Tag Archives: officer column

“We the Willing”

by Tina Morrison, AFM International Executive Board Member and Vice President of Local 105 (Spokane, WA)

We’ve all been through a particularly rough year and a half, but the situation is improving, people are gathering, and work is coming back. It’s exhilarating to reconnect with colleagues and bandmates and perform in front of live audiences again. But there’s something else: we have to remember that the “good old days” were not so good. Many workers struggled to cover basic needs, even while working long hours providing essential services. We have an opportunity to change the narrative, to build power and create a better future. I firmly believe that musicians and music making are an essential part of achieving this generational correction.

Music is a universal language that brings people together, a natural bridge, a unique artform that breaks down barriers. Diverse audiences attend concerts and shows, listen to bands in local establishments, experience shared humanity in real time and enjoy music together. We’ve spent so much time isolated and surrounded by “news” preying on our differences. There needs to be a rebuilding of a sense of community and musicians are uniquely qualified to fulfill that need.

However, along with the ability to provide this essential service, there also must be a change in the way that music making is understood and valued. This change is not only necessary generally, but also within the music community. We know what it takes to make music that people want to hear. It’s a lot of work! Though it’s often joyous, sometimes it is not. Besides investing a significant amount of time, we also have to invest in our instruments, equipment, concert clothes, transportation, and rehearsal space. Music making should not be compromised due to lack of resources. The false narrative of the starving artist needs to be put to rest. It undermines our profession. We deserve to be fairly compensated for our work.

Somewhere the sense of value was redirected. This is terrific for those who depend on our services to benefit themselves. For example, there’s the rubber stamp symphony board members who like to list the “service” on their resumes, while not actively doing the necessary work to raise funds for the whole organization, not just the shell of management. Another example is the club owner who gives musicians the “opportunity” to perform while pricing their wares at rates that cover all business costs, with the exception of the musical services that draw people into the establishment.

We have a responsibility to ourselves and those coming after us, to commit not only to making music, but to actively participate in re-establishing the values necessary to maintain our profession in all its forms. Go to the AFM website (www.afm.org) and read Article 2, Mission Statement, in the AFM Bylaws.

Now, close your eyes and envision your career in your community. Are you satisfied with the work you perform, but also generally with how musicians in your community are perceived? Are musicians treated respectfully as professional people or is there a sense that making music isn’t a “real job”? What changes are necessary to improve the lives of musicians in your community? Get involved in your local by participating in or starting a committee. You don’t need to know how; the most important step is to be willing! Thank you for your work!

pension

Pension Benefit Reduction Plan Explained

As many of you know, on December 30, 2019, the AFM-EPF Trustees filed an application to reduce benefits under the Multiemployer Pension Reform Act (MPRA). The decision was reached after the trustees had engaged in more than two years of difficult discussions. The reductions are projected to allow the Fund to avoid insolvency and preserve a meaningful benefit for Fund participants and their beneficiaries. Far more drastic benefit reductions would result if the Fund were to become insolvent.

More work is needed in order to strengthen the Fund, particularly by bargaining improvements in employer contributions into the Fund, as the Federation has done over the past several years, and by earning good investment returns, as we have since the 2008-2009 financial crisis—an average annual return of nearly 9%. But the benefit increases that were adopted repeatedly through the 1990s and other generous benefit features provided by the Fund have ultimately proven unaffordable after the 2001 dot-com bubble burst and the 2008-2009 financial crisis. This has left us no alternative but to reduce benefits in order to keep the Fund solvent for future generations of participants.

The MPRA application is a very long and complex document, running over 1,500 pages. You can review it on the US Treasury website at www.treasury.gov/services/Pages/American-Federation-Of-Musicians-And-Employers-Pension-Fund.aspx, but in this month’s column, I will summarize the main features of the proposed benefit reductions and answer some questions we have received from a number of participants.

There are three underlying principles in our proposed reduction plan: level the playing field, protect the $1 multiplier, and minimize benefit reductions as much as possible.

Removing the Subsidies and Other Costly Features

The first principle involves leveling the playing field by reducing costly benefits and features of the plan that are richer than the regular pension benefit payable at age 65. These include the early retirement subsidy and certain other generous plan features that the trustees considered to have the same effect as subsidies. The trustees decided that the fairest way to distribute the reductions was first to eliminate the subsidies and other costly features that are not applicable to all participants. That allowed us to minimize the reductions to multipliers other than the $1 multiplier, which we decided to protect, without any reduction.

