The Superintendence of Catholic Schools of the Archdioceses of San Juan is being sued by past and current participants in its pension plan for terminating the plan in violation of the Employee Retirement Income Security Act, and then claiming exemption from ERISA as a church plan.
The complaint filed June 13 in U.S. District Court in San Juan alleges that since 2009, plan officials have failed to send annual financial reports and other documents required by ERISA, and to pay premiums to the Pension Benefit Guaranty Corp. Participants were led to believe the plan was covered by ERISA.
The lawsuit is seeking to recover $50 million in unpaid benefits, plus statutory penalties for the disclosure lapses, and court costs, as well as a temporary restraining order. The lawsuit is also seeking $50 million in alleged losses related to the plan investing more than 80% of its assets in Puerto Rico bonds, which lost significant market value.
In a March statement, pension fund officials said the plan became insolvent because benefits “were much higher” than contributions, with most participating employers hurt by the territory's economic crisis. According to the statement, plan officials met with participating employers on three occasions in 2016, and in March, employers voted to terminate the plan.
Calls to the pension fund, schools office, archdiocese and PBGC were not returned at press time.