The last session of the the Enrolled Actuaries meeting was on Church Plans (or Not) and the issue now before the Supreme Court. It turns out, if I am correctly reading between the lines, to be less about religion and more about lawyers.
Of course church plans should be covered by ERISA funding rules. Does being associated with a church give you special powers to divine your contribution amount and, if the money is not available, to make it appear? In 2013 the Hospital Center of Orange did get intervention, but from the PBGC.
Which got some lawyers to thinking that all church plans should be covered by ERISA as participants were being taken advantage of. So we got:
Rollins v. Dignity Health: On 12/12/13 the district court held that a church plan must be “established by a church.” On 7/26/16, the 9th circuit upheld the district court’s decision that Dignity Health’s pension plan was ineligible for the church plan exemption because the plan was not established by a church.
Overall v. Ascension Health: On 5/13/14 the district court held that the Ascension Health plan is a church plan pursuant to ERISA 3(33). The 6th circuit agreed to review the issue. On 9/17/15 the district court approved a settlement of the litigation.
Kaplan v. Saint Peter’s Healthcare System: On 3/31/14 the district court held that a church plan must be “established by a church.” On 12/29/15 the 3rd Circuit upheld the district court’s decision that Saint Peter’s is ineligible for the church-plan exemption because the plan was not established by a church.
Medina v. Catholic Health Initiatives: On 8/26/14 the district court held that a 501(c)(3) organization that is controlled by or associated with a church may sponsor a church plan. On 12/8/15 the district court held that the plan qualifies as a church plan because CHI “plainly shares common religious bonds and convictions with the Catholic Church.”
The Medina case was filed on May 10, 2013, the same day that the PBGC announced it was stepping in to pick up the benefits for participants in the Hospital Center of Orange plan.
Settlement activity has been brisk (per these two slides from that EA session):