The Wall Street Journal reported first thing this morning:
Employees and retirees of Minneapolis publisher Augsburg Fortress are suing their employer, alleging in their complaint that it allowed their pension plan to fail, and used its connection to the Lutheran church as a legal shield to avoid paying them all their pensions.Read it all in "Perils of Church-Related Pensions" here.
The suit, filed in federal court in Minneapolis on Wednesday, comes more than three months after the company announced it was terminating the plan, saying it had been underfunded for nine years. The plan had only $8.6 million to pay $24.2 million in pension obligations to 500 employees and retirees, said the company, which publishes books for the Evangelical Lutheran Church of America, including hymnals, the works of theologian Dietrich Bonhoeffer, and Garrison Keillor's latest book....
The publisher had asked the church for help, but "the church-wide organization advised us that it had no obligations or fiduciary duties" to do so, Ms. Lewis [Beth Lewis, Augsburg Fortress' CEO] noted.
"I'm disappointed that the church hasn't felt more responsibility for this," said Mr. Lipscomb [James Lipscomb, a 33-year Augsburg Fortress employee laid off in 2008]. "If the basis for a church plan is the company's relationship to the church, is it reasonable that the church can feel no responsibility for what its publisher is doing?"
Augsburg Fortress is a separately incorporated unit under the ELCA church wide organization. "The church-wide organization had no role in the creation, management or termination of that plan. That was Augsburg Fortress and its Board of Trustees decision," said John Brooks, a spokesman for the Evangelical Lutheran Church of America.
The suit alleges that the pension at Augsburg Fortress wasn't a church plan, but falls under the federal pension law because it promised pensions to its employees. The complaint claims that the employer violated its fiduciary duty by allowing the plan to become underfunded, and by failing to warn participants of the plans poor condition. And even if it is deemed to be a church plan, it failed its state-law duties to prudently manage the plans and its assets, the suit argues.
Shrimp reminds you of the following we quoted last January from the "Questions and Answers Regarding Termination of the Augsburg Fortress Retirement Plan" that Augsburg Fortress sent the affected employees/retiress:
10. Why can't the ELCA churchwide organization make up for the funding deficiency in the plan?Now we're going to quote from the "Human Dignity" section of Economic Life: Sufficient, Sustainable Livelihood for All, a Social Statement approved by the 1999 ELCA Churchwide Assembly:
A. We thoroughly explored options for overcoming the funding deficiency, including seeking support from the ELCA churchwide organization. However, the ELCA churchwide organization advised us that it has no obligations or fiduciary duties with respect to the Augsburg Fortress plan. Augsburg Fortress is a separately incorporated program unit of the ELCA and our retirement plan is separate from any plan sponsored by the ELCA.
Human dignity: Human beings are created "in God's image" (Genesis 1:27) as social beings whose dignity, worth, and value are conferred by God. Although our identity does not depend on what we do, through our work we should be able to express this God-given dignity as persons of integrity, worth, and meaning. Yet work does not constitute the whole of our life. When we are viewed and treated only as workers, we tend to be exploited.Shrimp wonders if top ELCA leadership took any of that in consideration in deciding that it had no fiduciary responsibility for employees of "the ministry of publishing within the Evangelical Lutheran Church in America."
Employers have a responsibility to treat employees with dignity and respect. This should be reflected in employees' remuneration, benefits, work conditions, job security, and ongoing job training. Employees have a responsibility to work to the best of their potential in a reliable and responsible manner. This includes work habits, attitudes toward employers and co-workers, and a willingness to adapt and prepare for new work situations. No one should be coerced to work under conditions that violate their dignity or freedom, jeopardize their health or safety, result in neglect of their family's well-being, or provide unjust compensation for their labor....
Power disparities and competing interests are present in most employment situations. Employers need competent, committed workers, but this does not necessarily presume respect for the personal lives and needs of individual workers. Individual workers depend on the organization for employment as their means of livelihood, but this does not necessarily presume respect for the organization's interest and goals. Management and employees move toward justice as they seek cooperative ways of negotiating these interests when they conflict. Because employees often are vulnerable and lack power in such negotiations, they may need to organize in their quest for human dignity and justice. When this occurs, accurate information and fair tactics are expected of all parties involved.
We commit ourselves as a church to:
- hire without discriminating on the basis of race, ethnicity, gender, age, disabilities, sexual orientation, or genetic factors;
- compensate all people we call or employ at an amount sufficient for them to live in dignity;
- provide adequate pension and health benefits, safe and healthy work conditions, sufficient periods of rest, vacation, and sabbatical, and family-friendly work schedules; ...