The American Federation of Musicians and Employers’ Pension Fund (AFM-PEF) continues to scrape along. Back in March 2020 they managed to settle a suit filed against Trustees that alleged poor management and unnecessarily risky investment strategies.
Both sides have claimed victory in the suit, and the reality is the AFM-EPF agreed to a $26.85 million settlement. According to Deadline.com, $17 million of that will be paid by the Plan’s fiduciary insurers. At the same time, the settlement was far short of the hundreds of millions of dollars the plaintiffs were seeking in recovery of investment losses due to the alleged risky decisions from Trustees.
Perhaps unsurprisingly, none of this alleviates the plan’s dire condition and on 1/7/2020, the AFM-EPF applied to the U.S. Treasury Department a second time to reduce earned benefits under the Multiemployer Pension Reform Act.
On the same day, Plan participants received an email outlining this decision along with a notice that each participant will receive an addition piece of communication via Postal Mail with details about their respective “benefit estimate statement.” Or in layman’s terms, how much less their retirement is worth if the Treasury Department approves the application.
In a nutshell, vested musicians under the age of 65 will see severe cuts; so much so that the AFM is telling members they should expect to develop their own additional resources for retirement.