WORST RETURNS / SPENDING / AFM BLATHER / COMMENTS / EVENTS

 

12/16/17

I. AFM RETURNS WORST IN CLASS
II. AFM SPENDING MORE PENSION DOLLARS
III. AFM’S LATEST ON THE SUBJECT
IV. COMMENTS
V. EVENTS

HAPPY THANKSGIVING FROM THE COMMITTEE!

…Absolutely guaranteed anonymity – Former Musician’s Union officer

…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician
…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician

 

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I. AFM RETURNS WORST IN CLASS

How the AFM-EPF’s Investment Fees
Actually Measure Up

When the trustees recently made a major statement about
how low the AFM-EPF’s investment fees are, we checked it out.

EXPENSES
As we know all too well, the trustees spin the facts,
especially when assessing their own performance.
Everything they say must be checked thoroughly.
So, when the trustees recently made a major statement
about how low the AFM-EPF’s investment fees are,
we checked it out. And not surprisingly, we found
their statement failed to tell the whole story.

In their December 9 email, they point out that
their investment fees compare favorably with
averages contained in a broad industry study
performed by Greenwich Associates. Since
the Greenwich Associates study is only
available to high paying subscribers (and
that does not include MPS), we thought we
would simply compare the AFM-EPF
investment expenses to the peer group in
the entertainment industry.[1] In any event,
we think the peer comparison provides a
more accurate measurement than a broad,
ill-defined industry study.

We took the industry standard measurement,
which is the ratio of investment fees[2] to
assets under management. It turns out
that AFM-EPF investment fees are 84.3%
higher than the mean[3] for the entertainment
industry peer group:

AFTRA: 0.36 Investment/Assets (%)
DG: 0.25 Investment/Assets (%)
IATSE: 0.024 Investment/Assets (%)
PW: 0.21 Investment/Assets (%)
SAG: 0.78 Investment/Assets (%)
(MEAN): 0.25 Investment/Assets (%)

AFM: 0.615 Investment/Assets (%)

 

We also looked at how AFM-EPF compares
with our sister fund in Canada, The Musicians
Pension Fund, which is affiliated with the
AFM. The investment fees of the AFM-EPF are
78% higher than our Canadian sister fund.

MUSICIANS PENSION FUND OF CANADA:
0.27 Investment Fees/Assets (%)
AFM: 0.615 Investment Fees/Assets (%)

 

To get one more relevant comparison, we
looked at the investment fees for an index
fund like Vanguard. The investment fees
of the AFM-EPF are 175% higher than
Vanguard’s:

VANGUARD: 0.04 Investment Fees/Assets (%)
AFM: 0.615: Investment Fees/Assets (%)

We need to remember that all these investment
fees paid out by AFM-EPF produced worse
performance than any of the funds cited
above. To take one example, the 10-year
annual average return earned by the Vanguard
passive index was 6.83%. [4] The 10-year
annual average return at AFM-EPF was 3.2%.
Overpaying for investment fees has a corrosive
effect on investment returns, especially over
long time horizons. Here’s a good explanation
of this phenomenon from Vanguard:

“Investment costs might not seem like a
big deal but they add up, compounding
along with your investment returns. In
other words, you don’t just lose the tiny
amount of fees you pay, you also lose
all the growth that money might have
had for years into the future. Imagine
you have $100,000 invested. If the
account earns 6% a year for the next 2
5 years and had no costs or fees, you
end up with about $430,000. If on
the other hand you pay 2% a year in
costs, after 25 years you’d only have
about $260,000. That’s right: the 2%
you paid every year would wipe out
almost 40 percent of your final account
value. 2% doesn’t sound so small
anymore does it?”[5]

Our trustees refuse to acknowledge that
the AFM-EPF has an expense problem.
As we have previously pointed out (see
prior post here), the AFM-EPF has
multiple layers of investment managers.
First, they have two investment consultants
who are taking substantial fees for their
overall management of the fund. These
two firms choose no less than 25 outside
investment managers, each of whom take
a cut of the assets under management.
Then under these 25 managers, there
are often sub-managers who take a further
cut. On top of all that expense, AFM-EPF
pension plan has a full staff of over 70
people, headed by an executive who
earns $425,000 per year. Given the layers
of consultants, outside managers, sub-
managers, and the full in-house staff, it
is no wonder that the AFM-EPF pays by
far the most expensive investment fees
in the relevant peer group, and has returns
that are worst in class.

