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New Jersey hospital pensioners sue Newark Archdiocese

For Immediate ReleaseContact: Emily Gilbert, 202-296-3776
May 08, 2019www.pensionrights.org

Former employees of Saint James Hospital filed a lawsuit on May 7 in the Superior Court of Essex County New Jersey alleging that the Archdiocese of Newark has wrongly denied them at least $2.7 million in lifetime pension benefits.

The retirees’ complaint alleges that  their pensions were payable for life and fully protected by federal law and the federal pension insurance program until 1990 when  the Archdiocese obtained an IRS ruling that the Saint James Hospital pension plan was a “church plan” that would no longer be protected by federal law. The Archdiocese did not inform the retirees about this loss of federal protections and continued to assure the retirees that they were entitled to lifetime benefits. But in 1996-1997 the Archdiocese transferred trust assets dedicated to funding the retirees’ pension benefits to another account that was insufficient to pay the promised lifetime benefits. The complaint alleges that the Archdiocese had a large surplus in its overall pension accounts but refused to use it to pay the retirees’ pensions in order to maximize benefits for itself.

The plaintiffs are a group of 135 retirees who worked primarily for Saint James Hospital, earned pensions, and left the hospital before becoming eligible to collect their pensions. Years after they began collecting their pensions, in November 2016, the retirees were notified that their plan was running out of money. One year later their pension checks stopped. The complaint alleges that the Archdiocese has refused to take responsibility for the shortfall.

Unlike many other lawsuits that have been brought by retirees in “church plans,” this case is being brought under state, rather than federal, law. The complaint alleges that the actions taken by the Archdiocese violate New Jersey contract and trust law. Once the Archdiocese elected to have the Saint James plan treated as a “church plan” not covered by federal law (the Employee Retirement Income Security Act of 1974 (ERISA)), it became subject to all applicable New Jersey laws.

Plaintiffs are represented by Richard S. Meisner and Michael Gilberti of Jardim, Meisner & Susser, PC, Florham Park, NJ, and Ted Scallet of EascoLaw, PLLC, Washington, DC.

The Pension Rights Center is a nonprofit consumer organization committed to protecting and promoting retirement security. The complaint in Richard Salvia, Alveira Dillard, and Virginia Coleman v. The Roman Catholic Archdiocese of Newark, New Jersey Civil Case ESX L 003418-19 can be found here.

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