You can read the class action complaint in Kaplan v. Saint Peter's Healthcare System here.
The suit is the most recent of four very similar suits brought since late March against non-profit hospital systems by the law firms of Cohen Milstein Sellers & Toll PLLC and Keller Rohrback LLP alleging a collective funding shortfall of over $2.1 billion. Like the other suits, the Saint Peter's suit claims that the hospital system is not entitled to claim the church plan exemption under ERISA, since the Retirement Plan fails the eligibility criteria specified in ERISA as amended in 1980: it was not and is not maintained by a church or a church pension board, as defined in the law. The suits challenge prior rulings by the IRS and Department of Labor that have allowed organizations which do not meet the ERISA criteria, but have some connection to a church, to claim church plan status. There is much more background on all four cases in this excellent summary.
Cohen Milstein and Keller Rohrback are well-known and respected in the field of ERISA law, and we trust they will competently handle the case on our behalf – all Plan participants and beneficiaries are members of the class.
Saint Peter's sent a letter to Plan participants on May 17 referencing the suit, twice calling it meritless and "fundamentally wrong," and repeating the claim that the Plan has never been an ERISA plan and has always been a church plan, because their consultants and attorneys say so. We note too that in the hospital's April 24 letter, they claimed they would issue a Summary Annual Report for the Plan in the third quarter 2013. The hospital stopped issuing such reports, mandated by ERISA, since first claiming church plan status in 2006.
This suit does not mean we as Plan stakeholders should not take advantage of the very real opportunity afforded by the hospital's re-application for church plan status – to contact the IRS by June 28 and explain why the Saint Peter's Plan should not be ruled a church plan. We will follow up very soon with more info to make our case to the IRS and others who can help. In the meantime, please get in touch with your fellow employees and retirees, and ask them to watch this blog for updates.
The management of Saint Peter's University Hospital is using the church to exempt itself from the Federal safeguards that protect your retirement plan. For an introduction, see Your Pension At Risk.
