Exhibit 7.08 

Annual Return Excerpts

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Exhibit 7.09 

Rehabilitation Plan and Updates

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 Fund

American Federation 

of Musicians & 

Employers’ Pension Fund 

P.O. Box 2673

New York, NY 10117-0262

(212) 284-1200

Fax (212) 284-1300

www.afm-epf.org

AMERICAN FEDERATION OF MUSICIANS AND EMPLOYERS’ 

PENSION PLAN

REHABILITATION PLAN

Adopted April 15, 2010, and updated June 27, 2016 

I. INTRODUCTION

The Pension Protection Act of 2006 (“PPA”) requires an annual actuarial status determination for 

multiemployer pension plans including the American Federation of Musicians and Employers’ Pension 

Plan (the “Plan”). On April 15, 2010, the Plan was certified by its actuary, Milliman, Inc. 

(“Milliman”), to be in critical status, also known as the “red zone”, for the plan year beginning on 

April 1, 2010 and ending on March 31, 2011 (the “2010 Plan Year”). The initial certification of 

critical status was based upon the Plan actuary’s determination that the Plan was projected to have an 

accumulated funding deficiency for the plan year ending March 31, 2011. The Plan was further 

certified in critical status each plan year thereafter to date. (The most recent certification as of the date 

of the adoption of the updated Rehabilitation Plan was for the plan year beginning April 1, 2015.) 

The PPA requires that the board of trustees of a multiemployer pension plan that has been certified by 

its actuary as being in critical status develop a rehabilitation plan that is intended to improve the plan’s 

funding over a period of years. A rehabilitation plan sets forth the actions to be taken by the pension 

plan’s trustees, as well as the collective bargaining parties, to enable the plan to emerge from critical 

status or forestall possible insolvency. The rehabilitation plan must be based on reasonably anticipated 

experience and reasonable actuarial assumptions regarding investment income and other experience of 

the plan over a period of future years.1

II. REHABILITATION PLANS GENERALLY

A rehabilitation plan consists of either (i) actions (including increases in employer contributions to, 

and/or reductions in benefits under, the plan) that, based on reasonably anticipated experience and 

reasonable actuarial assumptions, are formulated to enable the plan to emerge from critical status no 

later than the end of a 10-year “rehabilitation period”; or (ii) reasonable measures implemented by the 

plan’s trustees that are expected to enable the plan to emerge from critical status after such 10-year 

period, or to forestall possible plan insolvency, if the trustees determine that, based on reasonable 

 

1

 All of these requirements are set forth in Section 305(e)(3) of the Employee Retirement Income Security Act of 

1974, as amended (“ERISA”) and Section 432(e)(3) of the Internal Revenue Code of 1986, as amended (the 

“Code”).

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actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reasonably be 

expected to emerge from critical status by the end of the 10-year rehabilitation period.2

After extensive deliberations and consultations with Milliman and Plan legal counsel, as well as an indepth review of a variety of possible alternatives, the Board of Trustees of the Plan (the “Board”) 

concluded that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable 

measures, the Plan cannot reasonably be expected to emerge from critical status by the end of a 10-

year rehabilitation period. Further information regarding that conclusion is described in greater detail 

below. 

Accordingly, the Board adopted its initial rehabilitation plan (the “Rehabilitation Plan”) on April 15, 

2010 as the best long-term option for improving the funded status of the Plan and determined that it is 

in the best interest of the Plan and its participants and beneficiaries. The Rehabilitation Plan consists 

of a single schedule, known as the “default schedule” required by the PPA. The Rehabilitation Plan 

originally employed reasonable measures to enable the Plan to emerge from critical status at a later 

date than the 10-year rehabilitation period. As the Plan is currently not projected to emerge from 

critical status, the Rehabilitation Plan now employs reasonable measures to enable the Plan to forestall 

insolvency. 

III. OVERVIEW OF REHABILITATION PLAN

The Rehabilitation Plan consists of a single schedule that sets forth both benefit modifications and the 

employer contribution requirements. Under the PPA, the collective bargaining parties are responsible 

for adopting a contribution schedule consistent with the Rehabilitation Plan. 

The main elements of the Rehabilitation Plan are as follows: 

1. In addition to the reduction in the Plan’s “Benefit Multiplier” that was effective January 

1, 2010, the Rehabilitation Plan eliminates the following benefits and benefit 

alternatives previously available under the Plan: (i) early retirement subsidies; 

(ii) benefit guarantees for the single life annuity; (iii) “pop-up” and benefit guarantee 

features of the 50% joint and survivor annuity; (iv) post-normal retirement age 

subsidies; (v) certain forms of benefit for merged plans; and (vi) the lump sum form of 

benefit offered by the Plan (not including lump sums with an actuarial present value of 

$5,000 or less.). These changes, which generally became effective as of June 1, 2010, 

are described in more detail in Section V below. 

2. The Rehabilitation Plan requires additional employer contributions to the Plan. 

Additional employer contributions are necessary to enable the Plan to forestall 

insolvency after future benefit accruals and other benefits have been reduced to the 

maximum extent permitted by law. The employer contribution requirements are 

described in more detail in Section VI below. 

 

2 The 10-year rehabilitation period begins with the first plan year that begins two years after adoption of the 

rehabilitation plan or, if earlier, the first plan year after expiration of collective bargaining agreements (in effect 

when the actuarial certification for the first critical year was due) covering at least 75% of the plan’s active 

participants, although the rehabilitation plan may be effective before the 10-year rehabilitation period begins. In 

the case of the Plan, the 10-year rehabilitation period begins April 1, 2013. 

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IV. EXTENSION OF AMORTIZATION

The original Rehabilitation Plan also provided that the Board would seek approval from the Internal 

Revenue Service (the “IRS”) for the Plan to obtain a 5-year extension of the period for amortizing 

unfunded liabilities of the Plan pursuant to Section 431(d) of the Code and Section 304(d) of ERISA. 

However, the Rehabilitation Plan was subsequently updated to remove this provision because the 

Trustees instead elected to apply funding relief under the Pension Relief Act of 2010. 

V. BENEFIT MODIFICATIONS

A. Change in Future Benefit Accruals 

The monthly pension benefit payable to participants in the form of a single life annuity 

generally is computed by multiplying each $100 of employer contributions earned by a 

participant by a specified dollar amount (the “Benefit Multiplier”). In anticipation of the need 

to develop a Rehabilitation Plan, the Board decided in October 2009 to reduce the Benefit 

Multiplier for benefits earned under the Plan on and after January 1, 2010 from $2.00 to $1.00 

for benefits beginning at age 65. Corresponding revisions were made to the Benefit Multiplier 

for benefits commencing between the ages of 55 and 64. 

While it is not technically part of the Rehabilitation Plan, the $1.00 Benefit Multiplier was 

adopted in anticipation of the Plan entering critical status. The $1.00 Benefit Multiplier is the 

equivalent of a 1% monthly benefit accrual, which is the minimum rate permitted by a default 

schedule under the PPA. The Board considered the possibility of adopting an alternative 

schedule reducing the Benefit Multiplier below $1.00 in order to enable the Plan to emerge 

from critical status more rapidly. However, after lengthy deliberations, the Board ultimately 

concluded that the same likely effects of reducing the Benefit Multiplier to $1.00 that had made 

that decision so difficult – primarily, the wholly inadequate retirement benefits resulting from 

the reduction, and the consequent incentive for bargaining parties to withdraw from the plan 

and turn to alternative retirement vehicles that provide greater benefits for their contribution 

dollars – were of even greater concern when considering an even further reduction. These 

concerns were exacerbated by the fact that an alternative schedule would be extremely costly, if 

not impossible, to administer, given the large number of employers contributing to the Plan and 

the freelance nature of much of the covered employment.

Since the original Rehabilitation Plan was adopted, the Board and a special committee of the 

Board have attempted to develop other workable benefit structures that might improve the 

financial status of the Plan. Thus far, no structure has been identified that the Trustees consider 

reasonable and consistent with the applicable legal requirements. The Trustees are particularly 

concerned that further benefit reductions would undermine participant and employer support of 

the Plan. 

B. Description of Additional Benefit Modifications

The Rehabilitation Plan requires the additional modifications set forth below effective for 

pension benefit payments with a pension effective date on or after June 1, 2010, including 

participants with respect to whom contributions were not required to be made as of April 15, 

2010. However, these benefit reductions did not apply to pension benefit payments with a 

pension effective date of June 1, 2010 if the initial application for benefits was postmarked (or 

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received in the Fund Office, in the case of applications delivered by fax or by hand) on or 

before February 24, 2010. 

The reductions made by the original Rehabilitation Plan include the following:

1. Elimination of the Early Retirement Subsidy 

For benefits commencing prior to June 1, 2010, the portion of early retirement benefits 

earned by the participant before 2004 included a costly subsidy from the Plan. The 

Rehabilitation Plan eliminated the subsidy. Thus, the Benefit Multiplier for benefits 

beginning at ages prior to 65 (expressed as a single life annuity) is the actuarial 

equivalent of the Benefit Multiplier for benefits beginning at age 65, without any 

subsidy. 

Accordingly, under the Rehabilitation Plan, all benefits are based on the applicable 

Benefit Multiplier per $100 of contributions (rounded to the nearest $100) set forth in 

the chart below. Benefit Multipliers for early retirement benefits (ages 55 to 64) for 

amounts earned beginning in 2004 were never subsidized, so only the shaded Benefit 

Multipliers reflected in column A are adjusted by the Rehabilitation Plan.

A

modified

B

unchanged

C

unchanged

D

unchanged

E

unchanged

Age at 

Pension 

Effective 

Date

Contributions 

earned before 

January 1, 2004 

Contributions 

earned on or 

after 

January 1, 2004 

and before 

April 1, 2007

Contributions 

earned on or 

after 

April 1, 2007 

and before 

May 1, 2009

Contributions 

earned on or 

after 

May 1, 2009 

and before 

January 1, 2010

Contributions 

earned on or 

after 

January 1, 2010 

65 or 

older

$4.65 $3.50 $3.25 $2.00 $1.00

64 $4.16 $3.13 $2.91 $1.79 $0.90

63 $3.75 $2.82 $2.62 $1.61 $0.80

62 $3.36 $2.53 $2.35 $1.45 $0.72

61 $3.04 $2.29 $2.13 $1.31 $0.65

60 $2.75 $2.07 $1.92 $1.18 $0.59

59 $2.48 $1.87 $1.74 $1.07 $0.53

58 $2.26 $1.70 $1.58 $0.97 $0.49

57 $2.05 $1.54 $1.43 $0.88 $0.44

56 $1.86 $1.40 $1.30 $0.80 $0.40

55 $1.70 $1.28 $1.19 $0.73 $0.37

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2. Elimination of the Benefit Guarantee for Single Life Annuity

For pension benefits payable in the form of a single life annuity, there was previously a 

guaranteed payment of 100 times the portion of the monthly pension benefit as of the 

participant’s pension effective date for accruals earned prior to 2004. Under the 

guarantee, if a participant died before receiving a total of 100 times the portion of the 

monthly benefit earned prior to 2004, the designated beneficiary received the balance of 

that amount. The Rehabilitation Plan eliminated the guaranteed payment. Thus, the 

single life annuity under the Rehabilitation Plan provides for monthly payments for the 

life of the retired participant and ceases at the participant’s death.

3. Elimination of the “Pop-Up” Feature of the 50% Joint and Survivor Annuity 

For pension benefits payable in the form of a 50% joint and survivor annuity, if the joint 

annuitant dies before the participant, and within five years of the participant’s pension 

effective date, the portion of the benefit earned prior to 2004 previously increased to 

what it would have been if the participant had elected a single life annuity form of 

benefit. The Rehabilitation Plan eliminated this “pop-up” feature. Accordingly, the 

death of the joint annuitant after the pension effective date no longer has any effect on 

the participant’s monthly benefit. 

4. Elimination of the Benefit Guarantee for 50% Joint and Survivor Annuity 

For pension benefits payable in the form of a 50% joint and survivor annuity, if the 

participant and joint annuitant both die within five years of the participant’s pension 

effective date, the Plan previously paid the participant’s beneficiary the balance of the 

five years of monthly benefit payments on the portion of the benefit earned by the 

participant prior to 2004. The Rehabilitation Plan eliminated this payment guarantee. 

Accordingly, there are no longer any continuing payments after the death of the retired 

participant and his or her joint annuitant. 

5. Elimination of the Post-Normal Retirement Age Subsidy

For participants who begin to receive their pension benefit after normal retirement age 

(generally age 65), the Plan previously paid the amount payable at normal retirement 

age, increased to account for the late commencement using simplified factors. This 

resulted in a benefit that was greater than if it were computed using actuarial equivalent 

factors. Under the Rehabilitation Plan, the benefit payable after normal retirement age 

is increased using the interest and mortality assumptions that achieve actuarial 

equivalence.

6. Elimination of Merged Plan Forms of Benefit 

Under the Rehabilitation Plan, benefits earned by individuals who participated in either 

the AFM Retirement Plan or the AFM-EPF Staff Retirement Plan prior to merger with 

the Plan are paid to these individuals only in the same benefit forms that are generally 

available with respect to benefits under the Plan.

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7. Elimination of Lump-Sum Form of Payment for Retirement Account Benefit

The Plan previously permitted participants to receive a lump-sum payment of the 

amounts attributable to contributions earned before 1968, plus interest (also known as 

the Retirement Account Benefit). This form of payment was eliminated under the 

Rehabilitation Plan.3

VI. EMPLOYER CONTRIBUTION INCREASES

A. Employer Contribution Increases Required under the Rehabilitation Plan

The Rehabilitation Plan requires contributing employers to increase the amount of 

contributions made to the Plan, except for contributions that are not taken into account in 

determining any benefit payable under the Plan. As described in Section VII below, if the 

bargaining parties did not agree to the increased contributions in this Rehabilitation Plan by 

June 1, 2010, the employer is subject to a surcharge required by law that is greater than the 

contribution increases. 

The required increase in the employer contributions is as follows: 

1. Effective for contributions earned on or after June 1, 2010 but before April 1, 

2011, the contribution rate is 104% of the contribution rate otherwise in effect 

under the collective bargaining agreement or expired collective bargaining 

agreement.4

2. Effective for contributions earned on or after April 1, 2011 and thereafter, the 

contribution rate is 109% of the contribution rate otherwise in effect under the 

collective bargaining agreement or expired collective bargaining agreement 

(excluding the 4% increase, which is not cumulative). 

3. To the extent an employer’s contributions are calculated as set forth in the 

arbitration award of Burton Turkus (the “Turkus Award”): 

a. the 104% and 109% required contribution amounts set forth in 

paragraphs 1. and 2. are based on 100% of the contributions calculated as 

set forth in the Turkus Award (or, if greater, 100% of the minimum 

contribution rate set forth in the employer’s collective bargaining 

agreement) plus an additional 4% or 9% (as applicable) of the minimum 

contribution rate set forth in the employer’s collective bargaining 

agreement. 

b. However, if the employer had a complete or partial withdrawal from the 

Plan, or is otherwise terminated as a contributing employer by the Board, 

 

3

 The Plan does not provide for any other lump-sum benefits other than those benefits with an actuarial present 

value of $5,000 or less.

4

 Contributions are considered earned in accordance with the normal Plan procedures for crediting contributions. 

For live work, it is generally the date of the performance.

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on or before March 31, 2015, the employer must pay, within ten business 

days of the date on which the Plan sends the employer a written invoice, 

contributions (retroactive to June 1, 2010) calculated based on 104% or 

109% (as applicable) of the contributions calculated as set forth in the 

Turkus Award (or, if greater, 100% of the minimum contribution rate set 

forth in the employer’s collective bargaining agreement), less any 

additional contributions already paid under subparagraph (a) above, plus 

interest calculated at an annual rate of 8%. 

4. In the case of single engagement agreements, the contribution rate otherwise in 

effect under the collective bargaining agreement shall be deemed to be a rate 

that is no less than the average of the contribution rates in all of the agreements 

submitted to the Plan by the employer (or by the bandleader, if the bandleader is 

the payor) during calendar year 2009, where the employer or bandleader 

submitted five or more single engagement agreements during calendar year 

2009. 

5. Effective in the sixth year of any collective bargaining agreement entered into 

on or after May 1, 2010 that establishes pension contributions for a term of more 

than five years (including extensions), the contribution rate will increase an 

additional 25% above the contribution rate otherwise applicable to those 

contributions (and the portion of the increase above 9% will not generate benefit 

accruals).

The increased contributions are generally treated the same as all other employer contributions, 

so they are payable on the same schedule as the contributions on which the increase is based 

and will generate benefit accruals for participants (except as noted in paragraph 5. above). 

B. Effective Date of Contribution Increases

Unless otherwise specifically provided herein, the contribution increases required by the 

Rehabilitation Plan become effective upon the earlier of: 

1. the effective date of a collective bargaining agreement (or an amendment to that 

collective bargaining agreement) that adopts a contribution schedule that 

contains terms consistent with the Rehabilitation Plan contribution schedule, or 

2. 180 days after the expiration date of a collective bargaining agreement providing 

for contributions to the Plan that was in effect on April 1, 2010, if by such date 

the bargaining parties have failed to adopt a contribution schedule that contains 

terms consistent with the contribution schedule set forth in this Rehabilitation 

Plan.

