Federal Judge Approves Partial Settlement for Lost AME Church Retirement Funds

(RNS) — A district court judge granted final approval Monday (Aug. 18) to a partial settlement for clergy and staffers of the African Methodist Episcopal Church after a substantial percentage of funds from their retirement plan were discovered to be missing.

The historically Black denomination has been accused of mishandling the retirement funds, leaving many plan participants with about 30% of what they had hoped to use for retirement. The denomination accused its former retirement department head of embezzlement after discovering in 2021 that he provided “deceptive, false and grossly inflated financial statements” about the retirement plan.

Judge S. Thomas Anderson of the U.S. District Court for the Western District of Tennessee approved the partial settlements for the plaintiffs — totaling some 4,500 people whose single case was previously consolidated from six — with the denomination and Newport Group Inc., a third-party administrator involved with the church’s retirement services. He said if the case was not settled, the plan participants could “face the risk of rulings adverse to their cause.”

Under the approved settlement, the AME Church has put $20 million into a settlement fund and Newport provided $40 million, totaling $60 million plus any interest.

Lawyers for plan participants and the church confirmed Tuesday that, not including interest, legal fees currently total $20 million plus $1.3 million reimbursement for out-of-pocket expenses — more than a third of the settlement.

Both lawyers for the church and for the case’s plaintiffs said they were pleased with the development but acknowledged there is more work ahead of a trial set for 2026. The trial would involve defendants who continue with the litigation and are not part of the settlements.

“It’s been a long and difficult battle, and we’re not done, but this settlement is a major milestone in our efforts to collect every penny that these pastors lost,” Matt Lee, co-lead counsel for the plaintiffs, told Religion News Service via email. “It’s hard to overstate what the restoration of these funds will mean for thousands of retired AME Church ministers. While we’re proud of the work our team has done so far, we will not relent until every stone is turned and every responsible party is held accountable.”

Douglass Selby, general counsel for the AME Church, said the denomination was “thrilled” by the legal juncture.

“It marks an important point to the litigation,” he told Religion News Service in an interview. “Obviously, we still have a ways to go to get our plan participants who suffered this wrong fully restored to their financial position, but this is an important series of first steps.”