AFM pension fund, facing financial challenges, applies to reduce benefits

Posted on: January 8, 2020

“The largest musicians’ pension plan in the United States is seeking to cut retirement benefits that have already been earned by thousands of musicians, in an effort to keep the plan from running out of money,” writes Michael Cooper in Tuesday’s (1/7) New York Times. “The plan, the American Federation of Musicians and Employers’ Pension Fund … declared over the summer that it was in ‘critical and declining status’ and would run out of money to pay benefits within 20 years…. Plan officials wrote in an email to participants on Tuesday … that if the plan did nothing … the federal government’s insurer … would likely step in and pay retirees even less than the new proposal calls for.… If approved, the cuts would go into effect next year…. A number of factors have contributed to the fund’s shortfall, plan officials and musicians said…. The plan is seeking to cut benefits under a recent federal law, the Multiemployer Pension Reform Act, which was enacted in 2014. The Treasury Department will accept comments on the proposal and has until mid-August to review it. If it approves the plan, the proposed cuts will be put to a vote of the membership.”