When our trustees sent out a letter one year ago in December of 2016 disclosing for the first time that it was quite possible that we could be facing cuts to our existing benefits as soon as spring 2017 there was a lot of confusion, unanswered questions, and shock. In the months following, when many AFM members looked to our elected leaders and trustees for help, information and a plan. It became clear that our elected leaders were not going to help and that we would have to deal with the pension crisis ourselves. A group of concerned musicians organized to address the ongoing pension crisis and founded Musicians for Pension Security. Our mission statement from the beginning has been clear and simple: We have come together in search of more information about the state of our pension and, ultimately, to demand more transparency and accountability from the AFM-EPF Trustees. With input and participation from plan participants across the country, we will be able to speak with one unified voice working towards a sustainable long-term plan for a secure pension.
On 12/9/2017, participants of the AFM-EPF pension plan received an email (read it here) from our trustees who say they want to “set the record straight” and accusing “individuals who have attacked Fund Trustees” with information “not supported by data and ignoring facts that don’t serve their agendas.”
If this is directed at MPS, then we will set the record straight about our organization. We are not a few “individuals.” MPS is now a national organization that reaches into every major local in this country. It took us only five days to crowdfund $15,000 to hire a highly respected actuarial firm, Bolton Partners. We have organized thousands of plan participants through our website www.musiciansforpensionsecurity.com and the MPS Facebook page. Our national conference calls are regularly attended by scores of engaged participants across the country. Policymakers in Washington D.C. like Senator Sherrod Brown and Senator Lamar Alexander (Chairman of the Senate Health, Education, Labor, and Pensions Committee) regularly deal with MPS as a serious and impactful interest group representing the concerns of pension plan participants. Our grassroots organizing capability was recently shown when we spearheaded an extremely successful call to action where thousands of AFM members called and emailed AFM President Ray Hair urging him to support The Butch Lewis Act. MPS Executive Director, Adam Krauthamer, recently received an award from the Pension Rights Center in Washington DC in recognition of his services to the AFM-EPF plan participants. He received this award alongside several other highly respected pension activists and journalists.
Far from “promoting our own selfish interests,” as the trustees put it, MPS volunteers are doing the thousands of hours of work it takes to try and help our friends and colleagues around the country stay informed in the face of this pension crisis, while at the same time seeking solutions. We all do this while holding down demanding careers as professional musicians. It is unclear how trying to protect our fellow members can be deemed selfish.
MPS does not have armies of advisors, consultants, lawyers and Washington D.C. pollsters controlling our actions and messaging like the AFM-EPF does. Through rigorous analysis of the facts, and help from our legal counsel, actuary and the Pension Rights Center, we have been able to debunk much of the spin and misdirection put forth by the trustees. For nine months we have published numerous pieces with clear explanations disproving many of the things our trustees have said and written about regarding our pension fund. All articles are painstakingly fact-checked and can be found here.
The trustees’ latest email blast is yet another example of their spin and misdirection. Let’s take each item in order:
The Butch Lewis Act
The Butch Lewis Act provides low-cost government loans to plans like AFM-EPF and would guarantee a 100% pension payout for everyone in the plan. It is a no-brainer for our trustees to support. (The AFM supports it, but critically the AFM-EPF trustees do not.) They state AFM-EPF actuaries are analyzing it but they have had this legislation in their hands for over a month. The actuaries have software and could produce any necessary analysis inside of one day. Our trustees continue to support the NCCMP and refuse to disassociate themselves from NCCMP’s active opposition to the Butch Lewis Act. (See the previous post here). The trustees’ refusal to endorse the Butch Lewis Act does not support the long-term interest of the fund. It is damaging the interests of plan participants.
“Streamlined” Investment Management
Our trustees claim that adding another investment manager to oversee the day-to-day decisions of the investment portfolio will “streamline” the investment strategy. However, they still keep a bloated staff of 70 plus people, including Maureen Kilkelly, who earns by far the most of any executive director of any pension plan we are aware of in the peer group. They will also keep investment consultant group Meketa on board despite their industry worst investment performance for our fund but, we are told, for a reduced fee. It is unclear why one more dollar would be spent on them based on their performance. (See our previous article on fund expenses here.)
The trustees do not even attempt to defend their overall expenses of $25 million per year. Instead, they take one sub-category, investment management fees, and try to show they compare favorably. They claim that they pay their investment managers less than other union pension funds do. Whether it is true or not, it is like saying if my electricity bill is less than yours, that means my total household expenses are less than yours are.
The trustees make the same specious argument they made in the Roadshow in March 2017: they compare absolute administrative expenses of much larger funds, like the Screen Actors Guild to ours. That is not the standard measure of efficiency in the investment business. The industry standard way to compare is to look at the ratio of expenses to assets under management. On this basis, AFM-EPF has by far the highest expenses of any peer pension plan. The trustees try to make themselves look better by cherry picking their data: stripping out expenses they don’t like (depreciation, professional fees, PBGC premiums). Of course, if you can customize your comparison you’re much more likely to get the results you want. See our previous article on this here.
In closing, we would like to say that we will continue to raise our voices until the AFM-EPF trustees and fund administrators accept their responsibility and work to fully protect the pension benefits of all fund participants. We encourage all AFM members to do the same.