<\/p>\n
12\/11\/17<\/p>\n
I. MUSICIANS FOR PENSION SECURITY ANSWER AFM COMPLAINTS
\nII. TRUSTEES BEHIND CLOSED DOORS
\nIII. WHAT THE AFM\/PENSION PLAN SENT OUT
\nIV. EVENTS<\/p>\n
HAPPY THANKSGIVING FROM THE COMMITTEE!<\/p>\n
…Absolutely guaranteed anonymity – Former Musician’s Union officer<\/p>\n
…The one voice of reason in a sea of insanity – Nashville ‘first call’\u2028scoring musician
\n…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician<\/p>\n
…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician<\/p>\n
<\/p>\n
================================<\/p>\n
<\/p>\n
I. MUSICIANS FOR PENSION SECURITY ANSWER AFM COMPLAINTS<\/p>\n
When our trustees sent out a letter one year ago in
\nDecember of 2016 disclosing for the first time that it
\nwas quite possible that we could be facing cuts to our
\nexisting benefits as soon as spring 2017 there was a
\nlot of confusion, unanswered questions, and shock.
\nIn the months following, when many AFM members
\nlooked to our elected leaders and trustees for help,
\ninformation and a plan. It became clear that our
\nelected leaders were not going to help and that we
\nwould have to deal with the pension crisis ourselves.
\nA group of concerned musicians organized to
\naddress the ongoing pension crisis and founded
\nMusicians for Pension Security. Our mission
\nstatement from the beginning has been clear and
\nsimple: We have come together in search of
\nmore information about the state of our pension
\nand, ultimately, to demand more transparency and
\naccountability from the AFM-EPF Trustees. With
\ninput and participation from plan participants across
\nthe country, we will be able to speak with one
\nunified voice working towards a sustainable
\nlong-term plan for a secure pension.<\/p>\n
On 12\/9\/2017, participants of the AFM-EPF
\npension plan received an email (read it here)
\nfrom our trustees who say they want to \u201cset
\nthe record straight\u201d and accusing \u201cindividuals
\nwho have attacked Fund Trustees\u201d with
\ninformation \u201cnot supported by data and ignoring
\nfacts that don\u2019t serve their agendas.\u201d<\/p>\n
If this is directed at MPS, then we will set the
\nrecord straight about our organization. We are
\nnot a few \u201cindividuals.\u201d MPS is now a national
\norganization that reaches into every major
\nlocal in this country. It took us only five days
\nto crowdfund $15,000 to hire a highly respected
\nactuarial firm, Bolton Partners. We have organized
\nthousands of plan participants through our website
\nwww.musiciansforpensionsecurity.com and the
\nMPS Facebook page. Our national conference
\ncalls are regularly attended by scores of engaged
\nparticipants across the country. Policymakers in
\nWashington D.C. like Senator Sherrod Brown and
\nSenator Lamar Alexander (Chairman of the Senate
\nHealth, Education, Labor, and Pensions Committee)
\nregularly deal with MPS as a serious and impactful
\ninterest group representing the concerns of pension
\nplan participants. Our grassroots organizing capability
\nwas recently shown when we spearheaded an
\nextremely successful call to action where thousands of
\nAFM members called and emailed AFM President Ray
\nHair urging him to support The Butch Lewis Act.\u00a0MPS
\nExecutive Director, Adam Krauthamer, recently received
\nan award from the Pension Rights Center in Washington
\nDC in recognition of his services to the AFM-EPF plan
\nparticipants. He received this award alongside several
\nother highly respected pension activists and journalists.<\/p>\n
Far from \u201cpromoting our own selfish interests,\u201d
\nas the trustees put it,\u00a0MPS volunteers are doing
\nthe thousands of hours of work it takes to try and
\nhelp our friends and colleagues around the country
\nstay informed in the face of this pension crisis, while
\nat the same time seeking solutions.\u00a0We all do this
\nwhile holding down demanding careers as professional
\nmusicians.\u00a0It is unclear how trying to protect
\nour fellow members can be deemed selfish.<\/p>\n
MPS does not have armies of advisors, consultants,
\nlawyers and Washington D.C. pollsters controlling our
\nactions and messaging like the AFM-EPF does.
\nThrough rigorous analysis of the facts, and help from
\nour legal counsel, actuary and the Pension Rights
\nCenter, we have been able to debunk much of the spin
\nand misdirection put forth by the trustees. For nine
\nmonths we have published numerous pieces with clear
\nexplanations disproving many of the things our trustees
\nhave said and written about regarding our pension fund.
