Churchwide Organization "Deeply Concerned"

Shrimp here. Apparently in response to news of the lawsuit regarding the Augsburg Fortress pension plan's failure, the ELCA News Service has issued the following news release. We'll let you read it before we ask a couple of questions.

ELCA NEWS SERVICE
April 23, 2010

ELCA Churchwide Organization Responds to Pension Plan Lawsuit

10-123-JB

CHICAGO (ELCA) -- The churchwide organization of the Evangelical Lutheran Church in America (ELCA) said today it is "deeply concerned" for the well-being of participants affected by the termination of a defined benefit compensation retirement plan of Augsburg Fortress Publishers, Minneapolis.

On April 21 former employees of the publisher who were covered by the terminated pension plan filed a class action lawsuit in the U.S. District Court of Minnesota.

The churchwide organization's statement, issued to the ELCA News Service, said, "The entire ELCA, including the leadership of the churchwide organization, understands the far-reaching implications of this matter, and is deeply concerned for the well-being of the plan participants and continues to hold them in prayer."

"In the midst of this complex, difficult and painful situation we are also mindful of the need to respect both the obligations and the limitations in the legal agreements so that we can be responsible to all of our commitments and relationships as an interdependent church," the statement said.

Augsburg Fortress is separately incorporated entity apart from the ELCA churchwide organization. The publisher has maintained and continues to maintain its own retirement benefits for its staff. The ELCA churchwide organization had no role in the creation, management, funding or termination of the Augsburg Fortress pension plan, according to an April 22 report in the Wall Street Journal.

Plantiffs in the lawsuit are Judith Thorkelson, Karen Walhof, Gayle Aldrich and Jean K. Stanley, all participants in the terminated plan. The suit also included "all others similarly situated" as plaintiffs. Approximately 500 people were affected by the termination of the pension plan.

Named as defendants were Augsburg Fortress; Beth Lewis, president and chief executive officer; John Rahja, chief financial officer; and Sandra Middendorf, vice president of human resources and organizational development; the ELCA; and current and former members of the publisher's board of trustees.

The class action lawsuit seeks to recover losses allegedly suffered by the plantiffs because of what they claim are "breaches of duty" with regard to the termination of the defined benefit pension plan, according to the lawsuit.

The suit also asks the federal district court to declare that the terminated pension plan is not a church plan, but a defined benefit plan regulated by the 1974 Employee Retirement Income Security Act (ERISA).

"We deeply regret any hardship that the termination of our defined benefit retirement plan has caused, but the complaint brought against Augsburg Fortress and other defendants in this matter is wholly without merit," said Lewis, in a statement in response to the suit. "We deny all claims of wrongdoing alleged in the complaint and will seek its dismissal."

"The complaint filed against Augsburg Fortress misrepresents the care with which the plan was administered and the communications that occurred with plan participants," Lewis added.

ELCA Secretary David D. Swartling denied all legal claims made by the plaintiffs against the ELCA.

In 2005 the Augsburg Fortress board of trustees took action to freeze the defined benefit plan, and began offering a 403b defined contribution plan to its employees. The costly defined benefit plan "has been underfunded for about nine years," Lewis said at the time the defined benefit plan was terminated on Dec. 31, 2009.

When that plan was terminated, Lewis said most participants in the defined benefit plan would receive a lump sum payment. Lewis said the trustees provided for a "more equitable allocation of plan assets among plan participants," she wrote in a letter to plan participants. Without the amendment, more than half of the plan participants would have received nothing at all, Lewis wrote.

"We wanted to make certain that we had the most equitable distribution of assets possible," she told the ELCA News Service. "If we had done nothing, the plan would have run out of money in approximately five years and left about 60 percent of those in the plan with no retirement benefits. We didn't think that was equitable or fair."

Distributions were made to plan participants in March, Lewis said.

For information contact:
John Brooks, Director (773) 380-2958 or news@elca.org
http://www.elca.org/news
Twitter: http://twitter.com/elcanews

Shrimp again. We think Pastor Richard Johnson, editor of Forum Letter raises an interesting question over at ALPB Forum Online:

Now doesn't that strike you as odd? I didn't know that an organization could actually speak. Or, if an organization can speak, I thought it could only speak through official actions by, say, it's "board of directors" (which, we are incessantly told, is the Church Council in the ELCA).

If you read the rest of the story, you heard Beth Lewis quoted a lot. She's speaking for Augsburg Fortress. But who is speaking for the ELCA?... Right now I'm just pondering: Who is this "churchwide organization" that says these things, anyway? Anyone got a clue?

Shrimp hasn't the slightest idea, but we are struck that here's a (seemingly rare) instance where the usually loquacious ELCA Presiding Bishop Mark Hanson is nowhere to be quoted.

No, the only named ELCA official is "ELCA Secretary David D. Swartling denied all legal claims made by the plaintiffs against the ELCA." Sure, there's the "deep concern" and "prayers" of a (suddenly) faceless churchwide organization, which we've been told has "no fiduciary responsibility" for the brothers and sisters who work for the ELCA's publishing ministry. Anyone else here thinking, "Go in peace, be warmed and filled" (James 2:15-17)?

Rather than holding hands singing Kum Bay Ya, someone in the ELCA churchwide organization ought to follow up on an idea Pastor Steven Tibbetts (aka Pastor Zip) raised elsewhere on ALPB Forum Online: the ELCA sets up a fund for these Augburg Fortress employees, similar to the Special Needs Retirement Fund. That fund was established by the 1993 Churchwide Assembly for pastors, those

retired leaders of the church [who] received lower incomes and either they or the congregations were, at times, unable to provide contributions to the pension plan. Consequently, they retired with low pension income and experience a very real financial hardship.

Then have a special churchwide offering -- and don't diddle around for a couple of years planning, as is happening with the Lutheran Malaria Initiative, but get on it now.

So, Bishop Hanson, what's preventing the ELCA from showing that sort of moral leadership?

Shrimp out.