3/10/17
PENSION? WHAT PENSION?….
Reports from New York and Los Angeles
I. PENSION MEETING REPORT – NEW YORK
II. PENSION MEETING REPORT – LOS ANGELES
III. Member Comments and Commentary
…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
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I. PENSION MEETING REPORT – NEW YORK
My experience of the local 802 meeting instigated by the Broadway
musicians was as follows: The club room of local 802 was packed
with people standing in the halls trying to get in. Union cards were
checked at the door to make sure that only musicians attended.
Never the less, I saw two AFM staff members at the meeting,
because they had union cards.
Ray Hair, local 802 president and IEB member Tino Gagliardi
were present as were various pension fund trustees. Their
presentation lasted over an hour and had many charts
and graphs. The upshot of their presentation was that the
two economic downturns and the increasing longevity of
the members has put the pension fund in it’s present condition.
Part of their presentation was as justification of the funds
paid to staff and consultants, showing that it was in the main
stream of the investment industry standards.
When musicians finally got to ask questions, the answers
were often less than satisfactory and the crowd sometimes
yelled out, “Answer the Question”. One of the best questions
asked was, “Why did the pension fund say in 2015 that the
fund was solvent until 2040 and then say in 2016 that the
fund was critical”? There never seemed to be an adequate
answer to this question.
That’s about it. Below is an email from a local cellist Scott
Ballantyne. He’s been analyzing the pension fund performance.
I’ll send you some of his other emails. He says it’s alright to
quote him.
+++++++++
Dear Friends,
A brief note on two topics from yesterdays meeting. Note that
I haven’t seen the video yet, but have had many reports on
what transpired. It sounds like the members represented
themselves very well.
Topic One: Pension Fund Comparisons.
It is absurd for our fund managers to use other pension fund’s
lack of performance to justify their own. Your descriptions of
this reminded me very much of the auto industry in 2008.
Our managers sound a lot like the ones from Detroit who
spent years justifying their terrible performance by comparing
themselves to the terrible performance of other U.S. car makers.
But these comparisons weren’t realistic, and as we all know,
the auto industry ended up begging for government intervention,
just as our pension fund has indicated they might do.
The only standard that makes any sense is to pick some kind
of stock index, and see how you do next to that. Much better
investors than our managers do this as a matter of course.
Topic Two: Index Fund Strategies
A quick word on exactly what an index strategy is. An index
is a list of stocks, like the index to a book. Index funds just
invest mechanically in every stock on the list. The larger the
company, the more shares are purchased. They purchase
smaller mounts of smaller companies. This requires no
expertise. It doesn’t require the highly educated and
expensive geniuses at The Fund. All you really need is a
highly trained chimpanzee with a computer. Seriously.
I truly think you could teach a Chimp to do this.
At the meeting, I am told that the Plan’s managers had
the following objections to index fund comparisions and/or use:
1) Index funds have a different fiscal year than the fund,
so comparisons are not fair.
2) They don’t allow the kind of diversity that the fund seeks,
so the fund would be more risky.
Objection one is easy to fix, and objection two is simply
not true. I will agree that the previous chart I sent out
was quick and dirty, and did not fully show the advantages
to our fund of using indexing. I’ll fix all this here.
To fix the fiscal year issue is easy: between 2013-2016,
let’s use quarterly data to compare the exact same point
in time for Index funds and the Pension Fund. There aren’t
quarterly figures available before that, so I made certain to
compare the end of year data from the index fund with the
corresponding figure 3 months later from the fund. While
not perfect, in practice this turns out to be extremely close.
And the comparison is 100% accurate for every point from
2013 on to the present.
To address the diversity issue, I selected a basket of diversified
index funds, covering stocks (domestic and international),
real estate via REITS, and some bond funds. I make this available
to the fund for free. That’s just the kind of guy I am.
Here’s the list:
VFIAX: US Large Cap Stocks
VVIAX: US Large Cap “undervalued” Stocks
VTMSX: Small Cap, with an eye to reducing friction from
taxable gains (this last not an issue for the fund)
VSIAX: Small cap, “undervalued” stocks
VGSLX: REIT (real estate) index fund.
VTMGX: Developed market (non-US).
VTRIX: International “undervalued” developed and emerging
market stocks.
VFSVX: Small cap non-U.S.
VEMAX; emerging markets (i.e. Brazil, Russia, Taiwan, China, others)
VGRLX: International real estate, including (but not only) international REITs.
VSVSX: Short Term U.S. Government Bond (non-inflation protected).
VSIGX: Mid-term U.S. Government Bond (non-inflation protected).
VTAPX: Short-Term inflation procted U.S. Government bonds.
I do not believe the fund is more diversified then this, arguably, it is less.
