Months after a settlement agreement was preliminarily approved in the case of Overall v. Ascension Health, the health care entity has agreed to a settlement agreement with the Wheaton Franciscan System Retirement Plan in a similar case challenging the plan’s “church plan” status under the Employee Retirement Income Security Act (ERISA).
Ascension sponsors the plan due to its acquisition of Wheaton Franciscan Healthcare, an Illinois non-profit corporation.
Similar to the settlement agreement regarding the Ascension plan, the agreement includes provisions that mimic the provisions of ERISA, concerning plan administration, summary plan descriptions, notices (annual summaries, pension benefits statements, current benefit values), and the plans’ claim review procedure. Ascension has also agreed to pay of the first $29.5 million of benefits that are distributable from the plan to settlement class members in the event trust assets attributable to the plan become insufficient to pay such benefits.
According to the settlement agreement, should a corporate transaction occur where plan assets and liabilities covering settlement class members transfer to a successor, Ascension Health shall cause the successor to honor Ascension Health’s commitments under the Plan Benefit Guarantee. Any of the releasees, in their sole discretion, may satisfy Ascension Health’s obligation under the Plan Benefit Guarantee, at any time after the effective date of the settlement, by making contributions to the plan trust that in the aggregate total $25,000,000.
The settlement agreement notes that defendants deny any and all allegations of wrongdoing made in the complaint. They aver that the plan has been and continues to be properly administered as a church plan, as defined in Internal Revenue Code Section 414(e) and ERISA Section 3(33).