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LAWSUITS NEWS & LEGAL INFORMATION

IRS Working to Bring "Church" Pension Plans under ERISA

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Washington, DCThe Internal Revenue Service is currently working to move the pension plans of employers with religious affiliations partially under the purview of the Employee Retirement Income Security Act, or ERISA.

When ERISA was enacted in 1974, religiously affiliated employers were exempted from the regulation, according to the Wall Street Journal. Recently, employers with only a tenuous association to religion have begun to convert their pension plans to "church plans," which generally cover the clergy and lay employees of churches and synagogues.

"They said: 'Hallelujah, I'm a church plan,' and no longer have to meet funding requirements, or pay premiums," said Andrew Zuckerman, the IRS's acting director of employee plans.

Church plans do not need to follow federal guidelines, perhaps the most important of which requires that employers ensure their plans through Pension Benefit Guaranty Corporation, a government agency that pays benefits if the pension fund goes under.

Now it appears that many businesses are taking advantage of the loophole in order to save money.

"Congress never intended for pension plans established and maintained by nonprofit hospitals, schools, and publishing houses for their own employees to be exempt from ERISA," Karen Ferguson, director of the Pension Rights Center, a consumer group, told the news source.

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READER COMMENTS

Posted by

on
You are correct. Churches can and DO walk away from their responsibilities. Concordia Plan Services, Lutheran Church Missouri Synod, St. Louis, MO, will not even issue me a statement of my own retirement account. I am of retirement age and do not know what this church is doing with my money. When I call the DOL, ERISA they all say the same thing, "Our hands are tied." This is unacceptable. There needs to be a class action lawsuit on behalf of the Lutheran teachers who have paid in and it doesn't matter. These people in the church, in my opinion, have a money laundering well-oiled machine. These people have lied on court documents, so they know how to work the system.

Posted by

on
I am a semi-retuired physician collecting my pension for 18 montrhs and now the hospital I worked for for 40 years just moved to a "Church" reitrement plan.
It doesn't give me much comfort to know that they under this Plan they can basically walk away from their responsibilities! I don't believe that religously allfiliated hospitals that collect enourmous amounts of money from government programs and thereby function similarly to secular hospitals should not be regulated by the same rules that apply to all other businesses.

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