Nurses with New Jersey’s St. Joseph’s Healthcare System won preliminary court approval for a $42 million settlement of claims that the system underfunded their pension plan — a deal that was reached after the U.S. Supreme Court said church-affiliated entities are exempt from the Employee Retirement Income Security Act.
U.S. District Judge John Michael Vasquez gave the initial nod to the settlement, which the nurses say would reduce the plan’s alleged underfunding by half, and he scheduled a final fairness hearing for March 2018. St. Joseph’s nurses proposed the deal in August after a Supreme Court ruling extended ERISA’s exemption for religious entities to include church affiliates, negating one of the nurses’ key arguments in the case.
The nurses told the court in a motion in favor of the settlement that St. Joseph’s has already put an amount slightly over the settlement amount into the plan, and that under the settlement, the hospital system will also ensure that all benefits are paid out for at least the next seven years.
The brief states that the proposed settlement “provides certain and immediate relief to the class, removing the inherent uncertainty of litigation and improving the retirement security of all plan participants.”
The instant suit is the consolidation of two proposed class actions filed in May 2016. Cohen Milstein Sellers & Toll PLLC and Keller Rohrback LLP filed their suit on behalf of Donna Garbaccio, who worked at St. Joseph’s Hospital and Medical Center in Paterson, New Jersey, from 1978 until 1998. It claimed that the pension plan was underfunded by over $180 million.
The plaintiffs are represented by Scott M. Lempert, Karen L. Handorf, Michelle C. Yau and Mary J. Bortscheller of Cohen Milstein Sellers & Toll PLLC, and Laura R. Gerber, Lynn Lincoln Sarko, Havila C. Unrein and Ron Kilgard of Keller Rohrback LLP.
The full article can be viewed here.