SUMMARY OF THE LAWSUIT

This lawsuit alleges that Holy Cross Hospital (“HCH”), a non-profit healthcare corporation, violated numerous provisions of the Employee Retirement Income Security Act (“ERISA”), after wrongfully claiming that the Pension Plan for Employees of Holy Cross Hospital (the “Pension Plan”) was exempt from ERISA’s protections because it was a “Church Plan,” despite HCH’s operation of the Pension Plan as an ERISA plan for almost nineteen years prior to claiming the exemption.

SUMMARY OF THE CLAIMS

In the Complaint, Plaintiffs allege that Defendants wrongfully claim that the Pension Plan was exempt from ERISA’s protections because the Pension Plan was a “Church Plan.”  Claiming this “Church Plan” exemption allowed HCH to forgo protections to plan participants that are required under ERISA.  Defendants had previously operated the Pension Plan as an ERISA plan for almost nineteen years until 1993, when HCH retroactively claimed “Church Plan” status. 

HCH instituted a merger with Sinai Health System (“Sinai”) in August 2012 that included a condition that HCH would abandon its under-funded Plan and resultant liabilities.  Accordingly, HCH attempted to transfer sponsorship of the Plan to the Sisters of Saint Casimir of Chicago (“SCC”)—an entity with few assets—directly before the merger.  This transfer required HCH to amend the definition of “employer” in the Plan to SSC.  Less than two years later, SSC notified Plan participants that the underfunded Plan would be terminated and the benefits distributed in an amount drastically less than promised, based on a termination discount rate of 13.5%.  This rate is over three times higher than the ERISA discount rate of four percent.

This transfer was an attempt by HCH to renounce liability for the underfunded Plan within five years of the Plan’s termination.  The transfer, however, was invalid—the Plan amendment listed SCC as the employer, but HCH employees were never employees of SCC.  Therefore, HCH and Sinai are liable for reimbursement of the underfunded plan.  Moreover, the high discount rate of 13.5% resulted in Plan participants receiving substantially less (up to less than half) of the benefits to which they were entitled.  This reduction is a violation of the ERISA anti-cutback provision. 

CLASS ACTION ALLEGATIONS

This lawsuit is brought on behalf of all participants or beneficiaries of the HCH Pension Plan.

Excluded from the Class are any high-level executives at HCH or any employees who have responsibility or involvement in the administration of the Pension Plan, or who are subsequently determined to be fiduciaries of the Pension Plan, including the Individual Defendants.

STATUS OF THE LITIGATION

On March 1, 2017, after months of negotiation facilitated by a neutral, third-party mediator, Plaintiffs and Defendants signed a Settlement Agreement to resolve the claims of Plaintiffs in this case against all Defendants for $4 million on top of Defendants’ existing plan assets, for a total of approximately $9 million. Plaintiffs filed an Unopposed Motion for Preliminary Approval of Settlement Agreement on March 1, 2017.

On March 9, 2017, after a brief hearing, Judge Shah granted the motion, preliminarily approving the Settlement Agreement. Class members should expect to receive a notification of the Settlement from the pension plan’s administrator.  Class members can reach the Holy Cross Hospital Pension Service Center at (888) 414-8820.

For more information about the Settlement, including a detailed description of the settlement, settlement documents, and contact information for the settlement attorneys and administrators, please visit the Holy Cross Hospital Settlement webpage.

WHOM TO CONTACT FOR MORE INFORMATION

If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:

Karen L. Handorf, Esq.: khandorf@cohenmilstein.com
Julie Goldsmith Reiser, Esq.: jreiser@cohenmilstein.com
Maria Dewees, Paralegal: mdewees@cohenmilstein.com
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, NW, Suite 500
Washington, DC 20005
Telephone:  888-240-0775 (Toll Free) or 202-408-4600