Ascension Health Settlement
Welcome to the Ascension Health Settlement website. This website is designed to keep class members informed regarding the Class Action Settlement in Overall v. Ascension Health. While the District Court has approved the Notice of Proposed Settlement and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Plaintiff’s Class Counsel, and has not been approved by the Court.
On September 17, 2015, the Honorable Avern Cohn granted the Final approval order of the Class Action Settlement Agreement (“Settlement Agreement”). The Settlement is now Final.
On March 28, 2013, a putative class action complaint was filed against Ascension Health and various other defendants alleging violations of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Court has appointed Keller Rohrback L.L.P., Cohen Milstein Sellers & Toll, PLLC, and Stephen F. Wasinger PLC as Class Counsel.
The Complaint alleged that Defendants denied the Plans’ participants and beneficiaries the protections of ERISA by claiming that the Ascension Plans qualified as ERISA exempt “church plans.” The Complaint alleged that the Plans sponsored by Ascension—a large, non-profit healthcare entity—did not qualify as ERISA exempt church plans.
Defendants moved to dismiss the Complaint on June 28, 2013. The Parties submitted briefs and documents regarding Defendants’ motion. After several hours of oral argument, and submissions of additional documents, the Court granted Defendants’ motion. Plaintiff filed a Notice of Appeal. Plaintiff-Appellant filed her opening brief in the Sixth Circuit Court of Appeals, Defendants-Appellees filed their response, and Plaintiff-Appellant filed her reply.
Class Counsel were cognizant that there was no guarantee of success in their appeal. Accordingly, the Parties participated in the mediation program sponsored by the Sixth Circuit, pursuant to Rule 33 of the Sixth Circuit Rules. Following negotiations with the mediator for over six months, the Parties accepted a mediator’s proposal and an agreement in principle was reached orally.
The Settlement Class
On September 17, 2015, the Honorable Avern Cohn granted the Final approval order of the ERISA Settlement on behalf of the following:
All participants in or beneficiaries of any of the defined benefit pension plans maintained, sponsored, or claimed by Ascension as Church Plans, including but not limited to: Ascension Health Pension Plan, Borgess Health Alliance Pension Plan, Carondelet Health Pension Plan, Catholic Health Partners Pension Plan, Columbia Hospital Retirement Plan, St. John Health Pension Plan, St. Joseph Health System Pension Plan, St. Joseph Regional Medical Center Pension Plan, St. Mary’s Healthcare Pension Plan, Genesys Regional Medical Center Retirement Plan, Via Christi Health Cash Balance Plan, Alexian Brothers Health System Basic Pension Plan, Alexian Brothers of San Jose, Inc. Bargaining Unit Pension Plan, Affinity Health System Retirement Plan, St. John Health System Employee Retirement Plan, and Ministry Health Care Employee Retirement Plan (collectively, the “Plan” or “Plans”) on or before the Effective Date of Settlement (the “Class Period).
The Court has not decided in favor of Named Plaintiff or Defendants. Instead, Named Plaintiff and Defendants have agreed to a settlement to resolve the Action. In reaching the Settlement, they have avoided the cost and time of the uncertainty of the appeal and a trial if their appeal is granted. As with any litigation, the Named Plaintiff would face an uncertain outcome if this case proceeded, including the risk of dismissal of the appeal as well as the risk of not prevailing at trial.
The Settlement provides both non-monetary equitable consideration and monetary equitable consideration.
Non-Monetary Equitable Consideration
The Settlement provides for the following ERISA-like, financial and administrative protections for the next seven and one-half years (the period commencing on January 1, 2015 through June 30, 2022):
- A guarantee the Plans have sufficient funds to pay participants the level of benefit stated in the Plans;
- None of the Plans may be terminated unless there are sufficient assets to meet the life annuity and lump sum distribution amounts (as those terms are defined by the relevant Plan), elected by participants in a termination, including any administrative costs;
- If any Plan is merged with or into another Plan, participants will be entitled to the same (or greater) benefits post-merger as they enjoyed before the merger; and
- In the case of an amendment to any Plan, the actuarial value of a participant’s accrued benefit under the terms of the Plan shall be no less than it was the day immediately prior to the effective date of the amendment.
These commitments are crucial because the Ascension Plans, like most church plans, are “fund-specific,” meaning that the Plans’ financial responsibility for benefits is limited solely to the amount of assets in the fund. Such fund-specific provisions are forbidden by ERISA and as to Ascension, they are now forbidden by the Settlement Agreement for the next seven and one-half years (January 1, 2015 – June 30, 2022).
The Settlement also includes other equitable provisions that mimic the provisions of ERISA concerning:
- Plan Administration. The Plan documents shall: (a) name a fiduciary; (b) provide a procedure for establishing and carrying out the current funding policy and method; (c) describe a procedure for allocation of administration responsibilities; (d) provide a procedure for plan amendments and identifying the persons with authority to make such amendments; (e) specify the basis on which payments are made to and from the Plans; and (f) provide a joint and survivor annuity as currently defined in the Plans;
- Summary Plan Descriptions (“SPDs”). The Plans’ SPDs shall be distributed within four months of the time that the Order approving the settlement becomes Final and nonreviewable. The SPDs shall: (a) exclude any mention of ERISA or information about ERISA rights; (b) include information about the Plans’ Church Plan status, including that the Plans’ benefits are not insured by the PBGC; (c) make it clear that the Plans are Church Plans; (d) be in the same form and manner as they are now written; (e) not comply with ERISA § 102; (f) be distributed electronically; however, if a participant sends a written request for an SPD, once during any calendar year a SPD will be provided in hard copy format at the expense of the participant; Annual Summaries, Pension Benefit Statements, and Current Benefit Values. The Plans’ annual summaries, pension benefit statements, and current benefit values (the content of said communications to be determined solely by Ascension) will be distributed electronically in the format determined by Ascension, or on request, and at the expense of the participant, once during any calendar year paper copies of such documents will be provided; and
- Plans’ Claim Review Procedure. The Plans’ claim review procedures, which shall be included as part of the SPDs, shall state: (a) the identity of the person or entity to whom a claim should be addressed; (b) the time period for filing a claim; (c) the information that must be provided in support of the claim; (d) if a claim is denied, in whole or in part, the person to whom an appeal should be sent; (e) the time period for filing a claim appeal; (f) the information the claimant must provide in support of an appeal; and (g) any statute of limitation period for filing a benefits related claim.
