Saturday, September 08, 2018

Challenges To Pension Plan's ERISA Exemption Move On

Last year, the U.S. Supreme Court ruled in favor of three large health care systems whose employees had challenged whether their retirement plans qualified as exempt "church pans" under ERISA. (See prior posting.)  Now in one of the cases on remand, a California federal district court has refused to dismiss further challenges to the pension plan's exemption.  In Rollins v. Dignity Health, (ND CA, Sept. 6, 2018), the court held that plaintiffs can move ahead with their claims that the plan is not properly "maintained" as a church plan and that it is not associated with a church.  The court also refused to dismiss state breach of contract and breach of fiduciary duty claims. The court held that it will reach plaintiffs' Establishment Clause challenge to the church plan exemption only if it concludes that the plan qualifies as a church plan.  If the plan's exemption is not ultimately upheld, the plan may be underfunded by as much as $1.2 billion. (See prior posting.)