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Pension Fight Raises Moral
Concerns for ELCA, Publisher

BY G. JEFFREY MacDONALD                                                                               ©2010 Religion News Service

As the Evangelical Lutheran Church in America (ELCA) fights to stay out of a legal battle over unpaid pension benefits, all sides agree on at least one point:
More is at stake than millions of dollars owed to some 500 pensioners of Augsburg Fortress, the ELCA's publishing arm.
Last month, the ELCA asked a federal court to be dropped from a suit filed by stakeholders in Augsburg's recently dissolved pension plan. The ELCA contends it bears no responsibility under the 1974 Employee Retirement Income Security Act because Augsburg Fortress' pension program is a "church plan." Church plans are exempted from ERISA requirements, which include sufficient funding to meet promised obligations. Some Lutherans, however, don't like what they're seeing.
If Augsburg Fortress is indeed a church plan by virtue of its denominational affiliation, they say, then shouldn't the church take responsibility for the publisher's debts?
Whether or not the ELCA has a legal duty to keep Augsburg Fortress retirees out of poverty, it certainly has a moral one, according to the Rev. Leonard Flachman, a retired ELCA minister who worked at Augsburg Fortress from 1987 to 1993 as assistant to the president.
"The church cannot say, `We need to raise money for people in Haiti,' when we have 500 people here who will live on the edge of poverty when they retire because they lost their pension," said Flachman, who is not an Augsburg Fortress pensioner because he gets a separate ELCA clergy pension. "That in my view is the justice issue."
In its motion to dismiss, the ELCA seeks to distance itself from all financial obligations pertaining to Augsburg Fortress pensioners, regardless of whether the U.S. District Court in Minnesota deems it to be a church plan.
"Even if the Plan is deemed an ERISA plan, Plaintiffs' allegations that the ELCA is an appointing fiduciary fail to state a claim as a matter of law," says the ELCA's motion.
ELCA spokesperson John Brooks declined to comment further, citing pending litigation. A hearing on the motion to dismiss is scheduled for October 29.
Augsburg Fortress, a program unit of the ELCA, terminated its defined benefit plan on December 31. In March, the publisher distributed the remaining funds--about $8.2 million--among stakeholders in lump sum payments worth a fraction of what employees expected to receive over their lifetimes.

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