Cohen Milstein is conducting an investigation of companies claiming an exemption from federal law by declaring that their pension or other retirement plans qualify as “church plans.”  Pension plans that are church plans are not subject to many of the requirements of ERISA, the federal law that protects pension plan participants.   

Healthcare Facilities Under Investigation

  • SSM Health Care
  • Adventist Health
  • Adventist Health System
  • Bon Secours
  • Mercy Health (formerly Catholic Health Partners)
  • Baptist Memorial Health
  • Christus Health

Cohen Milstein’s Current Church Plan Cases

Stapleton, et al. v. Advocate Health Care Network & Subsidiaries, et al. 
This lawsuit alleges that the non-profit healthcare corporation Advocate Health Care Network and Subsidiaries (“Advocate”) is violating numerous provisions of the Employee Retirement Income Security Act (“ERISA”), while wrongfully claiming that the Advocate Health Care Network Pension Plan (the “Advocate Plan”) is exempt from ERISA’s protections because it is a “Church Plan.” This lawsuit is currently pending in the United States District Court for the Northern District of Illinois.

Overall, et al. v. Ascension Health, et al.  
This lawsuit alleges that the non-profit healthcare system Ascension Health Alliance and its subsidiaries (“Ascension”) improperly claim that their pension plans qualify as “Church Plans” under the Employee Retirement Income Security Act (“ERISA”). This lawsuit is currently pending in the United States District Court for the Eastern District of Michigan.

Chavies, et al. v. Catholic Health East, et al. 
This lawsuit alleges that the non-profit healthcare system Catholic Health East (“CHE”) improperly claims that its pension plans qualify as “Church Plans” under the Employee Retirement Income Security Act (“ERISA”). This lawsuit is currently pending in the United States District Court for the Eastern District of Pennsylvania.

Medina, et al. v. Catholic Health Initiatives, et al. 
This lawsuit alleges that the non-profit healthcare system Catholic Health Initiatives (“CHI”) improperly claims that its pension plans qualify as “Church Plans” under the Employee Retirement Income Security Act (“ERISA”). This lawsuit is currently pending in the United States District Court for the District of Colorado.

Rollins, et al. v. Dignity Health, et al. 
This lawsuit alleges that the non-profit healthcare corporation Dignity Health (“Dignity”) is violating numerous provisions of the Employee Retirement Income Security Act (“ERISA”), while wrongfully claiming that the Dignity Plans are exempt from ERISA’s protections because they are “Church Plans.” This lawsuit is currently pending in the United States District Court for the Northern District of California.

Butler v. Holy Cross Hospital 
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.

Griffith, et al. v. Providence Health & Services Retirement Plan Committee, et al. 
This lawsuit alleges that the non-profit healthcare conglomerate Providence Health Services and its subsidiaries (“Providence”) improperly claim that Providence’s Health & Services Cash Balance Retirement Plan (“Providence Plan”) qualifies as a “Church Plan” under the Employee Retirement Income Security Act (“ERISA”). In operating its Plan as a “Church Plan,” the Complaint alleges that Providence does not comply with many protections afforded to pension beneficiaries under ERISA.  The lawsuit seeks to compel Providence’s Plan to fully comply with ERISA. This lawsuit is currently pending in the United States District Court for the Western District of Washington.

Owens, et al. v. St. Anthony Medical Center, Inc., et al. 
This lawsuit alleges that the non-profit healthcare corporations St. Anthony Medical Center, Inc. (“SAMC”) and the Franciscan Sisters of Chicago Service Corporation (“FSCSC”) violated numerous provisions of the Employee Retirement Income Security Act (“ERISA”), while wrongfully claiming that the St. Anthony Medical Center Retirement Plan (the “Retirement Plan” or the “Plan”) is exempt from ERISA’s protections because it is a “Church Plan.”  Defendants’ failure to properly maintain and operate the Retirement Plan under ERISA harmed the 1,900 Plan participants who suffered cutbacks of up to 40% of their pension benefits when Defendants purportedly terminated the Retirement Plan in April 2012. This lawsuit is currently pending in the United States District Court for the Northern District of Illinois.

