Employees Allege Publisher Using Church Tie to Cut Pension Payouts

Employees and retired workers at a Minneapolis publishing house are suing the company, claiming it is using the religious tie to avoid paying their full pensions, The Wall Street Journal writes.

Augsburg Fortress, which publishes books for the Evangelical Lutheran Church of America, announced this year that it was terminating its pension plan, which was underfinanced due to investment losses. Current and former employees have received payouts worth considerably less than their full pensions.

Federal legislation enacted in the 1970s that requires employers to finance and insure pensions exempted churches, and in the 1980s the Internal Revenue Service broadened the exemption to include entities affiliated with religious groups. According to the Journal, a number of church pension plans are struggling, but they are not required to disclose details to the IRS or to employees.