Episcopal Diocese Claims 403(b) Accounts “Held Hostage”

June 7, 2013 (PLANSPONSOR.com) – The Episcopal Diocese of South Carolina claims the retirement savings of more than 80 non-clergy employees and its parishes “are being held hostage by their former pension plan at The Episcopal Church (TEC).”

The lay employees have been trying to arrange for the rollover of their retirement savings since February, when they first contacted the Church Pension Group, which provides retirement, health and other benefits to employees of The Episcopal Church, its parishes, dioceses and other institutions. The employees became eligible to rollover their funds into another qualified plan when their employer, the Diocese or the parishes that voted to disassociate from the denomination, officially ceased to be employed by any TEC organization or parish.

In mid-March, the Diocese’s pension administrator Nancy Armstrong began correspondence with TEC’s Church Pension Group administrator to notify it that several Diocese employees would soon begin the rollover process.  After numerous emails back and forth, Frederick Beaver, a senior vice president with the Church Pension Group, informed Armstrong that protecting TEC’s pension plans is “paramount” and said he would contact her when he has “definitive legal responses.”

For more than six weeks, the Pension Group has not responded to communication on the issue and has not provided the promised legal response.


“TEC is in noncompliance with the Department of Labor and the Internal Revenue Service requirements, said Jim Lewis, Canon to Bishop Mark Lawrence.  “These 403(b) contributions are being incorrectly held.”

Lewis explained that the Diocese’s parish employees are legally eligible to move their pension savings to other authorized funds, such as the plan established by the Diocese after it disassociated from the Episcopal Church.  The funds involved belong to the lay employees who chose to remain with the Diocese when it disassociated from the Episcopal Church last year.

The Diocese has attempted to help affected employees by seeking the cooperation of both the Pension Group and Fidelity Investments, which administers the denomination’s pension fund.  Fidelity has referred questions to the Pension Group.

In a statement, the Church Pension Group said: “We seek to ensure that all participants in plans sponsored by the Church Pension Fund will have access to their funds, in accordance with Federal regulations.  Due to the complexity of the current situation, we are working through proper channels to make sure this happens for participants in our plans who are employed by parishes and institutions whose leadership has terminated their affiliation with the Episcopal Church.  In doing so, we are following protocols required by the Internal Revenue Code to avoid any adverse consequences for the participants in the plans.  We expect to complete this process shortly.  In the meantime, all funds remain invested in the options selected by these employees, and all accounts are fully viewable on Fidelity’s website.”