Hospital Sisters Health System Hit with Pension Plan ERISA Lawsuit

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A class action filed on behalf of members and beneficiaries of the Hospital Sisters Health Services Employees’ Pension Plan claims the plan has been underfunded by hundreds of millions of dollars. The 32-page lawsuit alleges Hospital Sisters Health System, Hospital Sisters Services, Inc. and their retirement committee and investment committee boards failed to maintain the employee pension plan pursuant to the Employee Retirement Income Security Act of 1974 (ERISA). “As of June 2015,” the suit says, “the Plan’s pension benefit obligations exceed its assets by over $317 million. The Plan has had no less than $210 million in shortfalls since 2011, with over $410 million in unfunded pension obligations in 2012.”

At the heart of the suit is the defendants’ allegedly wrongful classification of the employees’ non-contributory pension plan as an ERISA-exempt “church plan.” Because Hospital Sisters Health System is neither a church nor convention or association of churches, the plaintiff claims, the employee plan is subject to ERISA protection.

The proposed class covers all participants or beneficiaries of the Hospital Sisters Health Services Employees’ Pension Plan.