AFM-EPF Tries Again

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.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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AFM-EPF Tries Again

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