“Some 20,000 unionized musicians across the country will soon see ‘painful’ reductions in their pension benefits in order to keep the American Federation of Musicians’ $1.8 billion multi-employer pension fund from running out of money within the next 20 years,” writes David Robb in Saturday’s (5/25) Deadline.com. “The Fund has now entered ‘critical and declining’ status. The benefit reductions … won’t kick in until late next year at the earliest.… Trustees of the Fund informed participants Friday night that it has applied to the US Treasury Department for approval to reduce benefits by an amount sufficient to prevent insolvency.… As of March 2019, the Fund had roughly $1.8 billion in assets and about $3 billion in liabilities…. That puts the Fund’s funding percentage at 60%—as measured by its assets divided by its liabilities…. The Fund estimates that 40% of its nearly 50,000 participants will be affected by the reductions…. The reductions will fall mostly on younger retirees … and on those who receive the largest pensions…. According to the Treasury Department’s MPRA website, 25 funds have applied to reduce benefits, including pension plans covering thousands of truck drivers, machinists, ironworkers, bricklayers, laborers, carpenters, roofers, auto workers….”
Posted May 29, 2019
