Saint Francis Hospital and Medical Center, Hartford, Conn., will contribute $107 million to its pension plan to settle a class-action lawsuit challenging its church-plan status.
The settlement was preliminarily approved May 20 by U.S. District Court Judge Victor A. Bolden in Bridgeport, Conn.
A class of pension plan participants sued the company in July 2015 challenging its church-plan status, which they claimed denied them of protections under the Employee Retirement Income Security Act. According to court documents, the plan had $264 million in assets and $409 million in liabilities as of Sept. 30, 2013. “Consequently, the plan was underfunded by a staggering $139,123,000 or 34%. Upon information and belief, the underfunding continues to this day,” the complaint said.
The company, which is a wholly-owned subsidiary of St. Francis Care Inc., denied all allegations, but agreed to settle to avoid further litigation. The plan will continue to operate as a church plan, but the settlement “provides significant non-monetary equitable consideration,” with participants receiving certain ERISA-like protections for the next 15 years, such as reporting in addition to the funding, the settlement said.
Saint Francis Hospital and Medical Center said in a statement it “remains committed to ensuring our retirees and their beneficiaries receive their benefits under all of our retirement plans. We have complied with the law, and all applicable requirements related to our retirement plans. As intended, the plan has paid benefits in full to our retirees and will continue to do so into the future. The lawsuit was resolved by committing to fund the plan in a manner consistent with what Saint Francis has done in the past and intends to do in the future.”