U.S. Treasury Denies American Federation Of Musicians And Employers' Pension Fund's MPRA Application

Today, the U.S. Treasury Department officially denied the American Federation of Musicians and Employers’ Pension Fund’s (AFM-EPF, the Plan) application to reduce benefits under the Multiemployer Pension Reform Act (MPRA). The Plan’s MPRA application was filed with Treasury in December 2019 in an attempt to save the Plan and avoid insolvency. Treasury’s letter to the AFM-EPF explained that its denial is based on a disagreement over the reasonableness of two of the actuarial assumptions used in the application.

Because of Treasury’s denial, participants' benefits will not be reduced on January 1, 2021, and the Plan will continue its financial decline. To avoid insolvency, the Plan’s Trustees have started working with their actuaries to prepare and file a second MPRA application.

Treasury Staff advised the AFM-EPF in advance that they would be recommending to the Secretary of the Treasury that he deny the application based on this disagreement. On August 5, the Trustees sent a letter to Treasury Secretary Steven Mnuchin conveying their objections to the Staff’s position and asking him to instead approve the application.

The Trustees maintain that Treasury was wrong to deny the application on this basis, but they say they are encouraged by the fact that Treasury Staff advised the AFM-EPF verbally that it had no issue with any other elements of the MPRA application or the proposed benefit reduction plan.

For more information, follow the link below to view a communication that was sent to the Plan's participants: https://afm-epf.org/Portals/2/AFMDocuments/Pension_Fund_Notes_20200811.pdf

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