Pension News

from Pension Fund Notes
November 21, 2019

U.S. Senators Charles Grassley (R-IA) and Lamar Alexander (R-TN) yesterday released a proposal that would provide financial relief to troubled multiemployer pension plans and make some structural changes to the multiemployer pension system. Sens. Grassley and Alexander are chairmen of the Senate Finance and Senate Health, Education, Labor and Pensions Committees, respectively. We are encouraged to see activity in the Senate to try to address the nationwide multiemployer pension crisis.

the U.S. House of Representatives passed the Rehabilitation for Multiemployer Pensions Act, also known as the “Butch Lewis Act.” This bill would provide low-interest government loans to struggling multiemployer pension funds, including the AFM-EPF. If necessary, these loans can be coupled with additional financial assistance from the Pension Benefit Guaranty Corporation. The bill would provide sufficient money for these funds to pay benefits to current retirees and beneficiaries for life, while allowing the funds to grow back to stronger financial footing. 29 Republicans joined the Democratic majority in voting for the legislation – an encouraging sign.

The Fund’s board of trustees recently appointed Brad C. Eggen, president of Local 30-73 (Minneapolis-St. Paul, MN) to act as the Retiree Representative, a position created by the Multiemployer Pension Reform Act (MPRA). His role is to apply the statutory list of equitable factors in the best interests of the retirees and present his viewpoint to the Fund trustees and the US Department of the Treasury. He will provide an independent

As one of the delegates at the AFM Convention this year, I was appointed to serve on the Finance Committee. In this role I participated in the process by which the various recommendations and resolutions are introduced to the floor of the convention. At the committee level, we hear testimony from proponents and opponents, if they choose to be heard. We discuss and prepare a recommendation on the proposed legislation for the moment when it is brought to the floor.

The theme of the Convention was “Together We Can” and presentation after presentation brought focus to the larger effort necessary to address solutions for today’s difficulties. From facing the challenges of maintaining a balanced budget for the federation, to keeping pace with changing technologies shaping the livelihoods of musicians, and (of course) to putting our Pension Fund back on course to solvency.

In late May, the actuaries of the AFM-EPF advised that the Fund is entering “critical and declining” status, which means the Fund is projected to run out of money to pay benefits within 20 years. This has occurred because of the combination of investment losses during the Great Recession and rising benefit payments that increasingly exceed contributions.