Public Comment Period for the MPRA Application is Open
On Friday, January 17, the U.S. Treasury Department posted the AFM-EPF’s application to prevent insolvency by reducing benefits as necessary through the Multiemployer Pension Reform Act (MPRA). Treasury also began accepting public comments on the application. You can click here
to view the MPRA application.
If you wish to submit a comment to the U.S. Treasury Department, click here
to open the Regulations.gov website and click on the “Comment Now!” button. After writing your comment (or uploading it as an attachment), you may enter your name or leave it blank to remain anonymous. As mandated by MPRA, the comment period will remain open for 45 days, through Monday, March 2, 2020
Additional information is available in the January 18 issue of Pension Fund Notes.
AFM-EPF Submits MPRA Application to U.S. Treasury Department
On December 30, 2019, the AFM-EPF submitted an application to the U.S. Treasury Department to reduce benefits under the Multiemployer Pension Reform Act (MPRA) in order to prevent the Plan from becoming insolvent. We know that our participants have anticipated this difficult moment for some time. Now that the application has been completed and submitted, we can provide important information about how each participant would be affected by the proposed benefit reductions if the application is approved by Treasury.
On January 6, 2020, the Fund Office mailed a packet of information about the MPRA application to all participants and beneficiaries of deceased participants. This mailing includes three documents, all of which are important for participants to read in full:
- Personal Benefit Estimate Statement ― Personalized statement showing your estimated benefit as of January 1, 2021 should the reduction be approved and go into effect
- "Difficult Choices" Newsletter ― Overview of what's happening and why
- Official Notice of Proposed Reduction ― Official notice of the Plan's application to reduce benefits, including important information about your rights
In addition to the copies that participants will receive via U.S. mail, the "Difficult Choices" Newsletter and Official Notice of Proposed Reduction referenced above are available now on the Recent Mailings
page of the Plan website, under the "Stay Informed" tab.
Participants who have registered on the Plan website can access their Personal Benefit Estimate Statement by logging into the Participant Portal
and clicking on the MPRA Benefit Estimates icon. Participants who have not yet registered may do so by clicking here
or by clicking on the link in the heading of the Plan website.
We will continue to keep participants informed throughout the MPRA process via the Pension Fund Notes
e-newsletter. We will also maintain resources on the Plan website, including the Frequently Asked Questions
page and the MPRA Benefit Reductions page, which contains a description of each component of the proposed benefit reduction.
AFM-EPF Enters "Critical and Declining" Status – Trustees Will Apply to Treasury Department to Reduce Benefits Under Multiemployer Pension Reform Act
At the May meetings of the Board of Trustees of the American Federation of Musicians and Employers' Pension Fund, our actuaries advised that the Fund is entering "critical and declining" status for the plan year beginning April 1, 2019. This means that the Fund is projected to run out of money to pay benefits (or become "insolvent") within 20 years. Because the Fund is entering critical and declining status, the Trustees are now able to, and now intend to, apply to the government to reduce earned benefits in order to prevent the Fund from becoming insolvent.
Please view the May 24 issue of Pension Fund Notes
for information on what this means for participants.
Tell Congress to Protect Your Pension Benefits
In February 2018, Congress established a bipartisan Joint Select Committee on the Solvency of Multiemployer Pension Plans. This Committee is tasked with producing legislation by November 30, 2018 to address the dire solvency issues facing over 100 multiemployer pension funds across the US, such as the American Federation of Musicians and Employers' Pension Fund (AFM-EPF).
The Fund has set up a webpage with more information on the Joint Select Committee and how participants can make their voices heard in Congress. Click here
to learn how you can contact your own Members of Congress and the Joint Select Committee.
The voices of our 50,000 participants and those of other funds facing insolvency will be crucial in persuading members of the Joint Select Committee to act this year to produce and pass legislation that fully and fairly solves this crisis.
AFM-EPF Remains in "Critical" Status for Another Fiscal Year Due to Higher Than Expected Investment Earnings
At the May 24, 2018 meeting of the Board of Trustees of the American Federation of Musicians and Employers' Pension Fund, our actuaries advised that better than expected investment earnings will keep the Plan in "critical" and not yet "critical and declining" status for another fiscal year.
Please view the May 24 issue of Pension Fund Notes
for information on this determination of status and what it means for participants.
AFM-EPF Holds Q&A Webinar for Fund Participants
On Monday, January 29, the AFM-EPF held a Q&A webinar for Fund participants. Fund Trustees, Staff and Plan Advisors answered questions submitted by participants in real time.
to listen to the webinar.
A lawsuit was filed by two participants against the Trustees and the Executive Director challenging, among other things, certain investment decisions on behalf of the Fund. On behalf of the defendants, the Executive Director issued the following public statement:
The lawsuit filed against the Board of Trustees and Executive Director of the American Federation of Musicians and Employers' Pension Fund is entirely without merit. The Board of Trustees and staff of the Fund have always taken our fiduciary responsibilities very seriously. Every step of the way, we have consulted with respected and experienced investment experts in the industry, closely reviewed investment options, and always acted in the best interests of the Fund's nearly 50,000 participants and beneficiaries.
The lawsuit is directed at the performance of fund investments. But there are many other causes of the Fund's present financial predicament. Many multiemployer pension plans across the nation are struggling with a similar "perfect storm" of challenging factors. These include the volume of Baby Boomers taking retirement; more benefits being paid out to retirees and beneficiaries than contributions coming in from actives; and significantly longer pay-outs because participants are thankfully living longer. Additionally, two major recessions since 2000, the one in 2008-09 being of epic proportions and causing the collapse of financial markets worldwide, have profoundly impacted pension plans across the nation.
The Trustees, Executive Director and staff of the Fund have responded prudently to all challenges and have consistently based their decisions on the counsel of proven investment advisors and actuaries.
We will vigorously contest this lawsuit, and expect to prevail. Our focus will continue to be on doing everything we can to preserve the hard-earned benefits of our participants and beneficiaries.