November 28, 2018

A group of current and former employees of an Indiana hospital have told an Illinois federal court they have settled their suit accusing the hospital of underfunding its pension plan and then wrongly cutting back participants' benefits when the plan was terminated.

In a joint notice filed Tuesday, the workers and St. Anthony Medical Center said they had reached a settlement of the worker's claims that the hospital violated the Employee Retirement Income Security Act when it reduced pension benefits 30 percent to 40 percent and that they are in the process of drafting a final agreement for submission to the court.

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The employees sued St. Anthony in June 2014 over the 2012 termination of their pension plan, which was underfunded at the time, alleging that the decision led to an illegal reduction of their benefits. The employees said in their December third amended complaint that St. Anthony flouted ERISA's funding requirements and failed to make payments to the Pension Board Guaranty Corp., all while wrongly claiming the church plan exception, among other things.

Certification of the proposed 1,900-member class was first sought in November 2014, but the motion was denied without prejudice after the U.S. Supreme Court said it would take up a case concerning the scope of ERISA's religious exemption. The workers renewed their certification motion late last month.

In September, the case survived a motion to dismiss from St. Anthony, after the court found premature the hospital's assertions that the employees' claims were time-barred and that they had delayed too long in bringing the suit. The court also allowed most of the employees' state law claims to proceed, dismissing only their unjust enrichment claim.

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 Lincoln Sarko, Erin M. Riley, Laura R. Gerber, Havila Unrein and Ron Kilgard of Keller Rohrback LLP.

The complete article can be accessed here.