If the collective bargaining agreement had an expiration date before April 1, 2010 and no 

successor agreement was yet in effect on that date, the contribution schedule must have been 

adopted by September 28, 2010 (180 days from April 1, 2010). 

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C. No Decrease Permitted in Employer Contributions Otherwise Required

The Board previously announced that the contribution rates in any collective bargaining 

agreement may not be decreased.

5

 Accordingly, the contribution rate in a collective bargaining 

agreement may not be decreased to avoid application of the contribution rate increase under the 

Rehabilitation Plan. 

VII. EMPLOYER SURCHARGES

The PPA requires that mandatory “surcharges” be imposed on every contributing employer beginning 

30 days after the date on which the PPA-required notice of critical status is provided to the employer – 

in this case, surcharges began June 1, 2010 – and continuing until the employer’s collective bargaining 

agreement(s) (or other agreement(s) pursuant to which it is contributing) is amended to incorporate a 

contribution schedule that contains terms consistent with the Rehabilitation Plan. 

The amount of the surcharge is as follows: 

1. Effective for contributions earned on or after June 1, 2010 and before April 1, 2011, the 

surcharge was 5% of the employer’s contributions to the Plan; and 

2. Effective for contributions earned on or after April 1, 2011, the surcharge is 10% of the 

employer’s contributions to the Plan. The 10% surcharge remains in effect for each 

plan year in which the Plan remains in critical status. 

The surcharge is due and payable on the same schedule as the contributions on which the surcharges 

are based. Surcharges are over and above the required employer contributions and, consistent with 

law, will not generate any benefit accruals for participants. 

Where the bargaining parties failed to adopt the contribution schedule in the Rehabilitation Plan by 

June 1, 2010, the employer remains subject to all surcharges imposed under the PPA until such time as 

the bargaining parties adopt provisions (or, if later, such time as those provisions take effect) in the 

employer’s collective bargaining agreement that contain terms consistent with the Rehabilitation Plan 

schedule. No retroactive amendments are permitted. If there is an unreasonable delay in providing the 

Fund Office with an executed agreement that contains terms consistent with the Rehabilitation Plan 

schedule, the adoption date will be treated as the date of receipt by the Fund Office and the surcharge 

will be imposed through that date. 

The law provides that employers on whom the Rehabilitation Plan contribution schedule is imposed 

(e.g., because the bargaining parties have not adopted the Rehabilitation Plan contribution schedule 

 

5

 Specifically, an employer and a collective bargaining agreement is not acceptable to the Board in the event that: (i) 

in the case of a collective bargaining agreement the terms of which were in effect (by agreement or operation of 

law) on October 15, 2009, the effective contribution rate applicable to any period of that collective bargaining 

agreement is reduced (by agreement or otherwise on or after October 16, 2009); or (ii) in the case of any future 

extension of or successor to any collective bargaining agreement the terms of which were in effect (by agreement 

or operation of law) on October 15, 2009, the effective contribution rate is reduced to a rate that is lower than the 

effective contribution rate in effect on the last day of the expiring collective bargaining agreement (based on the 

terms of the collective bargaining agreement as they existed on October 15, 2009).

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within 180 days after expiration of the collective bargaining agreement) will remain subject to the 

surcharges imposed under the PPA until such time as the collective bargaining parties adopt provisions 

in their collective bargaining agreements that contain terms consistent with the Rehabilitation Plan 

schedule. Thus, under the law, such employers would be subject to both the Rehabilitation Plan 

contribution schedule and the surcharge. 

VIII. REHABILITATION PLAN OBJECTIVES

The original Rehabilitation Plan consisted of reasonable measures adopted by the Board which, based 

on reasonable actuarial assumptions, were expected to enable the Plan to emerge from critical status at 

a later time than the end of the 10-year rehabilitation period. At the time the Rehabilitation Plan was 

adopted by the Board, the Plan was estimated to emerge from critical status no later than March 31, 

2047. 

Currently, Milliman does not project that the Plan will emerge from critical status. Accordingly, the 

objective of the Rehabilitation Plan is to take reasonable measures to forestall possible insolvency. 

These projections were based on the Plan’s actuarial assumptions, including achieving the 7.5% annual 

investment return assumption and, as required by law, do not take into account the possibility of 

investment returns achieved by the Plan in excess of that amount. Whether the Plan will continue to 

remain solvent over the long term depends most on its investment performance over time and also on 

the total amount of contributions made to the Plan. 

IX. ALTERNATIVES CONSIDERED BY THE BOARD

At the time it adopted the Rehabilitation Plan, the Board devoted a considerable amount of time and 

attention to considering the advantages and disadvantages of the alternatives that would enable the 

Plan to emerge from critical status by the end of the 10-year rehabilitation period. Some of the 

alternatives that were considered by the Board would have required at least 58% increases in employer 

contribution rates to emerge from critical status by the end of the 10-year rehabilitation period (even 

without corresponding increases in benefit accruals and with the benefit reductions described in 

Section V above).6 The contributions that would be required to meet this goal are far higher now. 

After considering these alternatives when designing the Rehabilitation Plan, the Board concluded that 

each would be unreasonable and would involve considerable risk to the long-term health (and even 

viability) of the Plan. In that regard, the original Rehabilitation Plan stated the following:

“In reaching this conclusion, the Board took into account various considerations, including the 

following: 

1. The near-impossibility of emerging from critical status at the end of the 10-year 

rehabilitation period in view of the significant investment losses suffered by the Plan 

over the two plan years ended on March 31, 2009. The collapse of the financial 

markets in 2008 resulted in the Plan’s experiencing the worst investment losses in its 

 

6

 Specifically, the Board considered that a 58% contribution rate increase (or 91%, if the increase generated a 

benefit accrual) would have been required if the same benefit changes described in Section V, above, were 

adopted. In addition, the Board considered that the contribution rate increase would need to be 76.75% (120.5% if 

benefit accrual generating) if the benefit changes were not adopted.

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50-year history over these two plan years. As compared to the asset level that was 

projected by Milliman over this period based on the Plan’s assumed investment return 

of 7.5%, the Plan’s assets declined by 40% or nearly $900 million. As a result of this 

decline in value, the Plan’s funded percentage (using the fair market value of assets), 

which was 108.5% as of April 1, 2007, declined to 62.6% as of April 1, 2009 and then 

increased to 72.8% as of April 1, 2010. 

2. The impact of the severe economic decline in 2008 and 2009 on the music industry. 

Overall, employer contributions to the Plan during 2009 declined by 7% from the 

previous year. Many of the contributing employers to the Plan are small organizations 

that do not have the financial resources to withstand the economic downturn. Of 

course, they are not alone. Larger contributors are also undergoing considerable 

economic stress as a result of the severe recession. As simply one example of the 

unprecedented problems afflicting the live music industry, many symphony orchestras, 

which together make up more than 40 percent of annual Plan contributions, are in 

significant financial distress.7 The recorded music industry is in substantial economic 

distress as well. Sales of recorded music have been declining substantially for the past 

decade and all of the major record companies that contribute to the Plan have 

experienced large-scale layoffs; this downward trend is expected to continue by all 

accounts for the foreseeable future. The theatrical motion picture and television 

industries have also experienced significant restructuring and layoffs as a result of the 

economic downturn. On Broadway, producers have been under increased pressure to 

keep capitalization costs down, resulting in fewer musicals with smaller orchestras. 

3. Even if certain contributing employers could financially withstand the enormous 

contribution increases under the alternative schedules described above, the Board 

believes that neither the participants nor contributing employers would find continuing 

value in participating at those rates in a retirement plan that has reduced accrual rates 

and eliminated adjustable benefits to the maximum extent permitted under the law.8 

4. In addition, the magnitude of the employer contribution increases required by the 

alternative schedules would likely have resulted in lower negotiated wages for 

participants and/or decreased employer contributions to other benefit plans covering 

these participants (such as the plan providing their health benefit coverage). If 

participants perceive a significant decrease in value in their total overall compensation 

– including wages, pension benefits and health benefits – the Board concluded that they 

would be likely to encourage their employers to withdraw from the Plan. Thus, the 

 

7

 All orchestras are non-profit organizations and most depend on donations and endowment income for the majority 

of their income. These particular revenue sources have declined significantly as a result of the recent economic 

crisis. Many orchestras have been driven close to bankruptcy and some have gone out of business altogether. 

Most, including some of the nation’s oldest and most prominent symphony orchestras, are negotiating wage 

freezes and wage reductions. 

8

 As merely one example, the Board concluded that it was unlikely that contributing employers will pay the required 

contribution increases to maintain the current plan of benefits under one of the alternative schedules considered by 

the Board. As employers’ contribution payments are increased to levels that exceed their annual withdrawal 

liability payment amounts, the Board is concerned that employers would respond by completely and/or partially 

withdrawing from the Plan.

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Board concluded that a further reduction in benefits would be inconsistent with the goal 

of presenting a viable plan with ongoing value to active participants. Such action could 

also lead to increased employer withdrawals or reductions in contributions, as the 

collective bargaining parties would see less benefit to ongoing participation. 

5. The Plan is maintained pursuant to thousands of collective bargaining agreements 

negotiated by the American Federation of Musicians of the United States and Canada 

(the “AFM”) or one of the AFM’s 145 local unions. The AFM does not have the ability 

to require its local unions to make ongoing participation in the Plan a core principle in 

contract negotiations. 

6. The Board also considered other methods of calculating the Plan’s liabilities. The 

implementation of one such method, known as the “shortfall method” of amortizing the 

liabilities of the Plan, could have the effect of causing the Plan not to be in critical 

status for the plan year beginning April 1, 2010. However, the Board concluded that 

entering critical status was inevitable and implementing this actuarial technique would 

only require even more severe benefit and contribution modifications in the future to 

protect the Plan’s long-term viability.

7. The Board also considered eliminating early retirement benefits entirely (such that 

participants would not be permitted to receive retirement benefits prior to age 65, even 

on an actuarially equivalent basis) and eliminating pre-retirement death benefits for 

non-spousal beneficiaries. However, the Board chose not to do so due to (i) the Plan 

actuary’s conclusion that the actuarial impact of eliminating these benefits would be de 

minimis and (ii) the administrative costs associated with these changes.” 

Each year since the adoption of the Rehabilitation Plan, the Board and a special committee of the 

Board have continued to assess the Plan’s funded status and have confirmed the original conclusion 

about the alternatives considered. Based on its experience in the industry and in negotiating collective 

bargaining agreements that include contribution obligations to the Plan, regardless of the employer size 

and financial strength, contribution rates and benefits are such that a further increase in contributions 

or reduction in benefits would create an unreasonable risk that contributing employers would seek to 

negotiate withdrawals from the Plan at a substantially increased rate, and that an increased number of 

bargaining units would cease their efforts to negotiate agreements requiring contributions to the Plan. 

The Board therefore concluded that requiring annual contribution increases above the level currently 

required or reducing benefits below the level currently provided would not be reasonable and would 

accelerate a possible insolvency of the Plan, rather than forestall it. 

X. DELINQUENT EMPLOYER CONTRIBUTIONS/WITHDRAWAL FROM THE PLAN

A contributing employer’s failure to contribute to the Plan timely at the rates required by the 

Rehabilitation Plan schedule (once agreed to or imposed) will result in the deficient amounts being 

treated as delinquent employer contributions under the Plan. In addition, the contributing employer 

will be subject to excise taxes (equal to 100% of the unpaid contributions) as provided under the PPA. 

Additionally, this may result in a determination by the Board that the employer has failed to maintain 

(and thus has withdrawn from) the Plan, in which case such employer will then be subject to 

withdrawal liability under the terms of the Plan and Title IV of ERISA. Further, under the PPA, any 

failure to make a surcharge payment will also be treated as a delinquent contribution.

www.afm-epf.org 07-01-2016 AFMEPF1409
 

- 12 - 

XI. NOTICE GIVEN BEFORE BENEFIT REDUCTIONS BECOME EFFECTIVE

Pursuant to Section 432(e)(8)(C) of the Code, notice was given at least 30 days before the general 

effective date of the reduction in adjustable benefits under the Plan. 

XII. NON-COLLECTIVELY BARGAINED PARTICIPANTS

In the case of an employer that contributes to the Plan on behalf of both collectively bargained and

non-collectively bargained participants, the contributions for, and the benefits provided to, the noncollectively bargained employees, including surcharges on those contributions, were determined as if 

those non-collectively bargained participants were covered under such employer’s first-to-expire 

collective bargaining agreement that was in effect on April 1, 2010. 

In the case of an employer that contributes to the Plan on behalf of non-collectively bargained 

employees only, the rules contained in this Rehabilitation Plan shall be applied as if the employer were 

the bargaining party, and its participation agreement (or other operative agreement) were a collective 

bargaining agreement with a term ending on the first day of the plan year beginning after the employer 

is provided with the Rehabilitation Plan (i.e., generally April 1, 2011). 

XIII. APPLICATION OF REHABILITATION PLAN TO FUTURE AGREEMENTS

If a collective bargaining agreement providing for contributions to the Plan in accordance with the 

Rehabilitation Plan schedule expires while the Plan is still in critical status and the bargaining parties 

to the agreement fail to adopt a contribution schedule with terms consistent with the updated 

Rehabilitation Plan and its contribution schedules, then the contribution schedule under the expired 

collective bargaining agreement (as updated and in effect on the date the collective bargaining 

agreement expires) is implemented 180 days after the date on which the collective bargaining 

agreement expires. 

XIV. REHABILITATION PLAN STANDARDS

The PPA requires that a plan set forth annual standards for meeting the requirements of its 

rehabilitation plan. However, the PPA does not define the standards applicable to a rehabilitation plan, 

such as this Rehabilitation Plan, that is not designed to emerge from critical status at the end of the 10-

year rehabilitation period. 

Based on reasonable assumptions, Milliman currently projects that, if the Plan meets its current 

assumptions, the Plan will remain solvent over Milliman’s 20-year projection period. Longer-term 

projections show that insolvency may occur after that 20-year period, but Milliman has advised that 

projections that far into the future are less likely to be accurate. 

Accordingly, this projection will change over time, as the Plan’s actual experience differs from the 

assumptions that were made to develop the projection. The Board recognizes the possibility that the 

Plan’s actual experience could be more or less favorable than the assumptions used as the basis for 

developing the Rehabilitation Plan. The Board also recognizes the need to review and update the 

Rehabilitation Plan on an annual basis. Consequently, the Board will rely on an annual updated 

assessment regarding this projection as the basis for evaluating the Plan’s progress under this 

Rehabilitation Plan, and the annual standard for meeting the requirements of the Rehabilitation Plan 

will be a demonstration, based on the updated actuarial projections each year using reasonable 

www.afm-epf.org 07-01-2016 AFMEPF1410
 

- 13 - 

assumptions, that the Rehabilitation Plan (as amended from time to time and as then currently in 

effect) will forestall insolvency until at least the end of the 10-year rehabilitation period. 

XV. ANNUAL REVIEW AND UPDATE OF REHABILITATION PLAN

Milliman will annually report to the Board regarding the Plan’s progress in meeting this annual 

standard. The Board may make any changes to this Rehabilitation Plan that it deems necessary or 

advisable. 

XVI. CONSTRUCTION AND MODIFICATIONS TO THIS REHABILITATION PLAN

This Rehabilitation Plan is intended to present only a summary of the law, the Plan and the changes to 

the Plan. It is not intended to serve as an exhaustive, complete description of the law, the Plan or the 

modifications discussed herein.9 

The Board reserves the right, in its sole and absolute discretion, to construe, interpret and/or apply the 

terms and provisions of this Rehabilitation Plan in a manner that is consistent with the PPA and other 

applicable law. Any and all constructions, interpretations and/or applications of the Plan (and other 

Plan documents) or the Rehabilitation Plan by the Board, in its sole and absolute discretion, shall be 

final and binding on all parties affected thereby. Subject to the PPA and other applicable law, and 

notwithstanding anything herein to the contrary, the Board further reserves the right to make any 

modifications to this Rehabilitation Plan that they, in their sole and absolute discretion, determine are 

necessary and/or appropriate (including, without limitation in the event of any omission or the issuance 

of any future legislative, regulatory or judicial guidance). 

 

9

 The terms of the official plan documents will govern in the event of any contradiction between this notice and the 

Plan documents as adopted to incorporate the changes to the Plan described herein. 

www.afm-epf.org 07-01-2016 AFMEPF1411
AMERICAN FEDERATION OF MUSICIANS AND EMPLOYERS’ PENSION PLAN

UPDATE TO REHABILITATION PLAN

June 2018

The Rehabilitation Plan contribution schedule has been updated to require a 10% increase in the rate of 

contributions to the American Federation of Musicians and Employers’ Pension Plan (the “Fund”), as 

described in greater detail below. This increase is in addition to the 9% additional contribution previously 

required by the original 2010 Rehabilitation Plan. This means for all successor collective bargaining 

agreements, the contribution rate for contributions made on scale wages must increase by 10%, to 110% 

of the current contribution rate.

1. Required effective date of change

This increase must be included in the successor to any collective bargaining agreement (or extension of 

that collective bargaining) that expires on or after August 1, 2018. 

This increase must be effective on the effective date of the successor agreement (but no later than the 

Automatic Effective Date described below).

