February 2017

Faith-Based Organization Reduces Risk of Pension Claims

In a unanimous decision in June 2016, the Supreme Court settled an issue that impacts thousands of faith-based hospitals, schools, nursing homes and other organizations. At issue was whether pension plans established by religiously affiliated organizations are entitled to the “church plan” exemption from ERISA, or whether the exemption is only available when a so-called “steeple church” established the pension plan. Our firm filed an amicus brief on behalf of several clients in support of the religiously affiliated petitioners in Advocate Health Care Network v. Stapleton.

The brief argued that the exemption applies to all pension plans maintained by church-affiliated organizations, not just those that were established by “steeple churches,” and that the appellate courts’ attempts to exclude these plans from the exemption reflected “a fundamental misunderstanding of how many churches are structured and perform their ministries.” The Court concurred, holding that such plans qualify as ""church plans"" regardless of who established them.

The outcome of the case reversed decisions in the Third, Seventh and Ninth Circuits.

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