MPS RESPONSE TO AFM-EPF WEBINAR

The trustees held a Webinar on October 9, which is full of misleading and inaccurate information. Here is MPS’ point by point response:

Trustee Statement: “We supported the Butch Lewis Act since it was introduced and throughout the Joint Select Committee process.”

What they are not telling you:

The trustees supported Butch Lewis in late 2017, but since have gone soft on it. Meantime, Butch Lewis has been under attack from the NCCMP, a powerful Washington lobbying group that played a key role in the formulation of MPRA, the 2014 law that allows trustees to cut accrued pension benefits. NCCMP wants to put the loan assistance program under Butch Lewis out of reach for plans like AFM-EPF. 

AFM-EPF is an important member of the NCCMP and has long been in its inner policymaking circle.  

Making MPRA Fair and Transparent

Background: The proposed Butch Lewis Act has been severely narrowed so that the proposed loan assistance program will be available to only a handful of multiemployer plans. This will leave most troubled plans subject to the MPRA suspension process. That process is riddled with procedural unfairness and should be improved. Unfortunately, lobbying groups such as the NCCMP are proposing to make the MPRA suspension process even more unfair than it already is. 

Trump Administration is Kinder to Disabled Musicians Than Our Trustees

In a prior post, MPS called attention to the fact that our trustees have decided to eliminate the disability pension for most musicians who need it (see post here). In response to our post the AFM-EPF trustees published a Pension Notes article on Wednesday, August 21 (see article here), In that article, the trustees pushed back saying that their recent action has nothing to do with MPRA cuts. Rather, it has to do with “new federal regulations effective April 1, 2018, that imposed more stringent and complex requirements for how plans process Disability Pension claims.” In other words, the Disability Benefit has become too complex and expensive to administer, so the trustees have eliminated it, except for a very narrow category of claims.


ICSOM and Accountability at the AFM-EPF

n the next 12-18 months, barring another record year in the stock market, participants in the AFM-EPF are facing potentially deep cuts to their accrued pension benefits. At this critical juncture, it is especially important that the trustees of the AFM-EPF be held to the highest standards of accountability and transparency. The leadership of ICSOM can play a crucial role in this regard. Opportunities for live interactions with the AFM-EPF trustees are all too rare these days. At the upcoming convention, there will be an opportunity to question the lead Union side trustee, Ray Hair, about issues currently facing the AFM-EPF. The following are some of the questions that Mr. Hair should be called upon to answer. 

Trustees Target the Most Vulnerable Musicians

Many of you have received notice that our trustees have decided to eliminate the disability pension for most musicians who need it. In a recent mailing (click here for mailing), the trustees informed us that any musician eligible to receive a regular pension benefit – including any musician over 55 years of age and fully vested in the pension – is no longer eligible for a disability pension benefit. Even musicians below 55 years of age won’t be getting any disability pension if they don’t have at least one year of vesting service in the three calendar years beforehand. 

AFM-EPF Trustees Must Declare Support for Butch Lewis Now

The Select Committee on Multiemployer Pensions is now crafting a legislative solution to the multiemployer pension crisis. At last week’s hearing, Senator Sherrod Brown (D-OH) stated that he and the Chairman of the Select Committee, Orrin Hatch (R-UT), had agreed that beginning this week, their respective staffs would be empowered to “get serious about negotiations,” to enable the Select Committee to “get close to real solutions in September.” Hatch added that the Select Committee will come together on a bill and that it “would be to no one’s liking."


A Fellow Musician's Response to the AFM-EPF's Choice for New Trustee

Last Friday, the AFM-EPF announced the appointment of Gail Kruvand to the board of trustees. She will replace Phil Yao who recently resigned. (Read the announcement here.) As usual, we were preparing our response to this news when we received the email below from a fellow musician in the MPS network. We believe it captures the voice of musicians who are feeling marginalized by our trustees in 2018 and reflects the ongoing concerns of AFM members across the country.

Make Your Voice Heard: How to Contact Your Reps and Tell Them to  Support the Butch Lewis Act

Make Your Voice Heard: How to Contact Your Reps and Tell Them to  Support the Butch Lewis Act

We received many emails in response to Jonathan Kantor's latest "Butch Lewis Watch" blog post entitled, Butch Lewis is in Trouble Unless Plan Participants Are Heard From. Read it here. To summarize, Mr. Kantor's post reported that lawmakers are making it clear that unless there is more vocal support from Union members and retirees, The Butch Lewis Act is unlikely to pass. The Butch Lewis Act would extend government guaranteed loans to plans like AFM-EPF, avoiding any necessity for cuts to accrued pension benefits.

At the hearing, Senator Joe Manchin (D-WVA) said that unless workers and retirees “make your voice heard”there will be no help forthcoming from the Federal government.

Manchin pleaded, “we need your help.”

You asked how to make your voice heard, here's how:

Do the AFM-EPF Trustees Really Support the Butch Lewis Act?

As many of you know, the Butch Lewis Act would provide Government-backed loans to the AFM-EPF which would assure that no musician’s pension gets cut. 

So where do our trustees currently stand on the Butch Lewis Act? They declared their support for it in late 2017 after months of pressure from musicians across the country, but since then, they have been cagey about it, saying only that there is an urgent need for Congress to act in a “bipartisan” fashion and that any solution must be “fair” to the musicians.

10% Increase in Employer Contributions: Less Than Meets the Eye

Over the past 18 months, MPS has been tirelessly arguing that employers need to be part of the solution now that our pension plan is in crisis. The idea that musicians should take draconian, life-altering cuts to their pensions, while employers got away with under-contributing for the last decade, struck us as very unfair. Now the trustees have decided to take a small step toward MPS by requiring a one-time 10% increase in the rate of employer contributions to the AFM-EPF. Unfortunately, this increase does little to address the unfairness of the situation. 

