AARP Foundation Recovers $60 Million in Church Retirement Funds

African Methodist Episcopal clergy and other workers sued over alleged retirement plan mismanagement

Kenneth Terrell,

Updated August 21, 2025

AARP

Comments

En español

Published April 04, 2022

/ Updated August 21, 2025

Getty Images

Nearly 4,500 current and former employees of the African Methodist Episcopal (AME) Church will see tens of millions of dollars in retirement funds restored thanks to settlements in lawsuits in which they were represented by AARP Foundation and other counsel.

On August 18, a district court granted approval of two class action settlements in the case. In one, the plaintiffs and the AME Church settled their claims against Newport Group, Inc., a retirement-plan provider, for $40 million. In the other, plaintiffs settled claims against the AME Church for $20 million.

Litigation against additional defendants, including an insurance company and the estate of a late former church leader, is ongoing.

“These settlements are hard-won victories and will bring much-needed financial relief to thousands of AME clergy and others who dedicated their lives to serving their communities,” said William Alvarado Rivera, senior vice president of litigation at AARP Foundation. “The settlements help restore critical retirement funds, without further delay and expense.”

In April 2022, AARP Foundation attorneys joined the class-action lawsuits to help former and current clergy and other employees recover more than $90 million in retirement funds that were lost due to alleged mismanagement by the fiduciaries and others responsible for the accounts.

The agreement to settle with the AME Church was reached in August 2024, and the agreement to settle with Newport was reached in March 2025. Newport denies any wrongdoing as part of the settlement. The settlement funds will be deposited into a qualified trust administered by a third-party administrator and fiduciary.

What happened with the AME retirement plan

Founded in 1816, 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. AME clergy and other participants in the church’s retirement plan had been told for decades that contributions from individual churches were being conservatively invested in a life insurance company. According to the lawsuit, the plan’s participants also were told that the fund was covered by the federal Employee Retirement Income Security Act (ERISA), which offers federal insurance protections.

But an audit in 2021 found that, contrary to regular audits that had been presented to the AME board and church membership at large, two-thirds of the retirement funds — approximately $90 million — were instead placed in a risky venture capital company and a real estate deal, both of which are now essentially worthless. When they disclosed the loss of funds in February, AME leaders also told participants that, due to a religious exemption, the retirement plan actually was not covered by ERISA and did not have federal insurance to protect against the loss of funds.

Those retirees include the lead plaintiff in the lawsuit, the Rev. Cedric Alexander, a former AME minister and presiding elder of the California Conference, San Francisco/Sacramento District. Alexander, who is also a certified public accountant, had believed that his AME retirement account, which held approximately $90,000, was protected by ERISA. His retirement from the church coincided with the discovery of the missing millions, and he was unable to obtain the money he was expecting.

The suit, filed in March 2022 in the U.S. District Court for the District of Maryland by the law firm Kantor and Kantor, also alleges that the AME did not enroll numerous eligible clergy in the plan and did not make the church’s share of promised contributions.

AARP Foundation attorneys are also co-counsel in litigation in New York state court on behalf of pensioners who are suing the Roman Catholic Diocese of Albany over pension funds, part of the foundation’s mission to provide legal advocacy and other services that support older Americans’ economic and social well-being.

Editor's note: This story, originally published in 2022, has been updated with new information about the settlements

%{postComment}%

Kenneth Terrell covers employment, age discrimination, work and jobs, careers, and the federal government for AARP. He previously worked for the Education Writers Association and U.S. News & World Report, where he reported on government and politics, business, education, science and technology, and lifestyle news.