Retirement roulette: should hospitals be permitted to gut employee pension plans simply because they are religious?

Author:Hayes, Liz

A pending trio of U.S. Supreme Court cases could impact the retirements of hundreds of thousands of Americans, simply because they work for religiously affiliated hospitals and other entities.

The cases focus on a federal law known as the Employee Retirement Income Security Act (ERISA), which requires most employers who offer pension plans to include several measures of security and transparency for their employees.

The safeguards include adequately funding the plans to ensure there is enough money to pay out the promised pensions to retirees, insuring the plans through a governmentbacked program to protect against underfunding and regularly informing employees about the status and financial health of the pensions.

Since the 1980s, the federal government has exempted houses of worship from these requirements to prevent government intrusion into church finances and records.

On the surface, that might sound like a move designed to protect church-state separation. But in recent years, a problem has arisen: Religiously affiliated organizations, particularly hospitals and health systems that employ thousands of people in secular roles, have taken advantage of this loophole to underfund employee pension plans.

Employees of these organizations are fighting back, and the issue now is headed to the Supreme Court. The high court in December agreed to hear lawsuits filed by employees of three health systems that altogether employ nearly 100,000 people. Those cases include:

* Dignity Health, et al. v. Starla Rollins: Dignity, a San Francisco-based health system formerly known as Catholic Healthcare West, is the country's fifth-largest health care provider with 60,000 employees.

* Advocate Health Care Network, et al. v. Maria Stapleton, et al. : Illinois-based Advocate is affiliated with both the Metropolitan Chicago Synod of the Evangelical Lutheran Church in America and the Illinois Conference of the United Church of Christ. It operates 12 hospitals and more than 250 other health care facilities and employs 33,000 people.

* St. Peter's Healthcare System, et al. v. Laurence Kaplan: The New Jersey-based health system, which has ties to the Roman Catholic Diocese of Metuchen, N.J., employs about 2,800 people.

Americans United filed a friend-of-the-court brief at the federal appeals court level supporting the employees in these three cases and will file again before the Supreme Court.

"Unlike houses of worship, religiously affiliated entities regularly employ people of other faiths, and many if not most of these employees perform functions that are secular," AU noted. "[T]hese employees are entitled to the same protection for their employment benefits as everyone else."

AU points out that the separation of church and state forbids government from meddling in the internal affairs of houses of worship, but entities that happen to have a religious connection are another matter. AU's legal brief pointed to several court cases that have found that religious accommodations that burden or harm third parties such as employees don't...

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