As I write this column, we have just begun negotiations for a new collective bargaining agreement with the League of American Theatres and Producers, as well as Disney and other producers who have bargained with the League in recent years.
The committee, as well as our new attorney, is working hard to bring back a good contract to the musicians working under this agreement. We are primarily focusing on fixing our health benefits fund — both to increase the benefits that the fund provides to participants and to assure that the fund will remain solvent for the long term.
Our bargaining team believes that limiting the scope of bargaining will help us succeed in this endeavor and avoid a host of hot-button issues from both sides in order to achieve our goals.
We are starting this process late this year, but perhaps this streamlined approach will allow us to reach agreement more quickly than usual and perhaps next month’s Allegro will include an announcement of a new agreement on Broadway.
The other compelling news of the past month is the announcement of another reduction in the monthly benefit multiplier under the AFM and Employers’ Pension Fund.
Benefits at age 65 will now pay $3.25 (down from $3.50) for contributions earned on and after April 1, 2007. (Corresponding reductions will apply to benefits beginning before age 65.)
Of course, it goes without saying that this news is not welcome. It should not, however, be a cause for panic, as the fund’s overall funding status is continuing to improve.
The benefit multiplier at age 65 for contributions earned on or before March 31, 2007 will remain at either $4.65 (for all contributions before Jan. 1, 2004) or $3.50 (for contributions earned between Jan. 1, 2004 through March 31, 2007). The union trustees are committed to restoring the $3.50 multiplier as soon as the fund’s conditions permit.
Some explanation of the benefit reduction is in order.
The effects of the downturn in the financial markets in 2001 through 2003 are still being felt by the fund.
For purposes of applicable IRS funding rules, gains and losses are required to be spread out over several years. While the losses incurred from April 1, 2001 through March 31, 2003 are still being taken into account, the gains from later years have not yet been fully recognized.
The fund’s long-term outlook has improved, but changes must be made to satisfy these IRS rules on a short-term basis.
I had the opportunity to attend my first meeting as a trustee of the fund in February. Although the step of reducing the monthly multiplier was not taken lightly, the trustees have done so in order to place the fund on a stable financial basis for many years to come.
With the current changes and updated actuarial assumptions, the fund’s financial condition will be very sound and steadily improving as far out as the actuaries’ projections go — that is, through 2041.
I believe all of the trustees, both management and union, take their responsibility to the fund very seriously.
The fund’s long-awaited Web site is now in place at www.afm-epf.org, bringing — it is hoped — a new era of user-friendly service to participants. We’ll review the site in next month’s Allegro.
It is my desire to work together with the fund’s administrator and the other trustees to assure that the pension fund is open and responsive to its participants and is managed conservatively for their benefit.
Administrators from the pension fund will be at Local 802 to meet with members on Wednesday, April 25 at 5 p.m.