Legal Recourse

St. Clare’s Hospital Pension Case: Key Findings

In December 2025, a jury awarded $54.2 million to former St. Clare’s Hospital employees after finding that hospital and church leaders failed to protect the pension fund serving more than 1,100 workers.

Why the Case Succeeded
Plaintiffs showed that leadership breached its fiduciary duty by failing to properly fund and oversee the pension plan for nearly 20 years. Evidence demonstrated that required contributions and audits were not completed, investments were not adequately monitored, and employees were repeatedly told their pensions were secure when they were not.

The case also highlighted the Diocese of Albany’s control over the hospital, including the bishop’s authority over board appointments and major decisions. Plaintiffs argued that seeking “church plan” status intentionally removed federal pension protections, leaving workers without a safety net.

The Verdict
The jury found former bishops and hospital executives personally liable for the pension’s collapse. While the Diocese itself was not found directly liable by the jury, the judge later ruled it is legally responsible for the actions of its leaders. The jury also determined the conduct was reckless enough to justify punitive damages, which were later resolved through settlement.

Beyond the landmark St. Clare's Hospital verdict in late 2025, several other high-profile cases have exposed the vulnerabilities of "church plan" pension exemptions in Catholic health systems: 

• St. Joseph Health Services (Rhode Island): In a historic move in December 2024, the federal Pension Benefit Guaranty Corporation (PBGC) agreed to take over the failed St. Joseph’s pension plan, marking the first time the agency has ever covered a plan originally classified as an exempt "church plan". The plan, which had roughly 2,700 participants, was placed in receivership in 2017 with a $55 million shortfall after hospital sales complicated its legal status.
• Christian Brothers Services: As of late 2025, this pension fund—which covers numerous Catholic schools and dioceses—is facing an estimated $800 million funding gap. The shortfall arose from massive investment losses in 2020 and a rising number of retirees relative to active employees, leaving the plan with only about 66% of the assets needed to meet its obligations.
• Mercy Health (Now Bon Secours Mercy Health): This system faced a class-action lawsuit alleging its pension plans did not qualify for the church-plan exemption. While the system maintained its exempt status, it reached a settlement in 2025 to resolve claims related to the management of its retirement plans, with payments distributed to claimants in December 2025.
• Ascension Health: One of the largest Catholic health systems in the U.S. previously settled a major lawsuit regarding its use of the church plan exemption, which plaintiffs argued was used to bypass federal funding and transparency standards.
• Diocese of Rockville Centre (New York): Former employees have publicly criticized this diocese's pension program, alleging it provided significantly lower benefits compared to similar non-church-exempt roles. 

These cases have collectively prompted new state-level legislation; for instance, Rhode Island now requires church plans with more than 200 participants to publicly disclose their financial health.