Click here for a short summary of the issue. Click here for a detailed timeline.
See also the Pension Rights Center website.
Click here for ex-St. Peter's CEO John Matuska's 2011 letter to the IRS.
Click here for ex-St. Peter's VP of HR Bruce Pardo's 2011 letter to the IRS.
Haga clic aqui para verun resumen del problema en español.

Wednesday, June 7, 2017

More: Hospitals Win Supreme Court Case

As we (too briefly) reported in a prior post, on Monday the U.S. Supreme Court ruled in favor of the church-affiliated hospital systems, including Saint Peter's, in the three consolidated "church plan" cases. The opinion was unanimous, 8-0 (new justice Neil Gorsuch did not participate).

Prior to the ruling, three federal appellate courts ruled that to take advantage of the governing ERISA statute's church exemption, a pension plan must have been established by a church. Monday's ruling reversed these appellate rulings, allowing church-affiliated organizations, including some of the largest healthcare corporations in the country, an exemption from ERISA's protections for employees and retirees.

In Justice Elena Kagan's written opinion, the court studied the statutory language, weighed both sides and found that "the hospitals have the better of the argument." Justice Sonia Sotomayor wrote in a concurring opinion that while she agreed with the majority about the establishment requirement, she was "troubled" – specifically that Congress, when they authored and adopted the statute, would likely not anticipate the large church-connected healthcare corporations of the present day, many of them for-profit, and all competing in the market with non-church-connected organizations whose pensions (if they have them) must comply with ERISA. She states that "other provisions ... including the provisions governing which organizations qualify as principal purpose organizations permitted to establish and maintain 'church plans,'" should also be considered in granting such exemptions.

These concerns in Justice Sotomayor's opinion appear to drive the remaining hope that such plans might still be brought under ERISA protections. Karen Ferguson, director of the Pension Rights Center, stated in a PRC press release that "(t)he Court addressed only one issue: that a pension plan can be a church plan even if it is not established by a church. The Court did not decide whether the plans involved in the cases before it are maintained by the type of organization envisioned  by Congress when it enacted the law. That this was not addressed in the Court’s decision leaves hope for workers and retirees covered by these plans that they will receive the pensions they earned."

Yesterday the hospital sent a statement to all employees from new interim CEO Leslie Hirsch, celebrating the ruling and its freeing the hospital to "appropriately fund its defined benefit pension plan minus the burden of excessive and often costly government regulations." As before, on behalf of the hospital Hirsch promises the hospital's commitment to deliver on its promises to plan members – but for now, the hospital's word will have to suffice.

We will continue to update the blog when and if events warrant. Until then, on behalf of the members of the Saint Peter's pension plan, we'd like to thank Karen Ferguson and all at Pension Rights Center, who have fought steadfastly for us since this effort began; former Saint Peter's executives John Matuska and Bruce Pardo, for stepping forward and putting their names to letters and other forms of support, and everyone who has supported our effort and this blog with information and opinions, even (perhaps especially) anonymously. Special thanks to Larry Kaplan, who has devoted several years and untold grey hairs to challenging Saint Peter's shifting explanations and serving as the face of the original lawsuit and the subsequent appeals. Larry has performed a great service and valiantly fought the good fight, and he has our eternal gratitude. (We believe he would appreciate comments to that effect under this post.)

Some selected media reports: