In this age of overextended retirement benefits, the Sequoia Healthcare District pension plan goes unnoticed. Fact is, CHW (now Dignity Health) has ponied up over $24 Million dollars in the past 9 years for the unfunded liability of this plan. CHW assumed responsibility for the plan in 1996, when the hospital was first sold. The District will tell you that this is a "passthru" expense which does not involve tax dollars. The District deposits $2.5+ Million per year into the pension fund and CHW cuts the District a check in the same amount.
True, but it's not that simple.
In December of 2007, CHW became sole owner of Sequoia Hospital in an agreement which provided Sequoia Healthcare District with an economic return on its investment($75,000), for the hospital rebuild, which equals 50% of Sequoia Hospital's excess profit. In legalize, excess profit means "Operating EBIDA exceeding an aggregate 9.3% annual Operating EBIDA Margin". This has provided the District with over $15 Million in revenue since 2007. Had it not been for the unfunded liability of the pension plan, the District would have received $12 Million more in profit sharing.
Who is responsible for the gross mismanagement of the pension fund which created the unfunded liability? Who is receiving the pension benefits?
Art Faro, currently a Member of the Sequoia Healthcare District Board of Directors was CEO of Sequoia Hospital when it was sold in 1996. He is a beneficiary of the plan.
I am asking questions.