Advisory Opinion 2004-11A

Dear Ms. Licastro:

This responds to your request on behalf of the Pittsburgh Mercy Health System and the Mercy Life Center Corporation in Pittsburgh, Pennsylvania, regarding the applicability of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Specifically, you request an advisory opinion concluding that the Pittsburgh Mercy Health System Cash Accumulation Plan, the Pittsburgh Mercy Health System 401(k) Savings Plan, and the Mercy Life Center Corporation Pension Plan (collectively "Plans") are "church plans" within the meaning of section 3(33) of ERISA, that are excluded from Title I coverage by ERISA section 4(b)(2).⁽¹⁾

You represent that the Pittsburgh Mercy Health System, a nonprofit corporation controlled by the Religious Sisters of Mercy, which is a religious congregation of women within the Roman Catholic Church, established the Cash Accumulation Plan and the 401(k) Savings Plan and continues to maintain them for eligible employees of the System and its nonprofit corporate components. You also represent that Mercy Life Center Corporation, which is one of the System's nonprofit corporate components, established and continues to maintain its Pension Plan for union-member employees of Mercy Senior Care-St. Joseph in Pittsburgh, Pennsylvania. You further represent that the Roman Catholic Church controls the Pittsburgh Mercy Health System through the Religious Sisters of Mercy, including the Sisters of Mercy of the County of Allegheny, which is the province of the Religious Sisters of Mercy for Pittsburgh and surrounding geographic area. Among other materials, you submitted a private letter ruling issued by the Internal Revenue Service (IRS) to the Plans on October 22, 2003. The private letter ruling concludes, based on facts it recites about the Pittsburgh Mercy Health System, the Mercy Life Center Corporation, and the Plans, that the Plans are "church plans" described in section 414(e) of the Internal Revenue Code (Code). Finally, you represent that current structure and operation of the Pittsburgh Mercy Health System, the Mercy Life Center Corporation, and the Plans are not materially different from facts presented in the IRS private letter ruling.

Section 3(33) of ERISA defines the term "church plan" using language virtually identical to Code section 414(e). Conditioned on the accuracy on your representation concerning the current structure and operation of the Pittsburgh Mercy Health System, the Mercy Life Center Corporation, and the Plans not being materially different from facts on which the IRS based its October 22, 2003, private letter ruling, the Department sees no reason to disagree with the IRS's conclusion. Accordingly, for the above reasons, and assuming an election under section 410(d) of the Internal Revenue Code has not been made for any of the Plans, it is the view of the Department that the Plans constitute "church plans" within the meaning of section 3(33) of Title I of ERISA.

This letter constitutes an advisory opinion under ERISA Procedure 76-1. Accordingly, it is issued subject to the provisions of that procedure, including section 10 thereof relating to the effect of advisory opinions.