- AB5 UPDATE, LOCAL 47
- MUSICIANS’ UNION TO TREASURY: LET US REDUCE BENEFITS IN 2021.
- UNION FAILS TO WIN STREAMING RESIDUALS
- MEMBER COMMENT
…Absolutely
guaranteed anonymity – Former Musician’s Union officer
…The one voice
of reason in a sea of insanity – Nashville ‘first call’
scoring musician
…Allows us to
speak our minds without fear of reprisal – L.A. Symphonic musician
…Reporting
issues the Musicians Union doesn’t dare to mention – National touring musician
Editor’s Comment: As anyone who’s followed the AB5 story knows by now,
The AFM and Local 47 made no request to exempt freelance musicians from AB5. In
fact, they support it. Word is they support it because they think it’ll force
those who’ve gone Fi-Core or are non-union to re-join or join the AFM. That’s
not going to happen, and as you will read below, the AFM and Local’s conduct is
coming home to roost in a big way, affecting us all.
READ ON…….
====================================================
- AB5
Update LOCAL 47
Originally posted December 31, 2019
by AFM Local 47 President John Acosta [johncoz2022]:
Many of you may now have heard of
California legislation AB5 which was created to ensure that most workers in
California are classified as employees, not independent contractors. Introduced
by California Assemblymember Lorena Gonzalez, AB5 was created to incorporate
the Dynamex ruling, which was a California Supreme Court decision from last
year, into state law. That decision limited an employer’s ability to classify
certain types of workers as independent contractors. Some members have asked if
this new law will negatively impact the practice of using loan out companies as
a way of ensuring fair tax treatment for our members. It is our view that AB5
will have no impact on the use of loan outs. AFM Local 47 along with DGA, WGA,
IATSE and SAG-AFTRA have done exhaustive due diligence with counsel to come to
this conclusion.
Another hot topic with AB5 is the
so-called “end of the music business as we know it” tagline that some
organizations are touting. Nothing could be farther from the truth! While AFM
agreements clearly establish that musicians are employees and not independent
contractors, there were many instances where employers attempted to misclassify
musicians. Leading up to the bill’s adoption we worked closely with SAG-AFTRA
to ensure that musicians and singers were properly covered under this new
legislation. With the backing of the California Labor Federation, our
Secretary/Treasurer Gary Lasley along with AFM reps all over California reached
out to elected officials to seek continued support for this important
legislation.
There are current talks underway with
the California legislature and employer partners to clarify AB 5’s impact where
necessary, but AFM Local 47 will always do what is in the best interest of its
members first and foremost.
Whether it is a community orchestra,
small theater, or a live performance, California law requires employers who
hire musicians for performances, which meet the AB5 threshold, to pay the
appropriate taxes and make the necessary withholdings. This way, musicians can
apply for disability, unemployment, Social Security or workers’ comp when
necessary and applicable.
This entry was posted in All News,
Legislative
News (Deadline.com) and tagged AB 5,
AB5
on January
2, 2020.
- Comment on the
site for this story:
January
4, 2020 at 10:12 am
Horrible
stupid bill and shame on the “union” for backing it!!!! The union represents less
than 5% of the music industry but they don’t give a crap about anyone else. I’m
going to-core
- Additional Local 47 member comment:
Really? Someone who has been a desk jockey for nearly
two decades has the balls to tell the rank-and-file the Union is working for
us?!!
==========================================================
2. Musicians Union’s Pension Plan Asks Treasury Department For Permission To Reduce Benefits In 2021
By David Robb (Deadline.com)
VIEW
ALL
January 7, 2020 9:00am
Trustees of the American Federation of
Musicians’
troubled Pension Plan have asked the U.S. Treasury Department for permission to
reduce thousands of musicians’ monthly pension benefits in order to keep the
“critical and declining” Fund from becoming insolvent within the next 20 years.
The Plan is in trouble because as of March, its $3 billion in
liabilities exceeded its $1.8 billion in assets, meaning that the Plan is
underfunded by about $1.2 billion. Ironically, many musicians facing pension
cuts were once employed on films executive produced by Treasury Secretary
Steven Mnuchin, who was a prolific movie producer and investor before joining President Donald
Trump’s Cabinet in
February 2017.
See the
trustees’ FAQ here.
