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All News > Church-Sponsored Plans

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Church-Sponsored Retirement Plans: Overview and Considerations (PDF)
American Academy of Actuaries Link to more items from this source
[Guidance Overview]
Jan. 24, 2024

11 pages. "This issue brief discusses the broad range of church plans and practices. It discusses: [1] The impact on a participant of being in a church plan when the ERISA protections and provisions for U.S. tax-qualified single or multiemployer pension plans generally do not apply; [2] Governance and fiduciary responsibilities, including plan audit considerations; [3] Differing funding sources and varying approaches to funding benefits; and [4] How the bankruptcy or termination of an underfunded church plan exposes plan participants to potentially more harm than if the plan were covered by PBGC."

Tags: Church-Sponsored Plans  •  Funding of DB Plans  •  Retirement Plan Design

GAO Report: Improved Communication Needed on Church Plan Eligibility for PBGC Coverage
U.S. Government Accountability Office [GAO] Link to more items from this source
Oct. 27, 2023

"Church plans are generally exempt from most ERISA requirements, including rules to fund plans, disclose information, and insure benefits.... This report addresses [1] data available on church plans and plan administration, [2] federal and state roles regarding church plans, and [3] expected outcomes for participant benefits from church plan litigation."

Tags: Church-Sponsored Plans  •  PBGC  •  Retirement Plan Policy

District Court Reexamines ERISA's Church Plan Definition After Supreme Court Weighs In
Thomson Reuters / EBIA Link to more items from this source
Mar. 31, 2023

"The [district court] applied a three-step analysis developed by the Tenth Circuit following the Supreme Court's ruling, asking whether the employer plan sponsor was associated with a church, whether the plan was maintained by a principal-purpose organization, and whether the principal-purpose organization was associated with a church.... The court rejected the argument that only the entity with the authority to amend and terminate the plan 'maintains' a plan[.]' [Kaplan v. Saint Peter"s Healthcare System, No. 13-2941 (D.N.J. Feb. 17, 2023)]

Tags: Church-Sponsored Plans  •  Retirement Plan Policy

Church Plan ERISA Charges Dismissed, But Plan Administrators Newport, Symetra Still on the Hook
PLANSPONSOR; free registration may be required Link to more items from this source
Mar. 22, 2023

"The African Methodist Episcopal Church retirement plan and third-party administrators had federal ERISA charges from a class action retirement complaint dismissed by a Tennessee federal judge's ruling, but they still face state charges.... The lawsuit alleged claims under Tennessee law and 'in the alternative,' claims under [ERISA], against the denomination, church officials, the third-party service providers to the plan and others[.]" [In re: AME Church Employee Retirement Fund Litigation, No. 22-3035 (W.D. Tenn. Mar. 17, 2023)]

Tags: Church-Sponsored Plans  •  Fiduciary Duties

Tax-Exempt and Church Plan Highlights from SECURE 2.0
Groom Law Group Link to more items from this source
[Guidance Overview]
Mar. 14, 2023

"SECURE 2.0 ... updated 403(b) plan rules to conform more closely with 401(k) plan rules, and made a number of key changes specific to 457(b) plans (although many of those changes only apply to governmental 457(b) plans). Further, church plans that do not elect to be subject to ERISA were also impacted by a number of the changes made in SECURE 2.0."

Tags: 403(b) Plans and Annuities  •  Church-Sponsored Plans  •  SECURE 2.0

District Court's Church Plan Ruling Could Have Wide Implications
PLANSPONSOR; free registration may be required Link to more items from this source
Feb. 23, 2023

"Retirement plan sponsors affiliated with a religious entity won in court after a federal district judge ruled that the Saint Peter's Healthcare System of New Jersey qualifies for the church-plan exemption under [ERISA] ... The original complaint in 2013 argued that Saint Peter's retirement plans were not church plans under the technical church-plan rules because of organizational and other similar matters." [Kaplan v. Saint Peter's Healthcare System, No. 13-2941 (D.N.J. Feb. 17, 2023)]

Tags: Church-Sponsored Plans  •  Retirement Plan Design

District Court Rules St. Joseph Retirement Fund No Longer Qualifies as Church Plan
Pensions & Investments Link to more items from this source
Sept. 20, 2022

"A U.S. District Court judge in Rhode Island ruled that the St. Joseph Health Services of Rhode Island Retirement Plan does not have a church-plan exemption from ERISA because it is no longer affiliated with a relevant sponsor....[The judge] denied the remaining defendants motion to dismiss, and ordered the parties to return to mediation." [Del Sesto v. Prospect CharterCare, No. 18-328 (D.R.I. Sept. 13, 2022)]

Tags: Church-Sponsored Plans

California Churches Don't Have to Provide Abortion Coverage in Health Plans, Court Rules
Los Angeles Times, via Yahoo News Link to more items from this source
Aug. 26, 2022

