Perils of Church-Related Pensions

 |  NCR Today

Today's Wall Street Journal has an important article on how church-related pensions can fail miserably, shut down and leave its participants out in the cold.

"Pensions are protected by federal law, which requires employers to fund the benefits, and insure their pensions with the Pension Benefit Guaranty Corp., which ensures their pensions will be paid even if the pension plan fails and the employer files for bankruptcy.

But when the law was enacted in the 1970s, churches were exempt unless they opted in. In the 1980s, the IRS definition of "church plan" widened to include almost any organization affiliated with a religious group. That includes recreational groups, hospitals and schools, and publishers like Augsburg Fortress.

Christmas-NCR-gifts-half_0.jpgGive a subscription to our award-winning newspaper and save $10.

Now, a number of church plans are struggling in the wake of investment losses. How many is difficult to say. Church plans don't have to file annual reports with the Internal Revenue Service disclosing their pension obligations, assets and investment managers, among other details.

Church plans also don't have to tell employees how healthy their pension plans are, so bad news can come as a shock. That happened to Augsburg Fortress employees in January. The company sent letters to the 500 employees, former employees and retirees explaining that most would receive only a portion of their pensions, paid out in a check in March."

This is yet another example of how church and church-related entities are given favoritism by Congress for special exemptions that make little-to-no sense. Church and church-related entities in their capacities are fiduciaries of citizens-of-faith must be required to operate with full and mandatory disclosure without exemptions. Moreover, if churches and church-related entities truly cared about "their people," they would ask Congress to remove these exemptions, as common sense, stewardship and justice require that churches and church-related entities engage their employees in a forthright manner. Could you imagine a Wall Street firm operating like a church entity and getting away with it? (Hmmmm....maybe that's what Wall Street is doing.)

Support independent reporting on important issues.

 One family graphic_2016_250x103.jpg


NCR Comment code: (Comments can be found below)

Before you can post a comment, you must verify your email address at
Comments from unverified email addresses will be deleted.

  • Be respectful. Do not attack the writer. Take on the idea, not the messenger.
  • Don't use obscene, profane or vulgar language.
  • Stay on point. Comments that stray from the original idea will be deleted. NCR reserves the right to close comment threads when discussions are no longer productive.

We are not able to monitor every comment that comes through. If you see something objectionable, please click the "Report abuse" button. Once a comment has been flagged, an NCR staff member will investigate.

For more detailed guidelines, visit our User Guidelines page.

For help on how to post a comment, visit our reference page.

Commenting is available during business hours, Central time, USA. Commenting is not available in the evenings, over weekends and on holidays. More details are available here. Comments are open on NCR's Facebook page.



NCR Email Alerts


In This Issue

July 14-27, 2017