ERISA-Ninth Circuit Holds That A Plan Will Not Qualify For the Church Plan Exemption From ERISA, Unless It Is Actually Established By A Church

In Rollins v. Dignity Health, No. 15-15351 (9th Cir. 2016), plaintiff  Starla Rollins filed a putative class action against her former employer, defendant Dignity Health, and others (together “Dignity Health”), alleging that Dignity Health has not maintained its pension plan in compliance with ERISA.  Dignity Health concedes it has not complied with ERISA, but contends its plan qualifies for ERISA’s church-plan exemption, under ERISA sections 3(33) and 4(b)(2).

The district court held that a pension plan must have been established by a church, or by a convention or association of churches, to qualify as a church plan and thus be eligible for the exemption. It is not sufficient that the plan merely be maintained by any such entity or a related entity. Because the district court found that Dignity Health’s pension plan was not established by a church, or by a convention or association of churches, the court awarded partial summary judgment to Rollins, ruling that Dignity Health’s pension plan must comply with ERISA. The Ninth Circuit Court of Appeals (the “Court”) held that the district court was correct on this point. As such, the Court affirmed the district court’s decision on this matter.

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