In December I attended the Recording Musicians Association (RMA) conference that was held in Nashville. (How convenient for me!) This conference is very intimate, with guests sometimes outnumbering the delegates!

During the RMA conference, Maureen Kilkelly, Executive Director of the American Federation of Musicians and Employers Pension Fund (AFM-EPF, or the Fund), gave a very informative presentation. It was interesting to hear about the percentage of contributions received versus the amount of wages reported. Much of the recording income and contributions derived from recording work (TV, motion picture, jingles, and audio recording) are broken down by work type, and contributions average between 2 percent and 5 percent of total Fund contributions for each contract type.

Fifty percent of the wages reported to the Fund are from symphonic sources, and they are responsible for 39 percent of the total Fund contributions. Surprisingly, 20 percent of the Fund’s contributions come from casual engagements. I can only assume this large number is due, in part, to the recent introduction of the LS-1 form. This form, available to any member of the AFM, allows musicians, bands, pick-up orchestras, and others to receive pension contributions for concerts, weddings, shows, parties, etc. This has been especially successful in locals where pension may not be included in their “Miscellaneous Scale Wage” charts.

Maureen also spoke about the past few years’ changes to the AFM-EPF’s multiplier as well as some of the reasons for those reductions. One point of interest related to the trustees’ application to the IRS for an amortization extension. One IRS requirement included a prohibition on benefit improvements for 30 years. Because the IRS requirements were unacceptable, in the end the trustees chose to lower the multiplier a second time (on April 1, 2007). This was done to ensure that the Fund would not have a funding deficiency through 2042 (based, of course, on all the actuarial assumptions). By the trustees’ refusing to accept a freeze on benefits for such a long period of time, we might see a multiplier or other benefit increase sometime in the future, hopefully long before 30 years passes us by.

Many were not aware of a requirement to name a primary beneficiary (on a form available from the AFM-EPF office) and to keep that information current at all times. That includes participants who have not yet begun receiving pension benefits as well as participants who started receiving pension benefits before normal retirement age (usually age 65) and who then continued to earn additional pension benefits before achieving age 65 (what the Fund calls a re-retirement benefit). The pre-retirement death benefit was changed effective in January 1, 2004, and that change was significant. Now, the spouse or other designated beneficiary of a vested participant who dies before beginning to collect a pension benefit may receive the pre-retirement death benefit only as a monthly annuity; a lump sum payment is no longer available. Because the pre-retirement benefit is paid as a monthly annuity for the life of the beneficiary, naming an estate or trust as the beneficiary is prohibited. For purposes of the pre-retirement survivor annuity, a participant may designate up to three primary beneficiaries and an equal number of alternate beneficiaries (unless there are more than three children). Until recently, participants were only allowed to designate one beneficiary, so you may want to check with the AFM-EPF office or your local to update your beneficiary information once the new forms become available.

Additionally, it was pointed out that same-sex marriages are not recognized by the federal government. Because of that, a participant should not assume that a same-sex spouse would receive an annuity should the participant die before designating that partner as the beneficiary.

These were just a few of the facts that Maureen covered in her fascinating presentation. The pension discussion at last summer’s ICSOM Conference was well received, and the Governing Board is considering continuing our education with more pension-related topics at the next ICSOM Conference. I’d like to thank Maureen Kilkelly for her assistance with this article.