Church and AME providers sued over pension plan losses
A minister has filed a proposed class action lawsuit against Newport Group, Inc., Symetra Financial Corp., AMEC’s Pension Services Department and one of its former executive directors alleging mismanagement of a pension plan of the African Methodist Episcopal Church.
According to the complaint, CHHA ministers and other employees were mandated to contribute part of their salary to the plan and were given the option of contributing additional amounts. The CHHA says the fund’s value grew from $47.5 million to about $125 million during the former chief executive’s tenure, and participants received quarterly statements of their account balances in the plan . However, the suit alleges that the defendants should have known that AMEC’s announcement and the participants’ statements were false.
The current executive director of AMEC’s pension services department discovered a shortfall in pension plan funds shortly after taking over as director in the summer of 2021, the complaint says. On October 7, 2021, AMEC said in a Facebook post that the fund “reported a material loss in value of one or more of its departmental investments.” AMEC also said a full audit by an independent law firm and accounting firm was “in progress”.
According to the lawsuit, the church declined to say how much money was missing from the retirement plan, but at a church board meeting in mid-January, the AMEC discussed borrow $45 million or sell church property to replace at least some of the missing money. “Based on information and beliefs, the plaintiffs and members of the AMEC community believe that the losses are even greater and exceed sixty percent of the fund,” the lawsuit states.
The Complaint goes on to explain that the Complainant in the lawsuit received a form letter from AMEC’s Pension Services Department which was addressed to all plan participants and dated September 14, 2021 advising that the payouts would be temporarily suspended while the plan was audited due to a change in management. The letter stated that the audit would take four to six weeks. The applicant mailed a written request to release the funds held in the plan, and his request was denied.
The lawsuit says AMEC wrongly denied ministers like the plaintiff access to their retirement funds.
The defendants are being sued for breach of contract, breach of fiduciary duty, negligence and unjust enrichment, among other charges. The lawsuit says the plaintiff requires accounting that details all income, expenses, investments and other gains and losses of pension plan assets.
Plaintiff seeks compensation on behalf of a class of ministers and other CHHA employees as well as an injunction to restrain “defendants from engaging in the conduct which resulted in plaintiffs’ losses likely to be sued by nature”.
Newport Group says its policy is not to comment on pending litigation. The other defendants in the lawsuit have not yet responded to a request for comment.