Friday, November 04, 2016

Another Challenge Filed To "Church Plan" Status of Retirement Plan

Another religiously affiliated health care system has been sued by participants in its retirement plan who claim that the plan is not exempt from ERISA as a "church plan."  The complaint (full text) in Sheedy v. Adventist Health System Sunbelt Healthcare Corp., (MD FL, filed 10.28/2016), contends that the plans are underfunded by $134 million. The complaint alleges that:
the Plans do not meet ERISA's requirements for the "church plan" exemption because they were not "established,"and are not "maintained" by a church.
Reporting on the lawsuit, BNA Daily Report for Executives (Nov. 1, 2016) [subscription required] says:
 The 12-count lawsuit against Adventist Health differs from many of its predecessors because it targets several pension plans, including a multiemployer plan covering several Adventist-affiliated entities and a group of frozen plans in which participants are no longer accruing benefits.
The case is also noteworthy for being the first to target a hospital system with ties to the Seventh-Day Adventist Church. The vast majority of the nearly 40 church plan lawsuits have targeted Catholic health-care providers.
Petitions for certiorari in other cases posing the same issue are pending before the U.S. Supreme Court. (See prior posting).