A settlement agreement has been achieved between St. Joseph’s Hospital and Medical Center and the participants of their defined benefits plan. The plan participants have challenged the status as a church plan and this has been preliminary approved by a Newark U.S. District Court judge.
Pension Plan Settlement Agreement Benefits Workers
The agreement requires that St. Joseph has to contribute $42.5 million in benefits across the next two months. In the event that the funding is insufficient to pay the benefits owed to plan participants over the course of the next 7 years as part of their pension plan, all accrued benefits must be guaranteed by St. Joseph’s. If the plan is terminated or amended, or eventually merged with another pension plan, those benefits remain protected.
Amendments to the plan also require that it be closed no later than December 31st, 2018. The settlement terms of this pension plan agreement are similar to the Employee Retirement Income Security Act that require notices, plan descriptions, administrative procedures, and benefit statements. The plaintiffs who filed the case also shared that the settlement summary filed in the docket explained the potential for a future ruling on the church plan exemption under ERISA as a result of Congress, the IRS, a court or even the Roman Catholic Church.
Ultimately, the litigation landscape could be affected by changes in this pension plan categorization. The settlement was proposed prior to a June 5th Supreme Court ruling that any health care system retirement plan sponsor affiliated with the church is covered by the ERISA exemptions for church plans. St. Joseph’s denied the validity of any claims brought forward by the plaintiffs in this pension plan claim but agreed to settle in order to avoid further costs and risks associated with litigation.
According to the summary document filed with the pension plan settlement agreement, St. Joseph has already completed their financial requirement by inputting $45 million in cash to the plan. A final hearing is scheduled to approve the settlement in full on March 6, 2018.
The plan participants initially filed this pension plan lawsuit in May of 2013 arguing that the pension fund for St. Joseph’s failed to meet church plan definition since it was never controlled or established by a church and was initially established as an ERISA plan. ERISA requirements can be extremely complicated, but they lay a critical foundation about the manner in which companies must manage certain aspects of pension and investment plans. The rules are in place to protect workers and to enforce standards across the board, but aggrieved employees who believe the company is not following the law may pursue legal action to recover funds or change practices, as was the case in this situation.
If you or someone you know believes you may have a legal claim as a result of mismanagement of a pension plan, contact the experienced attorneys at Bradley Grombacher today- you have rights under ERISA that could be protected with the help of a lawyer.
Note: Bradley/Grombacher is not representing the plaintiff in this lawsuit.