Monday, April 07, 2014

Pension Plan of Catholic Hospital Does Not Qualify As "Church Plan" Exempt From ERISA

In Kaplan v. St. Peter's Healthcare System, (D NJ, March 31, 2014), a New Jersey federal district court held that in order for a pension plan to qualify as a "church plan" exempt from ERISA, it must be established by a church or an association of churches.  It is not sufficient that it is established by a tax exempt corporation merely controlled by or associated with a church, despite a 2013 IRS private letter ruling that recognized the New Brunswick, New Jersey Catholic hospital's plan as a church plan. This is the second recent case (see prior posting) to require pension plans of religiously affiliated health care organizations and hospital systems to comply with ERISA. Plaintiff contends that St. Peter's pension plan violates a number of ERISA's requirements, including a requirement that results in its being underfunded by $70 million. reports on the decision.