Example: A collective bargaining agreement expires on December 31, 2018. On April 1, 2019, 

the bargaining parties agree to an agreement with a retroactive general effective date of January 1, 

2019. The effective date of the increase must be no later than January 1, 2019.

Example: A collective bargaining agreement expires on December 31, 2018. On April 1, 2019, 

the bargaining parties agree to an agreement with an effective date of April 1, 2019. The 

effective date of the increase must be no later than April 1, 2019.

Treatment of Extensions

Any extension agreed to on or after August 1, 2018 will be disregarded in determining the expiration date 

of a collective bargaining agreement in effect on July 31, 2018 for purposes of the required contribution 

increase. 

Example: On July 31, 2018, a collective bargaining agreement provides that it expires on 

September 30, 2018. On August 1, 2018, the bargaining parties agree to extend the collective 

bargaining agreement’s term through October 31, 2019. Because the extension was agreed to on 

or after August 1, 2018, the collective bargaining agreement is treated as expired on September 

30, 2018 for the purposes of the requirement to increase the contribution rate.

If an expired collective bargaining agreement was extended prior to August 1, 2018 and the extension 

expires by its terms on a specific calendar date on or after August 1, 2018, the contribution increase will 

not be required until the extension expires (or, if earlier, the effective date of the successor agreement). 

Bargaining parties must submit to the Fund Office by August 15, 2018 documentation evidencing 

the existing extension. 

If an expired collective bargaining agreement was extended prior to August 1, 2018 but the extension 

does not expire by its terms on a specific calendar date (for example, it extends until a new collective 

AFMEPF1412
2

bargaining agreement is reached), the agreement will be deemed to have expired on August 1, 2018 for 

the purposes of the required increase.

Agreements Without Specific Expiration Dates

If a collective bargaining agreement or extension in effect on July 31, 2018 does not expire on a specific 

calendar date, it will be deemed to have expired on August 1, 2018 for the purposes of the required 

increase.

If a collective bargaining agreement, by its terms, automatically renews for an additional term absent 

notice to the contrary, it will be deemed to have expired the day before the next automatic renewal date

for the purposes of the required increase. 

Already Expired Agreements

If a collective bargaining agreement or extension expired prior to August 1, 2018 but a successor 

agreement or extension has not been agreed to prior to August 1, 2018, the collective bargaining 

agreement or extension will be deemed to have expired on August 1, 2018 for the purposes of the 

required increase.

Contributions for Non-Collectively Bargained Employees

In the case of an employer that contributes to the Fund on behalf of non-collectively bargained employees 

in accordance with a participation or other agreement with the Fund, the contribution increase will be 

required immediately following the expiration of the participation agreement in effect on July 31, 2018. 

New Use/Reuse of Media Content

In the case of a new use or reuse of media content for which the contribution rate remains governed by an 

expired collective bargaining agreement, the contribution increase will take effect on February 1, 2019.

Contracts Agreed to Prior to July 1, 2018 Subject to Ratification

If the bargaining parties of an agreement that expires on or after August 1, 2018 have agreed to the terms 

of a successor agreement prior to July 1, 2018, but the successor agreement is still subject to ratification,

then the successor agreement will not be subject to the 10% increase as long as it is ratified prior to 

September 1, 2018. The 10% increase will instead apply to the next successor or extension after that one.

Bargaining parties must submit to the Fund Office by August 15, 2018 documentation evidencing 

the bargaining parties’ agreement and the scheduled date for ratification. 

2. Automatic Effective Date

The required increase will automatically take effect on the date that is 180 days after the expiration or 

deemed expiration of the collective bargaining agreement or extension, if the bargaining parties (or the 

parties to the participation agreement, in the case of non-collectively bargained employees) have not 

agreed to the required increase by that date.

AFMEPF1413
3

3. Amount of increase

The increase is a 10% increase in the contribution rate in effect when the collective bargaining agreement

expires, including any previous negotiated increases (including previous increases required by the 

Rehabilitation Plan). The final rate derived is rounded to the nearest hundredth of one percent.

Example: If an expiring collective bargaining agreement provides for an 8.72% contribution rate 

(8.0% being the original contribution rate and 0.72% being the 9% increase previously required 

by the Rehabilitation Plan), the successor agreement must contain a rate of at least 9.59% (8.72% 

x 110%).

The increase in contribution rate required by this Update applies to contributions based on scale wages. It 

does not apply to contributions that are not based on scale wages or do not result in increased benefits 

under the Fund’s plan of benefits. 

Turkus Award 

To the extent an employer’s contributions are calculated as set forth in the arbitration award of Burton 

Turkus (the “Turkus Award”), the required contribution amount will be (i) 100% of the contributions 

calculated as set forth in the Turkus Award (but no less than 100% of the minimum contribution rate set 

forth in the employer’s collective bargaining agreement) plus (ii) 19.9% of the minimum contribution rate 

set forth in the employer’s collective bargaining agreement (which represents the cumulative 9% and 10% 

increases on the minimum).

Single Engagements

For employers or bandleaders (if the bandleader is the payor) who have in the past submitted one or more

single engagement agreements, the contribution rate in any new single engagement agreement must be at 

least 10% higher than the rate specified in the wage scale book for the applicable Local Union or, if none, 

in the last single engagement agreement submitted for the period prior to August 1, 2018.

4. Effect on Benefits

Amounts paid to the Fund as a result of the 10% increase in the contribution rate will be used solely to 

improve the financial health of the Fund. Those amounts will not be considered when calculating a 

pension benefit and therefore will not increase future benefit payments to participants.

Example: Assume a participant has scale wages of $5,000, the expiring collective bargaining 

agreement provides for an 8.72% contribution rate (8.0% being the original contribution rate and 

0.72% being the 9% increase previously required by the Rehabilitation Plan), and the new 

successor agreement contains a rate of 9.59% (8.72% x 110%). In that case, the employer will 

pay contributions of $479.50 ($5,000 x 9.59%), but the participant’s benefit amount earned in the

year of the successor agreement will be based on contributions of $436.00 ($5,000 x 8.72%).

5. New Employers

A new contributing employer to the Fund under a new collective bargaining agreement will be required to 

pay the contribution rate set forth in the new collective bargaining agreement. However, 9.09%1 of the 

 

1 The June 22, 2018 version of this Update rounded this percentage to 9.1%. This is the precise number. 

AFMEPF1414
4

contribution rate (which is equivalent to the 10% increase for existing employers) will not be considered 

when calculating a pension benefit and therefore will not increase benefit payments to participants. As 

described below, it will also generally be disregarded in determining the amount of, and payment 

schedule for, withdrawal liability.

If a new contributing employer to the Fund becomes obligated under an existing collective bargaining 

agreement for which the 10% increase is effective, the employer will be required to pay the full 

contribution rate (including the portion representing the 10% increase) in the collective bargaining 

agreement. The portion of the contributions representing the 10% increase will not be considered when 

calculating a pension benefit and therefore will not increase benefit payments to participants.

6. Delinquent Contributions and Withdrawal Liability

A contributing employer’s failure to contribute to the Fund timely at the new rate required by this Update 

to the Rehabilitation Plan (once effective) will subject the contributing employer to the remedies imposed 

on delinquent employers. The failure will also subject the contributing employer to excise taxes (equal to 

100% of the unpaid contributions) as provided under the Pension Protection Act of 2006. Additionally, 

this may result in a determination by the Board that the employer has failed to maintain (and thus has 

withdrawn from) the Fund, in which case such employer will then be subject to withdrawal liability.

Employers should note that the 10% increase in the contribution rate is considered required by the 

Rehabilitation Plan under Section 432(g)(3) of the Internal Revenue Code. Therefore, generally speaking,

for withdrawal liability purposes, the increase in the contribution rate is disregarded in determining the 

allocation of unfunded vested benefits to an employer used to determine the employer’s withdrawal 

liability. It is also disregarded in determining the employer’s highest contribution rate for the purposes of 

determining the payment schedule for withdrawal liability in the event of a withdrawal.

7. Decreases in Contribution Rates Not Permitted

The Board previously announced that the contribution rates in any collective bargaining agreement may 

not be decreased. Accordingly, the contribution rate in a collective bargaining agreement may not be 

decreased to avoid application of the contribution rate increase under the Rehabilitation Plan. See this link 

for further information regarding the Fund’s policies in this regard:

(http://afm-epf.org/RateReduction.aspx).

AFMEPF1415
Exhibit 7.10 

Valuation Reports 

AFMEPF1416
Milliman Actuarial Valuation

Issued November 8, 2018

American Federation of Musicians & 

Employers’ Pension Fund

April 1, 2018 Actuarial Valuation

Prepared by:

Kevin M. Campe, EA, MAAA

Principal and Consulting Actuary

Robert A. Behar, FSA, EA, MAAA

Principal and Consulting Actuary

Timothy J. Herman, FSA, EA, MAAA

Principal and Consulting Actuary

Milliman, Inc.

71 South Wacker Drive

Suite 3100

Chicago, Illinois 60606

Tel +1 312 726 0677

Fax +1 312 726 5225

milliman.com

AFMEPF1417
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation i

American Federation of Musicians & Employers’ Pension Fund

April 1, 2018 Actuarial Valuation of the

American Federation of Musicians & Employers’ Pension Fund

The actuarial valuation of the American Federation of Musicians & Employers’ Pension Fund (the “Plan”) for the 

plan year beginning April 1, 2018 has been completed in accordance with our understanding of the minimum 

funding requirements under ERISA and the Pension Protection Act of 2006 as well as the applicable sections of 

the Internal Revenue Code (IRC), including all regulations and guidance issued to date. It also has been 

completed in accordance with our understanding of FASB ASC Topic 960 for determining plan accounting 

requirements. The valuation results contained in this report are based on the actuarial assumptions and the 

actuarial methods (Appendix A), and principal plan provisions (Appendix B) summarized in the appendices.

Purpose of the Valuation

In general, the actuarial valuation determines the current level of employer contributions that, taking into account

prior funding, will accumulate assets sufficient to meet benefit payments and administrative expenses when due

under the terms of the Plan. This report has been prepared for the American Federation of Musicians & 

Employers’ Pension Fund as of April 1, 2018 to: 

 Calculate the Minimum Required Contribution for the plan year beginning April 1, 2018.

 Calculate the Maximum Deductible Contribution for the 2018 fiscal year.

 Determine the actuarial Present Value of Accumulated Plan Benefits as of March 31, 2018 for purposes of 

disclosing the Plan’s liabilities under FASB ASC Topic 960.

 Determine the Plan’s unfunded vested benefit liability as of March 31, 2018 for withdrawal liability purposes 

calculated in accordance with the requirements of the Multiemployer Pension Plan Amendments Act of 1980.

 Review the Plan’s funded status.

 Review the experience for the plan year ending March 31, 2018, including the performance of the Plan’s 

assets during the year and changes in the Plan’s participant demographics that impact liabilities.

 Provide operational information required for governmental agencies and other interested parties.

Limited Distribution

Milliman’s work is prepared solely for the internal business use of the Board of Trustee of American Federation of 

Musicians & Employer’s Pension Fund and the Plan’s Trustees and may not be provided to third parties without 

our prior written consent. Milliman does not intend to benefit or create a legal duty to any third party recipient of its 

work product. Milliman’s consent to release its work product to any third party may be conditioned on the third 

party signing a release, subject to the following exceptions:

 The Plan Sponsor may provide a copy of Milliman’s work, in its entirety, to the Plan’s professional service 

advisors who are subject to a duty of confidentiality and who agree to not use Milliman’s work for any purpose 

other than to benefit the Plan.

 The Plan Sponsor may distribute certain work product that Milliman and the Plan Sponsor mutually agree is 

appropriate as may be required by the Pension Protection Act of 2006.

Any third party recipient of this work product who desires professional guidance should not rely upon Milliman’s 

work product, but should engage qualified professionals for advice appropriate to its own specific needs.

Reliance

In preparing this report, we relied, without audit, on information (both written and oral) supplied by the Fund 

Administration office. This information includes, but is not limited to, plan documents and summaries, participant 

AFMEPF1418
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation ii

American Federation of Musicians & Employers’ Pension Fund

data, and financial information. We found this information to be reasonably consistent and comparable with 

information used for other purposes. The valuation results depend on the integrity of this information. If any of this 

information is incomplete or inaccurate, our results may be different and our calculations may need to be revised.

Limited Use

Actuarial computations for purposes other than determining the contribution requirements for an ongoing plan 

(such as for assessing benefit security upon potential plan termination) may yield significantly different results 

from those shown in this report. 

Future actuarial measurements may differ significantly from the current measurements presented in this report 

due to factors such as, but not limited to, the following: plan experience differing from that anticipated by the 

economic or demographic assumptions; changes in economic or demographic assumptions; increases or 

decreases expected as part of the natural operation of the methodology used for these measurements (such as 

the end of an amortization period or additional cost or contribution requirements based on plan funded status); 

and changes in plan provisions or applicable law. Due to the limited scope of the actuarial assignment, we did not 

perform an analysis of the potential range of such future measurements.

The consultants who worked on this assignment are pension actuaries. Milliman’s advice is not intended to be a 

substitute for qualified legal or accounting counsel.

Certification

In our opinion, each assumption used, other than those assumptions mandated directly by the Internal Revenue 

Code and regulations thereon, is individually reasonable (taking into account the experience of the Plan and 

reasonable expectations) and, in combination, such other assumptions offer our best estimate of anticipated 

experience under the Plan. 

On the basis of the foregoing, we hereby certify that to the best of our knowledge and belief, this report is 

complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial 

principles and practices which are consistent with the principles prescribed by the Actuarial Standards Board and 

the Code of Professional Conduct and Qualification Standards for Actuaries Issuing Statements of Actuarial 

Opinion in the United States promulgated by the American Academy of Actuaries. We are members of the 

American Academy of Actuaries and meet its Qualification Standards to render the actuarial opinion contained 

herein.

Respectfully submitted,

Kevin M. Campe, EA, MAAA Robert A. Behar, FSA, EA, MAAA

Principal and Consulting Actuary Principal and Consulting Actuary

Enrolled Actuary Number 17-05356 Enrolled Actuary Number 17-02754

Timothy J. Herman, FSA, EA, MAAA

Principal and Consulting Actuary

Enrolled Actuary Number 17-05628

November 8, 2018

Date 

AFMEPF1419
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation

American Federation of Musicians & Employers’ Pension Fund

Table of Contents

Summary of Results.................................................................................................................................................1

A. Overview.........................................................................................................................................................2

B. Purpose of the Valuation ................................................................................................................................4

C. Actuarial Methods and Assumptions ..............................................................................................................4

D. Plan Provisions ...............................................................................................................................................4

Exhibits......................................................................................................................................................................5

Summary of Market Value of Assets ......................................................................................................................6

Summary of Income and Disbursements................................................................................................................7

Asset (Gain) / Loss for Prior Plan Year on Market Value of Assets .......................................................................8

Actuarial Value of Assets ........................................................................................................................................9

Asset (Gain) / Loss for Prior Plan Year on Actuarial Value of Assets ................................................................. 10

Actuarial Balance Sheet....................................................................................................................................... 11

Normal Cost and Unfunded Actuarial Accrued Liability ....................................................................................... 12

Current Annual Cost and Minimum Required Contribution ................................................................................. 13

Actuarial (Gain) / Loss for Prior Plan Year........................................................................................................... 14

Charges and Credits for Funding Standard Account ........................................................................................... 15

Amortization Schedule for Minimum Funding Purposes...................................................................................... 17

Current Liability .................................................................................................................................................... 19

Full Funding Limitation......................................................................................................................................... 20

Maximum Deductible Contribution under IRC Section 404 ................................................................................. 21

Present Value of Accumulated Plan Benefits ...................................................................................................... 22

FASB ASC Topic 960 Present Value of Accumulated Plan Benefits .................................................................. 23

Change in FASB ASC Topic 960 Present Value of Accumulated Plan Benefits................................................. 24

Unfunded Vested Benefit Liability for Withdrawal Liability Calculations .............................................................. 25

Summary of Participant Data ............................................................................................................................... 26

Change in Participant Counts .............................................................................................................................. 27

Active Participants by Age and Service ............................................................................................................... 28

Summary of Contribution History ......................................................................................................................... 29

Appendices ............................................................................................................................................................ 30

Appendix A – Summary of Actuarial Assumptions and Methods ........................................................................ 31

Appendix B – Summary of Principal Plan Provisions .......................................................................................... 36

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Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 1

American Federation of Musicians & Employers’ Pension Fund

Summary of Results

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Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 2

American Federation of Musicians & Employers’ Pension Fund

A. Overview

Actuarial Valuation for Plan Year Beginning

4/1/2017 4/1/2018

Assets

Market Value of Assets (MVA)

Investment yield in prior plan year (MVA)

Actuarial Value of Assets (AVA)

Investment yield in prior plan year (AVA)

Contributions

 Expected

 Actual

$1,805,128,582

13.08%

$1,908,814,167

1.97%

$68,291,488

68,722,338

$1,876,609,576

10.87%

$1,844,511,996

2.92%

$72,102,183

TBD

Valuation Liabilities

Valuation interest rate

Normal Cost

Present value of benefits 

Actuarial Accrued Liability

Unfunded Actuarial Accrued Liability 

Present Value of Accrued Benefits

Funded percentage

 Based on Market Value of Assets

 Based on Actuarial Value of Assets

Present Value of Vested Benefits 

Funded percentage

 Based on Market Value of Assets

 Based on Actuarial Value of Assets

Current Liability

Current Liability interest rate

7.50%

$23,764,576

3,174,711,824

3,107,667,804

1,198,853,637

2,958,237,592

61.02%

64.53%

$2,905,823,272

62.12%

65.69%

$4,814,278,836

3.05%

7.50%

$24,676,607

3,200,458,840

3,130,864,743

1,286,352,747

2,985,962,165

62.85%

61.77%

$2,932,838,060

63.99%

62.89%

$5,204,629,080

2.98%

Credit Balance and Contribution Information

Credit Balance / (Funding Deficiency) at end of prior plan year

Minimum Required Contribution (before Credit Balance)

Minimum Required Contribution (after Credit Balance)

Maximum Deductible Contribution

$88,877,447

193,703,509

98,160,253

4,925,184,284

$(26,914,475)

186,664,360

215,597,421

5,553,468,048

AFMEPF1422
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 3

American Federation of Musicians & Employers’ Pension Fund

Withdrawal Liability

Present Value of Vested Benefits for withdrawal liability

Value of assets used for withdrawal liability

Unfunded Present Value of Vested Benefits

Unamortized value of affected benefits

Total effective unfunded vested benefit liability

Withdrawal liability interest rate

First 20 years

Thereafter

$6,165,559,373

1,805,128,582

4,360,430,791

91,463,893

4,451,894,684

1.87%

2.37%

$5,625,147,636

1,876,609,576

3,748,538,060

83,985,140

3,832,523,210

2.39%

2.60%

Participant Data

Active participants

Terminated vested participants

Retired participants

Disabled participants

Beneficiaries

Total participants

Plan compensation for active participants

Total benefits in pay status

Average benefit in pay status

21,085

14,456

12,093

170

2,225

50,029

$496,204,874

$160,686,455

11,091

20,602

14,177

12,848

175

2,305

50,107

$489,834,750

$176,219,077

11,497

Certification Status Critical Critical

AFMEPF1423
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 4

American Federation of Musicians & Employers’ Pension Fund

B. Purpose of the Valuation

This report has been prepared for the American Federation of Musicians & Employers’ Pension Fund as of 

April 1, 2018 to:

 Calculate the Minimum Required Contribution for the plan year beginning April 1, 2018.

