A federal judge in U.S District Court for the District of Colorado has issued a summary judgment in favor of sponsors of Catholic Health Initiatives’ defined benefit pension program.

The so-called “church plan” case could have ramifications for other similar claims around the country.

The Employee Retirement Income Security Act exempts church plans from most of the law’s requirements. ERISA defines church plans as pension plans “established and maintained for its employees by a church or by a convention or association of churches” that have tax-exempt status.

Catholic Health Initiatives is a Denver-based non-profit conglomerate of hospitals that operates in 17 states.

In 2013, participants in defined benefit retirement plans sponsored by CHI filed suit, alleging the pensions were underfunded by $892 million, ultimately to the detriment of 78,000 employee participants, according to court documents.

Plaintiffs’ attorneys argued the plans should not be protected by ERISA’s church-plan exemptions, because CHI “plainly is not a church or a convention or association of churches,” according to the suit.

In issuing his summary judgment in favor of CHI, Judge Robert Blackburn ruled differently.

“Plaintiff suggests that the plain meaning of ‘church’ is simply ‘a house of worship’,” wrote Blackburn, addressing the plaintiff’s core argument that CHI was not a church, but rather a sprawling institution the operated wholly outside the domain of church leadership.

Citing everything from common definitions of the meaning of the word ‘church’ to canon law, Blackburn found CHI’s operations are very much executed under the authority of the Catholic Church.

Blackburn also cited plan documents instructing the subcommittee overseeing the funds to “share common religious bonds with the Roman Catholic Church and the Sponsoring Congregation of Catholic Health Initiatives.”

In dismissing the case, Blackburn bluntly wrote: “CHI is a church plan, and thus exempt from the requirements of ERISA.”

Several class actions across the country claim billions in underfunding in pensions sponsored by church-affiliated health care systems.

In May, participants in Ascension Health’s defined benefit plans have agreed to a preliminary settlement in a complaint that alleged the Catholic hospital network has underfunded pension plans by $440 million.

Instant Insights /

Church plan claim against Catholic Health Initiatives dismissed

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