October 16, 2017

Thousands of class members affected by seven Bon Secours Health System Inc. pension plans that were allegedly in violation of the Employee Retirement Income Security Act asked a Maryland federal court Friday to give final approval to a settlement that would require the health care organization to provide $98.3 million to bolster funding.

The settlement agreement calls for the hospital to contribute $14 million a year for the next seven years to the seven plans at issue, which “represents the total amount of underfunding,” the plaintiffs said in a request for final approval of the agreement. In addition, the settlement calls for the hospital to pay another $300,000 to benefit about 500 people who have unique circumstances under one of the plans.

Arlene Hodges and other named plaintiffs collectively asserted the hospital didn’t operate the seven benefit plans according to ERISA regulations and instead said they were under the “church plan” exemption, which allowed it to sidestep ERISA protections for participants in a variety of ways. According to the plaintiffs, Bon Secours didn’t establish proper funding and disclosure requirements for the plans along with other issues. Class notices were sent to about 28,000 members.

“In addition to the substantial monetary considerations, the settlement also provides equitable consideration to the class members that are still current participants in the plans,” the memorandum in support of the unopposed motion for final approval said. “Through Aug. 31, 2025, BSHSI will guarantee all accrued benefits of the class members, meaning the BSHSI will ensure that there are sufficient assets in the plans to pay accrued benefits through that date.”

The plaintiffs are represented by Mary J. Bortscheller, Jamie Bowers, Karen L. Handorf and Julia Horwitz of Cohen Milstein Sellers & Toll PLLC.

The full article can be accessed here.