Lawsuit Alleges Dignity Health Has Underfunded its Pensions by $1.2B
A class action lawsuit filed by a former Dignity Health employee alleges that the health system has underfunded its pension plans by about $1.2 billion, the Sacramento Business Journal reports.
Dignity has defined benefit pension plans, which require the company to allocate enough money to cover specific benefits.
The Catholic health system's last audited financial report -- for the fiscal year ending June 30, 2012 -- shows that its retirement plans were underfunded by $1.28 billion.
The lawsuit was filed on April 1 by Starla Rollins, a former billing contractor at San Bernardino Community Hospital, and would apply to 60,000 other Dignity Health employees.
In addition to accusations of underfunding its pension plans, the lawsuit also alleges that Dignity Health has falsely claimed that such plans are exempt from federal rules because they are "church plans."
Dignity Health Responds
In a statement, Dignity Health said that it does not comment on pending legal cases.The health system said, "We have complied with the law, including the applicable requirements for our retirement plans" (Robertson, Sacramento Business Journal, 4/15). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.