The final issue we need to deal with is to show the
effect of the re-invested savings that truly make
index funds shine. As I have said, we don’t need
the high priced geniuses at the fund, we can use a
chimpanzee instead. I took a conservative approach:
I took the entire $11 million that the fund currently
spends on outside investing “talent”, added $4
million to that to get $15 million and used that as
our cost savings. That gives us $20 million left to
pay the chimp, so clearly this is being conservative.
We start with this figure, and reinvest it each year.
The compounding of this savings leads to a truly
dramatic result, one which I am sure we would all
be happy with today:
========================================
II. PENSION MEETING REPORT – LOS ANGELES
Hi Editor,
Thanks for posting the informational slides and graphs
from the pension fund meeting!
Member Observer Notes:
Really ….it was a warning meeting.
Assets ( contributions / investments) v. Liabilities (benefits).
On the panel…the folks we pay to assist the “Trustees”.
They did try to provide history and context…and justify the
cost of their services.
Upshot from the panel: WE need YOU…”the membership”
to work together…make all YOUR work Union…
WE need the money!
One member analogized the problem the treatment of a
medical disease.
We have three basic components, 1) Expenses 2) Rate of Return
3) Multiplier that has been way too high. The member asked the
panel…’ How do we prolong our life?’
While the panel claimed too much is unknown at this time to say
what will happen at the end of the March bookkeeping…If the
fund found in “Critical and Declining” status…a reduction in
current and future benefits may be imposed.
(except for those over age 80)
As one member commented, “a haircut today or decapitation
tomorrow.”
One of the few younger members present addressed the panel
…future looks “bleak” no matter how many dollars are added.
Another comment received via e-mail:
the ‘genius’ of the chosen is coming back to haunt them. In
spite of their heavy contributions, the health & pension
funds are primarily financed by the vast majority of members
who have no hope of receiving any benefit. And since the
1%ers have over many years have systematically
disenfranchised the 99%, as the 99%ers go away, so does
the golden egg.
Another member reflected on the meeting by observing that
in our Local many musicians are finding themselves replaced
by USC and Colburn students…thus new membership for
contribution and freezing pension liabilities of the no
longer working older players.
Long Time Member
================================
III. Member Comments and Commentary
Some is up in Seattle either doing a video game or some
trailer music, but prob. a game.
– and what’s up with that current video game contract?
oh wait – Ray hair doesn’t quite get the game industry
yet – 6 years later – fellas – I’m gonna keep sending
these until I see you guys and the AFM address the
runaway from LA recording sessions done by Angeleno
composers that cannot work in this town! and I’m gonna
start posting these everyday on Facebook and call
out the parties that are not doing anything about it –
BTW – this is LA’s work John and Rick and it’s downright
depressing…and the real reason the AFM EPF fund is
upside down – so….still think things are cool?
——————————————————————-
Pretty demoralizing, and there really isn’t a viable solution. However,
despite yours and others warnings, unfortunately I think this was
imminent and bound happen regardless, and I don’t think that
simply getting rid of backend will magically return all the film
recording work to LA, and to think buyouts would return it to
pre-2000 levels is very wishful thinking. And it would take a
LOT more buyout sessions to make the equivalent of what was
paid out on the backend, so as much as hate hate the stranglehold
monopoly RMA has on film recording, it’s not entirely reasonable
to ask anyone, RMA or not, to just lightly agree to a buyout
after decades of an established business model enjoyed by
every other performing union that also gets backend, even
key grips at IATSE. It also makes the AFM look so pitifully
desperate and weak, which, well, it is, but would only add
to fuel to that fire, and allow the AFM to be further taken
advantage of.
“HELP! PLEASE! WE NEED WORK! EVEN CHEAP WORK! ANY
WORK! WE’LL EVEN TAKE A BUYOUT ON MEDIA WORK!!
WE’LL WORK FOR LESS THAN LONDON! REUSE IT AS
MUCH AS YOU WANT! WE DON’T CARE! WE CAN’T
AFFORD TO CARE!!”
You can never negotiate well from a position of weakness,
and I don’t foresee enough of a return in work volume
to compensate for giving up what literally would add
up to millions in future backend payments, (even a
decreased amount of future backend payments.)
And what if AFM did agree to changing all sessions to
buyouts? Eliminating backend is no guarantee of a
return to huge amounts of work, and let’s face it,
gone are those glory days. As you suggest,
backend is only one factor. There’s no escaping
technology, and with the ease and low overhead
of home studio recording eliminating the human
factor. Thus, simply eliminating backend is a very
chancy speculative solution to saving the Union’s
sinking ship, would probably only cause a very
marginal uptick at best in Union-sanctioned
recording at this point, and a dubious guarantee
it would save the pension fund from insolvency.
