The downturn in investment markets in late 2008 and early 2009 resulted in a gap between the net assets in the Fund and projected lifetime obligations to members, John G. Kapanke, Board president, said in a report to the ELCA Conference of Bishops, which met Oct. 1-6 in Chicago. Effective Jan. 1, 2010, monthly annuity payments will be decreased by 9 percent, he said. Kapanke said the Board anticipates monthly annuity payments will be decreased "by an additional 9 percent in 2011 and 2012." The interest-crediting rate for the non-annuitized portion in the "bridge component" of the Fund will be cut 3.5 percent for each of three years beginning in 2010, Kapanke said.Last November came the announcement that the 2011 cuts would not be as severe as earlier anticipated:
The trustees reduced annuity payments for 2011 by 6 percent for plan members in its Participating Annuity and Bridge Fund and set the interest crediting rate for 2011 at -0.3 percent for bridge accounts.Separately, the ELCA News Service reported:
The Church Council of the Evangelical Lutheran Church in America (ELCA) authorized one-time payments from the ELCA Special Needs Retirement Fund "as soon as realistically possible in 2011" to help people most adversely affected by reductions in ELCA Board of Pensions annuity payments caused by the crisis in financial markets in late 2008 and early 2009.Earlier today the Twin Cities Pioneer Press reported that some retired ELCA pastors aren't taking this lying down.
The council action was among a series of recommendations it approved from a report presented by an Ad Hoc Committee the council appointed in August....
In addition the council asked the Board of Pensions and the management committee of the ELCA Special Needs Retirement Fund to "develop criteria based on need and a process for distribution of available funds" to those with the greatest need. It asked for more frequent reviews of eligibility, including periodic comprehensive reviews to address plan members' needs in light of economic realities, and requested more information about the implementation of the recommendations at the council's April 2011 meeting.
Four retired Lutheran pastors are suing their former employer, the Evangelical Lutheran Church in America, alleging that the church guaranteed lifetime annuity payments that it later decided to "drastically reduce."Read here for more about this lawsuit, filed last month and seeking class action status for all those who annuitized all or part of their pensions. As you read this we'll observe that while those affected by this are retired ELCA pastors, lay rostered leaders, and other church workers, most were actually employed by ELCA congregations or institututions, not the ELCA itself. And, as the ELCA's News Service repeatedly notes in its reports, the ELCA Board of Pensions is separately incorporated from the ELCA.
While the retirees had been planning on a lifetime of steady and growing pension payments, they were told in September 2009, that the guaranteed payments would be cut 9 percent in 2010, with more cuts to come in 2011 and 2012.
And the four pastors are not alone.
Over the last 21 years, more than 10,000 eligible employees elected to take their retirement accumulations in a lifetime annuity or a pension, according to court filings from the ELCA, which has its headquarters in Chicago.
What these facts mean legally will, of course, be determined in the settlement of this suit. What they mean morally, well, we've written about "economic justice" in the ELCA before; as they say, "YMMV (Your mileage may vary)." We here at Shellfish do appreciate that, unlike with Augsburg Fortress pensioners, the ELCA Church Council has made some sort of attempt to alleviate some of the effects of the financial downturn on retired ELCA pastors and pensioners. And rather than cast further judgment, we'll point you to the ELCA Special Needs Retirement Fund and encourage you to act with your own sense of economic justice.