\nAll articles are painstakingly fact-checked and
\ncan be found\u00a0here.<\/p>\n
The trustees\u2019 latest email blast is yet another example
\nof their spin and misdirection. Let\u2019s take each item in
\norder:<\/p>\n
The Butch Lewis Act<\/p>\n
The Butch Lewis Act provides low-cost government
\nloans to plans like AFM-EPF and would guarantee a
\n100% pension payout for everyone in the plan. It is
\na no-brainer for our trustees to support. (The AFM
\nsupports it, but critically the AFM-EPF trustees do not.)
\nThey state AFM-EPF actuaries are analyzing it but
\nthey have had this legislation in their hands for over a
\nmonth. The actuaries have software and could produce
\nany necessary analysis inside of one day. Our trustees
\ncontinue to support the NCCMP and refuse to disassociate
\nthemselves from NCCMP\u2019s active opposition to the Butch
\nLewis Act.\u00a0(See the previous post here). The trustees\u2019
\nrefusal to endorse the Butch Lewis Act does not\u00a0support
\nthe long-term interest of the fund. It is damaging the
\ninterests of plan participants.<\/p>\n
\u201cStreamlined\u201d Investment Management<\/p>\n
Our trustees claim that adding another investment manager to
\noversee the day-to-day decisions of the investment portfolio will
\n\u201cstreamline\u201d the investment strategy. However, they still\u00a0keep a
\nbloated staff of 70 plus people, including Maureen Kilkelly, who
\nearns by far the most of any executive director of any pension
\nplan we are aware of in the peer group. They will also keep
\ninvestment consultant group Meketa on board despite their
\nindustry worst investment performance for our fund but, we
\nare told,\u00a0for a reduced fee. It is unclear why one more dollar
\nwould be spent on them based on their performance. (See
\nour previous article on fund expenses here.)<\/p>\n
Investment Expenses<\/p>\n
The trustees do not even attempt to defend their overall
\nexpenses of $25 million per year. Instead, they take one
\nsub-category, investment management fees, and try to
\nshow they compare favorably. They claim that they pay
\ntheir investment managers less than other union pension
\nfunds do. Whether it is true or not, it is like saying if my
\nelectricity bill is less than yours, that means my total
\nhousehold expenses are less than yours are.<\/p>\n
Administrative expenses<\/p>\n
The trustees make the same specious argument they made
\nin the Roadshow in March 2017: they compare absolute
\nadministrative expenses of much larger funds, like the
\nScreen Actors Guild to ours. That is not the standard measure
\nof efficiency in the investment business. The industry standard
\nway to compare is to look at the ratio of expenses to assets
\nunder management. On this basis, AFM-EPF has by far the
\nhighest expenses of any peer pension plan. The trustees try
\nto make themselves look better by cherry picking their data:
\nstripping out expenses they don\u2019t like (depreciation, professional
\nfees, PBGC premiums). Of course, if you can customize your
\ncomparison you\u2019re much more likely to get the results you want.
\nSee our previous article on this topic\u00a0here.<\/p>\n
In closing, we would like to say that we will continue to raise
\nour voices until the AFM-EPF trustees and fund administrators
\naccept their responsibility and work to fully protect the pension
\nbenefits of all fund participants. We encourage all AFM members
\nto do the same.<\/p>\n
<\/p>\n
================================================<\/p>\n
II. Trustees Tout Expense Cuts
\nBut Behind Closed Doors it’s Another Story<\/p>\n
Recently posted in the Frequently Asked Questions section of the
\nAFM-EPF website is a highly important new disclosure that the
\ntrustees have hired Cambridge Associates as an \u201cOutside Chief
\nInvestment Officer\u201d (OCIO). This is an important development
\nbecause it puts in perspective just how out of touch the AFM-EPF
\ntrustees are in December 2017. They are not replacing Meketa,
\nour fund investment consultant since 2010, but they are adding
\nanother layer of management and expense heaped on top of
\nwhat is already the bloated administration of our pension fund.
\nIt is no wonder that the expenses of the AFM-EPF are by far
\nthe highest in our industry. Our trustees spent over $250 million
\nover the last 10 years, with an investment return that is dead
\nlast in the business. (The 3 and 5-year returns are also at the
\nbottom of the peer group. See our previous article about
\nthese numbers here.)<\/p>\n
Now with the addition of an Outside Chief Investment Officer,
\nCambridge Associates, expenses at the AFM-EPF will be
\neven higher. The layers of expenses at the AFM-EPF are
\ntruly staggering. First, we have Cambridge Associates (OCIO),
\nthen Meketa our fund consultant, both of which are taking
\nsubstantial fees for their overall management of the fund.
\nThese two firms then choose over 25 investment managers,
\nwho each take a cut of the assets under management.
