IRS Comment Letter Templates Available

We have now posted sample letter templates for comments to the IRS. These templates give guidelines for effective comments to help convince the IRS to deny Saint Peter's latest attempt to claim "church plan" status for the pension plan. Since many current employees are concerned about reprisals from Saint Peter's, we have provided templates for both a signed and an anonymous letter. We have also provided a one-page fill-in-the-blanks template for people who feel intimidated by word-processing software, but we discourage its use; we believe a customized letter would be far more influential. If editing the template is a problem, try requesting help from a computer-savvy friend or family member, or write a handwritten letter along the lines of the template.

The IRS wants to hear from Plan participants, beneficiaries, and other "interested persons." Your comment must be received by the IRS by June 28, 2013 to be considered. Please tell your fellow retirees and employees about this opportunity, and pass along this blog's web address. The volume of comment letters received will mean a lot.

We have provided the templates in different file formats for compatibility with most word-processing software. If you have problems, please try another format; if problems persist, please post a comment and we'll do our best to help. You can access the letter templates here.

More Details on Class Action Lawsuit

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.

Class Action Lawsuit Launched Against Saint Peter's

Saint Peter's Retirement Plan participant Larry Kaplan has asked us to share the following statement.

A Class Action Complaint has been filed against Saint Peter's Healthcare System by Laurence Kaplan, on behalf of himself, individually, and on behalf of all others similarly situated. This lawsuit is brought on behalf of Plan participants who are covered by the original Defined Benefit Plan, which the Healthcare System is trying to convert to a Church Plan.

The complaint has been filed to convince the Court that our Plan should remain covered by ERISA with all of the benefits and not be changed to a Church Plan. Within the complaint are many reasons which describe why the Healthcare System is not entitled to change the Plan to a Church Plan. I cannot go into detail, but the complaint clearly covers the technical reasons for this change not to happen.

Our attorneys are a Nationally known firm based in Washington, D.C. and are handling this case on a contingency basis, so there is no money that we have to pay them at any time. Their fee will be determined by the Court, if the case is won, and will be ultimately paid by the Healthcare System. If we lose, the firm will not be paid by anyone, but will have put many man hours working on this complaint for our benefit.

Larry Kaplan

At present we have no further info on this announcement, but we will share info if and when it becomes available. We still expect to follow up soon on our previous post with information on responding to the latest IRS comment period.

Until then, some other related news: There's a new article in the Star-Ledger about the restoration of benefits for Healthcare Center at Orange retirees. Meanwhile, employees of St. Mary's in Passaic are losing their "church fund" pensions, as management there starved the fund and then sold the business. I'm sure they received similar reassurances as we have heard from SPUH management.

Saint Peter's Re-applies for Church Plan Status

In the past two weeks, Saint Peter's Retirement Plan participants have received two communications from Saint Peter's Healthcare System (SPHS) management. The first, a letter dated April 24, notified participants that a "corrected copy" of the IRS-mandated Notice to Interested Persons would soon be issued. (The Notice informs Plan participants and other stakeholders that SPHS has applied for "church plan" status to the IRS, which allows SPHS to evade federal protections – required contributions, insurance, etc. – that apply to most pension plans. SPHS filed their first notice in November 2011.) The new Notice followed on April 29.

The letter attempts to downplay the significance of the new Notice:

The first Notice stated that a ruling was requested for the plan year beginning January 1, 2006 (the year the application to the IRS was filed). The Notice should have stated that the ruling is requested for the Plan Year beginning January 1, 1974. This is the only change from the first Notice you previously received. The corrected date does not impact your rights under the Plan.

The change from 2006 to 1974 appears to be the only difference between the two notices, but this notice in effect amounts to a re-application to the IRS. Perhaps most importantly, the new Notice opens a new 60-day window for stakeholders to send comment letters to the IRS. Since the Notice was distributed on April 29, the new comment window extends until June 28, 2013. We will soon update this blog with much more information, including comment letter templates to help participants effectively communicate their concerns to the IRS.

In related news, a rare and stunning victory:  in late March the IRS overturned their 2003 decision to award "church plan" status to Hospital Center at Orange, rescuing the fund just as it was running out of money. It was this case that compelled the IRS to institute the moratorium that held up Saint Peter's application for "church plan" status from 2006 until late 2011, and to require that the participants be notified of the application. In short, they are the reason we get this chance to fight for our pensions, so we celebrate their victory. This New York Times article about the win mentions our pension plan and links to this blog. We welcome the exposure, and strive for a similar win!

More soon...