SSM Health Agrees to $60 Million Settlement in Church Plan Lawsuit

A federal judge has approved a $60 million settlement between SSM Health Care Corp., and a group of workers who accused the St. Louis-based health care system of overstating its link to the Catholic Church in order to be exempt from Employee Retirement Income Security Act (ERISA) rules as a so-called “church plan.”

In its complaint, the workers accused SSM Health of violating numerous provisions of ERISA, including underfunding the SSM Health Plans “while erroneously claiming that the plans are exempt from ERISA’s protections because they are ‘Church Plans.’”

According to the plaintiffs, citing SSM Health’s most recent financial statements, the company’s plans are currently underfunded by at least $700 million combined.

The plaintiffs argued that SSM Health “plainly is not a church,” and that its health plans were not established by a church or a convention or association of churches.

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“SSM Health may claim that it is permitted to establish its own Church Plans under ERISA, even though it is not a church, because it is an organization ‘controlled by’ or ‘associated with’ a church, within the meaning of ERISA,” said the workers in their complaint. “Even if ERISA permitted such nonchurch entities to establish Church Plans, which it does not, SSM Health is not controlled by a church.”

They also said that SSM Health “is not associated with a church within the meaning of ERISA because it does not, as ERISA requires, ‘share common religious bonds and convictions’ with a church.”

According to the terms of the settlement, SSM will contribute a minimum of $15 million per year to the health plans during the calendar years of 2019, 2020, 2021, and 2022, for a total of $60 million. It also has to pay $115 to each worker who received their retirement savings in a lump-sum distribution. However, the total settlement payment could be reduced to $50 million if the company pays that amount before Dec. 31, 2020.

SSM is also required to allocate the contributions among the plans to attempt to have them funded equally on a percentage basis, and to fund the plan with the lowest funding percentage first. Any amount paid in excess of $15 million during the calendar years of 2019, 2020, and 2021 may be used to reduce subsequent contributions.

Under the settlement, SSM Health does not admit any liability, and it continues to assert that each of its health plans has been, and continues to be properly administered as a church plan, as defined by the Internal Revenue Code, and ERISA.

High Court Ruling May Not Settle Church Plan Issue

Tags: Catholic Church, ERISA, Pension, SSM Health Care Corp

Lazard Asset Management Expands Quantitative Equity Platform with Addition of U.S. Systematic Team

Lazard Asset Management LLC announced the expansion of its quantitative equity platform with the addition of a San Francisco-based investment team.

The new Lazard U.S. systematic equity team comprised of Oren Shiran, Philip Summe, Stefan Tang, and Seavan Sternheim, focuses on capturing fundamental insights within a quantitative framework. The systematic investment process employed by the team utilizes a multi-model approach to consistently identify and capture compelling inefficiencies. Currently, the team invests in companies listed in the U.S. with a market capitalization below $10 billion and manages long-only and long/short portfolios.

The team joins LAM from Baylight Capital, which they founded in 2013. Each team member brings with them diverse knowledge and experience across disciplines, including financial markets, mathematics, and computer science.

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Target Group Appoints New Chief Financial Officer

Target Group announced the appointment of Azmatali Mehrali as the company’s new chief financial officer (CFO), effective June 14.

Target Group is calibrating the leadership of its finance department in order to optimize and accelerate its international and domestic initiatives. As CFO, Mehrali will be responsible for the direction of Target Group’s finance department, with an emphasis on capital allocation planning, M&A, and transactional execution.

Since 2006, Mehrali has served as President of a private CFO consulting business that provides regulatory and financial services to start-up brokerage firms in Canada. He recently provided consulting services to medicinal cannabis start-ups across North America, particularly in Canada, as they prepare for public listing.

Willis Towers Watson appoints Paul Sepe to lead its New Jersey market

Willis Towers Watson announced the appointment of Paul Sepe as market leader for its New Jersey market.

In his new role, Sepe will oversee the company’s business operations in the market across offices in Parsippany, Short Hills and Woodbridge. His primary responsibilities will include driving growth in the market, managing client relations and leading approximately 200 employees. Sepe will report to Diya Luke, market leader for Metro New York.

Sepe first joined Willis Towers Watson in 2001 as a retirement consulting actuary. He most recently held the role of client relationship director serving clients across the Philadelphia and Metro New York areas.

Tags: Lazard Asset Management, People Moves, Target Group, Willis Towers Watson