\nThen there are often sub-managers who take a further
\ncut. For example, in the private equity and alternative investment
\nsector (in which AFM-EPF is heavily invested), most of the
\nfunds we invest in are a \u201cfund of funds.\u201d These funds are
\nnothing more than general contractors who sub-contract
\nout the actual investing to other funds.<\/p>\n
On top of all that expense, AFM-EPF office has a staff of
\nover 70 reporting to Maureen Kilkelly, who is earning
\n$425,000 per year and her deputy, Will Luebking, who
\nearns $280,000 per year. Cambridge Associates has
\nbeen hired by AFM-EPF as its \u201cOutside Chief Investment
\nOfficer (OCIO)\u201d. If our trustees have outsourced the role
\nof chief investment officer, then what are all the high-
\npriced managers on staff at the AFM-EPF doing?<\/p>\n
Finally, we must ask why, after turning in the worst
\ninvestment performance in our peer group over the
\npast decade, is Meketa still serving as investment
\nadvisor and why is Meketa collecting a handsome
\nfee for doing the same work that Cambridge
\nAssociates is doing? MPS has learned that in early
\n2016, the trustees hired Gallagher Fiduciary Advisors,
\nLLC, to select a new investment advisor. In October
\n2016, Gallagher recommended that Meketa not be
\nconsidered for this role. The trustees overruled that
\nrecommendation and made the decision to hire
\nCambridge and keep Meketa as well.<\/p>\n
In December of 2016 when our trustees disclosed
\nfor the first time that we might be facing cuts to existing
\nbenefits as soon as spring of 2017, they sent to plan
\nparticipants an offensive letter stating What Participants
\nCan Do:<\/p>\n
“Given our financial status, we are faced with the reality
\nof the one-dollar benefit multiplier as the basis for any
\nbenefits earned in the future. This means that while
\nthe AFM-EPF pension you receive will still be important,
\nfor many the benefit will be a modest one. A modest
\npension emphasizes the importance of having a
\ncomprehensive retirement strategy that includes a
\npersonal savings component to supplement the AFM-EPF
\npension and Social Security benefits.\u201d<\/p>\n
In December of 2017, as our trustees still seem to be
\nembracing a plan to cut our existing benefits in the
\nnear future, MPS has a message for \u201cWhat Trustees
\nCan Do\u201d on behalf of plan participants: Stop wasting
\nour money. Stop making poor management decisions
\nand stop saying publicly you are going to cut down on
\nexpenses at the AFM-EPF while behind closed doors
\nthe opposite is true. Start being accountable to plan
\nparticipants for your actions both past and present.<\/p>\n
<\/p>\n
================================<\/p>\n
<\/p>\n
III. WHAT THE AFM\/PENSION PLAN SENT OUT<\/p>\n
Recently, participants have received emails from
\nindividuals who have attacked Fund Trustees and
\nhave misrepresented information about the Fund\u2014
\neither by cherry-picking or presenting things without
\nany factual context\u2014while making judgments not
\nsupported by data and ignoring facts that don\u2019t serve
\ntheir agendas.<\/p>\n
We recognize that the financial status of our Fund
\nand the security of our participants\u2019 pension benefits
\nis a concern shared by all. We have heard from you
\nthat these third-party communications are causing
\nboth confusion and distress among Fund participants.<\/p>\n
Today, we want to set the record straight on some
\nimportant issues. We also call upon those who do
\nnot support the long-term interests of the Fund, and
\nwho are promoting their own selfish interests, to
\ncease making false and misleading attacks, and to
\nredirect themselves toward responsible, productive
\nefforts to protect the pension benefits of their fellow
\nFund participants.<\/p>\n
We are committed to ensuring that all participants
\nhave access to timely and accurate information
\nabout the Fund and its financial status. You can find
\nadditional information on our website at www.afm-epf.org.<\/p>\n
AFM-EPF Actuaries Analyzing Federal Legislation
\nto Assist\u00a0Troubled Multiemployer Pension Funds<\/p>\n
On November 16, we informed you of the Butch Lewis
\nAct, which was introduced by U.S. Senator Sherrod
\nBrown to address the severe challenges being faced
\nby multiemployer pension funds across the nation.
\nCongressional Democrats have stated their intent to
\ninclude this legislation in the omnibus spending bill that
\nmust be passed by a now-extended deadline of
\nDecember 22.<\/p>\n
When this legislation was first introduced, the AFM-
\nEPF Trustees, immediately and not due to any
\nprompting, directed our actuaries to determine if
\nthe bill would, if enacted, provide the Fund with
\nthe financial support required to avoid insolvency.
