Dignity Health has agreed to pay at least $100 million to settle a proposed class action accusing it of using a religious Employee Retirement Income Security Act exemption to which it wasn't entitled to justify underfunding its pension plan by $1.8 billion.
A group of participants in the hospital system's pension plan asked a California federal judge Thursday to approve the settlement agreement, which would require Dignity Health to pay its plan $50 million in 2020 and at least $50 million in 2021.
The San Francisco-based Dignity Health, which runs hospitals in three states, also committed to funding the plan until 2024 as part of the settlement. For 2022, 2023 and 2024, the company must make the minimum contribution recommended by actuaries to the plan, according to the settlement.
The settlement also requires Dignity Health to promise plan participants that it will go 10 years without cutting their accrued benefits because of a plan merger or amendment.
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The plan participants are represented by Karen L. Handorf and Michelle C. Yau of Cohen Milstein Sellers & Toll PLLC, and Lynn L. Sarko, Matthew M. Gerend, Ron Kilgard, Christopher Graver and Juli E. Farris of Keller Rohrback LLP.
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