Pastors of the African Methodist Episcopal Church across the country are facing financial burdens that could be severe and unexpected after denomination leaders announced an investigation into missing pension funds.
It appears tens of millions of dollars are going unaccounted for, and federal law enforcement officials have reason to suspect ‘a possible financial crime’, according to a Wall Street Journal report citing documents and officials from the church.
In response to the financial crisis, AME Church officials have stopped sending checks to retirees and are now scrambling to find a solution that could involve selling property or taking out a large loan.
In the meantime, retired pastors now face a significant loss of income and serving clergy can no longer submit “hardship claims”, allowing them to draw on some of their retirement savings to pay housing, education or other necessities.
Reverend Wilford Kinlaw, 79, was pastor of New Mount Zion AME Church in Jamestown when he retired four years ago. He had $60,000 invested in the retirement fund and decided to take a lump sum payout.
“I’m blessed because I released all of mine,” he said.
He did not accumulate as much as the others because he did not know for a long time that he could add to the contributions made by the church in his name. Many other pastors did just that, confident the church would handle the money responsibly, Kinlaw said.
“If the money isn’t there, it’s going to hurt them,” he said. “We never thought church people would do things like this.”
Several other South Carolina AME pastors contacted by The Post and Courier declined to comment for this story. Requests for comment left with Bishop Samuel Lawrence Green Sr., who oversees AME activities in South Carolina, were not answered.
On March 17, The Post and Courier learned of an e-mail directive sent to pastors, asking them “not to communicate with any media regarding the AME church’s annuity department.”
Joe Watson, a longtime member of the Ebenezer AME Church on Charleston’s East Side who once considered the ministry, said annual audits, a clear paper trail and more transparency would have limited accounting errors and discouraged any action objectionable.
Just because an organization is supposed to be pious and devout doesn’t mean its leaders are always pure, Watson said.
“They must be able to take criticism or questions in the church,” he said. “It’s not possible that you push him away.”
The AME Church has approximately 2.5 million members in 20 episcopal districts located in 39 countries. About 5,000 contributors to pension funds are affected, the Wall Street Journal reported. Pastors are required to participate in the pension plan.
The church is most active in the eastern and southern coast states, as well as in the Caribbean and sub-Saharan Africa. Its origins date back to the late 1700s, making it the first Protestant religious institution founded by blacks in North America.
Like some other Protestant denominations, the AME Church is hierarchical. Its supreme governing body is the General Conference, under which are a Council of Bishops, a Board of Trustees, a General Administrative Council, and a Judicial Council. Each district has a bishop and holds annual gatherings to discuss a variety of business, programming, and personnel issues.
On Oct. 7, the church sent a memo to members reporting an impairment in one or more of the investments managed by the church’s pension services department, based in Memphis, Tennessee. Church officials said an audit was underway and detailed findings would be made public. The discovery was made after a personnel change in the department.
Church pension plans are exempt from federal pension and tax laws. Trustees can opt into a federal pension insurance program, but most don’t, according to the nonprofit Pension Rights Center. The AME Church Pension Fund is not federally insured.
“Employees and retirees covered by church plans are denied the basic protections provided to virtually all other private sector workers who participate in pension plans,” says the Pension Rights Center.
Churches are not required by law to disclose information about their pension funds to contributors and are not required to ensure that their pension accounts are properly funded.
The AME Church derives much of its income from tithing and member donations. A significant portion of the purse collected from individual parishes goes up to the level of the Episcopal district and helps fund statewide outreach, capital projects, and salaries.
The 7th Episcopal District of the AME Church includes the state of South Carolina. It organizes six conferences and provides financial support to Columbia-affiliated Allen University.
The church’s ties to South Carolina are strong. Its main founder, Richard Allen, preached regularly in the state, and one of the denomination’s founding parishes, Emanuel AME Church, is located here.
Another of the church’s founders, Morris Brown, was a native of Charleston who was involved in the Danish Vesey uprising and then moved to Philadelphia where he became the denomination’s second presiding bishop.
The AME Church has historically functioned as a major pillar of the black community in the South, providing not only spiritual nourishment but practical assistance to enslaved and free black people – and burdened by a socio-economic system that persecuted and marginalized them.
Church pastors pay part of their earnings into the pension fund, and now they don’t know when — or if — they can get that money back.
Elnora Taylor, a longtime member of the Emanuel AME Church, said she had recently heard about the pension fund problem and it only heightened her concerns about the management of the church’s money. church in general.
“For years we wondered where all the money taken from the churches went,” she said.
Eventually the truth will be revealed, she said.
“What is done in the dark comes out in the light. …God is just fed up now. You can commit sins and hide, but that ends at some point.