Pension Loophole Costs Staff at Religious-Affiliated Hospitals and Charities

Workers at some religiously affiliated hospitals and social-service agencies could lose much of their retirement money because their employers took advantage of a loophole in federal pension law allowing them to adopt uninsured church pension plans, according to the Associated Press.

Congress exempted churches from federal requirements that employers insure and contribute to staff pension plans to protect religious institutions from government interference in their finances. Many religious-affiliated nonprofits switched to church plans that are now severely underfunded due to investment losses or failure to make contributions.

Workers at some of the nation’s biggest Catholic hospital chains have gone to court in an effort to reclaim lost benefits. In some cases, the organizations did not notify workers for years that they had switched from federally insured pensions to church plans.