Retirement Plans and Clergy Dismissal

Courts often cannot get involved in such disputes.

Church Law and Tax 1996-01-01

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.

A South Carolina court ruled that the civil courts did not have the constitutional authority to decide whether a church’s revocation of a minister’s license was the equivalent to revocation of his ministry for purposes of a denominational pension plan that denied benefits upon revocation of ministry. 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Church of God, which provide that “any aged minister receiving benefit from the Aged Ministers’ Fund whose ministry has been revoked shall cease to draw compensation from the fund.”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 Church appealed, and a state appeals court reversed the trial court’s decision and ruled in favor of the Church. The court agreed with the Church that the minister’s arguments revolved around the meaning of the words license and ministry under the Minutes, and that this is an ecclesiastical matter over which the civil courts have no jurisdiction. The court quoted from the first South Carolina case addressing the lack of authority by the civil courts to intrude into ecclesiastical matters:

It belongs not to the civil power to enter into or review the proceedings of a Spiritual Court. The structure of our government has, for the preservation of civil liberty, rescued the temporal institutions from religious interference. On the other hand, it has secured religious liberty from the invasion of civil authority. The judgments, therefore, of religious associations, bearing upon their own members, are not examinable here …. Where a civil right depends upon an ecclesiastical matter, it is the civil court, and not the ecclesiastical, which is to decide. The civil tribunal tries the civil right, and no more, taking the ecclesiastical decisions, out of which the right arises, as it finds them. Harmon v. Dreher, 17 S.C. Eq. 87 (1843).

The court then quoted with approval from a landmark decision of the United States Supreme Court:

In this class of cases we think the rule of action which should govern the civil courts, founded in a broad and sound view of the relations of church and state under our system of laws, and supported by a preponderating weight of judicial authority is, that, whenever the questions of discipline, or of faith, or ecclesiastical rule, custom or law have been decided by the highest of these church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them, in their application to the case before them. Watson v. Jones, 80 U.S. 679 (1872).

It then quoted from a number of decisions by the state supreme court reaching the same conclusion—that the civil courts may not make the slightest inquiry into the decisions of ecclesiastical tribunals. It concluded:

We cannot resolve this controversy by in—depth analysis of the substantive criteria by which a matter of fundamental church administration and polity are decided. The words “license” and “ministry” are by their very nature defined in terms of the authority which they impart to the holder. This necessarily implicates the power to direct the ecclesiastical affairs of the Church. As such, we have no right or authority to make value judgments concerning the meaning and application of such words as “license” and “ministry” to the Church of God or its members. If we applied secular principles of contract construction to this “quintessentially ecclesiastical” matter, we would wade into waters prohibited to us by the first amendment …. [The minister] voluntarily joined this organization and became subject to its governance in all related matters. To whatever extent the parties had an enforceable contract, the continued receipt of benefits was unambiguously dependent on a ministry. Once the issue of [the minister’s] ministry was determined adversely to him by the highest Church authority, then the benefits were properly terminated under the contract. Unquestionably, the Church of God acted under its governing authority. Thus the limited application of secular law to this controversy is concluded, and recusal in the ecclesiastical matter is required under [the first amendment] and under our Constitution. Pearson v. Church of God, 458 S.E.2d 68 (S.C. App. 1995). [ Termination]

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