Dismissed Ministers’ Rights to Pension Benefits

Court rules that it is permitted to resolve claim.

Church Law and Tax 1997-11-01

Retirement Plans

Key point. The civil courts are prohibited by the first amendment guaranty of religious freedom from resolving lawsuits brought by dismissed clergy challenging a loss of their retirement benefits based on their dismissed status, especially if the resolution of such a dispute would require consideration of ecclesiastical matters.

The South Carolina Supreme Court ruled that the civil courts could resolve a dispute over a dismissed minister’s right to pension benefits. A minister served from 1952 until he retired in 1986 in churches of the Church of God (the Church). During his 33—year active ministry, he made the required monthly contribution to the Aged Ministers Pension Plan Fund of 4 percent of his gross income from the ministry. Following his retirement, he began receiving payments from the Fund. Payments from the Fund are governed by the Minutes of the Church of God, which provide that “any aged minister receiving benefit from the Aged Ministers’ Fund whose ministry has been revoked shall cease to draw compensation from the fund.” The Minutes further provide that “the license of a minister must be revoked when found guilty of adultery or fornication.” In 1989 the Church revoked the minister’s license after he confessed to adultery, and he stopped receiving pension payments. The minister sued the Church claiming that although the Church revoked his pastoral “license,” the Church did not thereby effectively revoke his “ministry.” He also argued that the Church could not have revoked his ministry by revoking his license because once he retired he had no “ministry” to revoke. A trial court agreed with the minister that his pension benefits had been wrongfully terminated by the Church, and awarded him $71,000 in damages. The state supreme court disagreed. It began its opinion by identifying the following three principles that emerge from a reading of decisions by the United States Supreme Court:

(1) courts may not engage in resolving disputes as to religious law, principle, doctrine, discipline, custom, or administration; (2) courts cannot avoid resolving rights growing out of civil law; and (3) in resolving such civil law disputes, courts must accept as final and binding the decisions of the highest religious judicatories as to religious law, principle, doctrine, discipline, custom, and administration.

The court concluded that the first amendment did not prevent it from resolving this case, since it was not being asked to adjudicate a matter of religious law, principle, doctrine, discipline, custom, or administration.” Rather, it was being asked to resolve a contractual dispute: “The issue here is the effect of the revocation of [the pastor’s] ministry on the pension agreement he had with the Church. This case simply requires the application of neutral principles of contract law and very little inquiry into religious law.” The court noted that the Church’s Minutes were “very clear” that if the pastor’s ministry was revoked he was not entitled to draw compensation from the Aged Ministers’ Fund. The court refused to address the former pastor’s claims that as a retired minister he had no ministry to “revoke,” and that revocation of a license to preach is not the same as revocation of ministry. These claims were “foreclosed by the fact that a court must accept the doctrinal and administrative determinations of the highest ecclesiastical body of the Church.” The court concluded that “because the [Minutes] unambiguously allowed the Church to discontinue [the former pastor’s] pension payments as a result of the revocation of his ministry, the trial court should have directed a verdict in favor of the Church.” Pearson v. Church of God, 478 S.E.2d 849 (S.C. App. 1995). [Termination, Judicial Resolution of Church Disputes]

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