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David Borough: “Cool!” Musical News by Alex Walsh pg 4 March - April 2017 | Vol. 89, No. 2 More From The Pension Front by David Schoenbrun, Local 6 President Our Pension Fund continues to be first But there were also pre-existing albeit probably not sufficiently. and foremost in many AFM members’ structural problems with the Fund For starters, soon after the dot.com minds, especially among those of us that have only recently come to bust the multiplier began to drop, who have been counting on receiving light. In the mid to late 1990s the pausing at various levels until it a certain retirement benefit after 30 or “multiplier,” the number used to reached $1.00 – as low as it can go 40 (or more!) years of contributions compute pension benefits, was raised – on January 1, 2010. Also during by employers on our behalves. The by the trustees to what the experts that time many of the previously Fund trustees have seen fit, after some now know to be an unreasonable and installed benefit enhancements, like In This Issue. cajoling from officers of the larger unsustainable level of $4.65 (per $100 inflated early retirement, surviving Locals, to “go on the road” and hold of contributions, paid monthly). To spouse and working retiree benefits, David Schoenbrun Article meetings with Local memberships in add insult to injury, it was applied were eliminated. The Rehabilitation TEMPO Application order to present in person a picture retroactively to all earnings since Plan was put into effect, requiring New & Reinstated Members of the current state of the Fund and the inception of the Fund in the late employers to pay 1% extra into Address Changes the prospects for its future. the fund on top of their Musicians Indivisible SF Perhaps the most important negotiated rates. The Fund focus will be the very real changed its investment Stay Informed, Organize, and Resist! possibility that a reduction of managers and its investment David Borough Article benefits might be instituted advisor, and redistributed Minutes / Expenditures in order to maintain the asset allocations in order to Members To Be Dropped Fund’s solvency through take advantage of previously Members Dropped the years of our retirements unexplored but potentially TEMPO / CODA Contributions and those of generations lucrative markets. It also of participant musicians to sought to reduce its expenses Advertisements come. via a physical move to Auditions reduce rent substantially Unfortunately, we were only and other belt-tightening recently able to confirm the measures. date of the San Francisco meeting with the Fund, so All of these things helped, for those of you reading this, but still our pension fund that meeting date (March 23rd) has 1950s. It was a very popular decision finds itself, by the very nature of its already passed. Hopefully the many at the time, as you might imagine. demographics, too close for comfort notifications that went out found But the participants who earned from the edge of the abyss. their way into our members’ already- money during this period are now cluttered minds and schedules, and starting to retire, and they are the So, what happens now? At least for the meeting enjoyed a good turnout “baby boomers,” so there are great a few months, we wait. At the end of and even proved useful to those numbers of them. So, a very large March the Fund will take a snapshot attending. bill has come due, and for an already of its financial position, and the weakened fund that was (and is) actuaries employed by the Fund will For those of you who did not attend, especially bad news, especially as the crunch those numbers in accordance I’d like to present a nutshell version Fund looks actuarily into the future with the law and standard actuarial of what happened to bring the Fund and determines how much money assumptions. Then, sometime in to this unhappy place, what’s going it needs to continue to pay all those June, a report will be issued which on now, and what we might expect. obligations. will tell us a lot more about what has Life Members As you can imagine, I’ve been on happened in the past year – has the the receiving end of many anxious On top of that we have the health of the Fund improved, or does Steven D’Amico and angry questions, so maybe I demographics of an aging fund – its outlook continue to deteriorate, can anticipate what is most pressing more and more retirees receiving with the key question being: might Brent Herhold among your needs to know. Also, benefits, and fewer and fewer the Fund face insolvency in fewer Deborah Tandoc please understand that the AFM- participants whose employers are than 20 years if no serious steps