"The case, based on a lawsuit filed by the churches in 2015, weighed their claims of religious discrimination against the state's position that abortion services represent basic care that should generally be covered by all health care plans offered in the state." [Foothill Church v. Watanabe, No. 15-2165 (E.D. Cal. Aug. 25, 2022)]

Tags: Church-Sponsored Plans  •  Health Plan Design

Plaintiffs Claim AME Church Plan Is Subject to ERISA
PLANSPONSOR; free registration may be required Link to more items from this source
Aug. 25, 2022

"Members of the African Methodist Episcopal Church have filed a consolidated class action complaint alleging retirement plan fiduciary breaches under [ERISA].... The complaint follows a proposed class action lawsuit against named plan fiduciaries that was filed earlier this year.... Plaintiffs allege that the church plan is an ERISA plan because the summary plan document clearly states that it is." [In Re: AME Church Employee Retirement Fund Litigation, No. 22-3035 (W.D. Tenn. complaint filed Aug. 19, 2022)]

Tags: Church-Sponsored Plans

New York Attorney General Files Lawsuit Against Catholic Diocese for Retirement Benefits Under Terminated PBGC-Exempt Church Plan
HealthLeaders Media Link to more items from this source
May 25, 2022

"The New York attorney general [has] filed a lawsuit to help more than 1,100 former employees of St. Clare's Hospital in Schenectady, New York, recover lost retirement benefits because of alleged 'negligent and intentional actions' by the Roman Catholic Diocese of Albany.... Of those 1,100+ who lost their retirement benefits, 650 retirees lost all their pension rights and nearly 450 retirees received a single payment equal to 70% of their pension's value."

Tags: Church-Sponsored Plans

AME Church Halts Retiree Payouts Amid Probe Into Missing Funds
The Wall Street Journal; subscription may be required Link to more items from this source
Mar. 10, 2022

"The African Methodist Episcopal Church, among the largest U.S. Protestant denominations, has suspended retirement payments and discussed steep cuts to the savings of its ministers amid an investigation into missing funds ... The church said federal law enforcement and an outside law firm are investigating 'a possible financial crime' involving funds managed by its retirement-services department covering about 5,000 participants, including ministers and bishops."

Tags: Church-Sponsored Plans

Guide to Church Retirement Plans, Part 1
Milliman Link to more items from this source
Jan. 12, 2022

"Chapters in this series will focus on three core principles church plans often look to balance: Benefit adequacy, benefit equity, and benefit security. [The series] will discuss each of these principles in more detail, and how they interact with each other. [This first chapter discusses] pension plans in general, including their history and unique considerations for church plans."

Tags: Church-Sponsored Plans

Guide to Church Retirement Plans, Part 2
Milliman Link to more items from this source
Jan. 12, 2022

"This chapter explores how an employer offering multiple benefits as part of total retirement income planning can lend itself to benefit adequacy."

Tags: Church-Sponsored Plans

Guide to Church Retirement Plans, Part 3
Milliman Link to more items from this source
Jan. 12, 2022

"[This] chapter explores the benefit security of a church plan following these topics and issues: [1] Funding policy; [2] Has the funding policy been checked lately? [3] What are some ways to calculate our contribution? [4] Is it time to make a change? [5] Other considerations."

Tags: Church-Sponsored Plans

Guide to Church Retirement Plans, Part 4
Milliman Link to more items from this source
Jan. 12, 2022

"This chapter explores what it means to have church plan status and how minimum standards may play a part in establishing a balance of the core principles of benefit adequacy, benefit equity, and benefit security."

Tags: Church-Sponsored Plans

Church Plan Litigation: Out of the ERISA Woods Into the State Law Forest
Groom Law Group Link to more items from this source
Dec. 29, 2021

"A recent slip opinion in a case involving a church plan maintained by a hospital in upstate New York reminds us that being a non-ERISA plan brings its own set of challenges because state law is not preempted. In particular, the case illustrates that, if a church plan starts to fail to pay benefits, its sponsor -- as well as related entities such as the church it is controlled by or associated with -- may find themselves subject to various pension-related claims under state law." [Hartshorne v. The Roman Catholic Diocese of Albany, New York, 2021 NY Slip Op. 07329 (3rd App. Div., Dec. 23, 2021)]

Tags: Church-Sponsored Plans  •  Retirement Plan Policy

Appellate Court Affirms Right of Retirees to Sue for Underfunding of Church-Affiliated DB Plan
The Daily Gazette Link to more items from this source
Dec. 27, 2021

"The Appellate Division of state Supreme Court rejected an attempt by the Roman Catholic Diocese of Albany and the St. Clare's Corporation to dismiss the pensioners' lawsuit against them.... Because the fund was church-affiliated, it was exempt from federal insurance requirements, leaving no safety net for the pensioners when the money ran out. The diocese has rejected responsibility for causing the crisis or paying to resolve it." [Hartshorne  v. The Roman Catholic Diocese of Albany, New York, 2021 NY Slip Op. 07329 (3rd App. Div., Dec. 23, 2021)]

