On June 5, 2017, the U.S. Supreme Court issued a decision holding that an employee benefit plan may be exempt from the Employee Retirement Income Security Act (ERISA) as a “church plan” even if a church did not establish it. The court held that the ERISA exemption for church plans applies to certain organizations that are affiliated with churches, regardless of how their benefit plans were established.

Employers with church affiliations should be aware of the specific criteria an employee benefit plan must meet to qualify for ERISA’s church-plan exemption.

ERISA generally defines a church plan as any employee benefit plan “established and maintained” by a church or group of churches. The definition also includes any plan maintained by “principal-purpose organization,” which is an organization that:

• Is controlled by or associates with a church or a convention or association of churches; and
• Has a principal purpose or function of funding or administering benefits to the employees of the church or convention or association of churches.

Refer to the attached compliance bulletin and see your NEEBCo representative with any questions you may have.

Supreme Court Rules Church-Affiliated Plans are Exempt from ERISA