===================================

II. AFM-EPF Trustees Find New Ways to Spend Your
Pension Dollars
DC Pollster Hired to Run Focus Groups

Participants in the AFM-EPF Pension Plan have recently
begun receiving e-mails from Geoff Garen, President of
the well-known Washington DC polling and political
strategy firm Hart Associates. They are offering $100
to musicians to participate in focus groups: “We believe
the insights you possess and the experiences you have
had would be extremely valuable to the Fund as it seeks
to better understand the perspective of plan participants
and to provide them with helpful and timely information
about the fund.”

So, who is Geoff Garen, and why is he being paid with
our hard earned and scarce pension dollars?

Geoff Garen is a pollster and political strategist who
has worked on the campaigns of many Democratic
politicians, including Hillary Clinton, Chuck Schumer,
Dick Durbin, Mark Warner and Diane Feinstein. He is
the man behind the now much-ridiculed attempt to
re-brand the Democratic Party: the so-called “Better
Deal” economic agenda, which was rolled out in July
2017. Widely seen as a poll-driven and focus group-
driven set of talking points, “The better deal is
covered not as an ongoing messaging effort but
as one event in July that quickly lost voters’
attention,” said the Washington Post. “It quickly
disappeared.”

We are sure Geoff Garen is very good at what
he does, which is furthering the careers of image-
conscious politicians. The problem is that the
AFM-EPF trustees are not politicians. They
are supposed to be guardians and fiduciaries
of our pension, not supporting their own
self-interests.

When they hire a political consultant, it is not
because they want to understand us better or
to communicate with us better. It is because
they want to limit the reputational damage
that they have suffered from their miserable
stewardship of our pension fund. But the
trustees have a problem: their failures are just
too obvious at this point and no political
strategist will be able to fix that. Other pension
funds in the entertainment industry are
operating at healthy levels and with expenses
well within their means. Our own sister fund
in Canada is doing fine. Our pension plan
stands alone for its remarkably abysmal
performance. No amount of spinning or
messaging is going to be able to change that.

As our pension plan approaches critical and
declining status, trustees should be making
extraordinary efforts to cut down on expenses.
Instead, our trustees are burning through our
hard-earned pension dollars more than ever
before. They are hiring layers upon layers of
expensive investment managers, consultants,
law firms and now pollsters. In a year when
AFM-EPF narrowly staved off being in critical
and declining status, every dollar is precious.
The trustees are spending our hard-earned
pension dollars to rehabilitate their image,
and that is an outrage.

You don’t need a pollster to know that.

*We’ve received multiple emails asking
whether plan participants should take part
in these focus groups. Our response is you
should absolutely. Ask the tough questions,
tell Geoff Garen what actions you would
like the trustees to take and let the data
they collect communicate how you feel
about the current leadership of the AFM-EPF.

================================================

III. AFM’S LATEST ON THE SUBJECT
(Why is our money being spent on this?)

Our Commitment: Timely, Transparent Communications
and Listening to Participants

The American Federation of Musicians and Employers’
Pension Fund (“the Fund”) and its Trustees are
committed to n this/ensuring that all participants
have access to timely and accurate information
about the Fund and its financial status. We want
to hear your questions and concerns, as well as
your communications preferences.

To this end, the Fund recently engaged the firm of
Hart Research Associates to assist us in this effort.
Hart is a well-respected firm that has deep experience
assisting unions, including those in the entertainment
industry, in listening to the needs and concerns of
members. Hart will conduct several telephone focus
groups to help us gain insights into our participants’
knowledge, views and questions about their pension
benefits and the financial status of the Fund.

This is part of our ongoing commitment to transparency.
We will use the insights gained from this process to
identify and answer the most pressing questions on
the minds of our participants—and help keep you
well-informed as we explore actions we can take
to protect your benefits.

We recognize that participants rely on different
sources of information, so we will be utilizing a
number of tools to listen to and inform participants
of important news regarding your pension benefits.
Soon, you will receive an invitation to participate
in a webinar that the Fund will host in January 2018
that will include a question-and-answer session
with the Trustee Co-Chairs, Fund Staff and Plan Advisors.

We believe that, while there are costs involved, it
is a necessary, appropriate and responsible use of
Fund resources to enhance and increase our
communications with participants at this time,
particularly given the ongoing barrage of
misinformation being put forth by individuals with
their own political agenda.

You can find additional information on our website at
www.afm-epf.org.

================================================
IV. COMMENTS

the afm/pension plan folks are SO full of shit !!

the mps (info@musiciansforpensionsecurity.com)
is So right on. thank you, Committee, for
shining the light on this dichotomy !

and come on everyone, please check out
Musicians for Pension Security, and let’s
help them put a stop to the AFM’s plan
to cut our pensions A LOT !!!