Kaplan, et al. v. Saint Peter’s Healthcare System, et al. 
This lawsuit alleges that the non-profit healthcare corporation Saint Peter’s Healthcare System (“Saint Peter’s”) is violating numerous provisions of the Employee Retirement Income Security Act (“ERISA”), while wrongfully claiming that the Saint Peter’s pension plan is exempt from ERISA’s protections because it is a “Church Plan.” This lawsuit is currently pending in the United States District Court for the District of New Jersey.

Lann, et al. v. Trinity Health Corporation, et al. 
This lawsuit alleges that the non-profit healthcare system Trinity Health Corporation (“Trinity”) improperly claims that its pension plans qualify as “Church Plans” under the Employee Retirement Income Security Act (“ERISA”). In operating its plans as “Church Plans,” Trinity does not comply with many protections afforded to pension beneficiaries under ERISA. The lawsuit seeks to compel Trinity’s pension plans to fully comply with ERISA. This lawsuit is currently pending in the United States District Court for the District of Maryland.

What Are Employers Doing?

Certain entities that claim to have a religious affiliation or beliefs are seeking to avoid their pension obligations to their employees under ERISA by declaring their pension plans to be “church plans.”  Many employers who claim that the pension plans they sponsor are “church plans” seek a determination from the Internal Revenue Service (“IRS”) that the plan meets the IRS definition of a church plan.  Recently, the IRS issued new procedures that must be followed before an employer may obtain such a determination.  The new procedures require that the participants of an affected pension plan be given notice of the request for church plan status.  The purpose of the notice is to give participants an opportunity to comment on and express their views as to whether the plan should be covered by ERISA.  The mere fact that the IRS has determined the plan to be a church plan for tax purposes does not prevent a participant from challenging that determination in court.

Why Is It Important Whether Your Plan Is Covered By ERISA?

A church plan is exempt from many of the provisions under ERISA which protect the promised benefits of a plan participant.  The protections applicable to ERISA-covered plans – but not a church plan – include:

  • Funding Requirements:  ERISA requires that employers set a certain amount of money aside to fund the future pension payments in case, for example, the employer goes out of business.  These requirements do not apply to church plans.
  • Protection against Benefit Reduction:  ERISA requires that benefits, once earned, cannot be reduced or taken away.  These requirements do not apply to church plans.
  • Requirements Regarding Vesting and Accrual of Benefits:  ERISA sets limits on the amount of time that an employee must work to vest in or accrue benefits under the plan.  These requirements do not apply to church plans.
  • Insurance Protection by the Pension Benefit Guarantee Corporation:  Private pensions covered by ERISA must have insurance in the event that the employer becomes insolvent and/or the plan terminates so that employees are provided a certain amount of benefits.  Church plans do not have PBGC insurance.
  • Operation & Management of the Plan and Plan Assets by A Fiduciary:  ERISA imposes duties on those who manage and administer pension plans to act with the highest level of loyalty and care known under the law by requiring them to act solely in the best interests of the participants and with the highest level of care.  ERISA does not impose these requirements on church plans.
  • Full Disclosure and Access to the Terms of the Plan:  ERISA requires that pension plans make certain disclosures to their participants, including providing them access to the terms of the plan.  No such requirements apply to church plans.
  • Required Government Reporting:  ERISA requires that pension plans make certain disclosures with respect to the financial condition of the plan and subject the plans to federal government oversight.  No such oversight occurs for church plans.

Whom to Contact for More Information

If your employer notifies you that it is requesting a determination that your pension plan is a church plan and you would like more information on what steps you may take to protect and preserve the benefits to which you are entitled under your plan, please contact one of the following persons:  
 
Karen Handorf, Esq. khandorf@cohenmilstein.com  
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005 
Telephone: 888-240-0775 or 202-408-4600