December 5, 2016

Peter Stris Comments to Bloomberg BNA About Pending Church Plan Litigation

Three hospitals have filed a petition for a writ of certiorari asking the U.S. Supreme Court to review and reverse appellate court rulings that would force the hospitals to bring underfunded pensions into compliance with federal law. The case is Dignity Health, et al. v. Rollins, No. 16-258.

Yesterday, Justice Kennedy granted a stay in the case, pending the disposition of the petition. This is an infrequent occurrence, and Bloomberg called expert Peter Stris to comment on the development.

The underlying lawsuit alleged that hospital employees have faced a $3.5 billion shortfall in their pensions because the hospitals did not adequately fund their pension plans. The hospitals claimed that the plans were “church plans.” (Church plans are exempt from the Employee Retirement Income Security Act and, thus, not subject to the same standards as pension plans that are governed by ERISA.)

All three federal courts of appeal were unpersuaded and ruled against the hospitals, finding that the pension plans were not church plans.

Coverage linked above:
As Church Plan Battle Heats Up, All Eyes on Supreme Court (Bloomberg BNA, September 22, 2016)

Related press coverage:
Billion-Dollar Church Plan Standoff Heads to Supreme Court (Bloomberg BNA, December 5, 2016)