Thursday, June 14, 2018

AFM Pension Fund (AFM-EPF) and the Butch Lewis Act


 
Thousands of union members showed up from all over the U.S. on July 12 and 13, 2018 for a national rally in Columbus, Ohio to save multi-employer pensions.  There was a hearing in the Ohio Statehouse on July 13th on the Butch Lewis Act.

It's a safe assumption that every union musician in the U.S. is aware that the American Federation of Musicians Employers' Pension Fund (AFM-EPF) has been in "critical" status since 2010 (following the recession of 2007-9). There has been a deluge of information and opinions on this matter flooding the internet, and it's rather daunting to attempt to separate fact from fiction.  Basically, the Fund has developed a a huge gap between its liabilities and its assets.  While its assets are growing due to increases in wages and due to earnings from investments, the benefits being paid to retirees far exceed the growth of the Fund's assets.  This problem is not unique to the AFM; 114 multi-employer  pension funds in the U.S. are expected to become insolvent over the next 20 years.  

Peter de Boor, editor of the International Conference of Symphony and Opera Musicians' (ICSOM's) official publication Senza Sordino, recently published this article to help shed light on the situation.

Shortly thereafter, the Musicians for Pension Security (a pension awareness group made up of AFM union members who are currently vested in the AFM-EPF Pension Fund) issued this response
to Peter de Boor's article.

Who's right?  Who's wrong?  Is there a solution to the problem?

In November 2017 Senator Sherrod Brown (D-OH) introduced the Butch Lewis Act of 2017 
(S. 2147/H.R. 4444).  This legislation is not a government bail-out; instead, it restores solvency to multi-employer pension plans by allowing the plans to borrow the money they need to remain solvent.  The actuaries of the AFM-EPF have confirmed that the Butch Lewis Act would address the financial issues of the AFM-EPF by providing the financial support to prevent insolvency in the event that the fund enters "critical and declining" status.  The Musicians for Pension Security also supports this legislation.

The Butch Lewis legislation was not included in the February 2018 Congressional budget deal, but a Joint Select Committee on the Solvency of Multi-employer Pension Plans was authorized to closely examine the multi-employer pension crisis and to develop legislation by November 30, 2018.  Now is the time to convince lawmakers to take this matter seriously, prior to that November 30th deadline.

We musicians have the ability to make our voices heard in Congress by using the contact information and suggestions provided by the American Federation of Musicians.

The Musicians for Pension Security offers these suggestions for taking action.

Here's a user-friendly online petition in support of the Butch Lewis Act.

If you haven't yet taken action in support of the Butch Lewis Act, please do so now for the sake of your retirement income and the retirement income of musicians nationwide.   

The Musicians for Pension Security (MPS) also proposes a solution based upon increased contributions.  Specifically, the MPS suggests 6% annual increases in contributions to the Fund over the next 5 years and 2.9% annual increases thereafter in order to prevent future cuts in benefits.  As a musician who is currently involved in Collective Bargaining Agreement negotiations, I can state with surety that it would be impossible to talk my orchestra and/or its administration into increasing our contributions to the AFM-EPF.  Instead, everyone is lamenting the fact that we're "trapped" in the Fund.  While it does seem plausible that increasing contributions (above the increases which occur as a result of wage increases) might solve the problem, it doesn't seem possible because of the Fund's unfortunate reputation.  That's why I believe that the Butch Lewis Act, endorsed by both AFM and MPS, is our best available solution at this time.  Let's do what we can to support it!



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