Workers successfully challenge pension funding based on 'church plan'

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Workers successfully challenge pension funding based on ‘church plan’
Workers successfully challenge pension funding based on ‘church plan’

In a case ripe with implications for religiously affiliated senior living organizations, employees at a Kentucky medical center earned a key victory in a lawsuit alleging inadequate pension funding.

The suit claims the employer — St. Elizabeth Medical Center — is treating the pension as a “church plan.” This practice has shielded the pension from funding requirements in the Employee Retirement Income Security Act. April 4, a federal judge decided that the lawsuit has standing.

Judge David L. Bunning ruled that because workers were suing under Section 502(a)(2) of ERISA, they were bringing claims on behalf of the plan as a whole. As a result, they did not need to show individual injuries, Bunning said.

This ruling represents one of the first successful challenges to “church plan” pension status since a 2017 U.S. Supreme Court decision that upheld the way some religious-based organization have run their plans.

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