As we have informed participants, the flat percentage cut to the multipliers above $1 was 15.5%. If we had not removed the early retirement subsidy (which only those who started to collect before June 2010 have been eligible to receive), the flat percentage cut for multipliers above $1 would have been 17.3% instead of 15.5%. Since the regular pension benefit—the age 65 benefit—is the Fund’s core promise, we determined that it was fair to protect that to the maximum extent possible.

There have been lots of questions about the early retirement subsidy. An early retirement benefit is “subsidized” if it is not reduced as low as the actuarial equivalent amount that would cost the plan the same as the regular pension benefit payable at age 65 over the expected lifetime of a participant. Because the benefit begins earlier, it is payable for a longer period of time and, over thousands of participants, the costs quickly become significant. And, because the money is being paid earlier, the Fund cannot earn investment income for those years prior to normal retirement age.

For Benefit Period A (through 12/31/2003) at age 55, the multiplier was $2.33 for retirements before June 2010, while the unsubsidized multiplier that went into effect for retirements on and after June 1, 2010 was only $1.70. The $2.33 multiplier is subsidized because it is 37% higher than the $1.70 multiplier. This means that the early retirees who started collecting before June 2010 are receiving more than the actuarial value of their age-65 benefit.

Like many other Taft-Hartley funds, the AFM-EPF has offered a subsidized early retirement benefit since at least 1972. However, the Fund can no longer afford this subsidy. The trustees also determined it would be unfair to continue this subsidy for those who are receiving it and who retired before June 2010 because it was already taken away from everyone else, even those who worked prior to 2003 while the subsidy was in effect, if they did not retire before June 2010. Moreover, those who will lose their early retirement subsidy by the 2021 effective date of the change if the application is approved will have already received the subsidized early retirement benefit for 10 years, and in some cases many more years. The Fund is not taking back that “excess” value. The trustees are very aware that this change, as well as other changes described below, will adversely affect the retirement benefits for a number of participants, but we believe that eliminating subsidies is the most equitable way to distribute the benefit reductions.

The proposed reduction plan also removes certain other generous, subsidy-like benefit features in order to reduce benefit costs, help preserve the $1 multiplier, and minimize the flat percentage reduction. The two most prevalent and expensive are the re-retirement benefit and the re-determination benefit.

The re-retirement benefit is the additional benefit participants earn if they retire before age 65 and then return to work. It is a very unusual benefit for a pension plan. Under existing rules, when such a retiree reaches age 65, the total benefit is recalculated as if the individual were first retiring at age 65, using the age-65 multiplier for all benefits. That amount is then reduced to reflect the early retirement benefits actually paid to the person during the years before age 65. The existing methodology produces an increased benefit that is like a subsidy because it provides a larger re-retirement benefit when compared to the benefit based solely on the new contributions earned during post-retirement employment.

If the proposed MPRA application is approved, re-retirement benefits would be calculated based only on the contributions earned after the early retirement pension begins, until age 65. For virtually all musicians not yet in pay status, the re-retirement benefit for service in and after June 2010 will use the $1 multiplier for contributions credited after the person’s early retirement through age 65, which amount will be added to the amount of the early retirement benefit, and adjusted for the forms of benefit selected.

Another costly benefit that would be modified if the application is approved is the re-determination benefit. The re-determination benefit is the additional benefit that a musician earns by working in covered employment after age 65 and after starting to collect a pension. Currently, the re-determination benefit is based on contributions received in the prior calendar year, reduced by the value of all re-determination benefits received in the year before that. Many pension plans do not permit participants to receive pension benefits while also earning additional pension credit. Under the proposed MPRA suspension, participants will still be able to return to work after age 65 while receiving their pensions, but their re-determination benefits will be offset by the total amount of all benefits already received from the Fund, rather than just the re-determination benefits in the year before. If the application is approved, current re-determination benefits will be reduced to $0, and re-determination benefits after January 1, 2021 will likely not result in any additional accruals.

Protecting the $1 Multiplier

The trustees concluded that the fairest way to design the proposed reduction plan was to protect the $1 multiplier from any reduction. We believe this is of paramount importance in order to maintain Fund support from active participants—those who are still employed and earning contributions but not yet retired. We know that the $1 multiplier, which has been in effect since 2010, is not a rich benefit. But it can provide a meaningful benefit payable over a lifetime starting at age 65. We also know that further reductions to this already reduced amount would jeopardize not only ongoing contributions, but also increases to contributions, which are critically important to the Fund. Eliminating the subsidies and the costly features that are effective subsidies helped us maintain this basic benefit.

