AARP Lawyers Join African Methodist Episcopal Church Retirement Funds Class-Action Suit
AARP Foundation attorneys will act as co-counsel in a class-action lawsuit alleging the African Methodist Episcopal (AME) Church mishandled nearly $90 million in retirement funds, the organization said.
The AME stopped making payments to retired ministers covered by its pension plan earlier this year after a 2021 audit found that two-thirds of the denomination’s retirement funds had been lost in risky investments in a venture capital company and a real estate deal.
The lawsuit was filed March 22 in the U.S. District Court for the District of Maryland by the law firm Kantor and Kantor on behalf of about 5,000 former and current clergy and other employees of the AME church, who were allegedly led to falsely believe through financial statements that their investments were growing, per PlanAdviser.
The suit names the AME Church’s Department of Retirement Services as well as financial advisers Newport Group, Inc. and Symetra Financial Corp. as defendants, saying they should have known the information provided to participants was inaccurate.
The lead plaintiff in the lawsuit is the Rev. Cedric Alexander, a recently retired AME minister and presiding elder of the California Conference.
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The AME Church is the oldest Black church in the United States and one of the largest Protestant denominations in the country with more than 2.5 million members. Ministers and other employees were required to contribute a portion of their salaries into the retirement plan and could choose to invest more.
The suit said AME retirement plan participants had been told all along that their money was being conservatively invested in a life insurance company, and that they were covered for losses under the federal Employee Retirement Income Security Act (ERISA).
But when the loss was disclosed to plan participants in February, they also were informed that because of its church affiliation, the retirement plan was in fact excluded from ERISA coverage.
Rev. Alexander, a recently retired AME minister and presiding elder of the California Conference who is lead plaintiff in the lawsuit, said he was among participants who believed that his AME retirement account, which held approximately $90,000, was protected by ERISA.
“As a result of gross financial mishandling, nearly 5,000 pastors, church elders and other employees find themselves contemplating a future without the retirement funds they were depending on,” said William Alvarado Rivera, senior vice president of litigation at AARP Foundation. “These employees and retirees served their community for years, some even decades, and justice requires they receive their deserved earnings they were promised.”