 Calculate the Maximum Deductible Contribution for the 2018 fiscal year.

 Determine the actuarial Present Value of Accumulated Plan Benefits as of March 31, 2018 for purposes of 

disclosing the Plan’s liabilities under PPA 2006 and FASB ASC Topic 960.

 Determine the Plan’s unfunded vested benefit liability as of March 31, 2018 for withdrawal liability purposes 

calculated in accordance with the requirements of the Multiemployer Pension Plan Amendments Act of 1980.

 Review the Plan’s funded status.

 Review the experience for the plan year ending March 31, 2018, including the performance of the Plan’s 

assets during the year and changes in the Plan’s participant demographics that impact liabilities.

 Provide operational information required for governmental agencies and other interested parties.

C. Actuarial Methods and Assumptions

The methods and assumptions used in this valuation are the same as those used in the prior valuation except as 

follows: 

 The mortality projection scale was changed from MP-2015 to MP-2017.

 For Current Liability purposes, the interest rate was changed from 3.05% to 2.98% in accordance with IRS 

guidance. (The statutory mortality tables also have been updated as required by law).

 For withdrawal liability purposes, the interest rate was changed from 1.87% for first 20 years and ultimate rate 

of 2.37% to 2.39% for first 20 years and ultimate rate of 2.60%.

Please see Appendix A for a complete summary of all methods and assumptions used in this valuation.

D. Plan Provisions

This valuation reflects the plan provisions in effect on April 1, 2018, which are the same provisions that were 

valued in the April 1, 2017 actuarial valuation report.

Please see Appendix B for a detailed summary of plan provisions.

AFMEPF1424
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 5

American Federation of Musicians & Employers’ Pension Fund

Exhibits

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Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 6

American Federation of Musicians & Employers’ Pension Fund

Exhibit 1

Summary of Market Value of Assets

The summary of plan assets on a market-value basis as of April 1, 2018 is shown below.

1. Assets

a. Investments at fair value

b. Receivable due from broker for securities sold 

c. Receivable employer contributions

d. Receivable accrued interest and dividends

e. Other receivables

f. Cash and cash equivalents

g. Fixed assets - net

h. Other assets

i. Total

$1,797,450,797

75,112,911

7,357,927

364,526

1,851,520

21,209,804

557,514

1,002,284

1,904,907,283

2. Liabilities

a. Accrued expenses and other liabilities

b. Due to broker for securities purchased

c. Total

6,083,446

22,214,261

28,297,707

3. Total

[(1i) - (2c)] 1,876,609,576*

* Excludes $6,642,302 in future withdrawal liability payments.

AFMEPF1426
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 7

American Federation of Musicians & Employers’ Pension Fund

Exhibit 2

Summary of Income and Disbursements

The change in the Market Value of Assets from April 1, 2017 to April 1, 2018 is shown below.

1. Market Value of Assets as of April 1, 2017 $1,805,128,582

2. Income

a. Contributions*

b. Interest and dividends

c. Net appreciation (depreciation) in fair value

d. Other income

e. Securities lending income, net

f. Total

68,722,338

35,688,488

165,739,818

14,321

50,406

270,215,371

3. Disbursements

a. Benefit Payments

b. Administrative expenses

c. Investment management fees 

d. Total

170,615,565

16,393,288

11,725,524

198,734,377

4. Net increase / decrease

[(2f) - (3d)] 71,480,994

5. Market Value of Assets as of April 1, 2018

[(1) + (4)] $1,876,609,576

* Includes $517,984 in withdrawal liability payments.

AFMEPF1427
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 8

American Federation of Musicians & Employers’ Pension Fund

Exhibit 3

Asset (Gain) / Loss for Prior Plan Year on Market Value of Assets

The Asset (Gain) / Loss is the difference between the expected and actual values of the Market Value of Assets. 

An asset gain is negative because it represents a decrease from the expected unfunded Actuarial Accrued 

Liability. The Asset (Gain) / Loss for the plan year ending March 31, 2018 is determined below.

1. Expected Market Value of Assets

a. Market Value of Assets as of March 31, 2017

b. Employer contributions for plan year

c. Benefit Payments

d. Administrative expenses

e. Expected investment return based on 7.50% interest rate

f. Expected Market Value of Assets as of March 31, 2018

[(a) + (b) - (c) - (d) + (e)]

$1,805,128,582

68,722,338

170,615,565

16,393,288

131,022,031

1,817,864,098

2. Market Value of Assets as of March 31, 2018 1,876,609,576

3. Asset (Gain) / Loss

[(1f) - (2)] (58,745,478)

4. Estimated investment return on Market Value of Assets 10.87%

AFMEPF1428
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 9

American Federation of Musicians & Employers’ Pension Fund

Exhibit 4

Actuarial Value of Assets

The Actuarial Value of Assets is the Market Value of Assets less a weighted average of asset gains / (losses) 

over a four-year period (five-year smoothing), but it must be within 80% to 120% of the Market Value of Assets. 

The Actuarial Value of Assets as of April 1, 2018 is determined below.

1. Market Value of Assets as of April 1, 2018 $1,876,609,576

2. Unrecognized asset gains / (losses) for the plan years ending 

Plan Year Ending

a. March 31, 2018

b. March 31, 2017

c. March 31, 2016

d. March 31, 2015

f. Total

Gain / (Loss) for Year

$58,745,478

91,563,510

(154,271,289)

(40,641,959)

Percent

Unrecognized

80%

60%

40%

20%

Amount

Unrecognized

46,996,382

54,938,106

(61,708,516)

(8,128,392)

32,097,580

3. Preliminary Actuarial Value of Assets as of April 1, 2018

[(1) - (2f)] 1,844,511,996

4. Actuarial Value of Assets as of April 1, 2018

[(3), but not < 80% x (1), nor > 120% x (1)] 1,844,511,996

AFMEPF1429
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 10

American Federation of Musicians & Employers’ Pension Fund

Exhibit 5

Asset (Gain) / Loss for Prior Plan Year on Actuarial Value of Assets

The Asset (Gain) / Loss is the difference between the expected and actual values of the Actuarial Value of 

Assets. An asset gain is negative because it represents a decrease from the expected unfunded Actuarial 

Accrued Liability. The Asset (Gain) / Loss for the plan year ending March 31, 2018 is determined below.

1. Expected Actuarial Value of Assets

a. Actuarial Value of Assets as of April 1, 2017

b. Employer contributions for plan year

c. Benefit Payments

d. Administrative expenses

e. Expected investment return based on 7.50% interest rate

f. Expected Actuarial Value of Assets as of April 1, 2018

[(a) + (b) - (c) - (d) + (e)]

$1,908,814,167

68,722,338

170,615,565

16,393,288

138,798,450

1,929,326,102

2. Actuarial Value of Assets as of April 1, 2018 1,844,511,996

3. Asset (Gain) / Loss

[(1f) - (2)] 84,814,106

4. Estimated investment return on Actuarial Value of Assets 2.92%

AFMEPF1430
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 11

American Federation of Musicians & Employers’ Pension Fund

Exhibit 6

Actuarial Balance Sheet

The total plan requirements compared to the total value of plan resources as of April 1, 2018 is shown below.

Plan Requirements

1. Present value of active participant benefits

a. Retirement

b. Termination

c. Death

d. Disability

e. Total

$1,162,329,456

72,929,280

16,362,787

0

1,251,621,523

2. Present value of inactive participant benefits

a. Retired participants

b. Terminated vested participants

c. Beneficiaries

d. Disabled participants

e. Total

1,450,205,233

372,640,621

99,058,724

26,932,739

1,948,837,317

3. Total plan requirements

[(1e) + (2e)] 3,200,458,840

Plan Resources

4. Actuarial Value of Assets $1,844,511,996

5. Unfunded Actuarial Accrued Liability 1,286,352,747

6. Present value of future Normal Costs 69,594,097

7. Total plan resources 3,200,458,840

AFMEPF1431
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 12

American Federation of Musicians & Employers’ Pension Fund

Exhibit 7

Normal Cost and Unfunded Actuarial Accrued Liability

The Normal Cost is the amount allocated to the current plan year under the Plan’s actuarial cost method. The 

Actuarial Accrued Liability is the accumulation of all prior Normal Costs. The unfunded Actuarial Accrued Liability

is the excess (deficiency) of the Actuarial Accrued Liability over the Actuarial Value of Assets. The employer 

Normal Cost and the unfunded Actuarial Accrued Liability as of April 1, 2017 and April 1, 2018 are determined 

below.

4/1/2017 4/1/2018

1. Normal Cost

a. Beginning of year Normal Cost

b. Beginning of year loading for 

administrative expenses

c. Total

$9,197,146

14,567,430

23,764,576

$9,161,101

15,515,506

24,676,607

2. Actuarial Accrued Liability

a. Active participants

b. Retired participants

c. Terminated vested participants

d. Beneficiaries

e. Disabled participants

f. Total

1,272,594,973

1,336,399,354

379,432,840

94,224,304

25,016,333

3,107,667,804

1,182,027,426

1,450,205,233

372,640,621

99,058,724

26,932,739

3,130,864,743

3. Actuarial Value of Assets 1,908,814,167 1,844,511,996

4. Unfunded Actuarial Accrued Liability

[(2f) - (3)] 1,198,853,637 1,286,352,747

AFMEPF1432
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 13

American Federation of Musicians & Employers’ Pension Fund

Exhibit 8

Current Annual Cost and Minimum Required Contribution

The Current Annual Cost is the Plan’s cost under the minimum funding requirements prior to the recognition of the 

full funding limitation and any Credit Balance. The Minimum Required Contribution is the amount needed to avoid 

a funding deficiency in the Funding Standard Account. These amounts for the plan year beginning April 1, 2018

are determined below.

1. Charges for plan year

a. Funding deficiency as of April 1, 2018

b. Normal Cost

c. Amortization charges (on $2,436,721,187)

d. Interest on (a), (b), and (c) to end of plan year

e. Additional funding charge

f. Total

$26,914,475

24,676,607

332,763,303

28,826,579

0

413,180,964

2. Credits for plan year

a. Amortization credits (on $1,177,282,915)

b. Other credits

c. Interest on (a) and (b) to end of plan year

d. Total

183,798,645

0

13,784,899

197,583,543

3. Current Annual Cost for plan year

[(1f) - (2d)] 215,597,421

4. Full funding credit for plan year

a. Full funding limitation

b. Full funding credit

[(3) - (4a), but not < $0]

2,931,188,473

0

5. Credit Balance for plan year

a. Credit Balance as of April 1, 2018

b. Interest on (a) to end of plan year

c. Total

0

0

0

6. Minimum Required Contribution for plan year

[(3) - (4b) - (5c), but not < $0] 215,597,421

AFMEPF1433
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 14

American Federation of Musicians & Employers’ Pension Fund

Exhibit 9

Actuarial (Gain) / Loss for Prior Plan Year

The Actuarial (Gain) / Loss for the prior plan year is the difference between the expected and actual unfunded 

Actuarial Accrued Liability as of the beginning of the current plan year. The Actuarial (Gain) / Loss for the plan 

year ending March 31, 2018 is determined below.

1. Unfunded Actuarial Accrued Liability as of April 1, 2017 $1,198,853,637

2. Normal Cost as of April 1, 2017 23,764,576

3. Interest on (1) and (2) to end of plan year 91,696,366

4. Subtotal 

[(1) + (2) + (3)] 1,314,314,579

5. Employer contributions for plan year 68,722,338

6. Interest on (5) to end of plan year 2,523,440

7. Subtotal 

[(5) + (6)] 71,245,778

8. Changes in Actuarial Accrued Liability

a. Plan amendments

b. Changes in actuarial assumptions

c. Changes in cost method

d. Total

0

(58,490,292)

0

(58,490,292)

9. Expected unfunded Actuarial Accrued Liability as of April 1, 2018

[(4) - (7) + (8d)] 1,184,578,509

10. Actual unfunded Actuarial Accrued Liability as of April 1, 2018 1,286,352,747

11. Actuarial (Gain) / Loss on Actuarial Value of Assets 84,814,106

12. Actuarial (Gain) / Loss on Actuarial Accrued Liability

[(10) - (9) - (11)] 16,960,132

13. Total Actuarial (Gain) / Loss for prior plan year

[(10) - (9)] 101,774,238

AFMEPF1434
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 15

American Federation of Musicians & Employers’ Pension Fund

Exhibit 10

Charges and Credits for Funding Standard Account

The amortization charges and credits for the Funding Standard Account for the plan year beginning April 1, 2018

are determined below.

1. Charges as of April 1, 2018 

Date

Established

a. April 1, 1979

b. April 1, 1981

c. April 1, 1989

d. April 1, 1990

e. April 1, 1991

f. April 1, 1992

g. April 1, 1993

h. April 1, 1994

i. April 1, 1996

j. April 1, 1997

k. April 1, 1998

l. April 1, 1998

m. April 1, 1999

n. April 1, 2000

o. April 1, 2000

p. April 1, 2002

q. April 1, 2002

r. April 1, 2004

s. April 1, 2005

t. April 1, 2006

u. April 1, 2006

v. April 1, 2007

w. April 1, 2008

x. April 1, 2009

y. April 1, 2009

z. April 1, 2009

aa. April 1, 2010

bb. April 1, 2011

cc. April 1, 2011

dd. April 1, 2011

ee. April 1, 2012

Description

Plan Amendment (1)

Plan Amendment (2)

Plan Amendment (3)

Plan Amendment (4)

Plan Amendment (5)

Plan Amendment (6)

Assumption Change (7)

Plan Amendment (8)

Plan Amendment (9)

Assumption Change (10)

Assumption Change (11)

Plan Amendment (12)

Assumption Change (13)

Assumption Change (14)

Plan Amendment (15)

Assumption Change (17)

Plan Amendment (16)

Actuarial Loss

Actuarial Loss

Actuarial Loss

Assumption Change (18)

Actuarial Loss

Actuarial Loss

Actuarial Loss

Funding Relief (20)

Plan Amendment (19)

Funding Relief (20)

Actuarial Loss

Assumption Change (21)

Fund Relief (20)

Actuarial Loss

Amortization

Amount

$745,535

1,579,974

6,223,488

859,142

2,094,898

3,081,955

796,624

1,099,963

2,254,258

365,537

254,337

4,197,714

428,210

2,223,572

6,890,854

3,748,294

2,458,330

7,860,311

4,736,859

2,504,148

2,966,524

1,205,175

13,648,181

66,543,199

43,383,626

453,892

13,077,860

7,533,814

703,018

12,462,612

10,802,405

Years

Remaining

1

3

1

2

3

4

5

6

8

9

10

10

11

12

12

14

14

1

2

3

18

4

5

6

20

6

7

8

8

20

9

Outstanding

Balance

$745,535

4,416,921

6,223,488

1,658,343

5,856,424

11,096,660

3,464,776

5,550,288

14,194,166

2,506,600

1,876,723

30,974,457

3,367,475

18,489,948

57,300,372

34,206,332

22,434,323

7,860,311

9,143,239

7,000,510

30,952,592

4,339,263

59,360,392

335,769,321

475,444,547

2,290,285

74,463,328

47,437,426

4,426,622

136,578,740

74,075,367

AFMEPF1435
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 16

American Federation of Musicians & Employers’ Pension Fund

Date

Established

ff. April 1, 2012

gg. April 1, 2013

hh. April 1, 2013

ii. April 1, 2014

jj. April 1, 2014

kk. April 1, 2015

ll. April 1, 2016

mm. April 1, 2016

nn. April 1, 2017

oo. April 1, 2018

pp. Total

Description

Funding Relief (20)

