Most Americans have watched their retirement plans suffer over the past two years. But the 500 members of the Augsburg Fortress pension plan have had it worse than most.
The publishing arm of the Evangelical Lutheran Church in America (ELCA) folded its plan in December, forcing beneficiaries to accept a significantly reduced income. The announcement, as well as similar ones from other church-affiliated organizations, has opened debate on how such pension plans are regulated.
As a church plan, Augsburg Fortress's is not insured by the federal agency that insures private pension plans. The 1974 pension law's exemption for churches has expanded to include church-affiliated nonprofits, such as hospitals, social service agencies, and publishers. Now the IRS is considering limits on such organizations' ability to convert to church plans.
Read Full Article »