AME Church Now Faces Two Lawsuits Over Alleged $90 Million Retirement Fund Loss
A second lawsuit has been filed against AME Church and it alleges that the global denomination’s retirement fund was mishandled, which led to an alleged $90 million loss in retirement fund investments meant to support thousands of pastors and others.
According to the Atlanta Journal-Constitution, the AARP Foundation has joined as co-counsels in a Maryland-based suit against the AME Church, filed on March 22 in U.S. District Court in the state by the firm Kantor & Kantor. Both plaintiffs are seeking class action status due to the number of potential victims who may consider legal action.
Both lawsuits claim millions of dollars were mismanaged, leaving clergy of the church and other retirees holding the bag when it comes to their portion of the investment, which was intended to help people retire.
The AJC reports that the suit claims people “dedicated themselves for years working for the church and were promised that the savings were invested conservatively and then it turns out that was not true,” according to William Alvarado Rivera, senior vice president of litigation at AARP Foundation. “It’s a real tragedy.”
The defendants named in the lawsuit include the former executive director of the AME’s Department of Retirement Services and several others.
The Nashville-based AME Church said it was investigating “possible financial irregularities” in retirement fund investments the church currently holds.
According to the Wall Street Journal, the African Methodist Episcopal Church, which has reported as many as 2.5 million members, suspended the pension payments to retirees after it found possible financial irregularities in the denomination’s pension fund last month.
The church stated via a press release that an outside regulation agency is investigating “a doable monetary crime.”
It’s unknown how much money is being investigated but the funds include contributions from 5,000 people, including ministers and bishops.
The press release read, “The AME Church takes this crime severely. We’re additionally dedicated to creating each fund participant complete by restoring their full funding plus curiosity.”
The WSJ reports that, as of 2017, the church had approximately $120 million in retirement assets. Church pensions are exempt from federal regulation laws and are not covered by federal insurance, according to the Pension Rights Center.
Back in February, Bishop Jeffrey N. Leath of the AME’s 13th Episcopal District in Tennessee, wrote on his blog that the pension fund was “overvalued by as much as 70%” and added, “The fix will be large, painful, and not loved by anyone. Let’s gird up our loins and DO IT.”
Leath has not spoken out about the recent suspension of retirement benefits.