Actuarial Loss

Funding Relief (20)

Actuarial Loss

Funding Relief (20)

Actuarial Loss

Actuarial Loss

Assumption Change (22)

Actuarial Loss

Actuarial Loss

Amortization

Amount

1,744,010

5,334,075

5,262,623

4,638,766

3,834,376

12,913,428

17,589,986

29,559,470

13,976,937

10,725,323

332,763,303

Years

Remaining

20

10

20

11

20

12

13

13

14

15

Outstanding

Balance

19,112,737

39,359,537

57,673,498

36,479,631

42,021,229

107,380,635

153,653,422

258,210,194

127,551,290

101,774,240

2,436,721,187

2. Credits as of April 1, 2018

Date

Established

a. April 1, 2007

b. April 1, 2008

c. April 1, 2009

d. April 1, 2009

e. May 1, 2009

f. April 1, 2010

g. April 1, 2010

h. April 1, 2010

i. April 1, 2011

j. April 1, 2012

k. April 1, 2013

l. April 1, 2014

m. April 1, 2018

n. Total

Description

Plan Amendment (1)

Plan Amendment (2)

Asset Method Change (4)

Funding Relief (5)

Plan Amendment (3)

Actuarial Gain

Funding Relief (5)

Plan Amendment (6)

Funding Relief (5)

Funding Relief (5)

Funding Relief (5)

Funding Relief (5)

Assumption Change (7)

Amortization

Amount

$2,603,583

2,405,442

10,562,549

57,484,442

16,390,158

25,778,645

9,974,601

22,632,740

16,153,570

2,232,485

6,645,675

4,770,845

6,163,910

183,798,645

Years

Remaining

19

5

21

6

6.08

7

20

7

8

9

10

11

15

Outstanding

Balance

$27,873,985

10,462,054

118,242,369

290,059,876

83,617,494

146,779,643

109,312,437

128,867,348

101,712,590

15,308,825

49,037,687

37,518,315

58,490,292

1,177,282,915

3. Net outstanding balance [(1pp) - (2n)] 1,259,438,272

4. Credit Balance / (Funding Deficiency) as of April 1, 2018 (26,914,475)

5. Waived funding deficiency 0

6. Balance test result [(3) - (4) - (5)] 1,286,352,747

7. Unfunded Actuarial Accrued Liability as of April 1, 2018, minimum $0 1,286,352,747

AFMEPF1436
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 17

American Federation of Musicians & Employers’ Pension Fund

Amortization Schedule for Minimum Funding Purposes

Charges

(1) through (6) Information not readily available.

(7) The mortality rate for disabled participants and the post-retirement benefit increase assumptions were revised.

(8) The retirement age assumption was changed from age 55 to age 62 for inactive vested participants*.

(9) The benefit multiplier was increased from $4.00 to $4.14 effective April 1, 1996, and pensioners and 

beneficiaries received a 3.50% increase in benefits. 

(10) The mortality, turnover, post-retirement accrual, and percentage married assumptions were revised.

(11) The assumption for participants with unknown gender was revised and an assumption to exclude inactive 

vested participants who are age 80 and over was added.

(12) The benefit multiplier was increased from $4.14 to $4.35 effective January 1, 1998 and pensioners and 

beneficiaries received a 5.00% increase in benefits.

(13) The retirement age assumption was revised from age 64 to various rates of retirement beginning at age 55.

(14) The mortality assumption was revised from 1983 GAM set forward two years to 1983 GAM set forward one 

year.

(15) All current and future benefits were increased 7%, and the merger of the Staff Pension Plan was recognized.

(16) The IRC Section 401(a)(17) and IRC Section 415 limits were increased and pre- and post-retirement death 

benefits were reduced.

(17) The retirement age assumption for inactive vested participants and the mortality assumption for healthy lives 

were changed.

(18) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

 Incidence of disability

 Retirement rates

 Termination rates

 Percent married

 Assumed age of commencement of deferred benefits

 Future benefit accruals

(19) The IRC Section 415 limit was increased.

(20) The special amortization rule under Preservation of Access to Care for Medicare Beneficiaries and Pension 

Relief Act of 2010 (PRA 2010) was adopted.

(21) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

 Termination rates

 Post-retirement benefit accruals

(22) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

 Retirement rates

 Termination rates

 Wage increase assumption

 Post-retirement benefit accruals

* Change identified as plan amendment in prior actuary’s report but assumed to be an assumption change.

AFMEPF1437
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 18

American Federation of Musicians & Employers’ Pension Fund

Credits

(1) The benefit multiplier was lowered from $3.50 to $3.25 for covered employment on and after April 1, 2007.

(2) The IRC Section 415 benefit limit was changed to be applied on an aggregated employer basis rather than on 

an employer-by-employer basis.

(3) The benefit multiplier was lowered from $3.25 to $2.00 for covered employment on and after May 1, 2009.

(4) The special asset valuation rule under Preservation of Access to Care for Medicare Beneficiaries and Pension 

Relief Act of 2010 (PRA 2010) was adopted.

(5) The special amortization rule under Preservation of Access to Care for Medicare Beneficiaries and Pension 

Relief Act of 2010 (PRA 2010) was adopted.

(6) The benefit multiplier was lowered from $2.00 to $1.00 for covered Employment on and after January 1, 2010 

and the rehabilitation plan was effective June 1, 2010.

(7) The mortality projection scale was change from MP-2015 to MP-2017.

AFMEPF1438
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 19

American Federation of Musicians & Employers’ Pension Fund

Exhibit 11

Current Liability

In accordance with IRS requirements, the Current Liability has been calculated at 2.98%. The Current Liability as 

of April 1, 2018 is determined below.

1. Current Liability

a. Active participants

b. Terminated vested participants

c. Retirees, beneficiaries, and

disabled participants

d. Total

Count

20,602

14,177

15,328

50,107

Vested Benefits

$2,171,314,465

711,678,404

2,200,508,541

5,083,501,410

All Benefits

$2,203,088,497

718,144,272

2,283,396,311

5,204,629,080

2. Expected increase in Current Liability for benefit accruals during year 57,147,319

3. Expected release from “RPA 94” Current Liability 187,226,852

4. Expected distributions during year 203,313,671

5. Market Value of Assets 1,876,609,576

6. Current Liability funded percentage

[(5) ÷ (1d)] 36.06%

AFMEPF1439
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 20

American Federation of Musicians & Employers’ Pension Fund

Exhibit 12

Full Funding Limitation

The full funding limitation (FFL) for the plan year ending March 31, 2019 and the tax year ending March 31, 2019

is determined below.

Minimum 

Required 

Contribution

Maximum 

Deductible 

Contribution

1. 100% Actuarial Accrued Liability (AAL) FFL

a. AAL as of April 1, 2018

b. Normal Cost as of April 1, 2018

c. Value of assets as of April 1, 2018

i. Lesser of actuarial and market value

ii. Credit Balance

iii. Undeducted employer contributions

iv. Plan assets 

[(i) - (ii) - (iii)]

d. Interest to March 31, 2019 at 7.50% on (a), (b), & (civ)

e. 100% AAL FFL 

[(a) + (b) - (civ) + (d), but not <$0]

$3,130,864,743

24,676,607

1,844,511,996

0

n/a

1,844,511,996

98,327,201

1,409,356,555

$3,130,864,743

24,676,607

1,844,511,996

n/a

0

1,844,511,996

98,327,201

1,409,356,555

2. Estimated Current Liability as of March 31, 2019

a. Current Liability as of April 1, 2018

b. Normal Cost as of April 1, 2018

c. Estimated benefit disbursements to March 31, 2019

d. Interest to March 31, 2019 at 2.98% on (a), (b), & (c)

e. Estimated EOY Current Liability 

[(a) + (b) - (c) + (d)]

5,204,629,080

72,662,825

187,226,852

154,494,098

5,244,559,151

5,204,629,080

72,662,825

187,226,852

154,494,098

5,244,559,151

3. Estimated assets for Current Liability FFL

a. Actuarial Value of Assets as of April 1, 2018

b. Estimated return to March 31, 2019 at 7.50% 

on (3a), (1ciii), (2c), & (3b)

c. Estimated assets as of March 31, 2019 

[(3a) - (1ciii) - (2c) + (3b)]

1,844,511,996

131,450,901

1,788,914,763

1,844,511,996

131,450,901

1,788,914,763

4. 90% Current Liability minimum funding limitation

a. 90% EOY RPA Current Liability [90% x (2e)]

b. 90% Current Liability FFL [(a) - (3c), but not < $0]

4,720,103,236

2,931,188,473

4,720,103,236

2,931,188,473

5. Full funding limitation [maximum of (1e) and (4b)] 2,931,188,473 2,931,188,473

AFMEPF1440
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 21

American Federation of Musicians & Employers’ Pension Fund

Exhibit 13

Maximum Deductible Contribution under IRC Section 404

The Maximum Deductible Contribution under IRC Section 404 for the tax year beginning April 1, 2018 is 

determined below.

1. Minimum Required Contribution for plan year beginning April 1, 2018 $215,597,421

2. Preliminary Maximum Deductible Contribution under

IRC Section 404 for tax year

a. Normal Cost

b. 10-year amortization of unfunded Actuarial Accrued Liability 

c. Interest to earlier of tax year end or plan year end

d. Total

24,676,607

174,328,831

14,925,408

213,930,846

3. Full funding limitation for tax year 2,931,188,473

4. Unfunded 140% of Current Liability as of March 31, 2019

a. Current Liability (for IRC Section 404 purposes) projected to end of year

b. Actuarial Value of Assets (for IRC Section 404 purposes)

projected to end of year

c. Unfunded 140% of Current Liability

[140% × (a) - (b), but not less than $0]

5,244,559,151

1,788,914,763

5,553,468,048

5. Maximum Deductible Contribution under IRC Section 404 for tax year

[maximum of (1) and (2d), but not greater than (3), nor less than (4c)] 5,553,468,048

There are alternative calculations of the Maximum Deductible Contribution under IRC Section 404 that may

produce a different amount than illustrated above. Additionally, deductibility of contributions to a d defined

contribution plan maintained for the same employees may be affected by the 25% of pay limitation for defined 

benefit and defined contribution plans combined. Employers should consult their tax advisors regarding the

deductibility of contributions.

AFMEPF1441
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 22

American Federation of Musicians & Employers’ Pension Fund

Exhibit 14

Present Value of Accumulated Plan Benefits for PPA 2006

Accumulated Plan Benefits are benefits earned to date, based on pay history and service rendered to date, 

expected to be paid in the future to retired, terminated vested, and active participants, and beneficiaries of active 

or former participants. The Present Value of Accumulated Plan Benefits for PPA 2006 as of April 1, 2017 and 

April 1, 2018 is shown below.

4/1/2017 4/1/2018

1. Present Value of vested Accumulated Plan Benefits

a. Active participants

b. Retired participants

c. Terminated vested participants

d. Beneficiaries

e. Disabled participants

f. Total

$1,094,385,481

1,316,624,618

375,804,759

94,224,302

24,784,112

2,905,823,272

$1,008,862,209

1,429,474,412

368,737,801

99,058,722

26,639,371

2,932,838,060

2. Present Value of non-vested 

Accumulated Plan Benefits 52,414,320 53,124,105

3. Present Value of all Accumulated Plan Benefits

[(1f) + (2)] 2,958,237,592 2,985,962,165

4. Market Value of Assets 1,805,128,582 1,876,609,576

5. Funded percentage on Market Value of Assets

a. Vested benefits

[(4) ÷ (1f)]

b. All benefits

[(4) ÷ (3)]

62.12%

61.02%

63.99%

62.85%

6. Actuarial Value of Assets $1,908,814,167 $1,844,511,996

7. Funded percentage on Actuarial Value of Assets

b. Vested benefits

[(6) ÷ (1f)]

c. All benefits

[(6) ÷ (3)]

65.69%

64.53%

62.89%

61.77%

AFMEPF1442
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 23

American Federation of Musicians & Employers’ Pension Fund

Exhibit 15

FASB ASC Topic 960 Present Value of Accumulated Plan Benefits

Accumulated Plan Benefits are benefits earned to date, based on pay history and service rendered to date, 

expected to be paid in the future to retired, terminated vested, and active participants, and beneficiaries of active 

or former participants. The Present Value of Accumulated Plan Benefits (determined on a plan continuation basis 

in accordance with FASB ASC Topic 960) as of April 1, 2018 is shown below.

Benefits Expenses Total

1. Present Value of vested Accumulated 

Plan Benefits

a. Participants in pay status

b. Participants not in pay status

c. Total

$1,555,238,052

1,377,600,010

2,932,838,062

$74,735,893

66,199,619

140,935,512

$1,629,973,945

1,444,799,629

3,037,773,574

2. Present Value of non-vested 

Accumulated Plan Benefits 53,124,103 2,552,843 55,676,946

3. Present Value of all Accumulated Plan 

Benefits

[(1c) + (2)] $2,985,962,165 $143,488,355 3,129,450,520

AFMEPF1443
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 24

American Federation of Musicians & Employers’ Pension Fund

Exhibit 16

Change in FASB ASC Topic 960 Present Value of Accumulated Plan Benefits

The change in the Present Value of Accumulated Plan Benefits (determined on a plan continuation basis in 

accordance with FASB ASC Topic 960) from April 1, 2017 to April 1, 2018 is shown below.

1. Present Value of all Accumulated Plan Benefits as of April 1, 2017 $3,100,946,139

2. Changes

a. Reduction in discount period

b. Benefits accumulated plus Actuarial (gain) / loss

d. Benefit payments

e. Plan amendments

f. Change in assumptions

g. Total

226,288,543

26,158,957

(170,615,565)

0

(53,327,553)

28,504,382

3. Present Value of all Accumulated Plan Benefits as of April 1, 2018

[(1) + (2f)] 3,129,450,520

AFMEPF1444
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 25

American Federation of Musicians & Employers’ Pension Fund

Exhibit 17

Unfunded Vested Benefit Liability for Withdrawal Liability Calculations

Withdrawal liability payments are based on unfunded vested benefit liability. Vested benefit liability is the present 

value of benefits earned to date, excluding benefits for non-vested participants and certain benefits such as death 

and disability benefits which are not considered vested. These liabilities have been determined as of March 31, 

2017 and March 31, 2018. However, if there is a termination by mass withdrawal during the year, a separate 

calculation has to be performed.

3/31/2017 3/31/2018

1. Present Value of Vested Benefits

a. Active participants

b. Retired participants

c. Terminated vested participants

d. Beneficiaries

e. Disabled participants

f. Total vested benefits

$2,962,823,405

2,124,146,162

886,063,344

153,530,082

38,996,380

6,165,559,373

$2,463,299,826

2,177,944,992

792,497,291

151,888,458

39,517,069

5,625,147,636

2. Market Value of Assets 1,805,128,582 1,876,609,576

3. Funded ratio

[(2) ÷ (1f)] 29.28% 33.36%

4. Unfunded vested benefit liability

[(1f) - (2), but not less than 0] 4,360,430,791 3,748,538,060

5. Unamortized portion of value of affected benefits

disregarded under Code Section 432(e)(9)(A)* 91,463,893 83,985,150

6. Total effective unfunded vested benefit liability for 

Withdrawal Liability Calculations (4) + (5) $4,451,894,684 $3,832,523,210

*Initial amount subject to amortization as of March 31, 2011 under “simplified method” pursuant to PBGC 

Technical Update 10-3 is $126,567,964 with unamortized amount based on 7.50% interest rate assumption from

of that date.

AFMEPF1445
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 26

American Federation of Musicians & Employers’ Pension Fund

Exhibit 18

Summary of Participant Data

A summary of participant data for the plan years beginning April 1, 2017 and April 1, 2018 is shown below.

4/1/2017 4/1/2018

1. Active participants

a. Count

b. Average age

c. Average vesting service

d Total plan compensation

e. Average plan compensation

21,085

46.8

14.0

$496,204,874

23,534

20,602

46.5

13.9

$489,834,750

23,776

2. Retired participants

a. Count

b. Average age

c. Total annual benefits

d. Average annual benefit

12,093

74.4

$146,579,330

12,121

12,848

74.3

$161,006,487

12,532

3. Terminated vested participants

a. Count*

b. Average age

c. Total annual benefits

d. Average annual benefit

14,456

56.5

$60,744,851

4,272

14,177

56.6

$60,740,449

4,284

4. Beneficiaries

a. Count

b. Average age

c. Total annual benefits

d. Average annual benefit

2,225

73.2

$11,102,180

4,990

2,305

73.4

$11,891,610

5,159

5. Disabled participants

a. Count

b. Average age

c. Total annual benefits

d. Average annual benefit

170

70.1

$3,004,945

17,676

175

70.3

$3,320,980

18,977

* Includes 238 and 146 participants with retirement account balance only as of April 1, 2017 and April 1, 2018 

respectively.

