Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
May 13 —Hospital workers have filed 15 class actions in the past two months challenging multimillion-dollar funding shortfalls in their pension plans.
The lawsuits accuse religiously affiliated hospitals of improperly treating their pension plans as "church plans" exempt from the funding and disclosure requirements of the Employee Retirement Income Security Act. The average pension funding shortfall alleged by these workers is nearly $370 million per plan, with an average of 25,000 employees potentially affected in each instance.
The cases all ask the same question: Can a religiously affiliated hospital treat its pension plan as a “church plan” exempt from ERISA, or must the hospital comply with the statute's funding, vesting and disclosure requirements?
This litigation effort—which was spearheaded in 2013 by plaintiffs' firms Keller Rohrback LLP and Cohen Milstein Sellers & Toll PLLC—has hit nearly 20 health-care companies in total, spanning 18 different judicial districts. The workers have scored victories in the U.S. courts of appeals for the Third and Seventh Circuits, with future rulings expected from the Ninth and Tenth Circuits.
Recent court filings suggest that one of the targeted hospitals, Illinois-based Advocate Health Care Network, plans to take this fight to the U.S. Supreme Court.
Since the Seventh Circuit determined that Advocate's pension plan wasn't an ERISA-exempt church plan in March, 15 church plan class actions have been filed against 10 different hospitals. The Cohen-Keller litigation team has filed six of the lawsuits, with two other law firms—Kessler Topaz Meltzer & Check LLP and Izard Nobel LLP, which frequently work together—responsible for the others.
The targeted hospitals are:
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