Minimizing the Flat Percentage Reduction

After eliminating the subsidies, the central feature of the proposal is a flat 15.5% reduction to all multipliers other than the $1 multiplier. Each of the higher, pre-2010 multipliers would be reduced by 15.5%, although various statutory protections apply to different participants, resulting in either no reductions for some participants or reductions for many that amounted to less than 15.5% in total.

Benefit estimate statements were mailed to all participants on January 6. These statements provide participants with current and estimated future reduced benefits, if the MPRA application is approved and plan reductions become effective. We know that the information included on the statements does not provide the detailed calculation of your estimate. If you wish to receive a statement that will include all calculation details, you can call the Fund office at 212-284-1311 and request a detailed statement. When your detailed statement is available, it will be posted to the benefit estimate icon in the registered participant’s portal on the plan’s website. You will be advised by email that it is available or you can request a copy to be sent in the mail to you. Fund representatives will walk you through it and help you understand the detailed calculations.

Removing the subsidies is painful, and will be difficult for many participants, but the regular pension benefit, that is, contributions from the $1 multiplier payable at age 65, is the core promise of the Fund. We believe it would be unfair to reduce that benefit or to reduce the other multipliers even more in order to maintain the early retirement subsidy and other costly features that the Fund can no longer afford.

No Easy Choices

The trustees agonized over decisions that we knew would affect the lives and families of thousands of participants, and we struggled over how to make those decisions in a fair and equitable manner. The trustees capped the MPRA reduction so that, even with the elimination of the subsidies, no individual benefit would be reduced more than 40%, and, as it turned out, the cap applied to only 0.35% of participants. The law provides protection for participants who receive smaller benefits, for disability pensions, and for people who are over 75 years of age.

The vast majority of the plan’s participants had either no reduction or a smaller than 20% reduction.

Here is a breakdown of numbers of participants and percentage of benefit reductions: The total number of Fund participants is 50,782. Of that number, 27,099 either earned all their credit at the $1 multiplier or were protected by law and received no benefit reduction. This meant that the money to address the problem of fund sustainability had to come from the remaining 23,683 participants. Of those, 11,483 received a reduction of 0%-9%; 11,270 received a reduction of 10%-19%; 374 received a reduction of 20%-29%; 376 received a reduction of 30%-39%; and 180 participants received a reduction of 40%. 

Finally, given the choice of preserving the Fund or letting it become insolvent, the trustees chose to propose a benefit reduction plan that adjusts benefits in the fairest way possible under the circumstances to allow the Fund to continue to serve past, current, and new participants into the foreseeable future.

film

2020: Fighting For the Right to Make a Living

Pour voir cet article en français, cliquez ici.

Much has been written in the past several months, by President Hair and others, about the motion picture/TV film negotiations that have commenced once again in Los Angeles; however, it cannot be stressed enough how important this round is. At stake are residuals on New Media, a form of broadcast which has risen above the others as being the choice for consumption in the future. On the one hand, we have the industry, which is loath to give up even the most miniscule amount of their vast profits, simply because corporate greed is a real thing. On the other hand, we have the musicians who do the film and TV work, collectively looking at that future in dismay.

The players have done their research. They can see that diminishing music budgets mean less union work as composers are forced to go dark, record off-shore, or simply produce music “in the box.” Where, then, will sufficient earnings be found to sustain a viable career in music? The simple answer is that fees must be tied to the back end—as the content generates profits through distribution, subscriptions, or advertising revenue, a piece should be carved off for those involved in the music.

While some negotiations prove to be anti-climactic, such is not the case this time. The musicians are engaged—eager to participate in both the bargaining and the garnering of public support. The fact that so many show up with their instruments at rallies is inspiring. The tour bus, carrying musicians to their energetic performances in front of industry executives’ homes on an early Sunday morning, is nothing short of fantastic. While the prize is still not within sight, these dedicated players have certainly gotten the attention of Hollywood money.

Of course, Los Angeles is not the only location where the digital age has wrought devastation. In a recent CBC Sunday Edition, Matt Zimbel of Local 406 (Montreal, PQ), member of the jazz super-group Manteca, had this to say: “The digital age has given us two ‘gifts.’ The technology used for playback sounds terrible and our recorded music no longer has any monetary value.”

