Archive for the ‘Church Plans’ Category

Breaking News: Supreme Court Rules on Church Plans

Today the United States Supreme Court released its ruling in Advocate Health Care Network v. Stapleton and it was unanimous:

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EA5: Church Plan Settlements

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.

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Church Plan Arguments

The United States Supreme Court today heard oral arguments in Advocate Health Care Network v. Stapleton as to, in the words of the Washington Times, whether some of the nation’s largest hospitals should be allowed to sidestep federal laws protecting pension benefits for workers. The court agreed last December to hear the case and will likely withhold any decision until their session ends this June.

The three supposed church plans involved, with links to their latest 990 filings including the page with pension obligations, are:

And there are many more church plans out there who would have major issues with ERISA coverage (as would the IRS and PBGC). Following are some excerpts from the arguments presented today.

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Church Plan Crisis Looming

It could be another trillion dollars in unfunded Defined Benefit pensions either picked up by taxpayers or defaulted upon. Fox Rorthschild’s newsletter For Your Benefit presents the situation in an article on page 4:

In early December, the United States Supreme Court announced that it will hear three consolidated cases to decide whether pension plans established by religiously-affiliated employers are entitled to the same treatment as plans established by churches. All three cases involve defined benefit pension plans maintained by church-affiliated healthcare systems; in each case, lower courts have ruled that the plans are not exempt from ERISA and must comply with all plan qualification requirements.
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Three years ago, participants, concerned about their benefits (and knowing that PBGC guarantees will not be available), began to file lawsuits claiming that the plans maintained by their religiously-affiliated employers should not be church plans and should not be exempt from ERISA. The Supreme Court agreed to hear these cases because the appellate courts in the Third, Seventh and Ninth Circuits have ruled in favor of the plaintiff employees, while district courts in other circuits have taken the contrary position.
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A decision that plans maintained by religiously-affiliated employers are not church plans reportedly could affect millions of employees across the country and trigger pension funding liabilities in the billions of dollars.

Today we got:

Text of Amicus Brief of U.S. to Supreme Court on Definition of Church Plan (PDF)
U.S. Department of Labor [DOL]; Pension Benefit Guaranty Corporation [PBGC]; U.S. Department of the Treasury; and U.S. Department of Justice

Why are these government agencies so anxious to keep these ‘church’ plans exempt from ERISA?
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