Saint Francis Hospital, one of many health care organizations that have been sued over the “church plan” status of their pensions, has agreed to a $107 million settlement of its case.
Under terms of the settlement agreement, which has been preliminarily approved by the U.S. District Court for the District of Connecticut, Saint Francis will make a one-time contribution of $17 million following final approval of the settlement for funding the plan. Thereafter, it will make a $10 million contribution to the plan each year for nine years.
Cases like Kemp-DeLisser v. Saint Francis Hospital and Medical Center allege that the defendants’ pension plans do not meet the definition of “church plan” under the Employee Retirement Income Security Act (ERISA), and therefore are subject to ERISA requirements, including funding requirements.
Among high-profile cases, district courts were split on the interpretation of the “church plan” definition in ERISA. However, in two of the cases that reached the appellate court level, the 3rd and 7th Circuits ruled that only a church, and not a church-affiliated organization, can establish a church plan. The third case, Overall v. Ascension Health, was sent back to the district court for approval of an $8 million settlement agreement.
The settlement agreement in Kemp-DeLisser is here.