A federal judge in U.S District Court for the District ofColorado has issued a summary judgment in favor of sponsors ofCatholic Health Initiatives’ definedbenefit pension program.

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

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The Employee Retirement Income Security Act exemptschurch plans from most of the law’srequirements. ERISA defines church plans as pension plans“established and maintained for its employees by a church or by aconvention or association of churches” that have tax-exemptstatus.

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

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

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

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

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

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

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Blackburn also cited plan documents instructing the subcommitteeoverseeing the funds to “share common religious bonds with theRoman Catholic Church and the Sponsoring Congregation of CatholicHealth Initiatives.”

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

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Several class actions across the country claim billions inunderfunding in pensions sponsored by church-affiliated health caresystems.

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In May, participants in Ascension Health’s defined benefit plans haveagreed to a preliminary settlement in a complaint thatalleged the Catholic hospital network has underfunded pension plansby $440 million.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.