January 7, 2021
AFM-EPF Submits Second MPRA Application to U.S. Treasury Department
On December 30, 2020, the AFM-EPF submitted a second 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. Now that the application has been submitted, we are providing important information directly to our participants about how each would be affected by the proposed benefit reductions if the application is approved by Treasury.
Specifically, on January 6, 2021, 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, 2022, should the reduction be approved and go into effect
- "Saving the Plan" 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 you will soon receive via U.S. mail, the Newsletter and Official Notice of Proposed Reduction referred to above are available now on the Recent Mailings
page of the Plan's website, under the "Stay Informed" tab.
Participants who have registered on the Plan website can access their Personal Benefit Estimate Statement now
by logging into the Participant Portal
and clicking on the MPRA Benefit Estimates icon. If you have not yet registered, you may do so by clicking here
No later than 30 days after the submission of the application, which would be January 29, 2021, Treasury will post the application in full on its website and request public comments.
We will continue to keep you informed throughout the MPRA process via the Pension Fund Notes e-newsletter. There are also several 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 reductions.
January 7, 2021
Martha Hyde to serve as a Union Trustee of the AFM-EP Fund
We are pleased to announce the appointment of Martha Hyde to serve as a Union Trustee of the AFM-EP Fund
effective February 9, 2021. Martha has many years of experience as a professional musician
performing in the orchestras as a Broadway and symphonic musician. She also has extensive experience
representing professional musicians in those workplaces spending more than 25 years as a Trustee of the Local 802 Musicians Health Fund.
Martha Hyde Resume
December 10, 2020
AFM-EPF Plans to Submit Second MPRA Application by End of the Year
As you know, the U.S. Treasury Department denied the American Federation of Musicians and Employers' Pension Fund's first application to prevent insolvency by reducing benefits under the Multiemployer Pension Reform Act. Since then, the Trustees have been working with the Plan's advisors to prepare a new application to save the Plan.
The Trustees plan to submit a second application to Treasury by the end of 2020 for a benefit reduction effective January 1, 2022. All participants and beneficiaries of deceased participants will receive a notice in early January 2021 with their estimated reduced benefit.
For more information, click here
to read the December 10, 2020 issue of Pension Fund Notes.
August 11, 2020
U.S. Treasury Department Denies the AFM-EPF's MPRA Application
Today, the U.S. Department of the Treasury officially notified the American Federation of Musicians and Employers' Pension Fund (AFM-EPF, the Plan) that it has denied our application, which we filed to protect our Plan's solvency by reducing benefits under the Multiemployer Pension Reform Act (MPRA). Treasury's letter explained that its denial is based on a disagreement over the reasonableness of two of the actuarial assumptions used in our application. You can click here
to read Treasury's letter.
Because of Treasury's denial, benefits will not be reduced on January 1, 2021, and our Plan will continue its financial decline. To avoid insolvency, the Trustees have started working with their actuaries to prepare and file a second MPRA application.
As we discussed in the August 5 issue of Pension Fund Notes
, we maintain that Treasury was wrong to deny the application on this basis, but we are encouraged by the fact that Treasury Staff advised us verbally that it had no issue with any other elements of our application or our proposed benefit reduction plan.
We will keep participants updated on all of the Trustees' efforts to preserve the Plan's solvency for current and future generations of musicians.
June 9, 2020
Snitzer and Livant v. The Board of Trustees of the American Federation of Musicians and Employers' Pension Fund, et al., No. 1:17-cv-05361-VEC.
As you may know, two participants brought a lawsuit against certain current and former Trustees of the American Federation of Musicians and Employers' Pension Plan. The Federal District Court in New York has preliminarily approved a proposed class action settlement of that lawsuit.
If you were a participant or beneficiary in the Plan at any time during the period from August 9, 2010 through May 18, 2020 you should receive a copy of the notice approved by the Court describing the proposed settlement and your legal rights and options. That notice, as well as other case documents, have been posted to a settlement website, which you can view at www.afm-epfsettlement.com
Settlement Reached to End Litigation Against AFM-EPF Trustees
On March 25, 2020, a settlement was reached in the July 2017 litigation filed against certain current and former AFM-EPF Trustees. The defendants continue to deny all plaintiffs' claims, and nothing in the settlement is an admission of any fault.
In fact, Phyllis Borzi, the former Assistant U.S. Secretary of Labor under President Obama – who was the top government official responsible for enforcing fiduciary obligations, and who the plaintiffs describe as "viewed as a champion of pension holders rights" – concluded that the Trustees did not breach their fiduciary duty in connection with the Plan's asset allocation. She further opined that the Trustees' decision-making process met or exceeded industry standards of prudence. Similarly, Cary Franklin of Horizon Actuarial Services – one of the most respected actuaries in the multiemployer plan community – concluded that the Trustees' asset allocation decisions represented reasonable measures and that the "Trustees' process was second to none."
Under the settlement, which is subject to court approval, a payment will be made by the defendants' fiduciary insurers into the Plan. The settlement also provides for the Trustees to implement a number of mutually agreed-upon Plan governance provisions.
As is clear from Ms. Borzi's and Mr. Franklin's conclusions, we have always taken our fiduciary responsibility seriously and acted prudently in the best interests of all Plan participants. We are pleased that two and a half years of litigation has been brought to a close, and that a needless, costly and disruptive court battle can be avoided. Having put this significant distraction to rest, we will continue to maintain a singular focus on the vital mission of preserving the Plan's solvency for all active participants, retirees and beneficiaries, now and in the future.
All active participants, retirees and beneficiaries of deceased participants should be receiving an official "Notice of Proposed Class Action Settlement" in the coming weeks, which contains a more detailed summary of the terms of the settlement. The Notice will advise participants to whom they should direct their questions about the settlement.