U.S. Department of the
Treasury
The
trusties, who determined that the Plan had entered “critical and declining
status” last April, told their participants today that “This means that the
Plan is projected to run out of money to pay benefits – or become ‘insolvent’ –
within 20 years under the Multiemployer Pension Reform Act (MPRA), a law
enacted in December 2014. Under MPRA, if a fund enters critical and declining
status, the trustees can apply to the U.S. Department of the Treasury for
approval to reduce participants’ benefits by an amount sufficient to avoid
insolvency.
“Although reducing earned benefits will be painful, the trustees
have submitted an application to do so because the alternative of running out
of money would leave participants with a much greater benefit reduction in the
future. The trustees have no other viable way to save the Plan for the long
term – that is to say, realistic investment returns and contribution increases
will not avoid insolvency.”
According to the trustees, nearly half the Plan’s 50,782
participants are expected to see some reduction of benefits beginning early
next year, and some will be harder hit than others. Pensioners who are 80 years
old and older, for instance, won’t see their pensions reduced at all, nor will
those who receive disability pensions. Those who receive relatively small
pensions won’t be affected either, or will be affected the least. The
reductions will fall mostly on younger retirees – current and future – and on
those who receive the largest pensions.
The trustees estimate that 22,753 participants (44.8%) are
expected to see reductions of 20% or less, with 930 (1.8%) seeing reductions of
20-40%. They estimate that 27,099 participants (53.4%) won’t see any reductions
at all.
If approved by Treasury and by the participants, the benefit
reductions, which will kick on Jan. 1, 2021, will affect a broad mix of
musicians who work or have worked in the film and television industry under the
union’s contract with management’s AMPTP; on sound recordings; at symphonies
and operas; on Broadway, and in regional and traveling musical productions.
20,000 Musicians To Receive
“Painful” Pension Cuts To Keep Benefit Fund Solvent
The decision to apply to the Treasury Dept. for benefit reductions
“was painful, but it is essential that we do everything possible to put the
Plan on stronger financial footing,” the trustees told participants today in
personalized statements telling each participant how much, if any, their
benefits will need to be reduced to keep the Plan solvent.
“Doing nothing also results in benefit reductions,” they said. “This
isn’t a choice between reducing benefits and not reducing benefits. It is a
choice between reducing benefits now, or reducing benefits later, but to a
greater extent. No one wants to reduce benefits. But, if we don’t reduce
benefits now, at some point in the future, the Plan won’t have enough money to
pay benefits.”
The Pension Benefit Guaranty Corporation (PBGC), which was created
by an act of Congress in 1974, is supposed to protect multiemployer pension
funds like the AFM’s, but facing a record-breaking deficit of more than $65
billion itself, has said that it could run out of money by 2025.
“The PBGC’s multiemployer program is projected to become
insolvent by 2025,” the trustees noted. “If that happens, then there will be
little to no PBGC guarantee to fall back on. In this scenario, if the Plan
became insolvent, then participants’ benefits would be reduced dramatically.
That’s why it’s so important for us to ensure that the Plan avoids insolvency.
While there is no doubt that benefit reductions for participants will be
difficult, they cannot be worse than the catastrophic reductions that would
take place for participants if the Plan and the PBGC both ran out of money.”
And even though the PBGC’s own financial problems make it an
unreliable guarantor – with more than 100 multiemployer pension plans across
the country currently facing insolvency – they’re required to pay into it,
regardless of their funding status. For 2020, multiemployer plan have to pay
$30 to the PBGC per plan participant – nearly quadrupling from $8 per plan
participant in 2007. For the AFM Plan, that means that its required PBGC
premiums increased from approximately $400,000 a year in 2007 to $1,450,000
last year “due to the enormous increases in the per-participant annual premium,”
the trustees said.
Musicians Union Failed To Win
Streaming Residuals – Its Main Goal In Film & TV Contract Negotiations
“Some legislative proposals in Congress have included significant
increases to PBGC premiums, including a November 2019 proposal by Senators
Charles Grassley and Lamar Alexander,” the trustees said. “If passed, such
increases would drain the assets of troubled plans like the AFM Plan even
faster, thereby hastening possible insolvency. The trustees oppose these
increases.”
“We have a real opportunity to save the Plan,” the trustees said.
“There are a number of other financially troubled plans that are too far gone
to even apply” to the Treasury Dept. for benefit reductions. “We believe that
our proposed reduction will reposition the Plan to be around to pay benefits to
current and future retirees for decades to come.”