\nThis analysis is currently underway.<\/p>\n
If it is determined that the Butch Lewis Act helps
\nprotect our participants\u2019 pension benefits, then the
\nTrustees would support it, as we would any legislative
\nproposal that provides relief to the AFM-EPF.<\/p>\n
OCIO Approach Streamlines Investment Strategy,
\nExpected to Generate Increased Returns<\/p>\n
The Fund’s Trustees recognize the need for both
\nexpert advice and the ability to respond quickly to
\noften rapidly-changing conditions in the financial
\nmarkets. As detailed in our recently updated FAQs,
\nwe recently made the decision to streamline our
\ninvestment structure and process by shifting to an
\nOCIO (Outsourced Chief Investment Officer) model.
\nThe respected firm of Cambridge Associates, LLC
\nhas been engaged to oversee day-to-day decisions
\nfor the Fund’s investment portfolio, acting within
\nparameters established by the Fund’s Investment
\nCommittee and Board of Trustees.<\/p>\n
Meketa Investment Group will no longer serve in
\nthe role of Investment Advisor and will instead,
\nunder a reduced fee structure, adopt the role of
\nIndependent Monitoring Fiduciary for the OCIO.<\/p>\n
We expect that, over the long term, this approach
\nwill allow us to be more responsive to new and
\nchanging market dynamics, and will lead to higher
\ninvestment returns after fees.<\/p>\n
AFM-EPF Investment Expenses are Lower
\nThan Those of Other Union Pension Funds<\/p>\n
The Trustees closely monitor investment fees and
\nmake every reasonable effort to keep them to a
\nminimum. According to Greenwich Associates’
\nmost recent survey of union pension funds (2016),
\nAFM-EPF\u2019s active investment manager fees\u00a0are
\nlower than the average in every asset class. Trustees
\nhave also reduced investment fees by moving
\nassets into passive index funds where it makes
\nsense to do so.<\/p>\n
AFM-EPF\u00a0Administrative Expenses Closely
\nMonitored, Comparable with Other Entertainment
\nIndustry Funds<\/p>\n
Despite the false claims made by others, the data
\nproves that AFM-EPF\u2019s administrative expenses
\nare actually in line with other large pension plans
\nin the entertainment industry. The chart below shows
\nthat we fall right in the middle of our peers. Since
\neach plan has its own fiscal year end, for this analysis
\nwe used the fiscal year (shown in parentheses in the
\ntable) that contained as much of calendar year
\n2015 as possible.<\/p>\n
It’s important to remember that our Plan was the only
\nstand-alone pension plan in this group. All other
\nentities administered a health fund, and, in most
\ncases, other ancillary funds among which general
\nadministrative expenses, including staff salaries,
\nare shared. When comparing administrative expenses,
\nwe adjusted the Form 5500 numbers to account for
\nthat. We also removed PBGC premiums, depreciation
\nand professional fees to make this more of an “apples
\nto apples” comparison. Any comparison that doesn\u2019t
\naccount for these critical factors is totally inaccurate
\nand misleading.<\/p>\n
Being in the middle of our peers is an accomplishment
\nbecause we run a far more complicated Plan than many
\nof our peers \u2013 we have thousands more collective
\nbargaining agreements and interact with thousands
\nmore employers than most. When you compare our
\nPlan’s administrative expenses to six other similar
\nentertainment industry plans, we have the lowest
\nexpenses per number of collective bargaining agreements,
\nthe second lowest per number of employers and the
\nthird lowest per number of participants.<\/p>\n
====================================<\/p>\n
IV. EVENTS
\nDEAN AND RICHARD
\nare now at Culver City Elks the first \u2028Friday of \u2028every month.
\n7:30pm-10:30pm,
\n11160 Washington Pl.
\nCulver City, 90232
\n310-839-8891<\/p>\n
<\/p>\n
————————————<\/p>\n
12\/17\/17<\/p>\n
ASMAC\/LAJS Holiday party @ Catalina\u2019s in Hollywood<\/p>\n
Dec 17 @ 11:30 am \u2013 3:00 pm<\/p>\n
Bill Cunliffe Trio with special guest Denise Donatelli
\n——————————————–<\/p>\n
UNTIL NEXT TIME,\u2028\u2028THE COMMITTEE FOR A MORE RESPONSIBLE LOCAL 47<\/p>\n","protected":false},"excerpt":{"rendered":"
12\/11\/17 I. MUSICIANS FOR PENSION SECURITY ANSWER AFM COMPLAINTS II. TRUSTEES BEHIND CLOSED DOORS III. WHAT THE AFM\/PENSION PLAN SENT OUT IV. 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’\u2028scoring musician …Allows us to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-484","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/www.responsible47.com\/index.php?rest_route=\/wp\/v2\/posts\/484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.responsible47.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.responsible47.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.responsible47.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.responsible47.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=484"}],"version-history":[{"count":0,"href":"http:\/\/www.responsible47.com\/index.php?rest_route=\/wp\/v2\/posts\/484\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.responsible47.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.responsible47.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=484"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.responsible47.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}