Musicians Union’s Pension Fund Withdraws Plan To Reduce Benefits

UPDATED with additional statements: Trustees of the American Federation of Musician’s Employers Pension Fund have withdrawn their application to reduce benefits for nearly half of its 50,000 participants. With help from the $1.9 trillion American Rescue Plan, which includes $86 billion in financial assistance to underfunded multi-employer pension plans, the musicians union now expects the Fund to remain solvent for the next 30 years. AFM international president Ray Hair called it an “historic victory.”

The Fund had applied to the Treasury Department for permission to reduce benefits because it had been projected to run out of money to pay benefits within 20 years. The Fund fell into “critical status” two years ago when its $3 billion in liabilities exceeded its $1.8 billion in assets, meaning that it was underfunded by about $1.2 billion.

The change in plans was made possible by the election of President Joe Biden and the $1.9 trillion American Rescue Plan Act (ARPA) he signed into law recently. After reviewing an actuarial analysis of the pension relief provisions contained in the Rescue Plan, the trustees decided to withdraw their application for the reduction and apply instead for financial assistance under ARPA, which, if approved, would allow the Fund to pay benefits for the next 30 years. ARPA provides lump sum grants to qualifying multiemployer pension plans which do not need to be repaid.

“Working people around the country fought to be heard by our legislators, and we won a huge victory in putting our pension plan back on level footing,” said Ray Hair, international president of the AFM. “We are now able to avoid proposed benefit reductions and can offer members a solvent pension for the next 30 years.

“While we can breathe a sigh of relief that our fund is no longer at immediate risk,” he said, “we must all work together going forward to ensure our pension not only survives but thrives. This means increasing pension contributions in our existing contracts, securing pension contributions in new contracts, and including pension in our local wage scales for single engagement work. Make no mistake: employers and naysayers will continue to attack our union and our pension fund to resist further contributions. It is crucial that we all stand together to ensure our fund grows and prospers not only for ourselves, but for all those who will come after us.

“Again, I want to thank you for all of the emails, calls, and other ways that you made your voice heard with your elected officials, especially over the past several weeks,” Hair added. “We would never have achieved this historic victory without the unified legislative lobbying efforts of our members, fund participants, locals, and player conferences.”

The Fund told its participants Wednesday: “The Pension Benefit Guaranty Corporation (PBGC) is charged with issuing regulations detailing how ARPA’s pension relief provisions will be implemented. These regulations are important because the value of the financial assistance and whether it will provide enough money to pay benefits through 2051 or beyond depends on how ARPA is interpreted. The Trustees intend to advocate for regulations that accomplish the purpose of ARPA, which will allow plans to pay benefits through at least the 2051 plan year. The PBGC regulations will also determine when the Fund can apply for financial assistance under ARPA. We intend to apply as soon as possible.”

“Your advocacy helped bring about this moment,” the trustees told the participants. “Thank you again to all who made your voices heard with your elected officials. Moving forward, we will continue to share news and information about the status of the PBGC regulatory process, as well as the process and timeline the Plan must follow to apply for relief under ARPA. For now, we wanted to deliver this important and very welcome news to you immediately.”

This article was printed from https://deadline.com/2021/03/musicians-unions-pension-fund-withdraws-plan-to-reduce-benefits-1234717051/