The Roman Catholic Archdiocese manages a number of local hospitals in Newark, New Jersey through their Cathedral Healthcare System. On May 7, 2019, class claims were filed against the Archdiocese. These claims were made by former employees of several Newark hospitals. Chief among the claims is an allegation that the Archdiocese has deprived payment of over $2.7 million dollars in employee pension plans. This payment would have applied to approximately 135 employees of the hospital.
The three plaintiffs filing this complaint are Richard Salvia, Alveira Dillard, and Virginia Coleman. According to the plaintiffs, the Archdiocese was supposed to sponsor pension plans to employees of their healthcare system. These plans include the St. James Hospital of Newark Retirement Income Plan, also known as the “SJH Plan.”
The plaintiffs allege that the fund was mismanaged. Due to poor planning on the Archdiocese’s part, the SJH Plan was depleted by November of 2017.
In earlier years, SJH Plan fell under the federal Employee Retirement Income Security Act of 1974 (“ERISA”). In 1990 the Archdiocese petitioned to have ERISA requirements removed. The defendant claimed that the SJH Plan was a “Church Plan.” The IRS responded with a private-ruling letter granting the request to release the Church from ERISA requirements. However, hospital employees were not informed of this change.
In their suit, the plaintiffs allege that the fund was mismanaged. They argued that the Archdiocese was aware that the SJH Plan did not have enough money in it to pay for pensions over the lifetimes of the class members.
Named plaintiffs seek to represent a class that includes all employees of the Archdiocese who participated in or were beneficiaries of the SJH Plan but have not received monthly pension payments. The suit’s official claims include breach of contract, breach of fiduciary duty, and promissory estoppel.
The Archdioceses reported $565 million in total assets, $263 million in net assets, and $51 million in revenue in 2017.
Further details of the case can be found by looking at the case which is titled Richard Salvia et al. v. The Roman Catholic Archdiocese of Newark, New Jersey, Case No.: L-3418-19, in the Superior Court of New Jersey, County of Essex.
