Select Page

 

Advocate Health Care Network Settlement

Welcome to the Stapleton v. Advocate Health Care Network Settlement website. This website is intended to keep Class members informed regarding the Class Action Settlement. The content of this website is the responsibility of Plaintiffs’ Counsel and has not been approved by the Court.

On June 27, 2018, the Honorable Edmond E. Chang granted final approval of the Settlement.

Background

The case involves the Advocate Health Care Network Pension Plan (the “Advocate Plan” or the “Plan”), a noncontributory defined benefit pension plan.

Plaintiffs filed a complaint on March 17, 2014, alleging that Advocate denied the Plan’s participants and beneficiaries the protections of the Employee Retirement Income Security Act (“ERISA”) by improperly claiming that the Plan is a “church plan” exempt from ERISA. The lawsuit further alleged that Advocate, as the Plan sponsor, violated ERISA in a variety of ways, and, alternatively, that application of the church plan exemption to the Advocate Plan violates the Establishment Clause of the Constitution.

After litigating in the District Court, the Seventh Circuit Court of Appeals, and the United States Supreme Court, and before moving forward with further litigation in the District Court, the case went to mediation and the parties reached a compromise with the mediator’s assistance.  A Class Action Settlement Agreement (the “Settlement Agreement”) was signed on February 16, 2018.  Judge Chang granted final approval of the Settlement Agreement on June 27, 2018.

The Settlement Class

On June 27, 2018, the final approval of the Settlement was granted on behalf of the following Class:

All persons who, as of the Settlement Date, are or were Plan participants, whether vested or non-vested, and their beneficiaries.

As defined in the Settlement Agreement, the Settlement Date is the date on which the Settlement has been approved by a Final Order of the Court that has become Final.

The Settlement

The Settlement resolves all claims against Defendants and applies to all past and present, vested and non-vested, participants in the Plan and their beneficiaries.

Benefits to the Settlement Class

The Settlement provides for Advocate’s corporate guarantee of accrued benefits under the Plan for a period of ten years beginning on January 10, 2018. Additionally, the Settlement provides significant non-monetary equitable consideration, in that current participants in the Plan will receive certain ERISA-like financial and administrative protections for ten years. Because the Plan is a defined benefit pension plan and not a defined contribution plan with individual accounts, like a 403(b) plan or a 401(k) plan, any amount that may be paid on account of the guarantee will be contributed to the Plan as a whole, rather than to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement.

The Settlement also provides a different form of relief to certain former participants in the Plan whose benefits are not vested under the terms of the Plan. These former participants will not have vested rights, but the Settlement provides for a one-time payment of three hundred dollars ($300.00) each to certain former participants in the Plan who terminated employment on or after January 1, 2013, and on or before September 1, 2017, and completed at least three (3) but less than five (5) years of vesting service.

The Effective Date of the Settlement is the date on which the Court has entered its Final Order approving the Settlement and the time to appeal has expired.

The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement.

Released Claims and Fairness Hearing

The Class Representatives and their attorneys believe that this Settlement is in the best interests of the Class members.  As a result of the Settlement, the Class releases certain claims against Defendants pertaining to the church plan exemption (these claims are defined in the Settlement Agreement).

The Court held a Fairness Hearing on June 27, 2018 at the U.S. District Court for the Northern District of Illinois and considered the fairness of the proposed Settlement.  The Court considered arguments concerning the proposed Settlement’s fairness at that time and entered an order approving the Settlement.  No benefits can be issued to Class members until after the time to appeal has expired.

Settlement FAQs

Q: How do I know whether I am part of the Settlement Class?

The Court has certified this case as a class action for settlement purposes only. You are a member of the Settlement Class if, as of the date on which the Final Order approving the Settlement becomes Final, you are or were a participant in the Plan, whether vested or nonvested, or the beneficiary of such a participant.

Q: How will the Settlement be distributed?

Because the Plan is a defined benefit pension plan and not a defined contribution plan with individual accounts, like a 403(b) plan or 401(k) plan, the guarantee, if ever paid in the future, will be contributed to the Plan’s trust fund as a whole, rather than to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement. You will remain entitled to the benefit you have accrued pursuant to the Plan’s terms, and under the Settlement, for ten years, the Plan cannot be amended to reduce your Accrued Benefit. The Settlement also provides significant non-monetary equitable consideration, in that current participants in the Plan will receive certain ERISA-like administrative protections, including access to certain information, for ten years.

If you are a member of the Settlement Class with more than three years but less than five years of service with Advocate, and you terminated employment on or after January 1, 2013, and on or before September 1, 2017, you will not have a vested pension benefit, but you will receive the one-time cash payment of $300.00 described above.

Members of the Settlement Class do not need to do anything in order to obtain the benefits and protections provided by the Settlement in this case.

 Q: What does the Settlement provide?

Advocate has agreed to provide significant protections for the Plan that will remain in place for a period of ten years beginning January 10, 2018.  First, Advocate guarantees that the Plan Trust will have sufficient funds to pay the level of accrued benefits stated in the Plan.  Second, amendment or termination of the Plan will not reduce participants’ accrued benefits.  Third, if the Plan is merged with or into another plan in that time period, participants will be entitled to the same or greater benefits than they were before the merger.

The Settlement also includes equitable provisions which mimic certain provisions of ERISA concerning plan administration, available information (including a plan summary and statements of participants’ account balances), and the Plan’s claim review procedure.  These provisions are also in place for ten years.

The Settlement also provides for a one-time payment of three hundred dollars ($300.00) each to certain former participants in the Plan who do not have any vested rights in the Plan, who terminated employment on or after January 1, 2013, and on or before September 1, 2017, and completed at least three (3) but less than five (5) years of vesting service.

The Effective Date of the Settlement is the date on which the Court has entered its Final Order approving the Settlement and the time to appeal has expired.

The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement.

Q: What do I need to do to be included in the Settlement?

Members of the Settlement Class do not need to do anything with respect to the Settlement in this Action.

Q: How will the lawyers be paid?

Court-appointed Class Counsel filed a motion for an award of attorneys’ fees and expenses, including incentive awards for the Named Plaintiffs. The Court considered and approved that motion at the Fairness Hearing on June 27, 2018.  Payment of attorneys’ fees, expenses, and incentive awards to Named Plaintiffs does not reduce the amount of the guarantee or the one-time payments to be made to certain Class members whose benefits are not vested.

Contact

If you are a Settlement Class member and you have questions regarding the Settlement, please contact Class Counsel at (888) 684-6672 or via .

Please do not contact the Court. Its personnel will not be able to answer your questions.