Tags: Church-Sponsored Plans  •  Funding of DB Plans

Parties in Dignity Health Church Plan Lawsuit Finally Get Preliminary Approval of Settlement
PLANSPONSOR; free registration may be required Link to more items from this source
Oct. 21, 2021

"Dignity Health will contribute $50 million to the plan for the 2020 plan year and will contribute either another $50 million or the amount of the minimum contribution recommendation calculated by the plan's actuaries for the 2021 plan year, if it's greater than $50 million. For calendar years 2022, 2023 and 2024, Dignity Health has agreed to make contributions to the plan in the amount of the minimum contribution recommendation calculated by the plan's actuaries." [Rollins v. Dignity Health, No. 13-1450 (N.D. Cal. Oct. 19, 2021)]

Tags: Church-Sponsored Plans  •  Funding of DB Plans

New IRS Snapshots Explain Two PATH Act Retirement Plan Provisions
Mercer Link to more items from this source
Sept. 16, 2021

"One snapshot highlights the expanded list of retirement plans and IRAs that can make rollovers into a Savings Incentive Match Plan for Employees (SIMPLE) IRA. The other snapshot addresses the enhanced flexibility to offer automatic enrollment in church plans not covered by ERISA. While the snapshots generally summarize existing guidance rather than provide new information, they may alert plan sponsors and taxpayers to the kinds of issues IRS agents review during audits."

Tags: Church-Sponsored Plans  •  Retirement Plan Design  •  Rollovers  •  SIMPLE 401(k), SIMPLE IRA Plans

IRS Issue Snapshot: Church Plans, Automatic Contribution Arrangements, and the Consolidated Appropriations Act, 2016
Internal Revenue Service [IRS] Link to more items from this source
[Guidance Overview]
Aug. 18, 2021

"The automatic enrollment provision of the PATH Act supersedes any state law that restricts the ability of a church plan to have an automatic contribution arrangement."

Tags: Church-Sponsored Plans  •  Consolidated Appropriations Act, 2021

What Makes a Plan an Electing Church Plan?
Retirement Learning Center, LLC Link to more items from this source
May 27, 2021

"IRS has taken the position that a church plan cannot be inadvertently categorized as an 'electing church plan' ... The plan administrator must make a formal election ... in order to be treated as an electing church plan. The election is irrevocable."

Tags: Church-Sponsored Plans

IRS Publication 4484: Choosing a Retirement Plan (PDF)
Internal Revenue Service [IRS] Link to more items from this source
[Guidance Overview]
Apr. 20, 2021

13 pages, rev. Apr. 2021. "Plan feature comparison chart ... Including plans for employees of tax-exempt and government entities (schools, hospitals, churches, charities). Highlights of eight types of retirement plansoes."

Tags: 401(k) Plans  •  403(b) Plans and Annuities  •  457 Plans  •  Church-Sponsored Plans  •  Retirement Plan Design

Editor's Pick Comparison of Retirement Programs Available to Church and Church-Related Employers (PDF)
Ice Miller LLP Link to more items from this source
[Guidance Overview]
Mar. 23, 2021

15 pages. "This chart compares retirement programs that are 'tax-qualified' under the Internal Revenue Code.... This chart covers the general rules that apply to each of these types of retirement programs to provide context.... [R]ules that apply only to church and church-related employers are bolded in red."

Tags: Church-Sponsored Plans

St. Joseph's Pension $30M Settlement Provides an Incremental Victory
Warwick Post Link to more items from this source
Jan. 5, 2021

"Hope remains for the eventual restitution of the full amount of the plan thanks in part to a [2018 bill] ... to prevent a settlement with one responsible party, or 'tortfeasor', to absolve the other responsible parties of the responsibility of an equitable settlement.... In 2019 ... another bill, also now enacted, [required] any nongovernmental pension plans not covered by [ERISA] and have 200 or more members to comply with ERISA's reporting requirement."

Tags: Church-Sponsored Plans  •  Funding of DB Plans

DOL's Final ESG Investment Rules May Force Reassessment of 'Church Plan Status' for Some Organizations
Business of Benefits Link to more items from this source
[Guidance Overview]
Nov. 10, 2020

"The DOL's new ESG rules may have a curious impact on some church related organizations which utilize faith based standards in their retirement plan investments. Their ability to continue do may now turn on the manner in which they handle their status as a 'church plan.' It arises because the ESG rules will NOT apply to 'non-electing' church plans, as ERISA does not apply to churches unless they affirmatively choose it to do so."

Tags: Church-Sponsored Plans  •  Retirement Plan Investments - ESG

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