Ascension Health Grants $29.5M Backstop for Wheaton Pension

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

Ascension Health will guarantee $29.5 million in benefit payments under Wheaton Franciscan Services Inc.'s pension plan, ending a lawsuit accusing Wheaton of wrongly treating the plan as a “church plan” exempt from federal law ( In re Wheaton Franciscan ERISA Litig. , N.D. Ill., No. 1:16-cv-04232, motion for preliminary settlement approval filed 9/1/17 ).

The deal, announced in court papers filed Sept. 1, requires Ascension to guarantee payment of the first $29.5 million paid out under the Wheaton pension plan in the event the plan can’t cover the payments itself. Ascension, which acquired part of Wheaton’s health-care business in 2016, also agreed to provide plan participants with annual notices of the plan’s funding levels.

This is the second significant settlement of a “church plan” pension dispute since June, when the U.S. Supreme Court held that the Employee Retirement Income Security Act allows religiously affiliated hospitals to run their pension plans as church plans exempt from the statute’s funding, disclosure, and vesting requirements. In August, St. Joseph’s Healthcare System and its employees asked a court to approve a $42 million settlement in a lawsuit over church plan status.

Unlike in the St. Joseph’s case, court papers indicate that Wheaton, Ascension, and the workers reached this deal after the Supreme Court’s June 5 decision.

Prior to the Supreme Court’s ruling, dozens of religiously affiliated hospitals have been sued over their church plan pensions. Several hospitals agreed to multimillion-dollar settlements, including Washington-based Providence Health & Services ($352M), Connecticut-based Saint Francis Hospital ($107M), Trinity Health Corp. ($75M), Ascension Health ($8M), and Alabama-based Baptist Health System Inc. ($11M).

The Wheaton settlement must receive court approval before becoming final. The case is pending before Judge Gary Feinerman of the U.S. District Court for the Northern District of Illinois.

Cohen Milstein Sellers & Toll PLLC and Keller Rohrback LLP represent the Wheaton plan participants. The settlement allows these firms to seek up to $2.25 million in attorneys’ fees and expenses, to be paid in addition to the settlement amount.

Proskauer Rose LLP and Holifield Janich Rachal & Associates represent Wheaton.

To contact the reporter on this story: Jacklyn Wille in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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