AARP Foundation Joins Class Action Lawsuit to Recover Retirement Funds for Nearly 5,000 Current and Former Pastors of the African Methodist Episcopal Church

Posted on 04/04/22 by Careena Eggleston


AARP Foundation attorneys have joined a class-action lawsuit as co-counsel on behalf of about 5,000 African Methodist Episcopal (AME) Church employees and retirees, whose fiduciaries mishandled and lost nearly $90 million in retirement funds. The suit, filed by the law firm Kantor and Kantor, LLP, alleges that AME leadership and its retirement services department violated the Employee Retirement Income Security Act (ERISA) and breached their contractual and fiduciary duties by not honoring an earned and promised pension plan for pastors, elders, bishops, and other employees of affiliated colleges and seminaries.   

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. Participants in its retirement plan had been told for years that contributions from individual local churches were invested in a conservative life insurance company to create a retirement fund. Plan summaries sent to employees also stated that the fund was covered by ERISA, and that they had federal pension protections. And AME promised to contribute 12% of each participant’s annual wages into their retirement fund. 

Contrary to regular audits presented to its Board and church membership at large, two-thirds of the funds — approximately $90 million — were instead invested in a risky venture capital company and an ultimately valueless real estate deal. When disclosing the loss of funds in February, AME leadership told participants that the retirement plan was not covered by ERISA because of a religious exemption, meaning no federal insurance to protect against the loss. Further, it appears that AME did not enroll numerous clergy in the plan as they should have and did not make promised contributions. AME leadership also stated they could not find any plan documents and that, accordingly, they would create a new plan that would provide only 30% of the participants’ vested benefits.  

“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. “These employees and retirees served their community for years, some even decades, and justice requires they receive their deserved earnings they were promised.” 

Plaintiff Ret. Presiding Elder Cedric Alexander, a former AME minister, filed the suit in the U.S. District Court for the District of Maryland on March 22, 2022. Defendants include Dr. Jerome V. Harris (Executive Director of AME’s Department of Retirement Services), Bishop Samuel L. Green, Sr. (former Executive Director), Trustees of the AME Church Ministerial Retirement Annuity Plan, AME Church Ministerial Retirement Annuity Plan, Department of Retirement Services, AME Church, Inc., General Board of the AME Church and Council of Bishops of the AME Church. 

MEDIA CONTACT: Madison Daniels, mdaniels@aarp.org, 202-531-9026 


This story is provided by AARP Michigan. Visit the AARP Michigan page for more news, events, and programs affecting retirement, health care, and more.

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