The clergy claimed that Portico’s decision to reduce annuity payments to retirees beginning in 2010 was improper and sought to recover losses for all annuitants. Portico said it reduced payments after market losses during the 2008-09 economic downturn caused a funding shortage in its ELCA Participating Annuity Investment Fund.
Class action was denied when a U.S. District Court judge found that the Board of Pensions’ move had improved the ability of the annuity fund to provide payments, and that the majority of annuitants “were helped, not harmed, by [the Board of Pensions’] challenged actions.”
Portico President and CEO Jeff Thiemann said the fund is now fully funded, which allowed annuity payment increases in 2013 and 2014. The increase for 2014 is 3 percent — the highest since 2002.
Another lawsuit settled
In April 2013, Augsburg Fortress, Publishers, the separately incorporated publishing ministry of the ELCA, agreed to a $4.5 million settlement for nearly 500 employees and retirees. Four former employees and retirees had sued the publisher over the 2009 termination of its underfunded defined benefit pension plan.
That plan, at its termination, had less than $9 million to pay $24 million in pension obligations. A federal judge ruled in 2011 that it was a “church plan” and therefore exempt from claims that the company had violated federal labor law under the Employee Retirement Income Security Act.
Augsburg Fortress now has a 403(b) defined contribution plan for employees.
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