Musicians for Pension Security has discovered documents from the AFM-EPF's own files that contradict their repeated claims that the investment performance has been favorable. We now have clarity on the subject:
Deep within an investment report recently posted to the AFM-EPF website (you can find it here, see page 41) is a comparison chart showing how the AFM-EPF investments performed versus the performance of peer multiemployer pension funds. The answer is clear - the investment performance of our fund is unbelievably poor. It is so poor that it makes no sense that the Trustees attempt to put a positive spin on it.
AFM Pension Fund vs Peer Multiemployer Pension Funds
The comparison group includes 23 multiemployer pension plans similar to the AFM-EPF with assets over $1 billion. The 23 plans are then ranked by the percentile they fall into with the 99th being the worst and the 1st the best. The comparisons are made over different time horizons from 1 year, 3 years, 5 years to 10 years. The chart below (again, straight from the AFM-EPF website) shows these time periods, rankings and percent of return on investments. This info is highlighted in red. Click the image to enlarge.
1. The AFM pension plan produced a 3.2% annualized investment return over 10 years. This placed AFM-EPF in the 99th percentile, dead last in the peer group.
2. The AFM pension plan produced a 7.3% annualized investment return over 5 years. This placed AFM-EPF in the 91st percentile, another poor result placing us again at the very bottom of the peer group.
3. The AFM pension plan produced a 4.5% annualized investment return over 3 years. This put them again at the bottom of the rankings in the 87th percentile within the peer group.
4. Finally, the AFM pension plan produced an 11.4% return on investment for 1 year. This placed them in the 64th percentile for the peer group, middling at best.
These returns are well below average and unacceptable, but if you took our Trustees at their word, you would think the AFM-EPF is doing well compared to other peer pension funds. President of Local 802 Tino Gagliardi, AFM-EPF Trustee since 2010 and Investment Committee member, just last week wrote the following statement regarding the pension fund:
“In the eight years since the end of the financial crisis, the Fund’s average annualized return is 9.8% before fees. That’s good, particularly since, in three of those years, the fund didn’t make its target 7.5% assumed rate of return.” This claim is taken from his written statement handed out at a Local 802 Membership Meeting on 10/18. Click here for the whole document.
If you were to only read Trustee Gagliardi’s statement, you might think that the AFM-EPF investment performance is “good" but the AFM’s own documents conclusively show that is not the case. AFM-EPF plan participants now know that the Trustees would rather spin numbers for us than be transparent and accountable for their poor performance. It is time for the Trustees to face the reality of the numbers in their very own reports. It is time for them to accept responsibility for their actions. It is time for them to get actively involved in seeking out solutions to save our pension beyond taking the easiest route: cutting our hard earned benefits.