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AARP Foundation attorneys have joined a class-action lawsuit as cocounsel on behalf of about 5,000 African Methodist Episcopal (AME) Church former and current clergy and other employees, whose fiduciaries allegedly mishandled and lost nearly $90 million in retirement funds.
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 its retirement plan had been told for years 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.
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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 the retirement plan actually was not covered by ERISA due to a religious exemption, so the plan did not have federal insurance to protect against the loss of funds.
“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.”
Those retirees include the lead plaintiff in the lawsuit, the Rev. Cedric Alexander, who is a retired AME minister and presiding elder of the California Conference, San Francisco/Sacramento District. As a certified financial planner, Alexander — who recently retired at age 65 — had believed that his AME retirement account, which held approximately $90,000, was protected by ERISA. His retirement, however, coincided with the discovery of the missing millions, and now he is unable to obtain the money he was expecting.
The suit, filed March 22 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 also are cocounsel in litigation in New York state court on behalf of pensioners who are suing the Roman Catholic Diocese of Albany over pension funds. The two lawsuits represent a portion of the foundation’s work on behalf of older adults. For example, AARP Foundation recently achieved a $1.29 million settlement for workers at Yale University who were disputing the university’s workplace wellness program.