Jewish Organizations Use Exemptions for Churches to Skirt Pension Rules
Seeking to cut pension costs, Jewish social service groups are using an obscure tax loophole to skirt federal rules that protect workers from being left out in the cold if their retirement plans collapse.
Jewish organizations, including federations and hospitals, have filed for the special “church status” that strips workers and retirees of legal protections and allows groups to drop insurance that would cover shortfalls in their pension plans.
Federal tax experts say the status is supposed to be for houses of worship and clergy-run religious groups, yet groups that are not clearly religious in nature have been approved, and more are eager to qualify.
… Among the Jewish groups that have already won the special status are the federations of Philadelphia, Detroit, Cleveland and Baltimore. Old-age homes and hospitals in Connecticut and in Baltimore, as well as the American Jewish Joint Distribution Committee, have also qualified.