• Colorado Springs Hospital Employees Sue for Lost Retirement Benefits
  • March 27, 2015 | Author: Diane Vaksdal Smith
  • Law Firm: Burg Simpson Eldredge Hersh & Jardine, P.C. - Englewood Office
  • Disputes related to Memorial Hospital in Colorado Springs have resulted in multiple lawsuits in the recent past, with the latest suit filed by two former employees. This lawsuit arises from a disagreement over retirement benefits and the hospital’s lease to University of Colorado Health, which the plaintiffs maintain deprived them of hundreds of thousands of dollars. As the facts alleged in the complaint demonstrate, employees can be significantly harmed when employers unilaterally make decisions about retirement benefits without informed consent.

    Can employees be forced to switch retirement plans?

    At the heart of this employee benefits conflict are actions that the city allegedly took when it began leasing Memorial Hospital to University of Colorado Health. Specifically, the plaintiffs maintain that there was never an employee vote prior to pulling them out of the Public Employees’ Retirement Association (PERA) when the lease went into effect. Such a vote is a statutory requirement, according to the lawsuit. In the absence of this vote, the employees were relocated to an inferior retirement plan offered by University of Colorado Health, notwithstanding representations that the new plan would at a minimum provide benefits on par with PERA.

    Thousands of employees potentially affected

    The long-term consequences of changing retirement plans for employees may be substantial. For example, certain employees lost over $100,000 in benefits, according to their attorneys. At the end of the day, this may mean working longer, having less money saved for retirement, or both. With around 4,000 people serving as employees of the hospital at the time the new lease started in 2012, this pension lawsuit could have far-reaching effects.

    City pays up for omitting vote

    This lawsuit is the latest case involving the Colorado Springs Health Foundation, which was set up to handle all funds from the Memorial Hospital lease and improve public health in the surrounding counties. Previously, the city agreed to pay PERA $190 million in a settlement involving claims that the city shorted the state’s retirement fund by removing hospital employees without allotting funds for future liabilities. Like the latest lawsuit, this case focused on the lack of a required hospital employee vote and 65% approval.