are EPF is a wholly separate entity from contributing to the Fund. And they taken to shore it up. If it improves, Union, so my understanding of much are all living longer. Damn modern then we’ve all dodged a bullet for the of this is only slightly more current medicine, exercise, healthy eating time being. If not and the 20-year In Memoriam and informed than any other Fund and reduced drinking and drug use test is not met, then the trustees will participant. among our members! I recommend at likely seriously consider applying to Benny Barth least taking up a dangerous hobby… the US Department of the Treasury How did we get here? By “here” I for all of our sakes. for permission to reduce benefits -- an Edward Williams mean having a pension fund with action that all participants will be able $1.7B in assets, $2.9B in liabilities, a Then there are the variables that to vote upon if approved by the DOT. funding percentage of 59%, and the are open for what will no doubt be dubious official label of “critical” and some lengthy debate: How were the And with that I’ve reached a perhaps soon “critical and declining.” Fund’s assets invested before, during point in this update where I could And by “we” I mean all of us: Fund and since the depression? Were they delve into my new and extremely participants, trustees and the experts adequately diversified? Too risky? limited understanding of MPRA that are hired to serve the Fund. Not risky enough? Did our trustees (Multiemployer Pension Reform Act), get bad advice, or exercised poor the federal law of 2014 that governs Those of us who don’t mince words judgment, or both? Were the costs how such benefit reductions can be PERMIT NO. 454 PERMIT regard the depression of 2007-2009 as of our asset investment management made, and the PBGC (Pension Benefit NON-PROFIT ORG. NON-PROFIT U.S. POSTAGE PAID U.S. POSTAGE SAN FRANCISCO, CA the main catalyst, with the real culprit way too high? Ditto other Fund Guaranty Corporation), the federal being Wall St. investor/manipulators expenses, like staff salaries, rent and pension guarantee fund that is itself who took advantage of human other costs of operation. in danger of failing and unlikely to frailties, hopes, dreams, greed, and be bailed out by the current Congress lack of sufficient regulatory oversight Of these criticisms, which qualify and administration. Or, perhaps to steal a full 60% of the total value as reasonable, cautionary tales from more wisely, save that for the next of this nation’s pension funds. Our which the Fund can learn and, in so installment, as this very anxious issue pension fund was fortunate, if you can doing, avoid repeating. And which continues to unfold. call only a 29.3% loss of asset value are simply a reflection of plain angry between 2008-2009 “fortunate.” And and frustrated Monday morning Until then, let’s remember to be kind this was the 2nd of a 1-2 punch, the first quarterbacking? and patient with each other. We’re being losses of investment assets as a all in this together, and there is every result of the bursting of the dot.com Now that you have a sense of the reason to continue to maintain hope bubble in 2002, from which the Fund large, steaming pot of “how did we that a workable solution to this had just recovered. get here,” a few mentions of what problem will be found. Musicians Union Local 6 - 9th Street 116 94103 San Francisco, CA has been done to rectify the matter, Your Trusted Servants... Official Bulletin of Local 6 Officers Musicians Union Local 6 David Schoenbrun, President American Federation of Musicians Kale Cumings, Vice-President Beth Zare, Secretary-Treasurer Beth Zare, Editor Alex Walsh, Managing Editor Board Of Directors Gretchen Elliott, Trustee The Musical News is published bi-monthly by Hall Goff, Trustee Musicians Union Local 6, AFM. Any notice Steve Hanson, Trustee appearing herein shall be considered to be Josephine Gray, Director an official notice to the membership. The Forrest Byram, Director appearance herein of an article or an advertisement does not imply an endorsement by the editors. President Emeritus Melinda Wagner Contact Us Staff Tony Orbasido - Recording, Reception (x301) Musicians Union Local 6 Lori Ponton Rodriguez - Treasury (x304) 116 - 9th Street Joe Rodriguez - Casuals (x306) San Francisco, CA 94103 Cheryl Fippen - MPTF, Death Benefits (x307) phone (415) 575-0777 Alex Walsh - Member Services (x308) fax (415) 863-6173 [email protected] Area-Wide Casual Wage Scale www.afm6.org Why Should You Become a Member of the AFM TEMPO Club? Committee With a $1 dollar per week donation, the AFM can make a meaningful Lisa Sanchez, Chair Office Hours and significant contributions to our allies in Congress.