Predominantly Black church African Methodist Episcopal Church (AME) is embroiled in two lawsuits that allege that the global denomination’s retirement fund was mishandled. The lawsuits claim the Nashville-based church squandered $90 million in retirement fund investments meant for thousands of pastors and other church retirees.
AME is the first independent Protestant denomination to be founded by Black people. It was founded by the Rt. Rev. Richard Allen in 1816. The AME Church has 20 districts — 13 are based in the United States and seven in Africa. There are more than 500 AME churches in Georgia alone, according to church officials. The global membership of the AME is an estimated 2.5 million members.
A Maryland lawsuit against the AME Church, in which AARP Foundation attorneys have joined as co-counsels, was filed on March 22 in the U.S. District Court by the law firm Kantor & Kantor. It is the second against the denomination. The first was filed March 3 in Memphis, Tennessee, on behalf of Rev. Pearce Ewing, of Jacksonville, Florida. Both seek class-action status, and both claim millions of dollars were mismanaged. The money involved the retirement income of AME clergy and other retirees. Among the several defendants is the former executive director of the AME’s Department of Retirement Services.
The Tennessee lawsuit claims Ewing, who retired last September, attempted to access his retirement funds and was “denied access to his money and has since learned that there may be nothing left.”
“This was his nest egg, and he had to go to work as a nighttime truck driver to support himself,” said Fred Tromberg, one of the attorneys representing Ewing. “He had over 30 years as a pulpit minister. He never, ever imagined that’s what he has to do to put food on the table and pay his bills.”
People “dedicated themselves for years working for the church and were promised that the savings were invested conservatively. It turns out that was not true,” William Alvarado Rivera, senior vice president of litigation at AARP Foundation, told The Atlanta Journal-Constitution. “It’s a real tragedy.”
According to The Wall Street Journal, the AME Church suspended the pension payments to retirees after it found possible financial irregularities in the denomination’s pension fund last month.
It’s unknown how much money is being investigated, but the funds include contributions from some 5,000 people, including ministers and bishops.
As of 2017, AME had approximately $120 million in retirement assets, The Wall Street Journal reports. Church pensions are mostly exempt from federal regulatory laws and are not covered by federal insurance, according to the Pension Rights Center.
The church confirmed a federal investigation is underway, although it did not specify which government agency.
“We are actively working with law enforcement to investigate this matter and recover any misappropriated funds,” according to a statement from the AME Church.
“The AME Church takes this crime seriously,” the church told The Wall Street Journal last momth. “We are also committed to making every fund participant whole by restoring their full investment plus interest.”