On New Year’s Eve, current and retired employees of Augsburg Fortress, the publishing arm of the Evangelical Lutheran Church in America, learned that their traditional defined benefit pension plan would be terminated and that they could lose a substantial portion of their benefits as a result of the termination.
These days, news of an employer terminating its pension plan, while never good for workers and retirees, isn’t all that uncommon. This, however, is a special case because the Augsburg Fortress pension is a “church plan.”
Because they are in a church plan, Augsburg Fortress workers and retirees are not protected by the Pension Benefit Guaranty Corporation (PBGC). The PBGC is the federal agency that insures private pension plans, paying out pensions when companies go belly-up or cannot afford to continue their plans. While not perfect, PBGC insurance helps ensure that people who spent a lifetime working for a company won’t lose their promised retirement benefits.
The shortfall between the Augsburg Fortress plan’s assets and what it owes current and future retirees is a whopping $15 million, but, because the plan isn’t protected by the PBGC, workers and retirees could lose the pensions that had been promised them.
These workers and retirees aren’t taking this lying down. Instead, they have taken to the popular social-networking site, Facebook, to take action and spread the word about their situation. Their goal is to get the Augsburg Fortress Board of Trustees to reverse its decision and reinstate the pension plan. Bravo!
Read articles about the Augsburg Fortress pension plan:
▪ Augsburg Fortress Cancels Retirement Plan
▪ Minneapolis Publisher to End Retirement Benefits
Extending pension insurance protections to workers and retirees in hospitals, schools and other entities whose pension plans are affiliated with a religious organization is one of the action items on our Consumer Agenda to Restore Retirement Security. Publishing houses for religious organizations should also have this important protection.