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…