As many of you know, the trustees have appointed Brad Eggen, long time President of the Twin Cities Musicians Union, as Retiree Representative. According to Mr. Eggen’s website, he is “an independent voice for a secure future,” and “an independent voice” in the process by which our pensions will be cut.
We are sure Mr. Eggen is a capable lawyer, union leader and musician. But if he is not independent, he should not serve as Retiree Representative. Unfortunately, his initial actions as Retiree Representative raise real questions as to whether he can be a truly independent voice for our retirees.
Take Mr. Eggen’s performance at the recent AFM convention, which was shockingly partisan for a Retiree Representative. No one truly independent of the trustees would have made a speech defending everything the trustees have done to date, absolving them of any responsibility for the current crisis.
And yet, Mr. Eggen did just that. He also made the speech nominating Ray Hair for another three years as President of the AFM, lavishing effusive praise on his record. Of all the delegates who could have made that nominating speech, we are amazed that Mr. Eggen was the one to be chosen.
We are also troubled that Mr. Eggen seems to take a narrow view of his role as Retiree Representative. He seems to think that his role is to provide a view of whether the cuts proposed by the trustees are equitably distributed over the many sub-groups that make up our pension plan. But this overlooks the threshold question: are cuts necessary in the first place? Mr. Eggen so far has blown right by that threshold question.
As a lawyer, Mr. Eggen is surely aware that under federal law, cuts to accrued pension benefits must be a last resort. If the trustees have missed any opportunities for financial improvement, the cut process cannot go forward. (This is known as the “all reasonable measures” test under MPRA.) Is Mr. Eggen prepared to challenge the trustees on this? Here are just some of the questions we have:
Will Mr. Eggen challenge the trustees to increase employer contributions to the plan?
Will Mr. Eggen challenge the trustees to examine all potential litigation they may have against their advisers and former advisers?
Will Mr. Eggen challenge the trustees to reduce their investment and administrative expenses, including staff salaries, conferences and other discretionary expenses?
Will Mr. Eggen challenge the trustees on the assumptions that go into their projections, including assumptions regarding employer contributions, discount rates and investment returns?
Under federal law the Retiree Representative has a duty to advocate on behalf of retirees and deferred vested participants and beneficiaries. To be an effective advocate, the Retiree Representative must take an independent view of the facts and be prepared to take positions adverse to the trustees as circumstances warrant. If Mr. Eggen cannot discharge his statutory duties, then he should resign.