08/30/2024 | Press release | Distributed by Public on 08/30/2024 11:21
WASHINGTON-The African Methodist Episcopal Church (AME) and Plaintiffs, represented by attorneys from AARP Foundation, Milberg, Leiff Cabraser, Kantor & Kantor, LLP, Osborne & Francis, and other firms have reached a contingent settlement agreement in the class action lawsuit concerning the misappropriation of retirement funds. The settlement is subject to Court approval. Litigation continues against the remaining defendants, including Newport Group Inc. and Symetra Life Insurance Co.
In April 2022, AARP Foundation joined the class action lawsuit as co-counsel on behalf of about 5,000 AME Church employees and retirees, whose fiduciaries mishandled and lost nearly $90 million in retirement funds. The suit alleged that AME leadership and its retirement services department breached their contractual and fiduciary duties by not honoring an earned and promised retirement plan for clergy and lay employees of affiliated churches, colleges, and seminaries.
The settlement provides immediate restoration of some funds and creates a pathway for the Church and Plaintiffs to restore the remaining missing retirement funds. The agreement also allows for thÂe Church and Plaintiffs to continue pursuing claims against all remaining defendants. The Church has committed to seeking full restoration for all plan participants and is introducing major reforms for its Department of Retirement Services operations to prevent future mismanagement.
"Church employees who served their community for years deserve the retirement funds they were promised," said William Alvarado Rivera, Senior Vice President of Litigation at AARP Foundation. "This agreement is an important step to address the financial harm caused to thousands of people by restoring funds they depend on."
"While the decision to sue the Church was difficult, it was necessary to reach this point," said Matthew Lee, co-counsel lead from Milberg. "This settlement enables the restoration of some of the funds while other culpable defendants continue to hide from their responsibility to make the plan participants whole. We look forward to seeking justice from Newport Group, Inc., Symetra Life Insurance Co., and other Defendants, who played a significant role in this tragic situation."
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 were told 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. AME promised to contribute 12% of each participant's annual wages into their retirement fund.
According to the settlement, the AME Church's elected General Officer, in coordination with several Defendants, stole retirement funds and concealed the diversion of other retirement funds to unauthorized, risky investment vehicles over an extended period of years for their own financial gain.
This case involved ten lawsuits that were consolidated in a multi-district litigation in the Western District of Tennessee. Defendants include the AME Church, Inc., General Board of the AME Church and Council of Bishops of the AME Church, the Estate of Dr. Jerome Harris, Newport Group Inc., Symetra Life Insurance Company, Sandra Harris, Robert Eaton, and Day and Night Solar.
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About AARP Foundation
AARP Foundation works to end senior poverty by helping vulnerable people over 50 build economic opportunity. Our approach emphasizes equitable outcomes for populations that have faced systemic discrimination. As AARP's charitable affiliate, we serve AARP members and nonmembers alike. Through vigorous legal advocacy and evidence-based solutions, and by building supportive community connections, we foster resilience, advance equity and restore hope. To learn more, visit aarpfoundation.org or follow @AARPFoundation on social media.