More HH Legal Updates

Houston Harbaugh is a full service law firm headquartered in Pittsburgh and serving Pennsylvania, West Virginia and Ohio. This collection of blogs further highlights the firms capabilities in several practice areas.

Separate “Principal-Purpose Organization” May be Required For “Church Plan” Status

In an article published in June 2017 (see “Church Plan” Need Not Have Been Established by a Church), we discussed the decision of the U.S. Supreme Court on the ability of church-affiliated organizations to maintain “church plans” exempt from the requirements of the federal Employee Retirement Income Security Act (ERISA). In that case, the Court held that in order for an employee benefit plan to constitute a church plan, it need not have been established by an actual church, provided that it is maintained by a “principal-purpose organization.”

The term “principal-purpose organization” comes from Section 3(33)(C)(i) of ERISA, which provides that a church plan “includes a plan maintained by an organization, the principal purpose of which is the administration or funding of a plan for the provision of retirement or welfare benefits or both, for the employees of a church, if such organization is controlled by or associated with a church.”

In order to qualify as a principal-purpose organization, two essential elements must be satisfied:

First, the organization must be controlled by or associated with a church.
In determining whether an organization is controlled by a church, the IRS has considered such factors as the authority of the church to appoint and remove members of the organization’s Board, and whether governing documents (e.g., bylaws) require that Board members be limited to members of the church. An organization is associated with a church if it shares common religious bonds and convictions with that church. Factors include whether the organization carries out the functions of the church and has a parallel mission, and whether the organization receives financial support from the church.

Second, the “principal purpose” of the organization must be the administration or funding of the plan.
The IRS has historically ruled via private letter rulings that a retirement or benefits committee can qualify. However, neither the Board of Directors of the plan sponsor nor its Human Resources Department would normally qualify, as benefit plan administration typically only represents a fraction of their duties.

While the church plan status of plans maintained by smaller church-affiliated organizations are not as likely to be challenged by employees, compared to the plans that are maintained by large church-affiliated hospital systems and have been the subject of the church plan litigation, all church plan sponsors should be aware of this issue. Action items might include:

  • a review of the relationship with the church (and solidification of those bonds, as necessary)
  • establishing and/or shoring up a benefits committee whose “primary purpose” is plan administration and not other functions, and
  • adoption of a formal charter or bylaws consistent with that primary purpose.

Houston Harbaugh remains available to advise and assist church-affiliated organizations on these issues, including preparation of an appropriate Benefits Committee Charter, as needed. For more information on this subject or to learn more about how we may assist you, contact Gary J. Gunnett at 412-288-2210 or

About Us

Trusted and Cost-Effective Business Law, Business Litigation and Estate Planning Attorneys and Counselors; Building Client Confidence™ with Businesses and Individuals Since 1975

Our firm offers individualized solutions and the highest quality, client-driven and cost effective legal services. Houston Harbaugh, P.C., is a well-known law firm in Pittsburgh, serving Pennsylvania, West Virginia and Ohio. Our diverse practice areas include Business Law, Business Litigation, Estate and Succession Planning, Intellectual Property Litigation and Prosecution, Employment and Labor, Employee Benefits, Oil and Gas, Landowner and Property Dispute Counseling and Litigation, Health Care, Environmental, Real Estate, Construction, Complex Tort and Catastrophic Injury Litigation, Insurance coverage and Bad Faith Law, Mediation, Arbitration and Special Master appointment work. As one of the 20 largest law firms in Pittsburgh, our lawyers serve clients on a regional and national basis.

We regularly represent regional, national and international insurance carriers in defense, insurance coverage, unfair trade practices and bad faith matters, and we issue opinions letters and coverage analyses for insurers. We defend designers, manufacturers and sellers in pharmaceutical, products and medical products liability matters and we litigate and try cases involving catastrophic injuries, industrial accidents, toxic torts, professional, engineering and architectural negligence, and agent and broker claims and lawsuits.

Why Houston Harbaugh, P.C.? The Answer Is Clear.

We are accomplished litigators with a strong track record of success in the courtroom and in jury trials. We design and manage business transactions, succession planning, banking and regulatory issues. Our firm has regularly been featured in the U.S. News “Best Lawyers”® rankings of Pittsburgh’s “Best Law Firms.” Our attorneys are also regularly nominated as “Best Lawyers” in this publication. In addition, many of our attorneys are consistently recognized in the annual national Super Lawyers peer review rankings, and our corporate practice has been selected as the winner of The Legal Intelligencer’s Best Law Firm Corporate Practices contest for the Midsize Firm category. Our property and landowner counseling and litigation practice in Oil and Gas and Real Estate is ranked at the top on a regional basis. We help clients to apply for, prosecute, audit, manage and protect intellectual property rights in patent, trademark, copyright and trade secrets. We are admitted to the USPTO and have experience in the TTAB. Some of our firm’s shareholders are Adjunct Professors of Law at the Duquesne University School of Law in litigation and intellectual property courses.

Helping You Achieve Your Goals For Over 40 Years

Since our inception as a health care practice in 1975, our attorneys have represented clients in state and federal courts in Pennsylvania, West Virginia, Ohio and throughout the nation. We have grown into a multi-disciplinary practice with the ability to handle complex business transactional and litigation matters. We counsel on estate and succession planning and on trust and guardianship matters. We have a strong employment and labor practice. We represent clients in trade secret counseling and federal Defend Trade Secret Act (DTSA) counseling and litigation. Our DTSALaw® practice group is well versed in this federal body of trade secret law. We counsel, draft, litigate and defend claims involving employment non-compete, restrictive covenants, non-disclosure agreements and breach of contract matters. We service clients in the collection of debts and in bankruptcy creditor matters. Houston Harbaugh litigates in Orphans and Probate courts for matters involving estates and trusts. We also provide mediation and arbitration services to parties involved in litigation and our lawyers are currently serving as court appointed special masters in the Federal Courts.

Contact us and Learn How We Can Help You and Your Business

For more information on how we can help you, call our Pittsburgh office at 412-281-5060. You can also reach us online.

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