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U.S. Supreme Court to Decide How Religiously-Affiliated Entities Run Retirement Plans


The U.S. Supreme Court announced on December 2 that it will hear three cases that may have a multi-billion dollar impact on the funding of retirement plans for several large hospital systems across the country as well as many other entities that are religious-affiliated organizations. The cases turn on whether the “church plan” exemption under ERISA – which exempts religiously-affiliated organizations from much of the stringent pension plan funding and other requirements under ERISA – applies only if a church initially established the retirement plan or whether such plan needs to be simply maintained by the church-affiliated entity. In each case, the IRS had issued determination letters blessing the hospital’s decision to treat the retirement plans as ERISA-exempt church plans. The U.S. Court of Appeals for the Third, Seventh and Ninth districts have all ruled against the hospitals.

The cases are Advocate Health Care Network v. Stapleton, Saint Peter's Healthcare Sys. v. Kaplan, and Dignity Health v. Rollins. The 3 cases will be consolidated and heard together and will impact nearly 3 dozen additional lawsuits across the nation challenging how religiously-affiliated entities run their retirement plans.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

David McFarlane
Partner – Los Angeles
Phone: +1 213.443.5573