National Coordinating Committee for Multiemployer Plans (NCCMP) is a trade association of multi-employer plans in Washington DC. In 2014, they were instrumental in formulating and passing MPRA, which is the law that would allow cuts to our hard-earned pension benefits. Our pension fund, the AFM-EPF, has deep connections to the NCCMP going back many years. The AFM-EPF is a dues-paying member of NCCMP and our AFM trustees attend their conferences every year. Two of our trustees, Christopher Brockmeyer and Bill Moriarity, serve on NCCMP’s Board of Directors and Steering Committee. Both have given lectures at those conferences. Brockmeyer, the AFM-EPF’s trustee co-chair, served on the NCCMP working group which formulated the MPRA proposal.
MPS needs your help! Please take a moment TODAY, Monday 11/26 to call and email President Hair and let him know that you want The American Federation of Musicians to support The Butch Lewis Act.
The “Butch Lewis Act of 2017” and its House companion bill “The Rehabilitation of Multiemployer Pensions Act," introduced by Senator Sherrod Brown, provide an innovative way to avoid retiree benefit reductions by providing relief to financially-troubled plans.
These bills set up a new office in the Treasury Department called the Pension Rehabilitation Administration (PRA), which would receive proceeds from the issuance of Treasury bonds. This money would then be lent to financially-troubled plans as long as they meet certain criteria. The Pension Rights Center is particularly pleased that the loans would be used to fully pay the benefits of retirees and that the bill would require plans, which have already been approved to cut benefits under MPRA, to apply for these new loans and if approved, use that money to restore previously suspended benefits.
Senator Sherrod Brown’s office has sent MPS the summary, FAQ and the full legislation related to The Butch Lewis Act of 2017. To view, click the links below.
The Butch Lewis Act of 2017 summary.
The Butch Lewis Act of 2017 FAQ.
The Butch Lewis Act of 2017 full legislation.
Senator Sherrod Brown and Congressman Richard Neal Introduce bills to save financially troubled multiemployer plans and protect retirees
Teamsters Support Brown-Neal Legislation to Solve Pension Crisis
The Pension Rights Center honored seven activists and financial columnist Michelle Singletary at an event held on November 7th, 2017 at the Carnegie Institution in Washington, D.C. One of the activists honored was Adam Krauthamer who is currently the Executive Director of Musicians for Pension Security.
Just last week, on November 16, many of you received the email from AFM President Ray Hair regarding recently proposed legislation to assist multiemployer pension funds by US Senator Sherrod Brown (D-OH). In the email, President Hair says:
"I have been in direct communication with Senator Brown's staff regarding this legislation. Now that the legislation has officially been introduced, the Trustees of American Federation of Musicians and Employers' Pension Fund (AFM-EPF) will carefully review its specifics to determine if it addresses the issues confronting the AFM-EPF..."
Encouraging words, but so far the Trustees' position on this potentially very helpful piece of legislation has been extremely skeptical.
Musicians for Pension Security has found more manipulation of the facts by AFM-EPF Trustees who are desperately trying to spin the truth about the performance of our pension fund. Recently posted to the AFM-EPF website is an updated presentation concerning our fund performance (click here) where the Trustees state that AFM-EPF administrative expenses are “comparatively low” within the peer group. (See slide 22) The peer group consists of five other pension plans, all in the entertainment industry.
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:
As you may know, several proposals have been made in Washington DC to address the crisis in the multi-employer pension sector. These proposals would impact not only the AFM-EPF plan but also the Teamsters pension plan and dozens of others that are chronically underfunded.
If you've been following MPS news, you're aware that MPRA is a law that would permit our plan trustees to apply to the Department of Treasury to slash our pension benefits (read more here). Since it was enacted in 2014, eighteen pension funds have applied to the United States Treasury under MPRA. But through the end of 2016, not a single one of those applications had been approved—five had been denied outright, and five had withdrawn. Notably, the application of the Central States Teamsters, which involved over $20 billion of unfunded pension liability, was denied.
Unfortunately, things have changed in 2017. Three applications for MPRA have recently been approved by the United States Treasury, including those from the NY Teamsters and United Furniture Workers Unions in the last three weeks alone. It is of concern that the Department has not denied an application since the inauguration of President Trump.
Our AFM-EPF vs. Musicians' Pension Fund of Canada
While researching the dramatic deterioration of our pension fund, Musicians for Pension Security (MPS) continues to be deeply troubled by how, compared to other pension funds in our industry, ours is performing so poorly. Our trustees cite declining demographics, unsatisfactory industry dynamics and changing mortality tables. But a peer AFM musicians’ pension fund, Musicians' Pension Fund of Canada (MPF Canada), is quite healthy, despite the fact that it is subject to the exact same factors cited by AFM-EPF trustees.
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.
On June 26, MPS and 39 AFM members across the country took a very successful first step in starting a national conversation about the problems at the AFM-EPF. Click to read the highlights.
MPS responds to President Ray Hair's July 2017 International Musician article
Ray Hair attempts to “bust the myths” related to our pension fund’s crisis in this month’s International Musician, which was copied verbatim from the AFM-EPF June newsletter (that message can be found here and here). President Hair’s message actually raises more questions than it answers.
You may have seen the latest AFM-EPF newsletter, stating, "Our trustees take seriously the commitment to more frequent, comprehensive communication." Last month, Musicians for Pension Security requested a series of documents. We also asked specific questions concerning investments, expenses, lobbying costs and other subjects of vital importance. Not one of these requests for information was honored. In response, Executive Director Maureen Kilkelly simply referred MPS to the disclosure document inventory list on the AFM-EPF website. This list includes several years of actuarial and investment management information, and the copying cost to receive these documents. This information, as required by federal law, must be posted to their website. For our remaining requests, Ms. Kilkelly’s response speaks for itself, “We are not responding to the remaining requests.* ”
Dear Plan Participants,
By now, many of you received an email from the AFM-EPF stating that our fund earned better-than-expected returns in 2016, and we will not be entering critical and declining status for the next fiscal year (read that email here). Avoiding critical and declining status means that our trustees will not be able to file an application to the U.S. Treasury to cut our hard-earned pension benefits. Under the law, the cuts could be up to 70% of accrued benefits (use this calculating tool to see the maximum reduction you could face).
The Keep Our Pension Plan Promises Act (KOPPA), is being reintroduced by Senator Bernie Sanders on May 9th, and it repeals the elimination of anti-cutback provisions under the Multiemployer Pension Act of 2014 (MPRA). Put plainly, this legislation prohibits cuts in benefits to participants in multiemployer pension funds just like the AFM-EPF.