When does the “church plan exemption” apply?

You already know that under the “church plan” exemption, Church plans do not have to comply with ERISA, including the requirements to fund a plan and pay Pension Benefit Guaranty Corporation premiums. (Congress amended ERISA in 1980 to state that “a plan established and maintained for its employees…by a church…includes a plan maintained by an organization…controlled by or associated with a church.”)

Currently, there are many lawsuits against religiously affiliated hospitals alleging they improperly asserted the “church plan” exemption. Plaintiffs claim that over 300,000 hospital workers face a $4 billion pension shortfall because these hospitals have improperly designated the plans as exempt.

Now Before the US Supreme Court: Three religiously affiliated hospitals seek reversal of lower court rulings concluding that their pension plans are not church plans because they were not established or maintained by a church.

On Monday the U.S. Supreme Court heard oral argument on the ability of religiously affiliated hospitals to apply the “church plan” exemption.

BNA’s Joe Lustig’s provides a helpful summary of the issues presented. https://www.bna.com/church-plan-oral-b57982085707/

BNA’s Jo-el Meyer provides a nice analysis on Monday’s oral argument and issues presented. https://www.bna.com/hospital-pension-plans-n57982085790/

My friend, Stephen Rosenburg, also provides some insightful analysis and early odds on the outcome of the Supreme Court decision. http://www.bostonerisalaw.com/archives/401k-plans-notes-and-a-prediction-on-the-supreme-court-argument-on-church-plans.html

And, if you follow the NCAA Final Four…. Go Zags…

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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.