But that will require the Plan’s participants to approve the
reductions if Treasury gives the okay. And if everything goes according to
plan, Treasury will post the AFM’s application on its website on Jan. 29, and
will have completed its review of the application by Aug. 11, approving or
denying it. If the application is approved, the Treasury Dept. will mail
ballots to all participants and beneficiaries of deceased participants within
30 days of approval. Voters will then have at least three weeks to cast
ballots, with those who don’t vote being counted as “yes” votes to reduce
benefits. Treasury must then announce the outcome of the vote within seven days
of the voting deadline, and for a plan of benefit reductions to be voted down,
a majority of eligible voters must vote against it, meaning that a low-voter
turnout will guarantee approval.
It’s also possible that Treasury will identify changes that need
to be made in the application before it can be approved. In that case, the Plan
may withdraw the application and resubmit it, which would restart the timeline.
This has occurred for many other pension funds that ultimately have had their
applications approved. “To reduce the likelihood of this scenario,” the
trustees said, “we have had numerous communications with Treasury about its expectations.”
“Nobody wants to see benefits reduced,” the trustees stressed.
“But unless Congress steps in with a legislative solution, something it has so
far refused to do, the options boil down to reduced benefits now or running out
of money and having a much higher reduction in benefits later. We understand
that participants don’t want to hear that we need to take away a portion of the
pension they have been relying on, but that’s the awful choice we face.”
COMMENT ATTACHED TO THE ARTICLE
“Good morning, thanks for calling the AF of M”
Yeah hi, this is runaway scoring calling. I’m here in Seattle,
tomorrow I’ll be in London at Abbey Road with all your musicians. We’re scoring
all your films non union now. I think you might have a long term problem coming
on your hands and I want to give you the heads up”
“I’m sorry, we’re busy at the moment right now with pressing
matters”…click.
===============================
3.Musicians Union Failed To Win Streaming Residuals – Its Main Goal In Film & TV Contract Negotiations
The
American Federation of Musicians failed to achieve its main goal in its
recently concluded negotiations for a new film and TV contract – winning
residuals for musicians’ work on episodic TV shows made for streaming services.
Even so, the 80,000-member union says it will keep fighting for those payments
when the contract comes up for renewal in two years.
The
negotiations with management’s AMPTP
concluded
with a tentative agreement on Friday, but terms of the deal
weren’t released until today.
The
new two-year contract, which still must be ratified by the union’s
members, “includes many substantive improvements and no significant
concessions,” the AFM said, “yet still does not include residuals for work on
films and episodic TV shows made for streaming.”
The union added: “For the first time in history, musicians will receive
screen credits when they perform on theatrical and streamed film scores. Also
for the first time, the proposed deal establishes fair wages and conditions for
high-budget shows made for streaming platforms.”
Other economic improvements include an increase in musician residual
payments for shows rented and purchased online, as well as 3%-a-year wage
increases. According to the union, “Musicians successfully resisted attempts by
the studios to impose unjustified concessions, including those that would allow
studios to score more TV shows and films abroad.”
The AFM added: “While these unprecedented achievements are significant wins
for musicians, their biggest demand — residuals for work in new media — was not
included in the final offer by the Alliance of Motion Picture and Television
Producers. While the studios continue to refuse industry-standard residuals for
new media projects, musicians have made it clear that this is still a priority
and that they will continue to fight for this basic standard.”
AFM president Ray Hair called the deal a temporary “truce” in its ongoing
battle for streaming residuals:
“The campaign for fairness in our
contract with the studios, particularly on the issue of compensation and
residuals for content made for streaming, has energized not only our film and
television musicians in Los Angeles, New York and Nashville, but musicians
throughout the country. The tentative agreement, if ratified, will be viewed as
a short-term truce. While we’ve made meaningful progress on how we are
recognized and treated when we perform scoring sessions for theatrical and long
form new media productions, our musicians’ concerted activity will continue as
the backdrop to our ongoing efforts to obtain fair residual terms whenever we
are engaged to score content made for streaming.”
===========================================
4. MEMBER COMMENT
Great blog! I agree with and support
both articles by Ari and the one with the letter. However, I think the most
compelling article is the one written by the current AFM member. I’ve spoken
with many union members about AB5 and learned that many of them did NOT support
this bill. Very little information was shared prior to September 18, 2019 when
the bill was signed by Governor Newsom. Even after the law was signed, the
majority of music professionals I spoke to knew nothing about the law. If the
AFM was truly “representing” the voice of their members and the music
community, they should have done a much better job at educating everyone about
the impending bill BEFORE it was signed into law. Now we must spend our
precious time and resources complying with the law while also fighting for an
exemption. Great job AFM!
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Until Next Time,
The Committee