Fund Status FAQs

ARPA stands for the American Rescue Plan Act of 2021. ARPA allows certain troubled multiemployer pension plans to obtain special financial assistance through the federal Pension Benefit Guaranty Corporation (PBGC). The special financial assistance is intended to provide these plans with the additional funding they need so that they are projected to be able to pay benefits and administrative expenses through 2051, without reductions to participants' benefits. Our Plan was approved for $1,440,137,839 of special financial assistance plus $87,701,535.81 of interest on the financial assistance amount since December 31, 2022.

Special financial assistance under ARPA is paid in the form of a lump-sum grant and does not need to be repaid.

No. ARPA does not impose any reductions to participants' benefits in plans that receive special financial assistance.

The American Federation of Musicians and Employers’ Pension Fund’s (AFM-EPF) rules do not allow contribution rate reductions.

Also, the Special Financial Assistance is intended to provide the additional funding to pay benefits and expenses through 2051, without any changes to contribution levels. So, plans receiving special financial assistance generally are not allowed to permit reductions in employer contribution rates.

Under the rules for receiving special financial assistance, the Plan is still considered to be in “critical” status through the Plan year ending 2051 – and subject to the restrictions that apply to plans in critical status – even if it would otherwise not be in critical status based on the funding measures that apply to plans without SFA.

The Plan will receive $1,440,137,839 of assistance plus $87,701,535.81 in interest on the assistance amount since December 31, 2022.

The special financial assistance under ARPA is intended to provide plans with the additional funding they need so that they are projected to be able to pay benefits and administrative expenses through 2051, without reductions to participants' benefits. The calculation to determine the amount of special financial assistance the Plan receives started with the assets of the Plan as of December 31, 2022, then factored in the expected income and outflows from 2023 through 2051.

As a result of the receipt of special financial assistance, the AFM-EPF will no longer be in critical and declining status. (However, the Plan is still considered to be in critical status. See FAQ 10.)

The special financial assistance is intended to provide our Plan with the additional funding we need so that we are projected to be able to pay benefits and administrative expenses through 2051. To the extent the Plan can outperform some of the assumptions that ARPA requires us to use, it may remain solvent long beyond that date. Right now, we are cautiously optimistic. Market conditions, investment returns, and future contributions to the Plan are a few of the many factors that will have an impact on the Plan’s financial health in the decades to come and cannot be predicted with certainty. As always, we will monitor our progress along the way.

ARPA requires plans to keep the special financial assistance separate from other plan assets. According to PBGC rules, 33% of special financial assistance may be invested in "return-seeking assets" and at least 67% must be in investment-grade, fixed-income securities. The Plan currently expects to invest 100% of the special financial assistance in investment-grade, fixed-income securities.

Yes. Benefit improvements are not permitted in the first 10 years after receiving the special financial assistance under ARPA unless they are for future accruals only and fully paid for with new contribution increases not initially considered in the application. After 10 years, a plan may request an exemption from this rule if it can demonstrate that it will avoid insolvency even with the benefit improvement.

A plan receiving ARPA special financial assistance is also not permitted to allow reductions in an employer's contribution rate. More specifically, an employer's contribution rate in each collective bargaining agreement cannot be any lower than it was on March 11, 2021, the date that ARPA was signed into law.

These restrictions on benefit increases and contribution rate reductions will expire after 2051.

There is little impact on the calculation of withdrawal liability, at least in the short- to medium-term.

The special financial assistance is not recognized all at once when calculating withdrawal liability. In accordance with the final rule from the PBGC, it will be phased in over several years. For this Plan, special financial assistance will be recognized in the calculation of withdrawal liability over seven years, beginning with the 2024 Plan year.

The regulations also prescribe the methodology for selecting the interest rates that must be used during the ten plan years following the receipt of the financial assistance to determine withdrawal liability amounts and payment schedules. This is the same methodology that was used by the Plan before receipt of special financial assistance.

As of January 2023, the Plan had roughly $1.7 billion in assets and about $3.5 billion in liabilities, which is the value of all the benefits that have been earned by participants for services already performed and that will be paid in the future. That means that the Plan is about $1.8 billion underfunded.

However, as a result of the receipt of special financial assistance, the AFM-EPF will no longer be in critical and declining status.

The special financial assistance granted to the AFM-EPF under ARPA is intended to provide the Plan with the funding needed so that it is projected to be able to pay benefits and administrative expenses through the plan year ending in 2051, without reductions to participants' benefits. To the extent the Plan can outperform some of the assumptions that ARPA requires us to use, it may remain solvent beyond that. Right now, we are cautiously optimistic. Market conditions, investment returns, and future contributions to the Plan are a few of the many factors that will have an impact on the Plan’s financial health in the decades to come and cannot be predicted with certainty. Of course we will monitor our progress along the way.

Under the rules for receiving Special Financial Assistance, the Plan is still considered to be in “critical” status through the Plan year ending 2051, even if it would otherwise not be in critical status based on the funding measures that apply to plans without SFA. That means that in future years, no matter its financial health, the Plan is required to provide a Notice of Critical Status each year, and the Plan’s Annual Funding Notice will describe the Plan as in “critical” status.

No. The Trustees have no plans at this time to change the current $1.00 multiplier for future service. Under the rules for receiving Special Financial Assistance, the Plan is not allowed to increase the multiplier unless certain conditions are met. ( See FAQ 7 for more information on these conditions.)

The PBGC is a government insurance agency that provides financial assistance to plans that no longer have enough money to pay benefits on their own. Pension plans pay annual premiums to the PBGC. This financial assistance is independent of the new special financial assistance for troubled multiemployer plans created by ARPA as described above.

Although the PBGC provides financial assistance to insolvent plans, it does not necessarily "cover" the full benefit amount. Rather, it insures and pays benefits up to a maximum amount set by federal law, which is known as the PBGC "guarantee."

The PBGC's website has more information on how the guarantees are calculated.

The PBGC is also charged with administering ARPA's special financial assistance program for troubled multiemployer plans. ( See FAQs 1 through 8 for more information on ARPA.)

All defined benefit multiemployer pension plans pay annual, per-participant premiums to the PBGC. These premiums are mandated by law and are not based on a plan's funded status. PBGC premiums are indexed each year for inflation, so they increase over time. In 2023, the Plan paid $1.8 million in PBGC premiums.

For 2024, multiemployer plan premiums are $37 per plan participant, but the per participant annual PBGC premium will increase to $52 in 2031. Plans must continue to pay PBGC premiums after receiving the ARPA special financial assistance, the amount of which includes the projected PBGC premiums through 2051.