Once you try changing all recording work to a
buyout, there is definitely NO going back. Union
producers and studio signatories NEVER give
something back that a Union agrees to give up
which is why SAG-AFTRA, WGA, DGA, and IATSE
fiercely hold on to their backend no matter what
and with the help and support of their sister
performing unions. Unfortunately, the AFM
doesn’t get that same kind of fellow-union support
and most composers really don’t have the clout
(or the balls) to demand LA recording.
(Some could fight a little harder, frankly.)
So what happens if agreeing to a buyout doesn’t
result in an appreciable increase in live recording?
It spells a lose-lose. I don’t care how much some
employers claim they’d record here if they didn’t
have to pay backend. Talk is cheap. Prove it-
make this argument less speculative. Lets see the
PGA put forward an actual musicians session
buyout proposal requiring their scoring be
recorded on an AFM contract if they’re serious
that they would discontinue outsourcing recording
sessions to Europe under a buyout agreement.
Let’s not wait for the AFM to propose amount.
Let’s FIRST find out what the PGA proactively would
be willing to pay on a supposed buyout that
would be low enough to incentivize for them a
serious return to record all of the London, etc.
work to LA or at least the US. If they all claim
they’d record more here if there were no backend,
why don’t we see real specifics proposed and
negotiated and put their money where their
mouth is? Because proposing a buyout based
on raw NUMBERS, FACTS and REAL PROPOSALS
vs. get rid of buyouts first and just “hope-for-the-
best SPECULATION” later would most likely expose
that a buyout scale producers would even begin
to consider would be so low as to be unacceptable,
amounting to little more than a fraction of what
musicians are currently earning between session
fees and backend. Even if one might complain
that a disproportionate number of members make
the lion’s share of backend, a drastic paycut
ultimately helps no one, including rank and file.
I think it is a fallacy to believe that an increased
volume in 3 hr. session buyouts would be enough
to make up for the amount of earnings musicians
are being asked to give up.
For all the cynics in our community about LA LA Land,
(which I happened to like apparently more than most
all my music colleagues,) we should be grateful
for it’s success, employing over 100 LA musicians,
and vocalists, and should be cheerleading the success
and popularity of this film in order to encourage studios
to do more of the same. More large-in-scope “original
movie musicals” employing 100’s of musicians for
many recording hours, arranging, orchestrating,
music prep, etc., would be nice. Somehow Chazelle
and composer Hurwitz managed to convince a studio
to do this, despite their thin resumes, and without any
crying over backend payments from their producers.
So let’s cheer for it’s success rather continually artistically
bashing it. It’s self-defeating.
As far as buyout, simply put, no one can make a decent
living on session wages alone even if the volume were to
marginally increase by eliminating backend. Would more
sessions on a buyout mean more work for more members?
I doubt it. Maybe more work, but not more income,
considering how paltry an agreed upon buyout wage
would probably have to be to producers. The only
members who could actually make a living under a
buyout model would still have the lion’s share of the
work going to that same relative few rather than
diluted and spread amongst many. There still wouldn’t
be enough work to open it up for 1000’s of rank and
file musicians even when you remove the backend
payments. The amount of such buyout sessions would
simply be too low in pay and still too infrequent to
keep enough members busy enough to make living wage.
At least that’s how I see it, and I’m sure many disagree.
To be clear, this is not me defending the Union by no
means. They have to answer for where we are.
(I didn’t see any reference to salary cuts as a cost-saving
measure in their presentation, for example.) It’s more
about asking ourselves the question, “will getting rid
of backend really make anything better for everyone,
or just hurt those members who are backend
participants?”
[EC: If the filmmakers are saving the money it would
take to travel to another country, it would be more
likely they would record here. And MANY currently
non-union sessions going on are paying above scale.
It comes down to this. Change nothing, you can say
you’re protecting the system as you DON’T work. Or
change the system and definitely increase work.
The best solution would be a new contract that says,
perhaps, “Any film considered BIG BUDGET by the AFM
signatories (Perhaps above 80 million) Must be done
union IF they are done here, which is no guarantee.
Anything below that should have a buyout option,
with higher pay up front. If they DON’T go overseas
anyway that could make some of the current none
union work union.
As to the pension. There are thousands more taking
out than putting in. If we have the hope of even
slowing down the demise of the AFM, there must be
more work. In Los Angeles that leaves only one option.
Buyouts. without them no increase in union recording
work is possible and everyone’s pension is screwed
within a decade.
And who can you blame for the loss of work?
You know who.
