January 9, 2020
Message to Members and Frequently Asked Questions and Answers
Nearly five years ago, Portico issued a news release about a lawsuit filed against the ELCA Board of Pensions (doing business as Portico Benefit Services). This lawsuit was one of many initiated against large 403(b) and 401(k) retirement plans, generally alleging poorly performing investment options and administrative expenses that are too high.
In response, we launched a vigorous defense, and years later, in 2018, the claims related to investment performance were not allowed to proceed as a class action, based, in part, on expert evidence that the majority of plan members were better off financially in ELCA Retirement Plan funds than in alternative funds cited in the lawsuit.
It has become clear in recent months, with the ongoing resource commitment needed from our organization and the significant costs incurred by our insurers, further litigation to dispute the remaining claims is no longer financially prudent nor in the best interests of our members. Therefore, we have agreed to settle this case with the plaintiffs.
“As a church ministry, we are required to be financially self-sufficient, and a good steward of church and member dollars,” said the Rev. Jeff Thiemann, president and CEO. “We believe the evidence introduced at trial would have demonstrated that we prudently managed the ELCA Retirement Plan. While we would have welcomed the opportunity to present our defense at trial, the cost of a lengthy trial and potential appeals over many years could prolong deliberations indefinitely. And that, we concluded, would not benefit our plan members and beneficiaries.”
The Rev. Elizabeth A. Eaton, Presiding Bishop of the ELCA, affirmed the important role Portico plays in the ELCA. “For over 200 years,” she said, “the Lutheran church has supported the well-being of those who dedicate their lives to ministry. Portico has been a resilient partner in ministry, navigating an evolving benefits landscape. They also have introduced us to innovative, holistic benefit solutions designed to help those who serve our church live well and to walk that 200+ year tradition of compassionate care.”
Looking ahead, freed from the distractions of this ongoing legal action, Portico will continue to do what it does best — leveraging the latest benefit innovations to support the holistic well-being of those who serve.
In the coming months, eligible members or beneficiaries participating in the ELCA Retirement Plan at any point between March 1, 2009, and Sept. 30, 2019, will receive information by email and/or mail about the administration of this settlement.