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.

Great Start to the MPS Spring Fundraiser

The MPS Spring Fundraiser is off to an incredible start. We set a goal to raise $15,000 by June 1st. Thanks to your generosity and quick action we are well on our way to achieving that goal! 


But we still need your help to reach our $15,000 goal!!!


2018 is a crucial year. Your donations will go a long way in helping to secure a more certain future for our pension fund. As You know, we are an all-volunteer organization working on behalf of fellow musicians across the country. Every single dollar donated to MPS goes directly to protecting our pension. 

Thanks for a Great Meeting - Now MPS Needs Your Help!

MPS 2018 Fundraising Drive

 
Last summer we asked for your help and you overwhelmingly responded to our fundraiser. We reached our $15,000 goal in less than two weeks thanks to your quick action and generosity. That allowed us to hire one of the country's leading actuaries Tom Lowman. The MPS team now has a viable Action Plan thanks to our experts. This spring, MPS once again needs your help to advocate for that plan and many other initiatives in the coming months. 

MPS Response to AFM-EPF Trustees

It only took 48 hours after the Musicians for Pension Security national meeting on April 4th for the AFM-EPF Trustees to reject each and every proposal we made, casually brushing aside months of careful work by our team of experts. Rather than engaging in a dialogue concerning the positive and creative recommendations we made for lessening the impact of cuts to our pensions, cutting expenses, or reforming the board, the Trustees chose to question our motives and attack our all-volunteer organization that works on behalf of fellow musicians across the country. Read the letter the trustees sent to us on 4/6 here.