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More than $90 million missing from AME pension funds, claim class-action lawsuits

The lawsuits claim that thousands of retirement clergy have been harmed by the potential loss of their pensions.

The African Methodist Episcopal Church's annuity investment department location in Memphis, Tennessee. Image courtesy of Google Maps

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

Last month, AME leaders stopped making 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 United States District Court of Maryland, the former leader of the church’s Department of Retirement Services “invested Plan assets in imprudent, extraordinarily risky investments that ultimately lost nearly $100 million of Plan participants’ retirement savings.”

Church officials allegedly gave sole authority over the pension fund to the former head of retirement services for the AME with little or no oversight, according to the lawsuit. That led to investments in the purchase of Florida land, a loan to a solar panel installer and investment “in a now non-existent capital venture outlet.”

The lawsuit alleges church officials have admitted the pension plan — which was valued at $126 million in June 2021 — has lost at least $90 million and that “no one connected with the Church” knew where the money had gone, except for the former head of retirement services. 

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

William Alvarado Rivera. Photo via AARP Foundation

William Alvarado Rivera. Photo via AARP Foundation

“As a result of the African Methodist Episcopal Church’s 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, which is helping represent Alexander, in a statement this week.

In an interview, Rivera said the AARP Foundation has long been concerned about church pension plans, as 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 focus of the lawsuit is the well-being of AME church retirees, many of whom rely on their church pension to pay their bills.

“Our focus is very much on making sure that the pension and retirement plan beneficiaries are made whole,” he said.

Similar lawsuits have been filed in Tennessee and Virginia.


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

“Out of an abundance of caution, we immediately engaged outside legal counsel and forensics experts to conduct an independent and comprehensive investigation,” church leaders said in the update. “We continue to actively work with federal authorities who are investigating this matter and recover any misappropriated funds. “

The African Methodist Episcopal Church Department of Retirement Services logo. Courtesy image

The African Methodist Episcopal Church Department of Retirement Services logo. Courtesy image

Church leaders have also said they are cooperating with federal officials who are investigating the pension fund. They have also set up a task force to look into the pension plan crisis and to develop “a plan of reorganization, recovery, and restoration for fund participants.”

“The AME Church is committed to making every fund participant whole by restoring their full investment plus interest,” church leaders said in the Frequently Asked Questions section of their March update.

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

“So having a case like this drag out, unnecessarily, really only harms the people who really dedicated their careers and many years of their lives to the church,” he said. “And we hope that they will work to resolve this as quickly as possible.”

Founded in the late 1700s by former slaves who had been part of Methodist churches, the African Methodist Episcopal Church is one of the nation’s most prominent Black Protestant denominations. The denomination, which was claimed as many as 2.5 million members in the past, is a hierarchical church led primarily by its bishops.


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