Matt then proceeds to plant his tongue firmly in cheek and explain to a friend how the record business is much more profitable than film and television: “I explained that last week I received my royalty statements for a TV series I had created and produced. It cost $1.2 million to make and had been on YouTube for a year. My royalties for 12 months were—are you sitting down?—.01 cent. Cent. Not even plural. No “S” required. .01 cent! On the other hand, I got my music statement for our 11th CD recording and for only three months we got the whopping sum of .01 cent. But it was only for three months. You don’t need an MBA to see how much more profitable music is!”

And then his statement of the reality: “Hey, our chart numbers are off the hook. The shows? Man, standing room only. Likes are in the millions. Hit me on Insta—we’re killing it! But really, truth be known, we’re not killing it, we’re just dying.”

Add that to the fact that over 200 musicians recently signed a letter demanding that the Québécois government take action so that they can receive fair compensation from music streaming services such as Spotify—most of them long-time, prominent members of the musicians’ guild (Local 406)—and the desperation begins to become crystal clear. The US-based market posted profits of $5.4 billion during the first six months alone. Meanwhile, Spotify pays artists $0.004 per stream, on average. As for the non-featured musicians in Canada? Forget about it.

And so, 2020 is shaping up to be a year when disgruntled, unfairly-treated musicians put on their union hats and begin a collective effort to restore to the music industry what has been ripped away by technology and corporations—the right to make a living.

I would like to take this opportunity to wish all of our members in the US and Canada peace and fulfillment during this Holiday season, and the very best for the New Year.

budgeting

AFM Budgeting Process Begins for 2020

As 2019 draws to a close, the International Executive Board (IEB) will soon be holding its December meeting. As in the past, we use the current year’s financial numbers to date (actuals) to estimate the budget for the upcoming year (2020). We go through the budget lines to determine what we anticipate will be monies coming in (income) and monies going out (expenses). Budgeting is not an exact science, but rather a best guess estimate based on past actuals and the expectations for the upcoming year. Income is never guaranteed, and unforeseen expenses often arise affecting the way the financial numbers turn out at year’s end.

The AFM budget process begins with a preliminary budget meeting that includes BDO Director Bob Hamilton, BDO Audit Manager and CPA Jessie Mabutas, AFM President Ray Hair, AFM Comptroller Michelle Ledgister, and myself. Once we all concur on the preliminary budget, the budget is brought to the AFM Finance Committee (currently Alan Willaert, John Acosta, Dave Pomeroy, and Ed Malaga) for review, discussion, and adjustment if necessary. The final step in the budgeting process is a day at the IEB meeting reserved for discussion, answering questions, and a vote on the final budget by the full IEB. The AFM bylaw Article 3, Sec. 9(u) states in part, “the projected operational expenses shall not exceed the projected annual income for that year.” Therefore, this bylaw requires that we have a balanced budget.

Our main budgeting objective is to create a healthy financial position for the upcoming year so that AFM programs and initiatives can be implemented or continued that improve the lives of AFM members.

2019 AFM Convention Official Proceedings

The 2019 AFM Convention Official Proceedings is now available on the AFM website in the Document Library – AFM International Conventions folder. Hard copies of the booklet were recently mailed to each 2019 AFM Convention Delegate.

AFM Bylaws (revised 9-15-19)

The AFM bylaws (rev 9-15-19) in English are currently available online at AFM.org. Log in with your AFM ID and password. Go to the Document Library and open the Bylaws folder. Click on AFM Bylaws (rev 9-15-19).

The printed bylaws booklet (English version) will be mailed to locals shortly. We are in the process of translating and printing the bylaws (French version). We will post the bylaws (French version) as soon as we receive the translated file. The bylaw booklets in French will be mailed to the appropriate Canadian locals as soon as we receive them.

2020 US Federal Election

Recently, we entered the US federal election campaign cycle. Regardless of any party affiliation you may or may not have, it is critical that you vote in the general election next November. If you think your vote will not make a difference or feel going to vote is a waste of time, I urge you in the strongest terms to reconsider. Democracy depends on everyone’s participation. Please take the time to educate yourself on the issues and exercise your right to vote.

We are less than a year away, so the election will soon be upon us. Make your voice heard.

jay blumenthal

Division in a Union Is Like Kryptonite

It’s a challenge writing this month’s column since it is being written before the AFM Convention and published after the convention. Having attended many AFM conventions, I’ve learned that much can happen. There are often several unanticipated twists, turns, and unexpected issues that come before the delegates. This is all part of the democratic process. At times it can get quite messy, but ultimately it’s a very healthy process for our union.

