Musicians across the country are cheering the U.S. Treasury Department’s decision Tuesday to reject the application filed by the Trustees of the American Federation of Musicians and Employers’ Pension Fund (AFM-EPF) to reduce their benefits. The Pension Rights Center joined more than 180 retired musicians, who were facing 40 percent cuts, in urging the Treasury Department to deny the application filed under the Multiemployer Pension Reform Act of 2014. (MPRA). The Center is a 44-year-old nonprofit consumer organization that works to protect and promote the retirement security of workers, retirees, and their families.
In its rejection letter to the Board of Trustees of the AFM-EPF Pension Fund, the Treasury Department stated that the application failed to meet specific statutory standards required under MPRA. The Department found that the actuarial assumptions used to demonstrate continuing plan solvency were not reasonable.
The Pension Rights Center, writing on behalf of retirees, had urged the Treasury Department to flunk the AFM Pension Fund’s application, pointing out that the plan’s benefit suspensions were insufficient for the plan to remain solvent and that they inequitably penalized a small group of retirees. The Treasury Department’s rejection letter specifically said that the letter did “not address whether the application satisfied” other MPRA requirements.
“This is a great day for the musicians whose benefits would have been cut and a great day for justice,” says Terrence Deneen, the Pension Rights Center Fellow who wrote the Center’s comments urging rejection of the application. “There were so many flaws in that application that in our opinion rejection was the only option.”
“We’re really glad Treasury made the fair and right decision to not let the AFM-EPF Trustees cut the pensions of retired musicians. These pianists, bassists, guitarists, trumpeters, violinists, composers and other artists perfected their crafts over their lifetimes, gave up significant portions of their salaries to fund their pensions, and felt betrayed by the trustees,” said Karen Friedman, Executive Vice President of the Pension Rights Center. “Now they can breathe a sigh of relief that their pensions are safe – at least for now. But their fight is not over. This is not a permanent solution. Their plan and 130 others could run out of money in the future. It’s time for Congress to come to the rescue.”
PRC, and allied organizations, are working with the retired musicians, as well as retired truck drivers, ironworkers, and healthcare workers and hundreds of thousands of others – to urge Congress to include provisions rescuing troubled multiemployer plans in the new COVID-19 financial relief package that is being negotiated by the Senate and House leadership. The Center is advocating “a comprehensive solution that would ensure that multiemployer pension plans survive for the long-term and will able to pay the benefits earned by workers and retirees,” says Karen Friedman. She notes that PRC also advocates for the restoration of benefits for tens of thousands of retirees whose benefits have already been slashed under MPRA.