ERISA Lawsuit Settled for $29.5 Million
Ascension Health recently agreed to a nearly $30 million deal to settle ERISA claims in their putative class suits. According to the ERISA lawsuit, participants as well as beneficiaries of a pension plan were wronged.
ERISA Lawsuit Argues Underfunding
The participants asked an Illinois federal judge to give preliminary approval to their proposed class action settlement. Ascension, based in Missouri was the sponsor of the plan when they acquired healthcare subsidiaries for the Wheaton Franciscan Service Health Care Plan in March of 2016.
Decisions not in line with what would have represented the best interests of the beneficiaries may be a violation of federal law could prompt legal action in the form of an ERISA lawsuit.
ERISA requires that a complex set of rules be followed by anyone managing a retirement or pension plan. The agreements that stipulate how much the plan is to be funded must be followed or beneficiaries can take action in the form of a lawsuit.
More than $29 Million Due in ERISA Lawsuit Settlement
The ERISA lawsuit settlement requires that the $29.5 million payment be given to benefits of the proposed settlement class in the event that trust assets associated with the plan are insufficient to pay out those benefits.
The ERISA lawsuit was initially filed in April 2016 and a putative class complaint was later lodged in June of that year. In January, those cases were consolidated.
The plaintiffs argued that ERISA protections were not afforded to them. According to the managers, the plan was classified as an ERISA exempt church plan. ERISA church plans are those plans established for an association of churches or employees of a church.
The complaints, however, allege that the defendants underfunded the plan by more than $134.5 million and inaccurately mandated that participants finish at least five years of service before accruing their vested interests in the benefits.
The ERISA lawsuit says that the plan managers violated the federal law by diminishing accrued benefits through numerous amendments and failing to provide members with mandated reports and statements.
Statements must be provided to plan members in a timely fashion, and those statements must accurately reflect the values in the accounts.
The U.S. Supreme Court issued a decision in June saying that pension plans do not have to be established by churches in order to meet eligibility as a church plan previously exempted from ERISA in a similar case.
Specific regulations govern what is classified as underfunding. If a plan manager discovers that the plan is underfunded, this is to be reported to beneficiaries. If this is not done, daily penalties may apply.
If you believe that a plan manager or other fiduciary violated your rights under ERISA, you have grounds to pursue a lawsuit with the help of an experienced attorney. Contact the lawyers at Bradley/Grombacher today by filling out the form on this page for more information.
The ERISA lawsuit is Wheaton Franciscan ERISA Litigation, Case No. 1:16-CV-04232 in the U.S. District Court for the Northern District of Illinois.
Note: Bradley/Grombacher is not representing the plaintiff in this lawsuit.