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directives on copyright

The EU Directive on Copyright

Pour voir cet article en français, cliquez ici.

I recently attended a briefing sponsored by the Canadian Music Publishers Association at the law offices of Cassels Brock. The keynote speakers were Erich Carey, vice president and senior counsel at the National Music Publishers Association, and John Phelan, director general of the International Confederation of Music Publishers.

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The Music Performance Trust Fund Is Back!

I am very happy to report that the new revenue stream from online interactive digital distribution bargained by the Federation in 2017 is paying real dividends. A recent report from the Sound Recording Special Payments Fund reflects that this revenue is now more than $1.5 million, which translates to an additional $250,000 available for distribution from the Music Performance Trust Fund (MPTF). This new revenue stream has brought the MPTF back from the dire straits in which the fund found itself just a decade ago.

The newly revitalized MPTF is a valuable resource that locals across the country can take advantage of by pursuing projects and partnerships with community organizations for events that meet the guidelines for MPTF grants. Among the possible projects are educational programs, park concerts, and music festivals. Free to the public events are perfect for the mission of the MPTF and offer our locals the opportunity to strengthen relations with diverse constituent groups in their municipalities and regions. 

From an organizational and recruitment perspective, MPTF projects open the door for local officers to connect with musicians performing within their local jurisdiction. They will be able to discover what bands are popular and drawing big audiences in the local clubs and whether or not they have a connection to the union. If not, local officers can provide them with information and guidance about tapping into MPTF resources. This can be an effective introduction to what our union can do for them. By building a local MPTF event, such as a music festival, you are not only creating real relationships with the communities you serve, but also offering meaningful opportunities for local musicians to perform, all under an AFM agreement.

Many public events are funded in part by grants from state and local arts councils. Approaching organizations that rely on such public funding with an offer to bolster their events with musical groups offering diverse styles of music, along with 50% funding for the musicians employed, will get their attention. AFM President Ray Hair’s February 2019 President’s Message in the IM goes into further detail on these types of community-based organizations. I urge everyone to take a look.

The reinvigoration of the MPTF provides all AFM locals with a real opportunity to build bridges and create authentic connections, not only with our communities, but also with the musicians who call those communities home. Regardless of genre—jazz, classical, hip hop, folk, rock or any of the other genres in which our members expresses themselves—nothing brings people together like live music.

I have been asked by President Hair to help connect with locals that may have been missing out on the wonderful resource available to them from the MPTF. My goal is to support your efforts in this regard, whether they involve finding ways to make existing projects fit within MPTF guidelines or developing new and creative initiatives that advance the mission of the MPTF and enhance your local community. Email me at tgagliardi@afm.org. I look forward to working with you to help you remind your communities of this fundamental truth: Live music is best!

jay blumenthal

New Directive from USCIS

The AFM (along with other unions) plays an important role in the nonimmigrant visa application process for foreign artists desiring to enter the US temporarily to perform and tour. Each application for an O or P visa must include a consultation letter generally provided by a labor union. There are times a union may find the applicant does not meet the criteria necessary to provide a favorable consultation letter. Cases of fraudulent use of these letters have occurred where the union’s letterhead is copied, dates are changed, and even signatures are forged to acquire the needed visas.

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streaming income

Musician’s Streaming Income: Growing and Glaring Disparity

Below are my remarks from a rally hosted by Local 47 (Los Angeles, CA) immediately prior to our negotiations with the Alliance of Motion Picture and TV Producers toward a successor film agreement.

Good morning, brothers and sisters. I’m proud to be here with my colleagues from the AFM International Executive Board, AFM staff, Local 47 (Los Angeles, CA) officers and staff, members of our sister union SAG-AFTRA, the good folks from the LA County Federation of Labor, but most importantly, great musicians, members of the American Federation of Musicians of the United States and Canada—the oldest and largest labor union in the world representing professional musicians.

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The Perfect Storm

In the first half of 2019 our New York Office is facing “the perfect storm.” A confluence of Federation events, culminating with our June AFM Convention, will be challenging to say the least.

During February and March we conduct the annual audit and submission of our Labor-Management report to the Department of Labor. While totally normal, this is always a busy time that puts our finance department into overdrive. 

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