MPS Response To The Lawsuit Filed Against AFM-EPF Trustees And Fund Administrator
Dear Plan Participants,
A class action lawsuit was recently filed against the trustees of the AFM- EPF. The central allegation is that Fund trustees failed to properly oversee the investment functions of our plan. In particular, it claims they directed too much plan money into emerging market
stocks, and as a result, the investment returns were lower than if they were invested in US stocks.
Musicians for Pension Security did not file this lawsuit. It was initiated by two AFM-EPF members who are not affiliated with our organization. MPS applauds any effort to hold plan trustees accountable for their performance and transparency failures. However, the litigation process could take years to unfold, and during this time the trustees will be deciding the fate of our plan. In the next few years, they will determine if the plan will move into critical and declining status, and whether or not to file an application to the US Treasury for cuts to our pension benefits. We cannot let the lawsuit distract us from the key task of protecting our pension benefits.
MPS believes that the lawsuit, if successful, would only recover approximately 1% of plan assets. In all likelihood our trustees have an insurance policy insulating them from possible litigation, and in general, these policies provide somewhere between $20-$40 million of protection. After deducting attorneys' fees, we believe that at most only approximately $20 million could be recovered. This equates to less than 1% of plan assets, or about $400 per participant.
While holding AFM-EPF trustees accountable is laudable, MPS remains focused on how plan participants can have a greater influence right now. We have retained our own independent actuary to provide a second opinion concerning the finances of our fund. MPS will continue to engage with policymakers in Washington to find solutions in plan participants' best interests. Through grassroots efforts, we can unite and work together to protect the pension benefits of all plan participants.
Musicians for Pension Security
Adam Krauthamer, Marilyn Coyne, Jon Kantor, Anja Wood, Pete Donovan, Elise Frawley, and Sylvia D’Avanzo
Read the full complaint here.
Articles about the lawsuit online:
Suit Filed Against Musicians' Union Board of Trustee
Lawsuit Claims Mismanagement Of Musicians Union’s Troubled Pension Plan