The
New York Times reported earlier this week on the unusual recent decision by the Internal Revenue Service to revoke its 2003 "church plan" designation for the employee retirement plan of Hospital Center of Orange. This allows the Pension Benefit Guaranty Corporation to pick up payments to retirees of the financially-troubled Catholic-affiliated New Jersey hospital that closed 8 years ago. The Times says that the hospital's problems:
underscores a wrinkle in the federal pension law, which some faith-based employers have used to save money, despite the risks. Churches and workplaces with religious affiliations have been able to avoid the complex and costly requirements of the federal pension law, known as Erisa, by obtaining an I.R.S. ruling that their pension plans were church plans.
The designation not only freed them from having to fund their workers’ benefits, it also meant they could stop paying insurance premiums to the government and receive refunds on their last six years’ worth of premiums.
Tough economic times, and pitches from benefits consultants, have prompted more than 100 faith-based employers to seek church plan status....
[Thanks to Ken Myers for the lead.]
