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Board approves plan to transfer hospital pension liability; staff says benefits unchanged
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Summary
Commissioners approved a resolution directing steps to transfer liability for the New Hanover County Regional Medical Center pension plan to an annuity provider, saying the move will not reduce benefits for roughly 5,500 participants and will remove contingent liability from county taxpayers.
The New Hanover County Board of Commissioners on April 20 approved a resolution to pursue a legal ‘‘termination’’ of the county’s responsibility for the New Hanover County Regional Medical Center pension plan, a process staff said would transfer the plan’s liabilities to an insurer without reducing participant benefits.
County staff explained the term "termination" is a legal description of transferring ownership of plan obligations and emphasized that no participant benefits would be cut. Staff said the pension trust’s assets have recovered since volatility following the hospital’s 2021 sale and that, as of the discussion, the market value of plan assets exceeded projected liabilities.
"This proposal will not result in the reduction of any benefits to any participants in the plan," said Eric, a county staff member overseeing the presentation. He said about 5,500 participants remain in the plan who did not elect a lump sum payment after the hospital sale and that participants will later be offered another lump-sum election. Non‑identifiable information on remaining participants would be shared with annuity providers for bidding; any insurer awarded the bid must provide payments based on existing plan terms.
Staff outlined a timeline: participants will receive notice in June; a more detailed packet and an election opportunity will go out in late July with roughly six weeks to decide; town halls will be scheduled during the election window; and an annuity bid and selection process would follow, with staff aiming to complete the transfer by year end. Staff also said the county currently holds a contingent obligation to fund shortfalls but that the transfer would remove that contingent liability from taxpayers.
Commissioners asked about potential excess assets. Eric said if plan assets exceed liabilities after the transfer process is finalized, any surplus would revert to the county. The board adopted the resolution to proceed and directed staff to communicate with participants and to coordinate with the plan administrator (USI) and others involved in the process.
The item was presented as a financial and administrative action, not a change to benefit formulas; staff urged participants to await the mailed materials and town halls for additional details.
