Ministers Lack Standing to Challenge Denominational Pension Board

Ministers had issues with pension board’s investment practices.

Church Law and Tax 1993-09-01 Recent Developments

Retirement Plans

Key point: Clergy may not be permitted to sue a denominational pension plan on the basis of its investment activities unless they are members of either their denomination or pension board.

A Minnesota appeals court ruled that clergy in the Evangelical Lutheran Church (ELCA) had no “standing” to challenge the investment practices of a denominational pension board. In 1987, the ELCA adopted a resolution that the church should “see that none of our ELCA pension funds will be invested in companies doing business in South Africa.” Three Lutheran ministers sued the ELCA pension board, arguing that this restrictive policy was incompatible with the pension board’s duty of investing pension funds prudently. They insisted that the board had a legal obligation to focus solely on increasing ministers’ “return on investment” and that it breached this duty when it let political and social concerns influence its investment decisions. A trial court dismissed the case on the ground that the three ministers lacked “standing” to sue. In order to bring a lawsuit, a litigant ordinarily must have “standing” to sue, which means that the litigant has a real interest in the outcome and is the proper person to bring the legal action. The three ministers appealed the case to a state appeals court, which agreed that the ministers lacked standing. The appeals court noted that only members of a corporation have legal standing to sue the corporation, and that none of the three ministers was a member either of the ELCA or the pension board. Membership in the ELCA is restricted to those ministers who are selected to serve on its churchwide assembly, and the pension board had no members. Since the three ministers were not members of either the ELCA or the pension board, they had no standing to sue either corporation for investment policies and the lawsuit had to be dismissed. Basich v. Board of Pensions, 493 N.W.2d 293 (Minn. App. 1992).

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