Trinity Health hospital to pay $107M to settle pension mismanagement lawsuit

Hartford, Conn.-based St. Francis Hospital, part of Livonia, Mich.-based Trinity Health, will pay $107 million to settle a lawsuit alleging it mismanaged its pension plan, according to Bloomberg BNA.

In 2015, a group of workers accused St. Francis Hospital of improperly classifying its pension as a "church plan" exempt from the Employee Retirement Income Security Act, which requires pension plans to have adequate funding to pay their promised benefits. The lawsuit alleged the misclassification resulted in the pension being underfunded by $139 million.

St. Francis has agreed to settle the lawsuit by contributing $107 million to its pension plan over a 10-year period, according to Bloomberg BNA, which cites recently filed court documents.

Under the proposed settlement, St. Francis will initially make a $17 million contribution to the plan. The hospital will contribute $10 million to the plan in each of the following nine years. If the hospital is unable to make the payments, the agreement requires Trinity Health to step in and make the contributions, according to the report.

The $107 million settlement is more than 13 times larger than the $8 million settlement reached by St. Louis-based Ascension Health and its workers in a similar suit in 2015. In their suit against Ascension, workers claimed the system's pension plans were underfunded by more than $444.5 million.

The St. Francis and Ascension Health cases are the only two public settlements that have been reached in the 30 class-action suits filed in the past three years accusing religiously affiliated hospitals of mismanaging their pensions, according to the report.

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