October 01, 2018
  • State law may be path forward in church plan suits
  • Case against St. Anthony hospital advances

The legal push to hold religious hospitals liable for pension funding shortfalls got a boost when a federal judge allowed state law claims to move forward against a Midwestern hospital’s terminated plan.

Former employees of St. Anthony Medical Center can proceed with breach-of-contract, fiduciary breach, and negligence claims under Indiana state law, the judge ruled Sept. 29. The workers say their pension benefits were cut by as much as 30 percent when the plan was terminated after recording a funding shortfall of more than $32 million.

The ruling could suggest a path forward for other hospital workers whose challenges to underfunded pension plans hit a roadblock in 2017, when the U.S. Supreme Court made it more difficult for these workers to sue under the Employee Retirement Income Security Act. The Supreme Court ruled that ERISA allows religiously connected hospitals to run their pension plans as “church plans” that don’t have to comply with the statute’s strict funding and insurance requirements. By allowing the St. Anthony workers to levy state law claims, the judge suggested that the Supreme Court ruling might not be the death knell for the pending cases involving ERISA-exempt church plans.

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Cohen Milstein Sellers & Toll PLLC and Keller Rohrback LLP represented the workers. Jackson Lewis PC represented St. Anthony.

The complete article can be accessed here.