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Re: Strike Vote by Pasadena Symphony

CONTAGIOUS !!!!!!!!!!!!!!

What comes around goes around.

Now they get a taste of what those
who came before them.

Letting it go for almost three years
since 2015 ?

The symphony thought the pops would
bring in more money from a different
subscriber group. I guess maybe it hasn’t.

 

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V. EVENTS
DEAN AND RICHARD
are now at Culver City Elks the first 
Friday of 
every month.
7:30pm-10:30pm,
11160 Washington Pl.
Culver City, 90232
310-839-8891

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12/17/17

ASMAC/LAJS Holiday party @ Catalina’s in Hollywood

Dec 17 @ 11:30 am – 3:00 pm

Bill Cunliffe Trio with special guest Denise Donatelli

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12/20/17
GLENDALE NOON CONCERTS
Pianist HAROUT SENEKEREMIAN
performs works by
Haydn, Tchaikovsky, and Stravinsky.

Concert at 12 noon.

http://www.glendalenoonconcerts.blogspot.com
Thank you!
Jacqueline Suzuki
Curator, Glendale Noon Concerts
818-249-5108

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12/21/17

John and Gerald Clayton
Father/Son concert at
BACCHUS KITCHEN

December 21, 2017
6pm
John & Gerald Clayton performing at
Bacchus Kitchen
626.594.6377
1384 E. Washington Blvd, Pasadena 91104
http://www.bacchuskitchen.com

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1/17/17

CalStateLA Symphony Orchestra/Olympia Youth Orchestra

You are cordially invited to attend the admission FREE concert
given by the CalStateLA Symphony Orchestra/Olympia Youth
Orchestra on Sunday, January 14, 2018 at 3PM at the San
Gabriel Mission Playhouse, 320 S Mission Drive, San Gabriel, CA 91776.

This concert will feature the 2017 ASTA-LA Competition
Grand Prize winner, 15 year old cellist Jessica Lee as soloist
in the 4th movement of the Elgar cello concerto. The
repertoire will also include Suppe Poet & Peasant Overture,
Sibelius Karelia Suite and Schubert Unfinished Symphony.

Young musicians age 12 through college in the orchestra
gain admittance to the orchestra through our annual
competitive audition. This is the first concert of this 2017-2018
concert season of the orchestra.

Please come give these young musicians the support they deserve.

Looking forward to seeing all of you there.

Sincerely,
Fung Ho
Music Director & Conductor
CalStateLA Symphony Orchestra/Olympia Youth Orchestra

 

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The Pacific Northwest Film Scoring Program at the Seattle Film Institute

is now accepting applications for the one-year

Master of Music in Film Composition

One of the Top 4 Film Music Programs in the World!

Recently rated as the #4 school in the world for film scoring education by Music School Central.

“in just one year, the school places students into a pressure cooker of intense learning resulting in a professional demo reel that can be used to obtain future paid commercial opportunities.”

 

Learn from Industry Professionals

All PNWFS faculty are active professional film and game composers, orchestrators, copyists, and engineers, including the program’s creator and lead instructor Dr. Hummie Mann.  Hummie is the two-time Emmy Award winning film composer of “Robin Hood: Men in Tights” and featured in Variety Magazine’s article “Leaders in Learning”.

Our Program Features:
• 9 live recording sessions with professional musicians at Studio X, Seattle’s premiere, world-class studio.
• Opportunities to work with student directors to score actual films from film programs all over the world.
• 
Training in all major software programs used in the industry.
• 
A state-of-the-art workstation assigned to each student fully installed with the latest versions of all software, sample libraries and plug-ins needed to complete the program.

 

Accelerated and Affordable

We are a one-year Master of Music in Film Composition program which not only gives our graduates the opportunity to enter the industry and start their careers a year sooner than other programs but saves them an entire year of living expenses. In addition to our accelerated format we also offer the most affordable tuition out of competing programs. Our students have access to FAFSA financial assistance, loans, and scholarships as well.

 

History of Success

We are very proud to have a high success rate for our graduates who have gone on to work on television shows such as Castle, Empire, and Once Upon a Time; video games such as World of Warcraft, Spate, and Destiny; and films such as The Revenant, Trolls, The Dark Tower, and Guardians of the Galaxy Vol. 2. Apply now and you could be joining their ranks!

Applications are being accepted for the Fall 2018 school year.
We offer rolling admissions – no deadline to apply.

 

 

(800) 882-4734 | www.pnwfilmmusic.com
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UNTIL NEXT TIME,

THE COMMITTEE FOR A MORE RESPONSIBLE LOCAL 47

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