AME Church reaches settlement to restore missing retirement funds
Some 5,000 employees and retirees of the African Methodist Episcopal Church who filed a class-action lawsuit against the denomination in 2022 after a former church executive allegedly squandered some $90 million of their retirement savings on “foolish" and risky investments, have reached a settlement that will begin restoring some of the lost money.
The settlement, which still needs to be approved by a judge, was announced at the AME Church General Conference meeting in Columbus, Ohio, on Monday by the denomination’s general counsel, Douglass P. Selby.
“The agreement reached today demonstrates the Church’s ongoing commitment to its clergy and the determination to hold those truly responsible accountable,” Selby said in a statement, according to RNS. “The prayer of the Church is that this settlement, and the reforms to which the Church has committed itself, will help to close a painful chapter in the denomination’s history, and begin the path towards healing and recovery of faith and trust among its members and in the systems of the Church.”
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According to The Christian Recorder, the AME’s official publication, the denomination offered the plaintiffs in the lawsuit $20 million. The AARF Foundation, which joined the class action lawsuit as co-counsel in April 2022, noted in a statement to The Christian Post that the settlement “provides immediate restoration of some funds and creates a pathway for the Church and Plaintiffs to restore the balance of the lost retirement funds.”
“Church employees who served their community for years deserve the retirement funds they were promised. This agreement marks an important step to address the financial harm caused to thousands of people by restoring the funding they depend on,” William Alvarado Rivera, senior vice president of litigation at AARP Foundation, said in a statement to CP.
The AME Church is the oldest and one of the largest U.S. Protestant denominations and historically black churches, with more than 2.5 million members and 7,000 congregations worldwide.
According to the 49-page federal complaint filed in the class-action lawsuit in March 2022 by retired AME pastor the Rev. Cedric V. Alexander, Jerome V. Harris, the former executive director of the African Methodist Episcopal Church, Inc.’s Department of Retirement Services’ “foolish” and risky management of the denomination’s pension fund hurt its more than 5,000 participants financially. At least two other lawsuits alleging similar charges were filed in Florida and Virginia.
Other defendants named in the lawsuit besides the AME Church, Inc., are the General Board of the AME Church and Council of Bishops of the AME Church, Newport, and Symetra Life Insurance Company.
The complaint alleges that Harris was "given sole authority” by the church “to invest tens of millions of AMEC clergy's and other Church servants' retirement savings in a questionable and potentially unlawful purchase of undeveloped land in Florida, a promissory note to an Illinois installer of solar panels, and an even more foolish investment in a now non-existent capital venture outfit."
While all of this was happening, church officials kept reporting to the plan's beneficiaries that their retirement funds were safely flourishing as investments in annuities from Symetra Financial.
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