AFMEPF1446
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 27

American Federation of Musicians & Employers’ Pension Fund

Exhibit 19

Change in Participant Counts

The change in participant counts from April 1, 2017 to April 1, 2018 is shown below.

Active

Terminated

Vested Retired Beneficiary* Disabled Total

As of 4/1/2017 21,085 14,456 12,093 2,225 170 50,029

Retired (472) (690) 1,162 0 0 0

Received lump sum

distribution (6) (70) 0 0 0 (76)

Terminated non-vested (1,691) 0 0 0 0 (1,691)

Terminated vested (1,729) 1,729 0 0 0 0

Disabled (8) (2) 0 0 10 0

Died with beneficiary (12) (15) (112) 140 (1) 0

Died without beneficiary (17) (55) (304) (95) (4) (475)

Lost Participants/Benefit 

expired (128) (214) 0 (26) 0 (368)

Rehired 1,023 (1,022) (1) 0 0 0

New during plan year 2,557 60 10 61 0 2,688

Net data adjustments 0 0 0 0 0 0

As of 4/1/2018 20,602 14,177 12,848 2,305 175 50,107

* The above participant counts include 191 and 202 alternate payees entitled to benefits under Qualified 

Domestic Relations Orders as of April 1, 2017 and April 1, 2018, respectively.

AFMEPF1447
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 28

American Federation of Musicians & Employers’ Pension Fund

Exhibit 20

Active Participants by Age and Service

The number of active participants summarized by attained age and years of credited service as of April 1, 2018 is 

shown below.

Years of Credited Service

Age 0 1–4 5–9 10–14 15–19 20–24 25–29 30–34 35–39 40+ Total

0–24 - 343 3 - - - - - - - 346

25–29 - 1,437 197 1 - - - - - - 1,635

30–34 - 1,525 862 158 6 - - - - - 2,551

35–39 - 1,014 845 695 175 5 - - - - 2,734

40–44 - 518 475 580 660 123 5 - - - 2,361

45–49 - 361 301 344 574 642 100 1 - - 2,323

50–54 - 229 212 277 417 592 444 96 3 - 2,270

55–59 - 179 206 261 402 484 592 517 140 8 2,789

60–64 - 140 152 202 359 423 443 441 468 122 2,750

65–69 - 57 67 66 133 115 96 72 82 44 732

70+ - 29 12 7 24 7 7 12 5 8 111

Total - 5,832 3,332 2,591 2,750 2,391 1,687 1,139 698 182 20,602

AFMEPF1448
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 29

American Federation of Musicians & Employers’ Pension Fund

Exhibit 21

Summary of Contribution History

The average contribution of active participants, summarized by plan year is shown below.

Total Contribution Active Participants Average Contribution

Year Ending 

3/31 Amount

Percent 

Change Number

Percent 

Change Amount

Percent 

Change

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

46,119,911

47,814,858

49,047,228

45,966,116

44,673,896

47,096,445

47,849,801

47,993,760

49,813,186

51,014,824

52,872,746

53,859,286

5.05%

3.68%

2.58%

(6.28)%

(2.81)%

5.42%

1.60%

0.30%

3.79%

2.41%

3.64%

1.87%

23,762

23,413

23,164

21,704

21,510

20,836

20,614

20,423

20,884

21,031

21,085

20,602

0.98%

(1.47)%

(1.06)%

(6.30)%

(0.89)%

(3.13)%

(1.07)%

(0.93)%

2.26%

0.70%

0.25%

(2.29)%

1,941

2,042

2,117

2,118

2,077

2,260

2,321

2,350

2,385

2,426

2,508

2,614

4.02%

5.20%

3.67%

0.05%

(1.94)%

8.81%

2.70%

1.25%

1.49%

1.72%

3.38%

4.23%

 Five-year average contributions: $51,110,760

AFMEPF1449
Milliman

 

 Actuarial Valuation 

April 1, 2018 Actuarial Valuation 30

American Federation of Musicians & Employers’ Pension Fund

Appendices

AFMEPF1450
Milliman

 

 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2018 Actuarial Valuation 31

American Federation of Musicians & Employers’ Pension Fund

Appendix A – Summary of Actuarial Assumptions and Methods

Actuarial Assumptions

 Investment Return:

 7.50% (net of investment-related administrative expenses) for ERISA minimum funding and FASB ASC 

Topic 960 plan accounting.

 2.98% for current liability purposes.

 March 2018 PBGC interest rates for mass withdrawal purposes of 2.39% for first 20 years and ultimate 

rate of 2.60% for unfunded vested benefit liability for withdrawal liability calculations.

 Mortality:

Employee: RP-2014 Employee Mortality Table adjusted to reflect Mortality Improvement Scale MP-2017 from 

2006 base year, and projected forward using MP-2017 on a generational basis for males and females

Annuitant: RP-2014 Annuitant Mortality Table adjusted to reflect Mortality Improvement Scale MP-2017 from 

2006 base year, and projected forward using MP-2017 on a generational basis for males and females

Disabled: RP-2014 Disabled Annuitant Mortality Table adjusted to reflect Mortality Improvement Scale MP2017 from 2006 base year, and projected forward using MP-2017 on a generational basis for males and 

females.

Mortality Rates Used in Conjunction with Full Funding Limitation Computations

Test I (ERISA): Based on the Plan’s mortality, as defined above.

Test II (RPA ’94): RP-2014 mortality table (male and female rates) with projection for mortality improvement, 

updated annually, as mandated by the IRS.

 Termination Rates:

Termination rates have been separated into two groups.

Sample rates are shown below for participants who earned less than $10,000 in the plan year prior to the 

valuation date:

Years of Service

Attained Age 0-2* (Select) 2-3 (Select) 3-4 (Select) 4 or More (Ultimate)

20

25

30

35

40

45

50

55

60

64

65

35.0%

35.0

40.0

45.0

45.0

45.0

45.0

45.0

45.0

45.0

0.0

30.0%

30.0

35.0

40.0

40.0

40.0

35.0

35.0

35.0

35.0

0.0

20.0%

20.0

25.0

30.0

30.0

30.0

30.0

30.0

30.0

30.0

0.0

20.0%

20.0

20.0

20.0

20.0

20.0

20.0

20.0

20.0

20.0

0.0

AFMEPF1451
Milliman

 

 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2018 Actuarial Valuation 32

American Federation of Musicians & Employers’ Pension Fund

* Participants with less than one year of service are not included for valuation purposes. Therefore, 

this select period with respect to the present value of benefits only impacts participants who have 

accrued between 1 and 2 years of vesting service as of the valuation date. Nonetheless, this select 

period has an impact on the Normal Cost (which spreads liability from entry age to retirement age) 

for all participants.

Sample rates are shown below for participants who earned $10,000 or more in the plan year prior to the valuation 

date:

Attained Age Termination Rate

20

25

30

35

40

45

50

55

60

64

65

6.0%

6.0%

6.0%

4.0%

4.0%

4.0%

3.0%

3.0%

3.0%

3.0%

0.0%

 Retirement Rates:

Retirement rates used are shown below:

Attained Age Retirement Rate

55-61

62-63

64

65

66-69

70 and Over

1.0%

2.0

15.0

50.0

20.0

100.0

The weighted average retirement age is 65.6.

 Disability Rates:

None.

AFMEPF1452
Milliman

 

 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2018 Actuarial Valuation 33

American Federation of Musicians & Employers’ Pension Fund

 Pre-Retirement Death Benefits:

80% of the participants are assumed to have beneficiaries. Male participants are assumed to be three years 

older than female beneficiaries and female participants are assumed to be three years younger than male 

beneficiaries.

 Administrative Expenses:

The average of the prior two years’ administrative expenses, increased by 2.25%. For FASB ASC Topic 960 

plan accounting, the present value of the administrative expenses was calculated by projecting the payment 

of expected administrative expenses for the duration of the Plan’s liabilities. The duration of the Plan’s 

liabilities was calculated to be 12 years at April 1, 2018 and 13 years at April 1, 2017. Projected 

administrative expenses were increased 2.25% per annum after the valuation year, then discounted using the 

Plan’s investment return assumption of 7.5% as of April 1, 2018 and April 1, 2017.

 Future Benefits Accruals:

Future years’ contributions for each active employee are assumed to increase by 2.25% per year from those 

contributions reported for the prior pension credit year.

 Post Retirement Benefit Accruals:

Sample contribution amounts used are shown below:

Attained Age Annual Contribution Amount

65-75

76-80

81-85

86-90

91-95

$600

480

360

240

120

 Benefit Limitations:

The Section 415 limit of $195,000* is applied on an aggregate basis but the participant’s total benefit at 

December 31, 2007 is applied on an employer-by-employer basis using a Section 415 limit of $180,000.

The Section 401(a)(17) limit of $245,000* is applied on an employer-by-employer basis. For valuation 

purposes, the Section 401(a)(17) limit is assumed to not apply for future accruals.

* The limits do not change based on automatic cost-of-living adjustments. Rather, the limits will remain at 

the noted levels above until the Trustees amend the plan.

 Assumed Age of Commencement of Deferred Benefits:

Age 65.

 Unreported Data:

Active participants with unreported data (gender, date of birth) are assumed to have characteristics of the 

average group. If not easily determined, participants with unknown sex are assumed to be male.

AFMEPF1453
Milliman

 

 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2018 Actuarial Valuation 34

American Federation of Musicians & Employers’ Pension Fund

 Rationale for Significant Assumptions

Investment Return for ERISA minimum funding and FASB ASC Topic 960 plan accounting: Selected 

based on the Plan’s target asset allocation as of the valuation date, capital market assumptions from several 

sources, including published studies summarizing the expectations of various investment experts. This 

information was used to develop forward-looking long-term expected returns, producing a range of 

reasonable expectations according to industry experts. Based on the resulting range of potential 

assumptions, in our professional judgement the selected investment return assumption is reasonable for this 

purpose and is not expected to have any significant bias.

Investment Return for withdrawal liability: Rates of return used by the PBGC to value annuities under a 

mass withdrawal. Withdrawal liability is used to allocate a portion of Unfunded Vested Benefits to employers 

who withdraw from the fund. A withdrawal is viewed as a settlement similar to an annuity purchase where the 

transfer of investment risk for a portion of a plan’s liabilities is assumed by an insurance company. Use of the 

PBGC rates reflects the fact that a withdrawn employer transfers investment risk to the remaining employers. 

As such it is reasonable to use PBGC interest rates that are used to measure plan termination liabilities and 

which are considered comparable to rates used by insurance companies for annuities to measure the 

financial obligation of the withdrawing employer. In our professional judgement, the selected investment 

return assumption for withdrawal liability is reasonable for this purpose and is not expected to have any 

significant bias.

Mortality: Based on recent pension mortality research conducted by the Society of Actuaries as of the April 

1, 2018 valuation date.

Retirement Rates: Based on analysis of retirements experienced by the Plan from April 2011 through April 

2016.

Actuarial Cost Methods

 Liability Valuation Method:

The Entry Age Normal actuarial cost method where Normal Cost is determined based on projected benefits 

for current active participants using each individual participant's actual entry age. Entry age is the age at date 

of employment or if date is unknown, attained age minus pension credits. Normal Cost and Actuarial Accrued 

Liability are calculated on an individual basis and are allocated by service. Projected benefits are based on 

benefits as if the current benefit accrual rate had always been in effect.

 Asset Valuation Method:

The market value of assets is adjusted by smoothing the differences between the expected market value of 

assets and the actual market value of assets from the past five years. In accordance with the special asset 

valuation rule under funding relief, the amount of the difference in expected market value of assets and the 

actual market value of assets for the plan year ending March 31, 2009 is amortized over a 10-year period. 

The expected value of assets for each year is the market value of assets at the valuation date for the prior 

year brought forward with interest at the valuation rate to the current year plus contributions minus benefit 

payments and administrative expenses, all adjusted with interest at the valuation rate from the prior year to 

the valuation date for the current year. The actuarial value of assets is the resulting amount except if the 

resulting amount is greater than 120% of the market value, actuarial value of assets is set equal to 120% of 

market value of assets and if the resulting amount is less than 80% of the market value, actuarial value of 

assets is set equal to 80% of market value of assets.

For purposes of determining the unfunded vested benefit liability for withdrawal liability calculations, the asset 

valuation method is market value.

AFMEPF1454
Milliman

 

 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2018 Actuarial Valuation 35

American Federation of Musicians & Employers’ Pension Fund

 Special amortization rule:

The Plan’s investment loss for the Plan year ended March 31, 2009 is treated separately from other 

investment gains/losses, to be amortized in equal installments over the period beginning from April 1, 2009 

through March 31, 2039.

The portion of the net experience loss is based on the prospective method as described in Notice 2010-83. 

The schedule of amortization bases is as follows:

Year

Amount

(Gain)/Loss

Years in

Amortization Base*

Years in 

Offset Base*

4/1/09

4/1/10

4/1/11

4/1/12

4/1/13

4/1/14

$ 545,478,705

(124,097,819)

153,283,704

21,184,391

63,061,837

 45,271,288

$ 704,182,106*

29

28

27

26

25

24

15

15

15

15

15

15

* The total loss of $704,182,106 equals the investment loss for the year ended March 31, 2009.

AFMEPF1455
Milliman

 

 Actuarial Valuation

 

Appendix B – Summary of Principal Plan Provisions

April 1, 2018 Actuarial Valuation 36

American Federation of Musicians & Employers’ Pension Fund

Appendix B – Summary of Principal Plan Provisions

Effective Date

November 16, 1959. The plan was amended and restated effective January 1, 2014.

Participation

An eligible employee becomes a participant on January 1 of the year in which the participant earns $750 in 

Covered Earnings by an Employer who is required to make contributions to the Fund.

Normal Retirement Age

Age 65 or if later, the date on which a Participant completes five years of participation in the Plan.

Vesting Service

Vesting Service is based on the Covered Earnings earned in each calendar year, as follow:

Covered Earnings Years of Vesting Service

< $750 0.00

$750 - $1,499 0.25

$1,500 - $2,249 0.50

$2,250 - $2,999 0.75

>= $3,000 1.00

A Participant becomes vested upon completion of 5 years of Vesting Service or upon attainment of Normal 

Retirement Age.

Regular Pension Benefit

A Participant is eligible to receive a Regular Pension Benefit at Normal Retirement Age or at age 55 with 5 years 

Vesting Service.

Regular Pension Benefit is calculated by multiplying each $100 of vested contributions earned by a Benefit 

Multiplier (a specific dollar amount). The monthly benefit amount under the Life Annuity form of payment is 

calculated in accordance with the following tables:

AFMEPF1456
Milliman

 

 Actuarial Valuation

 

Appendix B – Summary of Principal Plan Provisions

April 1, 2018 Actuarial Valuation 37

American Federation of Musicians & Employers’ Pension Fund

Effective June 1, 2010 Monthly Amount per $100 of Vested Contributions

Age

For Contributions

for Covered 

Employment

before 1/1/04

For Contributions

for Covered

Employment 

Between

1/1/04 and 3/31/07

For Contributions

for Covered

Employment

Between

4/1/07 and 4/30/09

For Contributions

for Covered

Employment

Between

5/1/09 and 12/31/09

For Contributions

For Covered

Employment

on and after

1/1/10

55 $1.70 $1.28 $1.19 $0.73 $0.37

56 1.86 1.40 1.30 0.80 0.40

57 2.05 1.54 1.43 0.88 0.44

58 2.26 1.70 1.58 0.97 0.49

59 2.48 1.87 1.74 1.07 0.53

60 2.75 2.07 1.92 1.18 0.59

61 3.04 2.29 2.13 1.31 0.65

62 3.36 2.53 2.35 1.45 0.72

63 3.75 2.82 2.62 1.61 0.80

64 4.16 3.13 2.91 1.79 0.90

65 4.65 3.50 3.25 2.00 1.00

For participants who retire after Normal Retirement Age, the monthly benefit is the regular pension amount at 

Normal Retirement Age actuarially increased to account for delayed retirement.

Disability Pension Benefits

An active participant who has completed at least 10 years of Vesting Service, who has stopped working in 

Covered Employment because of a condition of Total Disability, and who has not started to receive a Regular 

Pension Benefit, is eligible for a Disability Pension Benefit.

The monthly Disability Pension Benefit is calculated by multiplying each $100 of contributions by the applicable 

age-65 Benefit Multipliers, actuarially reduced to participant’s actual age as of the effective date of Disability 

Pension Benefit.

Pre-Retirement Death Benefits

If a vested participant who has not yet retired dies after age 55, the participant’s beneficiary will receive a benefit 

equal to the benefit the beneficiary would have received had the participant retired on his date of death and 

elected to receive a 50% Joint and Survivor Annuity. 

If a vested participant dies before age 55, the beneficiary’s benefit is actuarially equivalent to the 50% Joint and 

Survivor Annuity at age 55.

AFMEPF1457
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 Actuarial Valuation

 

Appendix B – Summary of Principal Plan Provisions

April 1, 2018 Actuarial Valuation 38

American Federation of Musicians & Employers’ Pension Fund

Post-Retirement Death Benefits

If a vested participant dies after his or her benefit begins and the pension benefit was being paid as a Joint and 

Survivor Annuity, the Joint Annuitant will receive 50% of the participant’s monthly benefit for his or her lifetime; if 

the pension benefit was being paid as Life Annuity, the remaining balance of the guaranteed benefit will be paid.

