Administrators of the American Federation of Musicians ‘Employers’ Pension Fund have withdrawn their claim for reduced benefits for nearly half of its 50,000 participants.
The Fund had applied to the treasury department for permission to reduce benefits, as it was expected that there would be no money left to pay benefits within 20 years. The Fund fell into “critical condition” two years ago when its $ 3 billion liability surpassed its $ 1.8 billion in assets, meaning it was underfunded by about $ 1 billion. , $ 2 billion.
The change of plans was made possible by the election of President Joe Biden and the $ 1.9 trillion American Rescue Plan Act (ARPA) he recently enacted. After reviewing an actuarial analysis of the pension relief provisions contained in the bailout, the trustees decided to withdraw their request for the reduction and instead seek financial assistance under ARPA, which, if it does was approved, would allow the Fund to pay benefits for the next 30 years. ARPA offers lump-sum grants to qualifying multi-employer pension plans that do not need to be repaid.
The musicians’ union pension fund again asks the Treasury ministry to reduce benefits to prevent insolvency within 20 years
“The Pension Benefit Guaranty Corporation (PBGC) is responsible for issuing regulations detailing how ARPA’s pension relief provisions will be implemented,” the Fund told its participants today. “These regulations are important because the value of financial aid and whether it will provide enough money to pay benefits until 2051 or beyond depends on how ARPA is interpreted. The Trustees intend to advocate for regulations that meet ARPA’s objective, which will allow plans to pay benefits at least during plan year 2051. The PBGC regulations will also determine when the Fund may request a benefit. financial assistance under ARPA. We intend to apply as soon as possible. “
“Your advocacy helped create this moment,” administrators told attendees. “Thank you again to all those who made your voice heard by your elected officials. Going forward, we will continue to share news and information on the status of the PBGC regulatory process, as well as the process and timeline the plan must follow to seek relief under ARPA. For now, we wanted to deliver this important and very welcome to you immediately. “