Compliance April 26, 2019

Parties in Dignity Health Church Plan Lawsuit Announce Agreement to Settle

The case made it to the Supreme Court, which ruled plans maintained by principal-purpose organizations can qualify as “church plans;” however, it did not rule that the hospital was a principal-purpose organization.

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In a Joint Notice of Settlement the plaintiffs and defendants in a lawsuit alleging Dignity Health’s pension plan is not a “church plan” as defined by the Employee Retirement Income Security Act (ERISA) notified the U.S. District Court for the Northern District of California that they have reached a settlement in principle with the assistance of a private mediator, and have approved a term sheet incorporating the major terms of the settlement.

In the court document, the parties say they anticipate they will execute the settlement and the plaintiffs will file an unopposed motion and memorandum for preliminary approval of the settlement by approximately May 15.

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In July 2014, the District Court granted a motion for partial summary judgment against Dignity Health, finding its pension plan was not a “church plan” as defined under ERISA. In its decision, the court took a step toward granting plaintiff Starla Rollins’ ultimate appeal for declaratory and injunctive relief directing Dignity Health to bring its pension plan into compliance with ERISA—including its reporting, vesting and funding requirements. The 9th U.S. Circuit Court of Appeals agreed with the district court’s findings.

Dignity Health then successfully petitioned the Supreme Court to weigh in on the case. Following oral arguments in the related cases of Advocate Health Care Network v. Stapleton, St. Peter’s Healthcare System v. Kaplan, and Dignity Health v. Rollins, the U.S. Supreme Court ruled plans maintained by principal-purpose organizations can qualify as “church plans.” However, it did not rule that the hospitals in these cases were principal-purpose organizations.

Back for a second time with the District Court, it granted the plaintiffs room to amend their complaint “to cure the defects identified in the order,” and the plaintiffs filed an amended complaint, attempting to do so.
Data and Research April 26, 2019

Uncertainty About Social Security Fuels Doubts About Retirement Outlook

Only 33% of women and 49% of men said they are “extremely” or “very likely” to have enough money to cover their needs throughout retirement.

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Fifty-nine percent of those polled by AARP said it was only “somewhat likely” or “not at all likely” that their savings, investments and Social Security benefits would be sufficient to cover their financial needs throughout retirement. Among women, this jumps to 67%, and among men, it ticks down to 51%. Only 33% of women and 49% of men said they are “extremely” or “very likely” to have enough money to cover their needs throughout retirement.

Asked to expand upon their doubts about retirement, those surveyed by AARP said not making enough money and uncertainty about Social Security were sources of insecurity. Among women, it was 47% who said the former and 46% who said the latter, and among men, it was 37% for each of those factors.

AARP also asked respondents to its poll what they viewed as their biggest financial mistake. The most common response was not saving enough, followed by taking on debt, including credit cards and loans.

“The situation is serious, but not one that can’t be improved,” says AARP Financial Ambassador Jean Chatzky. “No matter your circumstance, there are resources available to help almost everyone take simple steps to improve your finances, start a savings plan and get into the habit of putting away money on a regular basis.”

The survey also found that 60% of respondents had made a New Year’s resolution for 2019 related to money. The most common savings resolutions included building up an emergency fund, saving for vacation, paying off debt and saving for retirement.

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However, among those who made a resolution related to money, 51% of the women and 35% of the men said they had not saved as much as they had planned. Among this group, 61% said the reason for not saving as much as they had planned was due to unexpected expenses, and 20% said due to a decrease in income, either from unemployment or a business slowdown.

AARP’s findings are based on an online survey of 1,500 people in March. The full findings can be viewed here.

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