On April 1st, the Pension Fund (AFM-EP Fund; U.S.) starts its fiscal year. We are expecting an announcement from them shortly about the Fund’s financial standing.
The Pension Fund is expected to be certified as being in the Red Zone or Critical Status, as defined under the Pension Protection Act of 2006 (PPA). In accordance with the PPA, the Fund must then adopt and implement a Rehabilitation Plan as soon as possible. The purpose of the Rehabilitation Plan is to improve the Pension Fund’s financial health with the stated goal being the Fund’s emergence from Critical Status within 10 years or as soon thereafter as possible.
As you are already aware, on Oct 15, 2009, the Trustees of the Pension Fund reduced the Benefit Multiplier for benefits earned for employment on or after January 1, 2010 to $1 per month per $100 of Employer Contributions (Full Retirement at Age 65).
The Fund’s Trustees then met again on February 24 of this year, implementing additional changes which were part of an informational announcement released on March 1.
Changes announced in the March 1 document include the reduction of Benefit Multipliers attached to pre 2004 contributions for those individuals who elect to receive pension benefits before the full retirement age of 65. This change does not apply to anyone currently receiving a Pension. There were other changes as well, include some impacting employers and their contribution obligations to the Fund. All of this information can be viewed at the Fund’s website at http://afm-epf.org/ and we encourage you to do so.
In addition to those changes already made in anticipation of Critical Status being formalized, there may be additional modifications or rule changes added to the Rehabilitation Plan once it is actually adopted on or after April1.
We will share that information with you as soon as we are aware of it.
Pension Fund Staff
The Fund’s staff and consultants are deeply committed to the health of the Fund. They recognize the uncertainty and anxiety that the current situation is creating for all of us. They are acutely aware that individuals and families are attached to all of this and we are fortunate to have fine people working on our behalf at the Fund. They are not the decision makers, however; that is in the hands of the Trustees.
Meetings around the Country
We reported to you about a meeting held in Las Vegas on January 11, where various Local Officers, Player Conference representatives and others were able to speak with Pension Fund Staff and Consultants about impending changes at the Fund.
We were also in attendance at the Western Conference of AFM Locals in Dallas, Texas during the last weekend of February. Conference organizer and IEB Officer Ray Hair had placed a Pension Fund discussion on the agenda for Sunday February 28. The members on the Pension Panel were AFM President and Chair of the Union Trustees Tom Lee; Pension Fund Director of Finance Will Luebking; Pension Fund Counsel Anne Mayerson and former Trustee Bill Moriarity.
They explained the nature of the problems confronting the Fund; how we got there; the future funding challenges facing the Fund and the nature of the legal framework that governs the Fund’s operation. They also announced to those assembled, all of the changes which had just been implemented four days earlier by the Trustees and outlined components of the forthcoming March 1 announcement. Many people were truly shocked by the depth and degree of changes which were announced.
Guests at the Conference that day included symphonic musicians from various orchestras in the Dallas-Fort Worth area. Those musicians together with many AFM Local Officers in attendance asked a wide range of significant and probing questions. Many of those present spoke in a poignant and heartfelt manner about all the changes which had taken place at the Fund during recent months. Orchestral musicians recounted in very personal ways, the devastating impact those changes were having on them, their families and their financial future. Their comments and feelings were similar to what one would expect to hear from many recording musicians had you been in the audience.
Since there were time limitations on the specific hotel conference space we were using, Ray Hair had made arrangements for us to all adjourn to another room. The degree of interest and the complex nature of the discussion caused the presentation to continue for more than another hour. Pension Trustees Lovie Smith-Wright and Harold Bradley who were both in attendance at the Conference chose not to join us for that additional discussion.
It was disappointing that in an environment where working musicians were pouring their hearts out about what these changes meant to them, two Union Trustees seemingly had better things to do than hear from and interact with the very musicians whose pensions they are supposed to be protecting.
Other individuals, including Officers from Local 47 (LA), Local 802 (NY) and Local 257 (Nashville) asked questions, heard comments from rank and file musicians and stayed through every round of those Pension discussions.
Did we mention that 40% or more of Pension Contributions come from work done in those same 3 Locals?
Did we mention that not one Officer from any of those Locals currently serves as a Pension Trustee?
Did we mention that Trustee Harold Bradley was a no-show at the big February Pension Trustees meeting where all these changes were made?
Did we mention that Union Trustee are appointed and removed solely by AFM President Tom Lee?
There is no denying that the state of the economy has been a huge challenge for all Pension Plans, including ours. Yet it is hard to escape the impression that President Lee has continuously played politics with the appointments of Union Trustees.
Different Trustees ─ Trustees accountable to a broad range of stakeholders ─ might have reacted in different ways to mitigate some of what has happened at the Pension Fund. We can’t ever know… but having the AFM President use the Pension Fund as just one more place for personal politics is just plain wrong.
Our Commitment to You
Those of us in the Recording Community have been following these profound changes at our Pension Fund very closely. We all understand that anxiety and fear are real emotions being sparked by real problems at the Pension Fund.
Politics needs to be removed from this equation. It is time for our Union to behave honorably and create renewed confidence in the Fund’s operation. Our Union owes this to us, to our families, our colleagues, and to the next generation of musicians. RMA promises to stand shoulder to shoulder with each of you to do our best to ensure that this crisis is dealt with effectively, rationally and honestly.