AME Church Pension Fund Settlement Awaits Court Final Approval

The African Methodist Episcopal (AME) Church has reached a settlement agreement regarding allegations of mismanagement of pension funds, with the agreement now preliminarily approved by a federal judge in Tennessee. The settlement, reached on November 27, 2024, involves the AME Church, its retirement services department, and Newport Group, a retirement services provider named in the lawsuit. The court’s preliminary approval marks a significant step toward resolving the long-standing dispute.

The lawsuits, filed in 2022 by retired and current AME pastors, alleged that the church mishandled tens of millions of dollars in pension funds. One of the original lawsuits, filed in Maryland, claimed that the former leader of the church’s Department of Retirement Services invested plan assets in imprudent and highly risky investments, resulting in nearly $100 million in losses for participants. These lawsuits were consolidated into a single case in the U.S. District Court for the Western District of Tennessee, where the AME Department of Retirement Services was based.

In August 2024, the AME Church announced a tentative settlement agreement with the plaintiffs. The denomination’s press release emphasized that the settlement aimed to provide immediate financial relief to affected clergy and staff, though it noted the agreement was only partial and did not signal the end of the church’s efforts toward full restoration. The plaintiffs then filed a motion for preliminary approval of the settlement on December 13, 2024, arguing that the agreement offered adequate relief given the risks, costs, and duration of continued litigation.

The settlement includes a $60 million payment to the class of affected individuals, representing 69% of the difference between the misrepresented value and the true value of the pension plan. Attorneys’ fees will account for up to one-third of the settlement proceeds, a standard allocation in class action cases. The court found the settlement to be a reasonable recovery, particularly considering the time value of settling now and avoiding several more years of litigation.

Verita Global, a firm specializing in legal settlement administration, has been appointed by the court to oversee the process. Its responsibilities include managing communications with class members, establishing a settlement website, and executing the distribution plan outlined in the agreements. The court has also scheduled a fairness hearing to determine whether the settlement should be finalized, ensuring that the terms are fair and equitable for all parties involved.

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