Fifteen former Memorial Health System employees had a special retirement plan that cumulatively cost up to $636,000 a year. But after the city leased Memorial to University of Colorado Health on Oct. 1, the Public Employees' Retirement Association stopped making the payments, which included $20,000 a month to former CEO Dick Eitel, the Gazette reports.
Some of the recipients, the paper adds, are threatening to sue. If they do, it would be the third lawsuit triggered by the lease.
The first is between the city and PERA, which contends the city owes $240 million for Memorial's workers who left PERA under the UCH lease but are still due PERA benefits. The city says it owes nothing. The second was filed by investment funds over City Attorney Chris Melcher's early payoff of Memorial's bonds.
The 15 special retirement deals reportedly were struck by Memorial's board more than a decade ago and surprised former Councilor Randy Purvis, who served from 1987 to 1999 and again from 2003 to 2011. "I don't recall any secret retirement agreements with anybody at Memorial Hospital," he says.
The UCH lease mentions only PERA, and Melcher has never cited additional retirement plans as possible city liabilities.
Council President Pro Tem Jan Martin says Council wasn't told of the program until recently, but has since learned the hospital agreed to the payments in lieu of raises. Memorial and the employees both paid into PERA at a higher-than-normal rate. Since PERA benefits are capped, PERA then made payments to Memorial, which distributed them to the 15 people.
"It worked well for years until the PERA lawsuit with the city," Martin says, "and then PERA stopped making payments."