THE COMMITTEE]
—————————————
Far less than 20 years much quicker than that it’s
in the next five most likely
—————————————-
I got up and blasted the investment advisors and
proposed the AFM EPF do a trial basis of INDEX
funds only for a few years to see if they can match
or outperform the actively managed investment
advisors – I basically looked right at them and
said they were not providing a good return on
investment in the biggest bull run since AFTER
the great collapse from the late 1920’s – INDEX
funds have low fees and costs and mirror the
market –
we’re spending 11 mil a year for underperformance? –
i said sorry guys – if we can do index funds we wont
be needing you for awhile – I received a round of
applause from the audience – ask anyone that was there –
======================================
IV. EVENTS
DEAN AND RICHARD
are now at Culver City Elks the first
Friday of
every month.
7:30pm-10:30pm,
11160 Washington Pl.
Culver City, 90232
310-839-8891
————————————-
LA WINDS JAZZ KATS 584
NO COVER, NO MINIMUM.
Every 2nd and 4th Tuesday of the month at
Viva Cantina
7:30-10:00.
900 Riverside Drive,
Burbank.
Free parking across the street at Pickwick Bowl.
Come hear your favorite charts played the way
they
should
be.
We are in the back room called
the Trailside Room.
Come on down.
Guaranteed to swing.
———————————-
3/15/17
Free Admission GLENDALE NOON CONCERT
Wed MARCH 15, 2017 at 12:10-12:40 pm
ARTHUR OMURA Harpsichord Recital.
Thank you!
Sanctuary of Glendale City Church,
610 E. California Ave. (at Isabel St), Glendale, CA 91206.
For more information, email [email protected]
or call (818) 244- 7241.
Thank you!
Jacqueline Suzuki
Curator, Glendale Noon Concerts
818-249-5108
Jacqueline Suzuki
Curator, Glendale Noon Concerts
818-249-5108
—————————
3/18/16
SFV SYMPHONY ORCHESTRA
Mar. 18, 2017 –
Agoura Hills/Calabasas Community Center
Tuttle: By Steam or By Dream Overture
Inaugural Performance
Prokofiev: Symphony #1 in D major (Classical)
Ben-Haim: Pastorale Variée for
Clarinet, Harp and Strings
Geoff Nudell, clarinetist
Beethoven: Romance for Violin and Orchestra
Ruth Bruegger, violinist
++++++++++++++++++++++++++++
Other concerts in the series
May 13, 2017 –
Agoura Hills/Calabasas Community Center
Saint-Saens: Bacchanale from “Samson and Delilah”
Tchaikovsky: Orchestral Suite No. 2 in C major
Egizi: Orchestral Suite
“In Memoria di Mio Padre”
Inaugural Performance
Programs subject to change
——————————————
3/22/17
THE PHIL NORMAN TENTET
Herb Alpert’s Vibrato Grill Jazz
2930 Beverly Glen Circle
Los Angeles, CA.90077
Resevations call 310-474-9400
MARCH 22nd @ 8:00pm
Click here to visit Herb Alpert’s Vibrato Grill Jazz
PLAYING THE MUSIC OF JAZZ GREATS
Stan Kenton, George Shearing, Quincy Jones
Gerry Mulligan, Dave Brubeck,
Horace Silver, Dizzy
and other jazz giants
Performed by some of Los Angeles
finest musicians
————————————-
3/25/17
The Musicians at Play presents
Patrick Williams Big Band Live at the Moss
with special guests Arturo Sandoval and Peter Erskine
Saturday- March 25th, 2017 8:00PM

Click “Buy Tickets” to reserve your tickets up to 12:00 p.m. on the
day of the show (Remaining tickets will be available at door at show time.)
Award-winning composer Patrick Williams presents The Big Band Live!
featuring special guests Arturo Sandoval and Peter Erskine.
VIP – Doors 7:00 p.m. early entry – refreshments
General & Premium – Doors open 7:30 p.m.
Concert starts: 8:00 p.m. (there will be a brief intermission)*
www.musiciansatplay.org
——————————————
3/26/17
LOS ANGELES SYMPHONIC WINDS
Subscription Concert 3 – Calabasas High School
Stars of the Los Angeles Symphonic Winds
Revel in the artistry of some of the LA Winds’ most
acclaimed performers.
-Geoff Nudell and Parker Gaims (now a member of the US Marine Corps Band) play Felix Mendelssohn’s virtuosic Two Concert Pieces. Also on the program will be two works by the LA Winds’ resident composer,
– Charles Fernandez
• Sunday March 26, 2017
• 2:30 p.m. Performing Arts Education Centers.
——————————————
You can read all previous offerings at:
http://www.responsible47.com
UNTIL NEXT TIME,
THE COMMITTEE FOR A MORE RESPONSIBLE LOCAL 47
Where are the pension slides and graphs posted. I was out of town on the date of the meeting.