Re-Retirement Benefits

If a participant retires before his or her Normal Retirement Age, later returns to Covered Employment, and earns 

$50 or more of contributions in at least one calendar year between his or her initial pension Benefit Annuity Start 

Date and Normal Retirement Age, an additional benefit calculated based on the contributions made on the 

participant’s behalf during that period will be paid as of the first of the month after the participant reaches Normal

Retirement Age.

Redetermination Benefits

If a pensioner returns to Covered Employment and earns $50 or more of contributions in a calendar year after 

Normal Retirement Age, he or she will earn an additional pension benefit. This redetermination benefit is 

calculated each July 1st based on contributions for Covered Employment earned during the previous calendar 

year. The redetermination benefit is based on the age-65 Benefit Multiplier in effect at the end of the previous 

calendar year and is offset by the actuarial equivalent of any redetermination benefit received in the previous year 

that is based on contributions earned after 2003.

Normal Form of Payment

If a participant has an eligible spouse as of his or her Annuity Starting Date, the normal form of payment is Joint 

and Survivor Annuity. If a participant does not have an eligible spouse as of the Annuity Starting Date, the normal 

form of payment will be Single Life Annuity with respect to any benefit earned on and after January 1, 2004. If a 

portion of the participant’s benefit was based on contributions earned prior to January 1, 2004, there is a 

guaranteed amount of 100 times that portion of the participant’s benefit. The guaranteed feature is eliminated for 

benefit with an annuity starting date on or after June 1, 2010.

AFMEPF1458
Milliman Actuarial Valuation

Issued Febraury 13, 2020(272020)

American Federation of Musicians & 

Employers’ Pension Fund

April 1, 2019 Actuarial Valuation

Prepared by:

Kevin M. Campe, EA, MAAA

Principal and Consulting Actuary

Robert A. Behar, FSA, EA, MAAA

Principal and Consulting Actuary

Timothy J. Herman, FSA, EA, MAAA

Principal and Consulting Actuary

Milliman, Inc.

71 South Wacker Drive

Suite 3100

Chicago, Illinois 60606

Tel +1 312 726 0677

Fax +1 312 726 5225

milliman.com

AFMEPF1459
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation i

American Federation of Musicians & Employers’ Pension Fund

April 1, 2019 Actuarial Valuation of the

American Federation of Musicians & Employers’ Pension Fund

The actuarial valuation of the American Federation of Musicians & Employers’ Pension Fund (the “Plan”) for the 

plan year beginning April 1, 2019 has been completed in accordance with our understanding of the minimum 

funding requirements under ERISA and the Pension Protection Act of 2006 as well as the applicable sections of 

the Internal Revenue Code (IRC), including all regulations and guidance issued to date. It also has been 

completed in accordance with our understanding of FASB ASC Topic 960 for determining plan accounting 

requirements. The valuation results contained in this report are based on the actuarial assumptions and the 

actuarial methods (Appendix A), and principal plan provisions (Appendix B) summarized in the appendices. In 

addition, Appendix C contains information about the Plan’s risks.

Purpose of the Valuation

In general, the actuarial valuation determines the current level of employer contributions that, taking into account

prior funding, will accumulate assets sufficient to meet benefit payments and administrative expenses when due 

under the terms of the Plan. This report has been prepared for the American Federation of Musicians & 

Employers’ Pension Fund as of April 1, 2019 to: 

 Calculate the Minimum Required Contribution for the plan year beginning April 1, 2019.

 Calculate the Maximum Deductible Contribution for the 2019 fiscal year.

 Determine the actuarial Present Value of Accumulated Plan Benefits as of March 31, 2019 for purposes of 

disclosing the Plan’s liabilities under FASB ASC Topic 960.

 Determine the Plan’s unfunded vested benefit liability as of March 31, 2019 for withdrawal liability purposes 

calculated in accordance with the requirements of the Multiemployer Pension Plan Amendments Act of 1980.

 Review the Plan’s funded status.

 Review the experience for the plan year ending March 31, 2019, including the performance of the Plan’s 

assets during the year and changes in the Plan’s participant demographics that impact liabilities.

 Provide operational information required for governmental agencies and other interested parties.

Limited Distribution

Milliman’s work is prepared solely for the internal business use of the Board of Trustee of American Federation of 

Musicians & Employer’s Pension Fund and the Plan’s Trustees and may not be provided to third parties without 

our prior written consent. Milliman does not intend to benefit or create a legal duty to any third party recipient of its 

work product. Milliman’s consent to release its work product to any third party may be conditioned on the third 

party signing a release, subject to the following exceptions:

 The Plan Sponsor may provide a copy of Milliman’s work, in its entirety, to the Plan’s professional service 

advisors who are subject to a duty of confidentiality and who agree to not use Milliman’s work for any purpose 

other than to benefit the Plan.

 The Plan Sponsor may distribute certain work product that Milliman and the Plan Sponsor mutually agree is 

appropriate as may be required by the Pension Protection Act of 2006.

Any third party recipient of this work product who desires professional guidance should not rely upon Milliman’s 

work product, but should engage qualified professionals for advice appropriate to its own specific needs.

Reliance

In preparing this report, we relied, without audit, on information (both written and oral) supplied by the Fund 

Administration office. This information includes, but is not limited to, plan documents and summaries, participant 

AFMEPF1460
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 Actuarial Valuation

April 1, 2019 Actuarial Valuation ii

American Federation of Musicians & Employers’ Pension Fund

data, and financial information. We found this information to be reasonably consistent and comparable with 

information used for other purposes. The valuation results depend on the integrity of this information. If any of this 

information is incomplete or inaccurate, our results may be different and our calculations may need to be revised.

Limited Use

Actuarial computations for purposes other than determining the contribution requirements for an ongoing plan 

(such as for assessing benefit security upon potential plan termination) may yield significantly different results 

from those shown in this report. 

Future actuarial measurements may differ significantly from the current measurements presented in this report 

due to factors such as, but not limited to, the following: plan experience differing from that anticipated by the 

economic or demographic assumptions; changes in economic or demographic assumptions; increases or 

decreases expected as part of the natural operation of the methodology used for these measurements (such as 

the end of an amortization period or additional cost or contribution requirements based on plan funded status); 

and changes in plan provisions or applicable law. Except for the information provided in Appendix C, due to the 

limited scope of the actuarial assignment, we did not perform an analysis of the potential range of such future 

measurements.

The consultants who worked on this assignment are pension actuaries. Milliman’s advice is not intended to be a 

substitute for qualified legal or accounting counsel.

Certification

In our opinion, each assumption used, other than those assumptions mandated directly by the Internal Revenue 

Code and regulations thereon, is individually reasonable (taking into account the experience of the Plan and 

reasonable expectations) and, in combination, such other assumptions offer our best estimate of anticipated 

experience under the Plan. 

On the basis of the foregoing, we hereby certify that to the best of our knowledge and belief, this report is 

complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial 

principles and practices which are consistent with the principles prescribed by the Actuarial Standards Board and 

the Code of Professional Conduct and Qualification Standards for Actuaries Issuing Statements of Actuarial 

Opinion in the United States promulgated by the American Academy of Actuaries. We are members of the 

American Academy of Actuaries and meet its Qualification Standards to render the actuarial opinion contained 

herein.

Respectfully submitted,

Kevin M. Campe, EA, MAAA Robert A. Behar, FSA, EA, MAAA

Principal and Consulting Actuary Principal and Consulting Actuary

Enrolled Actuary Number 17-05356 Enrolled Actuary Number 17-02754

Timothy J. Herman, EA, MAAA

Principal and Consulting Actuary

Enrolled Actuary Number 17-05628

February 13, 2020

Date

AFMEPF1461
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April 1, 2019 Actuarial Valuation 3

American Federation of Musicians & Employers’ Pension Fund

Table of Contents

Summary of Results.................................................................................................................................................1

A. Overview.........................................................................................................................................................2

B. Purpose of the Valuation ................................................................................................................................4

C. Risk Disclosure ...............................................................................................................................................4

D. Actuarial Methods and Assumptions ..............................................................................................................4

E. Plan Provisions ...............................................................................................................................................5

Exhibits......................................................................................................................................................................6

Summary of Market Value of Assets.......................................................................................................................7

Summary of Income and Disbursements................................................................................................................8

Asset (Gain) / Loss for Prior Plan Year on Market Value of Assets .......................................................................9

Actuarial Value of Assets ..................................................................................................................................... 10

Asset (Gain) / Loss for Prior Plan Year on Actuarial Value of Assets ................................................................. 11

Actuarial Balance Sheet....................................................................................................................................... 12

Normal Cost and Unfunded Actuarial Accrued Liability ....................................................................................... 13

Current Annual Cost and Minimum Required Contribution ................................................................................. 14

Actuarial (Gain) / Loss for Prior Plan Year........................................................................................................... 15

Charges and Credits for Funding Standard Account ........................................................................................... 16

Amortization Schedule for Minimum Funding Purposes...................................................................................... 18

Current Liability .................................................................................................................................................... 20

Full Funding Limitation......................................................................................................................................... 21

Maximum Deductible Contribution under IRC Section 404 ................................................................................. 22

Present Value of Accumulated Plan Benefits ...................................................................................................... 23

FASB ASC Topic 960 Present Value of Accumulated Plan Benefits .................................................................. 24

Change in FASB ASC Topic 960 Present Value of Accumulated Plan Benefits ................................................. 25

Unfunded Vested Benefit Liability for Withdrawal Liability Calculations .............................................................. 26

Summary of Participant Data ............................................................................................................................... 27

Change in Participant Counts .............................................................................................................................. 28

Active Participants by Age and Service ............................................................................................................... 29

Summary of Contribution History ......................................................................................................................... 30

Appendices ............................................................................................................................................................ 31

Appendix A – Summary of Actuarial Assumptions and Methods ........................................................................ 32

Appendix B – Summary of Principal Plan Provisions .......................................................................................... 39

Appendix C – Risk Disclosure.............................................................................................................................. 42

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American Federation of Musicians & Employers’ Pension Fund

Summary of Results

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A. Overview

Actuarial Valuation for Plan Year Beginning

4/1/2018 4/1/2019

Assets

Market Value of Assets (MVA)

Investment yield in prior plan year (MVA)

Actuarial Value of Assets (AVA)

Investment yield in prior plan year (AVA)

Contributions

 Expected

 Actual

$1,876,609,576

10.87%

$1,844,511,996

2.92%

$72,102,183

76,256,722

$1,802,580,746

2.81%

$1,829,653,768

6.18%

$77,205,188

TBD

Valuation Liabilities

Valuation interest rate

Normal Cost

Present value of benefits 

Actuarial Accrued Liability

Unfunded Actuarial Accrued Liability 

Present Value of Accrued Benefits

Funded percentage

 Based on Market Value of Assets

 Based on Actuarial Value of Assets

Present Value of Vested Benefits 

Funded percentage

 Based on Market Value of Assets

 Based on Actuarial Value of Assets

Current Liability

Current Liability interest rate

7.50%

$24,676,607

3,200,458,840

3,130,864,743

1,286,352,747

2,985,962,165

62.85%

61.77%

$2,932,838,060

63.99%

62.89%

$5,204,629,080

2.98%

7.50%

$31,784,107

3,361,185,490

3,255,198,921

1,425,545,153

3,088,466,672

58.36%

59.24%

$3,047,275,798

59.15%

60.04%

$5,321,113,649

3.08%

Credit Balance and Contribution Information

Credit Balance at end of prior plan year

Minimum Required Contribution (before Credit Balance)

Minimum Required Contribution (after Credit Balance)

Maximum Deductible Contribution

$(26,914,475)

186,664,360

215,597,421

5,553,468,048

$(136,540,602)

199,374,655

335,915,257

6,092,598,016

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American Federation of Musicians & Employers’ Pension Fund

Actuarial Valuation for Plan Year Beginning

4/1/2018 4/1/2019

Withdrawal Liability

Present Value of Vested Benefits for withdrawal liability

Value of assets used for withdrawal liability

Unfunded Present Value of Vested Benefits

Unamortized value of affected benefits

Total effective unfunded vested benefit liability

Withdrawal liability interest rate

First 20 years

Thereafter

$5,625,147,636

1,876,609,576

3,748,538,060

83,985,140

3,832,523,210

2.39%

2.60%

$5,327,630,882

1,802,580,746

3,525,050,136

75,945,503

3,600,995,639 

3.09%

2.84%

Participant Data

Active participants

Terminated vested participants

Retired participants

Disabled participants

Beneficiaries

Total participants

Plan compensation for active participants

Total benefits in pay status

Average benefit in pay status

20,602

14,177

12,848

175

2,305

50,107

$489,834,750

$176,219,077

11,497

20,316

14,295

13,672

180

2,434

50,897

$487,070,021

$190,522,620

11,701

Certification Status Critical Critical and 

Declining

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April 1, 2019 Actuarial Valuation 4

American Federation of Musicians & Employers’ Pension Fund

B. Purpose of the Valuation

In general, the actuarial valuation determines the current level of employer contributions that, taking into account

prior funding, will accumulate assets sufficient to meet benefit payments and administrative expenses when due 

under the terms of the Plan. This report has been prepared for the American Federation of Musicians & 

Employers’ Pension Fund as of April 1, 2019 to:

 Calculate the Minimum Required Contribution for the plan year beginning April 1, 2019.

 Calculate the Maximum Deductible Contribution for the 2019 fiscal year.

 Determine the actuarial Present Value of Accumulated Plan Benefits as of March 31, 2019 for purposes of 

disclosing the Plan’s liabilities under PPA 2006 and FASB ASC Topic 960.

 Determine the Plan’s unfunded vested benefit liability as of March 31, 2019 for withdrawal liability purposes 

calculated in accordance with the requirements of the Multiemployer Pension Plan Amendments Act of 1980.

 Review the Plan’s funded status.

 Review the experience for the plan year ending March 31, 2019, including the performance of the Plan’s 

assets during the year and changes in the Plan’s participant demographics that impact liabilities.

 Provide operational information required for governmental agencies and other interested parties.

C. Risk Disclosure

The Plan’s risk is the potential that future actuarial measurements will differ from the current measurements 

presented in this report because future experience is different than expected. Risks include investment risk, asset 

/ liability mismatch risk, interest rate risk, longevity and other demographic risks, and contribution risk. As required 

by Actuarial Standard of Practice No. 51 Assessment and Disclosure of Risk Associated with Measuring Pension 

Obligations and Determining Pension Plan Contributions, Appendix C provides information on the Plan’s risks. 

D. Actuarial Methods and Assumptions

The methods and assumptions used in this valuation are the same as those used in the prior valuation except as 

follows: 

 The mortality projection scale was changed to MP-2019 from MP-2017.

 Assumed retirement rates after termination were changed to a graded scale from 100% at 65.

 Assumed form of payment election was changed to 45% electing Single Life Annuity, 30% electing 50% Joint 

& Survivor Annuity, and 25% electing 75% Joint & Survivor Annuity from 100% electing Single Life Annuity.

 Post-retirement accruals were modified.

 Lost participants are assumed to be owed benefits.

 For Current Liability purposes, the interest rate was changed to 3.08% from 2.98% in accordance with IRS 

guidance. (The statutory mortality tables also have been updated as required by the law)

 For withdrawal liability purposes, the interest rate was changed to 3.09% for the first 20 years and ultimate 

rate of 2.84% from 2.39% for the first 20 years and ultimate rate of 2.60%.

These changes resulted in an increase in plan liabilities. Please see Appendix A for a complete summary of all 

methods and assumptions used in this valuation.

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April 1, 2019 Actuarial Valuation 5

American Federation of Musicians & Employers’ Pension Fund

E. Plan Provisions

This valuation reflects the plan provisions in effect on April 1, 2019, which are the same provisions that were 

valued in the April 1, 2018 actuarial valuation report.

Please see Appendix B for a detailed summary of plan provisions.

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April 1, 2019 Actuarial Valuation 6

American Federation of Musicians & Employers’ Pension Fund

Exhibits

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April 1, 2019 Actuarial Valuation 7

American Federation of Musicians & Employers’ Pension Fund

Exhibit 1

Summary of Market Value of Assets

The summary of plan assets on a market-value basis as of April 1, 2019 is shown below.

1. Assets

a. Investments at fair value

b. Receivable due from broker for securities sold

c. Receivable employer contributions

d. Receivable accrued interest and dividends

e. Other receivables

f. Cash and cash equivalents

g. Fixed assets - net

h. Other assets

i. Total

$1,851,212,520

56,720,685

8,503,185

768,900

1,424,991

3,493,008

374,068

2,240,320

1,924,737,677

2. Liabilities

a. Accrued expenses and other liabilities

b. Due to broker for securities purchased

c. Total

5,346,892

116,810,039

122,156,931

3. Total*

[(1i) - (2c)] 1,802,580,746

* Excludes $903,373 in future withdrawal liability payments.

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April 1, 2019 Actuarial Valuation 8

American Federation of Musicians & Employers’ Pension Fund

Exhibit 2

Summary of Income and Disbursements

The change in the Market Value of Assets from April 1, 2018 to April 1, 2019 is shown below.

