More than $90 million is missing from AME pension funds, lawsuits claim

0

(RNS) — Retired pastors of the African Methodist Episcopal Church have filed at least three federal class-action lawsuits alleging that the church mistreated tens of millions of dollars in pension funds.

Last month, AME executives halted payments to retirees after discovering alleged financial irregularities in the church’s pension fund.

According to a lawsuit filed in the Southern Division of the U.S. District Court for the District of Maryland, the former chief of the church’s pension services division “invested plan assets in imprudent, extraordinarily risky investments that ultimately lost nearly $100 million in plan participants. Retirement provision.”

According to the lawsuit, church officials allegedly gave sole authority over the pension fund to the former director of AME pensions with little or no oversight. This led to investments in the purchase of land in Florida, a loan to a solar panel installer, and investments “in a now defunct equity investment.”

The lawsuit alleges church officials admitted the pension plan – which was valued at $126 million as of June 2021 – lost at least $90 million and that “no one associated with the church” knew , where the money had gone, except for the former head of pension funds.

The lawsuit was filed on behalf of Rev. Cedric Alexander, a retired Maryland pastor, and names, among others, the former director of retirement services, the trustees of the retirement fund, the AME and its bishops. Alexander is one of thousands of retired clergy and church workers affected by the pension crisis.

“As a result of the African Methodist Episcopal Church’s gross financial abuses, nearly 5,000 pastors, church elders and other employees are finding themselves contemplating a future without the pension funds they depended on,” said William Alvarado Rivera, senior vice president of litigation at AARP Foundation, which helps represent Alexander, in a statement this week.

In an interview, Rivera said the AARP Foundation has long been concerned about church pension plans because many of them are not covered by federal legislation known as the Employee Retirement Income Security Act of 1974, which covers most pension plans in the United States. The foundation is currently suing a Catholic diocese in New York over its pension plan.

Rivera said the lawsuit’s focus is on the welfare of AME church retirees, many of whom depend on their church pension to pay their bills.

“Our focus is very much on making sure beneficiaries of pension and retirement plans get well again,” he said.

Similar lawsuits have been filed in Tennessee and Virginia.

In an update released in late March, AME church officials said they became aware of problems with the church’s pension plan after a leadership change in 2021 revealed “possible financial irregularities.”

“As a precaution, we immediately hired outside counsel and forensic experts to conduct an independent and comprehensive investigation,” church leaders said in the update. “We continue to actively work with federal authorities investigating this matter and are recovering any embezzled funds. “

Church leaders have also said they are working with federal officials investigating the pension fund. Church leaders have also set up a task force to deal with the retirement plan crisis and to develop “a reorganization, recovery and recovery plan for the fund’s participants.”

“The AME Church seeks to make each fund participant complete by recovering their full investment plus interest,” church leaders said in the FAQ section of their March update.

Rivera said he hopes the lawsuit can move quickly, in part because church leaders have admitted there are problems.

“So dragging out a case like this unnecessarily really only hurts people who have truly dedicated their careers and many years of their lives to the Church,” he said. “And we hope they work to resolve this as soon as possible.”

Founded in the late 17th century by ex-slaves who were part of Methodist churches, the African Methodist Episcopal Church is one of the most prominent black Protestant denominations in the country. The denomination, which has claimed up to 2.5 million members in the past, is a hierarchical church led primarily by its bishops. — religious news service

Share.

Comments are closed.