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Op-Ed: Why U.S. Supreme Court Must Stand up for Retired Americans

Hospitals that masquerade as religiously affiliated institutions do their employees and themselves a grave disservice

mary rich
Mary Rich

This week, the Supreme Court will deliberate on a case that could have significant consequences for hundreds of thousands of hard-working Americans across the country.

At a quick glance, Advocate Health Care Network, et al. v. Maria Stapleton, et al. may appear obscure and technical. But in reality, the issue at hand — whether religiously affiliated hospitals can avoid paying earned retirement benefits to their employees — threatens the financial security of workers who have spent their careers caring for those in need. 

First, some history: in 1974, Congress passed the Employee Retirement Income Security Act (ERISA), a milestone in ensuring that employers fulfill their pension obligations to retiring Americans. In addition to requiring employers to fund their pensions responsibly, ERISA created a federally backed guarantor, the Pension Benefit Guaranty Corporation (PBGC), to protect current and future retirees when employers experienced financial hardship. Legislators exempted churches and other places of worship from these protections, believing that these institutions could be trusted to meet their pension obligations and to avoid crossing the divide between church and state. 

But government agencies began interpreting an amendment passed in 1980 to allow religiously affiliated institutions, such as hospitals, that had created their own plans to treat them as “church plans,” freeing them from complying with federal laws. And religious ties could be claimed retroactively, allowing an employer that was originally secular but later absorbed or acquired by a religiously affiliated organization to apply for “church plan” status. 

That happened at my community hospital in New Jersey. I proudly worked as a nurse for 25 years at the Hospital Center at Orange, serving our most vulnerable residents, many of whom were poor and uninsured. Like many of my colleagues, a deep sense of duty to care for others was instilled in me from a young age. My mother was a nurse, my father a firefighter. My coworkers and I worked long hours and sacrificed when budgets were tight, going years without raises. And while we dedicated our time and energy to caring for our patients, we believed in the promise that we could depend on a modest pension when we retired.

Yet one day in 2003, this all changed. For years, our hospital had been struggling financially and in 1998 had affiliated with a Catholic health system, which operated other medical centers in our area. Though we knew times were tough for our hospital, the full implications of this religious affiliation came as a devastating surprise. 

At a meeting on the hospital’s situation, one employee asked about her pension. Management’s response sent shockwaves throughout the room: We were told that Orange had claimed a “church plan” exemption, dismantling the federal guarantees protecting pensions for more than 950 hospital employees. We were stunned and confused. Most of my colleagues didn’t know what a “church plan” was. Word about what it meant began to spread, and I could sense the panic all around me. How could we retire? What about those who were already retired?

As a Christian, I felt especially betrayed. I take my faith — and the commitment to service that is central to it — seriously. My hospital’s decision to change to a “church plan” wasn’t grounded in faith. It was a calculated business move to take advantage of a legal loophole.

What followed was a decade of court battles, costly litigation and the pain of watching my friends and peers grapple with the possibility that they might not be able to retire. After our hospital closed in 2004, we were forced to race against the clock to try to keep our retirement benefits. Ultimately, nearly 10 years later, just months before the fund was set to go bankrupt the PBGC restored its protection of our pensions.

While I’m thankful and proud that we stood together and won, it is difficult to know that other employees could endure our experience. More and more hospital systems are manipulating the law and converting their pension plans to church plans. The risk that these plans could become underfunded and leave employees without their retirement benefits is why it is so important that the Supreme Court holds these institutions accountable to complying with the rules and standards outlined by ERISA.

Unlike the local church or temple that Congress exempted from government rules, the petitioners in the Supreme Court case are massive, multibillion dollar entities. Advocate alone manages 12 hospitals with nearly 33,000 employees, while another defendant, Dignity, is active in 20 states and employs 60,000 people. These religiously affiliated nonprofit organizations are no different from other large nonprofit organizations or from a Fortune 500 company. Like other private employers, they shouldn’t be allowed to use backdoor maneuvers to shirk their responsibilities.

A pension is not something we get for free; it is a benefit earned through years of hard work and dedication. And just as important, it is a promise. To take that away from those whose profession is to care for others under the guise of being a church is fundamentally wrong.

Mary Rich is a former vice president of patient care services, who worked at the now-defunct Hospital Center of Orange for 25 years. After learning that her hospital had claimed a “church plan” exemption, she led a 10-year effort to regain federal protections for pension participants. She remains active in promoting and protecting retirement security for American workers and their families.

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