The High Court Rules ERISA Church Plans Include Plans Maintained by Church Affiliates, Even if not Established by a Church.

• In Event: Equity Incentive, Financial Reporting, and Fair Value Accounting

Abstract

In Advocate Health Care Network v. Stapleton, 198 L. Ed. 2d 96 (2017), the Supreme Court unanimously ruled that for purposes of ERISA, a pension plan maintained by a church-affiliated organization is a church plan, even if the plan is not established by a church.
Pursuant to ERISA § 1003(b)(2), a church plan is exempt from ERISA. ERISA § 1002(33)(A) defines a church plan as a plan established and maintained for its employees by a tax-exempt church. ERISA § 1002(33)(C)(i) generally provides that a plan established and maintained for its employees by a church includes a plan maintained by a church-affiliated organization. The Court reasoned that the plain meaning of ERISA § 1002(33)(A) and (C)(i) taken together is that the church establishment requirement for church plans is removed for plans maintained by church- affiliated organizations.
The Supreme Court reversed the decisions of the Third, Seventh, and Ninth Circuit Courts, which all held that ERISA’s plain text requires that a pension plan maintained by a church-affiliated organization must be established by a church to be an ERISA church plan. The circuit courts ruled that subparagraph (C)(i) only expanded the definition of a church plan to include one established by a church but maintained by a church-affiliated organization.

Author

• Mark Aquilio, St John's University