An Indiana hospital has agreed to a $4 million settlement to resolve a suit accusing it of underfunding its pension plan and then wrongly cutting back participants' benefits when the plan was terminated.
A group of current and former St. Anthony Medical Center employees on Wednesday asked an Illinois federal judge to give preliminary approval to the deal that would settle claims the hospital flouted the Employee Retirement Income Security Act when it reduced pension benefits 30% to 40%. The central issue in the case was whether the plan was properly classified as a so-called church plan, exempting it from certain ERISA requirements.
They said $3 million of the settlement would be available to a proposed class of more than 1,900 plan participants, while the rest would be used for attorney fees and costs and for incentive awards for the named plaintiffs. The parties told the court in November they reached a deal, but didn't give further details on it at the time.
The workers called the deal fair and reasonable, saying that in coming to the deal they looked at the financial situation of St. Anthony and took into account the uncertainty of the case’s outcome.
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The employees are represented by Karen L. Handorf, Julie G. Reiser, Julie S. Selesnick, Jamie Bowers and Carol V. Gilden of Cohen Milstein Sellers & Toll PLLC, and Lynn L. Sarko and Ron Kilgard of Keller Rohrback LLP.
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