately no longer has the resources to make ongoing infusions of funds to the Plan.