MPS Responds to "AFM Pension Perspectives" Article

On April 4, MPS presented its Action Plan to an overflow audience of over 300 musicians, with thousands more watching online. At the conclusion of the meeting, we took an anonymous online poll to determine what support we had for the plan. The support was overwhelming – over 97% -- and was re-confirmed in subsequent weeks when we crowdfunded another $15,000 to help support future MPS projects. 
 
Within the musician community, there have been a few naysayers and cynics, none more so than Scott Ballantyne and Tom Calderaro, who have put out a piece entitled “MPS Action Plan and Analysis.” (Scott is a cellist in New York City and Tom is an orchestrator* in Los Angeles.) We have gotten some questions about some of the assertions Scott & Tom make in their piece. We are happy to answer those questions with full transparency and supporting data.

The Case for New Trustees

On April 4th at the MPS National meeting, we introduced the MPS Action Plan.  A central part of MPS’ Action Plan is to implement Board reform and these are the changes we would like to make:

MPS Plan For Board Reform

  • Replace five of the eight union trustees, require that the new trustees all have financial literacy

  • Bring investment expert onto the Board; require that all members of Investment Committee have financial literacy

  • Bring an actuarial expert onto the Board

  • Disclose on the AFM-EPF website the qualifications of each trustee; what skill they bring to the table

This simply means replacing many of the current trustees to make way for experienced financial, actuarial and investment experts to form a new team of consummate professionals that will work toward a sound future for our pension fund. Since we introduced this idea of Board reform we have gotten a lot of questions. The following is the answer to those questions and the case for new trustees.

MPS Responds to Peter de Boor's Article in Senza Sordino

We read with astonishment Peter de Boor’s “Dropping the Mute” in the June 2018 issue of Senza Sordino where he says MPS is asking for “enormous contribution increases” to help stabilize the AFM-EPF.

MPS is asking for 6% contribution increases over the next five years and 2.9% thereafter. This is a modest request, considering that, according to recent Congressional testimony, employer contributions are increasing at the rate of 6.9% per year, and have been over the past five years.

Federal Judge Calls AFM-EPF Trustees’ Investment Approach “Extraordinarily Risky”

Anyone who still thinks that the crisis at the AFM-EPF was not caused by the mismanagement of our trustees should read the transcript of a recent hearing before the Federal Judge overseeing the Snitzer class action. You can find the complete transcript here. As many of you know, Local 802 members Andy Snitzer and Paul Livant filed a class action lawsuit against the AFM-EPF trustees, charging them with breaches of fiduciary duty. On April 26, the federal judge conducted a hearing on the case, and after that hearing entered an order denying the trustees’ attempt to have the case dismissed.

MPS Year One Report and Fundraiser Update

Musicians for Pension Security celebrated its first anniversary in April. Thanks in large part to the overwhelming support from fellow musicians across the country, we have had a very successful year. 
 
Since April of 2017, MPS has built a network that now connects 20,000 fellow musicians across the country who are in search of more information about the state of our pension and desire more transparency and accountability from the AFM-EPF Trustees. 

AFM-EPF Avoids Critical and Declining Status but Trustees Still Have No Plan for the Future

The board of trustees of the AFM-EPF met this past week and decided to keep our pension plan out of critical and declining status for another fiscal year. That means we are spared the 25-30% cuts they have been planning since 2015. But the fact remains that, as our trustees stated in January of this year, our plan is “on the brink of entering critical and declining status in the near future.” The only thing saving us is that last year was one of the best years the US stock market has ever seen. No one is counting on that lucky circumstance again.  

Congressional Testimony Validates Major Component of the MPS Action Plan

New congressional testimony validates a major component of the MPS Action Plan just weeks after AFM-EPF trustees dismissed the plan as “based on a distortion of facts.”
 
The AFM-EPF trustees are contemplating potential cuts of 25-30% to our existing pension benefits. MPS and Tom Lowman, one of the country’s leading actuaries, recently proposed a comprehensive Action Plan that could help the AFM-EPF for decades to come. The Action Plan included a three-year delay of benefit cuts, negotiating 6% increase in employer contributions for five years, then reverting to 2.9% per year over the next 25 years. We have shown that if the trustees execute our plan and raise employer contributions, much milder cuts could take place, and would not happen for at least three years. Unfortunately, less than 48 hours after we proposed the plan our trustees refused to even consider it. They state that our call for a three-year delay in benefit cuts is “based on a distortion of facts”and is “just empty rhetoric.”[1]However, recent congressional testimony debunks those statements by the trustees and proves that a growth target of 6% in employer contributions is, in fact, attainable. 

Trustees Call Class Action Lawsuit “Frivolous” but a Federal Judge Disagrees

As many of you know, Local 802 members Andy Snitzer and Paul Livant filed a class action lawsuit against the AFM-EPF trustees, charging them with breaches of fiduciary duty. Trustees Ray Hair and Tino Gagliardi repeatedly called the lawsuit “frivolous.” But the federal judge overseeing the case believes it is not frivolous, and on April 26, entered an order denying the trustees’ attempt to have the case dismissed. The case will now proceed with discovery and an eventual trial.

Trustees Call Class Action Lawsuit "Frivolous" but a Federal Judge Disagrees

As many of you know, Local 802 members Andy Snitzer and Paul Livant filed a class action lawsuit against the AFM-EPF trustees, charging them with breaches of fiduciary duty. Trustees Ray Hair and Tino Gagliardi repeatedly called the lawsuit “frivolous.” But the federal judge overseeing the case believes it is not frivolous, and on April 26, entered an order denying the trustees’ attempt to have the case dismissed. The case will now proceed with discovery and an eventual trial.