In the months since the Internal Revenue Service lifted a moratorium in 2011 on issuing private letter rulings on church plans, IRS has issued at least 13 rulings granting church plan status, including one conferring church plan status on a defined benefit pension plan sponsored by a tax-exempt 501(c)(3) unincorporated religious organization that had been paying pension insurance premiums to the Pension Benefit Guaranty Corporation since Jan. 1, 1974, practitioners said in interviews with BNA in June and July.
IRS determined that the plans covered by those recent rulings met the definition under tax code Section 414(e)(3)(A) for “plans to be treated as church plans,” said Karen Ferguson, director of the Pension Rights Center in Washington.
Some plans treated as church plans may be facing legal challenges, however. Five recent complaints filed by plaintiffs seeking class actions to challenge the church plan status of underfunded pension plans maintained by church-affiliated hospitals and health systems could signal a new wave of class actions brought under the Employee Retirement Income Security Act, according to David E. Rogers, a partner at McDermott Will & Emery in Washington.
Ferguson said the language of ERISA and related tax code provisions makes clear that Congress provided ERISA protections for all private-sector workers, “with one narrow exception for church plans.” She added that “the legislative history makes plain that Congress enacted the church plan exemption only because it did not think that it was appropriate for a federal government agency, the Pension Benefit Guaranty Corporation, to examine a church's financial records.”
Others, however, have said that the statutory language defining a church plan under Section 414(e) is not black and white. “It's clearly a gray area,” said James J. Keightley, a partner at Keightley & Ashner in Washington. Congress always is “dancing a fine line” to avoid becoming involved in church matters, he said.
Excerpted from a story that ran in Pension & Benefits Daily (7/18/2013).
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)