Ascension will contribute $8 million to the Plans. Because the Plans are defined benefit pension plans, and not defined contribution plans like 401(k) plans with individual accounts, the cash amount will be contributed to the Plans as a whole, rather than to the individual accounts of the Plans’ participants and beneficiaries.
Defendants have also agreed to pay an additional $2 million to be used to fund the Court approved request for attorneys’ fees and expenses and an Incentive Fee to the Named Plaintiff. The attorney award and Incentive Fee will not come out of the $8 million contribution to the Plans.
Releases and Carve Outs to the Release
The Settlement includes a Release, which, in general, release claims brought by Plaintiff, or claims that could have been asserted by Plaintiff based upon the allegations in the case.
However, there is a significant carve out from the Release. Recognizing that the law on church plans is still in flux, the Settlement provides that Ascension will not be released prospectively in the event of a change in the law which makes clear that the Plans are not church plans. Likewise, the release will not apply prospectively in the event the structure of the Plans changes so that the Plans are plainly not church plans.
Final Fairness Hearing and Objections
On September 17, 2015, the District Court held a Fairness Hearing and granted Named Plaintiff’s request for final approval of the Settlement, for class certification, for an award of attorneys’ fees and expenses, and for an Incentive Fee to Named Plaintiff. The Settlement is now Final.
Q: How do I know whether I am part of the Settlement Class?
The Court has certified the Action as a class action. You are a member of the Settlement Class if you were a participant in or beneficiary of any of the defined benefit pension plans maintained, sponsored, or claimed by Ascension as Church Plans, including but not limited to: Ascension Health Pension Plan, Borgess Health Alliance Pension Plan, Carondelet Health Pension Plan, Catholic Health Partners Pension Plan, Columbia Hospital Retirement Plan, St. John Health Pension Plan, St. Joseph Health System Pension Plan, St. Joseph Regional Medical Center Pension Plan, St. Mary’s Healthcare Pension Plan, Genesys Regional Medical Center Retirement Plan, Via Christi Health Cash Balance Plan, Alexian Brothers Health System Basic Pension Plan, Alexian Brothers of San Jose, Inc. Bargaining Unit Pension Plan, Affinity Health System Retirement Plan, St. John Health System Employee Retirement Plan, and Ministry Health Care Employee Retirement Plan (collectively, the “Plan” or “Plans”) on or before the Effective Date of Settlement (the “Class Period).
Q: What does the Settlement provide?
The Settlement provides significant non-monetary equitable consideration, in that the participants in the Plans will receive certain ERISA-like protections for the next seven and one-half years (January 1, 2015 – June 30, 2022). Barring a significant change in the law, the Plans will remain non-ERISA plans, but Ascension will guarantee that the Plans pay to participants the level of benefits provided for now by the Plans through June 30, 2022. Ascension has made similar financial commitments with respect to the Plans should there be a plan termination, merger or amendment. The Settlement also includes equitable consideration, mimicking certain provisions of ERISA, concerning plan administration, summary plan descriptions, notices (annual summaries, pension benefits statements, current benefit values), and the Plans’ claim review procedure.
Ascension Health Alliance will make a one-time $8 million contribution to the Plans on or around December 16, 2015. The contribution will be, allocated among the Plans in the sole discretion of Ascension Health Alliance.
The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement.
Q: How will the Settlement be implemented?
Members of the Settlement Class do not need to do anything with respect to the Settlement in this Action.
With regard to the non-monetary component of the Settlement, Defendants have already begun implementing the administrative and financial commitments.
Ascension Health Alliance will make a one-time $8 million contribution to the Plans on or around December 16, 2105. The contribution will be allocated among the Plans in the sole discretion of Ascension Health Alliance. Again, because the Plans are defined benefit pension plans, and not defined contribution plans like 401(k) plans with individual accounts, the cash amount will be contributed to the Plans as a whole, rather than to the individual accounts of the Plans’ participants and beneficiaries.
For inquiries re this Settlement, please email: .
Please contact Ascension Health Pension Services at (877) 346-7284, option 3 for inquiries re: your individual pension account.
- Class Action Settlement Agreement
- Order Preliminarily Approving Settlement
- Notice of Proposed Settlement of ERISA Class Action Litigation
- Motion and Memo in Support of Plaintiff’s Motion for Preliminary Approval
- Motion and Memo in Support of Plaintiff’s Motion for Final Approval
- Joint Declaration of Sarko and Handorf in Support of Plaintiff’s Motion for Final Approval and for Award of Attorneys’ Fees
- Defs.’ Memo in Support of Final Settlement Approval & In Response to Objections
- Plaintiff’s Reply Motion for Final Approval & Award of Attorneys’ Fees
- Declaration of Overall in Support of Reply Motion for Final Approval & Award of Attorneys’ Fees
- Order and Final Judgment