1. Market Value of Assets as of April 1, 2018* $1,867,964,864

2. Income

a. Contributions**

b. Interest and dividends

c. Net appreciation (depreciation) in fair value

d. Other income

e. Total

76,256,722

13,188,706

61,739,247

8,063

151,192,738

3. Disbursements

a. Benefit Payments

b. Investment management fees

c. Trustee fees/expenses

d. Total

185,211,329

15,272,258

16,093,269

216,576,856

4. Net increase / decrease

[(2e) - (3d)] (65,384,118)

5. Market Value of Assets as of April 1, 2019

[(1) + (4)] $1,802,580,746

* Reflects decrease of $8,644,712 for difference between draft and final financial statement assets for the year 

ended 3/31/2018.

** Includes $3,450,799 in withdrawal liability payments.

AFMEPF1470
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April 1, 2019 Actuarial Valuation 9

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 3

Asset (Gain) / Loss for Prior Plan Year on Market Value of Assets

The Asset (Gain) / Loss is the difference between the expected and actual values of the Market Value of Assets. 

An asset gain is negative because it represents a decrease from the expected unfunded Actuarial Accrued 

Liability. The Asset (Gain) / Loss for the plan year ending March 31, 2019 is determined below.

1. Expected Market Value of Assets

a. Market Value of Assets as of March 31, 2018

b. Employer contributions for plan year

c. Benefit Payments

d. Administrative expenses

e. Expected investment return based on 7.50% interest rate

f. Expected Market Value of Assets as of March 31, 2019

[(a) + (b) - (c) - (d) + (e)]

$1,876,609,576

76,256,722

185,211,329

16,093,269

136,133,365

1,887,695,065

2. Market Value of Assets as of March 31, 2019 1,802,580,746

3. Asset (Gain) / Loss

[(1f) - (2)] 85,114,319

4. Estimated investment return on Market Value of Assets 2.81%

AFMEPF1471
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April 1, 2019 Actuarial Valuation 10

American Federation of Musicians & Employers’ Pension Fund

Exhibit 4

Actuarial Value of Assets

The Actuarial Value of Assets is the Market Value of Assets less a weighted average of asset gains / (losses) 

over a four-year period (five-year smoothing), but it must be within 80% to 120% of the Market Value of Assets. 

The Actuarial Value of Assets as of April 1, 2019 is determined below.

1. Market Value of Assets as of April 1, 2019 $1,802,580,746

2. Unrecognized asset gains / (losses) for the plan years ending 

Plan Year Ending

a. March 31, 2019

b. March 31, 2018

c. March 31, 2017

d. March 31, 2016

e. Total

Gain / (Loss) for Year

(85,114,319)

58,745,478

91,563,510

(154,271,289)

Percent

Unrecognized

80%

60%

40%

20%

Amount

Unrecognized

(68,091,455)

35,247,287

36,625,404

(30,854,258)

(27,073,022)

3. Preliminary Actuarial Value of Assets as of April 1, 2019

[(1) - (2e)] 1,829,653,768

4. Actuarial Value of Assets as of April 1, 2019

[(3), but not < 80% x (1), nor > 120% x (1)] 1,829,653,768

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April 1, 2019 Actuarial Valuation 11

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 5

Asset (Gain) / Loss for Prior Plan Year on Actuarial Value of Assets

The Asset (Gain) / Loss is the difference between the expected and actual values of the Actuarial Value of 

Assets. An asset gain is negative because it represents a decrease from the expected unfunded Actuarial 

Accrued Liability. The Asset (Gain) / Loss for the plan year ending March 31, 2019 is determined below.

1. Expected Actuarial Value of Assets

a. Actuarial Value of Assets as of April 1, 2018

b. Employer contributions for plan year

c. Benefit Payments

d. Administrative expenses

e. Expected investment return based on 7.50% interest rate

f. Expected Actuarial Value of Assets as of April 1, 2019

[(a) + (b) - (c) - (d) + (e)]

$1,844,511,996

76,256,722

185,211,329

16,093,269

133,726,047

1,853,190,167

2. Actuarial Value of Assets as of April 1, 2019 1,829,653,768

3. Asset (Gain) / Loss

[(1f) - (2)] 23,536,399

4. Estimated investment return on Actuarial Value of Assets 6.18%

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April 1, 2019 Actuarial Valuation 12

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 6

Actuarial Balance Sheet

The total plan requirements compared to the total value of plan resources as of April 1, 2019 is shown below.

Plan Requirements

1. Present value of active participant benefits

a. Retirement

b. Termination

c. Death

d. Disability

e. Total

$1,164,949,702

69,083,011

16,158,426

0

1,250,191,139

2. Present value of inactive participant benefits

a. Retired participants

b. Terminated vested participants

c. Beneficiaries

d. Disabled participants

e. Total

1,601,647,305

376,114,686

105,028,255

28,204,105

2,110,994,351

3. Total plan requirements

[(1e) + (2e)] 3,361,185,490

Plan Resources

4. Actuarial Value of Assets $1,829,653,768

5. Unfunded Actuarial Accrued Liability 1,425,545,153

6. Present value of future Normal Costs 105,986,569

7. Total plan resources 3,361,185,490

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April 1, 2019 Actuarial Valuation 13

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 7

Normal Cost and Unfunded Actuarial Accrued Liability

The Normal Cost is the amount allocated to the current plan year under the Plan’s actuarial cost method. The 

Actuarial Accrued Liability is the accumulation of all prior Normal Costs. The unfunded Actuarial Accrued Liability

is the excess (deficiency) of the Actuarial Accrued Liability over the Actuarial Value of Assets. The employer 

Normal Cost and the unfunded Actuarial Accrued Liability as of April 1, 2018 and April 1, 2019 are determined 

below.

4/1/2018 4/1/2019

1. Normal Cost

a. Beginning of year Normal Cost

b. Beginning of year loading for 

administrative expenses

c. Total

$9,161,101

15,515,506

24,676,607

$15,765,204

16,018,903

31,784,107

2. Actuarial Accrued Liability

a. Active participants

b. Retired participants

c. Terminated vested participants

d. Beneficiaries

e. Disabled participants

f. Total

1,182,027,426

1,450,205,233

372,640,621

99,058,724

26,932,739

3,130,864,743

1,144,204,570

1,601,647,305

376,114,686

105,028,255

28,204,105

3,255,198,921

3. Actuarial Value of Assets 1,844,511,996 1,829,653,768

4. Unfunded Actuarial Accrued Liability

[(2f) - (3)] 1,286,352,747 1,425,545,153

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 Actuarial Valuation

April 1, 2019 Actuarial Valuation 14

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 8

Current Annual Cost and Minimum Required Contribution

The Current Annual Cost is the Plan’s cost under the minimum funding requirements prior to the recognition of the 

full funding limitation and any Credit Balance. The Minimum Required Contribution is the amount needed to avoid 

a funding deficiency in the Funding Standard Account. These amounts for the plan year beginning April 1, 2019

are determined below.

1. Charges for plan year

a. Funding deficiency as of April 1, 2019

b. Normal Cost

c. Amortization charges (on $2,357,000,144)

d. Interest on (a), (b), and (c) to end of plan year

e. Additional funding charge

f. Total

$136,540,602

31,784,107

327,971,260

37,222,198

0

533,518,167

2. Credits for plan year

a. Amortization credits (on $1,067,995,593)

b. Other credits

c. Interest on (a) and (b) to end of plan year

d. Total

183,798,648

0

13,784,899

197,583,547

3. Current Annual Cost for plan year

[(1f) - (2d)] 335,934,620

4. Full funding credit for plan year

a. Full funding limitation

b. Full funding credit

[(3) - (4a), but not < $0]

3,289,359,251

0

5. Credit Balance for plan year

a. Credit Balance as of April 1, 2019

b. Interest on (a) to end of plan year

c. Total

0

0

0

6. Minimum Required Contribution for plan year

[(3) - (4b) - (5c), but not < $0] 335,934,620

AFMEPF1476
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 15

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 9

Actuarial (Gain) / Loss for Prior Plan Year

The Actuarial (Gain) / Loss for the prior plan year is the difference between the expected and actual unfunded 

Actuarial Accrued Liability as of the beginning of the current plan year. The Actuarial (Gain) / Loss for the plan 

year ending March 31, 2019 is determined below.

1. Unfunded Actuarial Accrued Liability as of April 1, 2018 $1,286,352,747

2. Normal Cost as of April 1, 2018 24,676,607

3. Interest on (1) and (2) to end of plan year 98,327,202

4. Subtotal 

[(1) + (2) + (3)] 1,409,356,556

5. Employer contributions for plan year 76,256,722

6. Interest on (5) to end of plan year 2,800,098

7. Subtotal 

[(5) + (6)] 79,056,820

8. Changes in Actuarial Accrued Liability

a. Plan amendments

b. Changes in actuarial assumptions

c. Changes in cost method

d. Total

0

49,682,038

0

49,682,038

9. Expected unfunded Actuarial Accrued Liability as of April 1, 2019

[(4) - (7) + (8d)] 1,379,981,774

10. Actual unfunded Actuarial Accrued Liability as of April 1, 2019 1,425,545,153

11. Actuarial (Gain) / Loss on Actuarial Value of Assets 23,536,399

12. Actuarial (Gain) / Loss on Actuarial Accrued Liability

[(10) - (9) - (11)] 22,026,980

13. Total Actuarial (Gain) / Loss for prior plan year

[(10) - (9)] 45,563,379

AFMEPF1477
Milliman

 

 Actuarial Valuation

 

April 1, 2019 Actuarial Valuation 16

American Federation of Musicians & Employers’ Pension Fund

Exhibit 10

Charges and Credits for Funding Standard Account

The amortization charges and credits for the Funding Standard Account for the plan year beginning April 1, 2019

are determined below.

1. Charges as of April 1, 2019 

Date

Established

a. April 1, 1981

b. April 1, 1990

c. April 1, 1991

d. April 1, 1992

e. April 1, 1993

f. April 1, 1994

g. April 1, 1996

h. April 1, 1997

i. April 1, 1998

j. April 1, 1998

k. April 1, 1999

l. April 1, 2000

m. April 1, 2000

n. April 1, 2002

o. April 1, 2002

p. April 1, 2005

q. April 1, 2006

r. April 1, 2006

s. April 1, 2007

t. April 1, 2008

u. April 1, 2009

v. April 1, 2009

w. April 1, 2009

x. April 1, 2010

y. April 1, 2011

z. April 1, 2011

aa. April 1, 2011

bb. April 1, 2012

cc. April 1, 2012

dd. April 1, 2013

ee. April 1, 2013

Description

Plan Amendment (1)

Plan Amendment (2)

Plan Amendment (3)

Plan Amendment (4)

Assumption Change (5)

Plan Amendment (6)

Plan Amendment (7)

Assumption Change (8)

Assumption Change (9)

Plan Amendment (10)

Assumption Change (11)

Assumption Change (12)

Plan Amendment (13)

Assumption Change (15)

Plan Amendment (14)

Actuarial Loss

Actuarial Loss

Assumption Change (16)

Actuarial Loss

Actuarial Loss

Actuarial Loss

Funding Relief (18)

Plan Amendment (17)

Funding Relief (18)

Actuarial Loss

Assumption Change (19)

Funding Relief (18)

Actuarial Loss

Funding Relief (18)

Actuarial Loss

Funding Relief (18)

Amortization

Amount

$1,579,974

859,141

2,094,898

3,081,956

796,623

1,099,963

2,254,258

365,537

254,337

4,197,714

428,210

2,223,572

6,890,854

3,748,294

2,458,330

4,736,859

2,504,149

2,966,524

1,205,175

13,648,181

66,543,198

43,383,626

453,891

13,077,860

7,533,815

703,018

12,462,612

10,802,404

1,744,010

5,334,075

5,262,623

Years

Remaining

2

1

2

3

4

5

7

8

9

9

10

11

11

13

13

1

2

17

3

4

5

19

5

6

7

7

19

8

19

9

19

Outstanding

Balance

$3,049,718

859,141

4,043,640

8,615,808

2,868,263

4,784,099

12,835,401

2,301,643

1,744,065

28,784,999

3,159,710

17,486,354

54,190,232

32,742,391

21,474,193

4,736,859

4,833,589

30,085,023

3,369,145

49,140,627

289,418,081

464,465,490

1,974,122

65,989,378

42,896,383

4,002,874

133,424,838

68,018,434

18,671,382

36,577,372

56,341,691

AFMEPF1478
Milliman

 

 Actuarial Valuation

 

April 1, 2019 Actuarial Valuation 17

American Federation of Musicians & Employers’ Pension Fund

Date

Established

ff. April 1, 2014

gg. April 1, 2014

hh. April 1, 2015

ii. April 1, 2016

jj. April 1, 2016

kk. April 1, 2017

ll. April 1, 2018

mm. April 1, 2019

nn. April 1, 2019

oo. Total

Description

Actuarial Loss

Funding Relief (18)

Actuarial Loss

Actuarial Loss

Assumption Change (20)

Actuarial Loss

Actuarial Loss

Actuarial Loss

Assumption change (21)

Amortization

Amount

4,638,766

3,834,376

12,913,429

17,589,986

29,559,470

13,976,936

10,725,323

4,801,627

5,235,666

327,971,260

Years

Remaining

10

19

11

12

12

13

14

15

15

Outstanding

Balance

34,228,930

41,050,867

101,552,248

146,268,194

245,799,528

122,092,429

97,877,586

45,563,379

49,682,038

2,357,000,144

2. Credits as of April 1, 2019

Date

Established

a. April 1, 2007

b. April 1, 2008

c. April 1, 2009

d. April 1, 2009

e. May 1, 2009

f. April 1, 2010

g. April 1, 2010

h. April 1, 2010

i. April 1, 2011

j. April 1, 2012

k. April 1, 2013

l. April 1, 2014

m. April 1, 2018

n. Total

Description

Plan Amendment (1)

Plan Amendment (2)

Asset Method Change (4)

Funding Relief (5)

Plan Amendment (3)

Actuarial Gain

Funding Relief (5)

Plan Amendment (6)

Funding Relief (5)

Funding Relief (5)

Funding Relief (5)

Funding Relief (5)

Assumption Change (7)

Amortization

Amount

$2,603,583

2,405,443

10,562,550

57,484,442

16,390,158

25,778,644

9,974,601

22,632,741

16,153,570

2,232,485

6,645,675

4,770,846

6,163,910

183,798,648

Years

Remaining

18

4

20

5

5.08

6

19

6

7

8

9

10

14

Outstanding

Balance

$27,165,682

8,660,858

115,755,807

250,018,592

72,269,386

130,076,073

106,788,174

114,202,204

91,975,947

14,057,066

45,571,413

35,203,530

56,250,861

1,067,995,593

3. Net outstanding balance [(1oo) - (2n)] 1,289,004,551

4. Credit Balance as of April 1, 2019 (136,540,602)

5. Waived funding deficiency 0

6. Balance test result [(3) - (4) - (5)] 1,425,545,153

7. Unfunded Actuarial Accrued Liability as of April 1, 2019, minimum $0 1,425,545,153

AFMEPF1479
Milliman

 

 Actuarial Valuation

 

April 1, 2019 Actuarial Valuation 18

American Federation of Musicians & Employers’ Pension Fund

Exhibit 11

Amortization Schedule for Minimum Funding Purposes

Charges

(1) through (4) Information not readily available.

(5) The mortality rate for disabled participants and the post-retirement benefit increase assumptions were revised.

(6) The retirement age assumption was changed from age 55 to age 62 for inactive vested participants (Change 

identified as plan amendment in prior actuary’s report but assumed to be an assumption change).

(7) The benefit multiplier was increased from $4.00 to $4.14 effective April 1, 1996, and pensioners and 

beneficiaries received a 3.50% increase in benefits. 

(8) The mortality, turnover, post-retirement accrual, and percentage married assumptions were revised.

(9) The assumption for participants with unknown gender was revised and an assumption to exclude inactive 

vested participants who are age 80 and over was added.

(10) The benefit multiplier was increased from $4.14 to $4.35 effective January 1, 1998 and pensioners and 

beneficiaries received a 5.00% increase in benefits.

(11) The retirement age assumption was revised from age 64 to various rates of retirement beginning at age 55.

(12) The mortality assumption was revised from 1983 GAM set forward two years to 1983 GAM set forward one 

year.

(13) All current and future benefits were increased 7%, and the merger of the Staff Pension Plan was recognized.

(14) The IRC Section 401(a)(17) and IRC Section 415 limits were increased and pre- and post-retirement death 

benefits were reduced.

(15) The retirement age assumption for inactive vested participants and the mortality assumption for healthy lives 

were changed.

(16) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

 Incidence of disability

 Retirement rates

 Termination rates

 Percent married

 Assumed age of commencement of deferred benefits

 Future benefit accruals

(17) The IRC Section 415 limit was increased.

(18) The special amortization rule under Preservation of Access to Care for Medicare Beneficiaries and Pension 

Relief Act of 2010 (PRA 2010) was adopted.

(19) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

 Termination rates

 Post-retirement benefit accruals

(20) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

 Retirement rates

 Termination rates

 Wage increase assumption

 Post-retirement benefit accruals

(21) The following actuarial assumptions were revised:

 Non-disabled mortality rates

 Disabled mortality rates

AFMEPF1480
Milliman

 

 Actuarial Valuation

 

April 1, 2019 Actuarial Valuation 19

American Federation of Musicians & Employers’ Pension Fund

 Assumed form of payment election 

 Retirement rates after termination

 Post-retirement benefit accruals

 Lost participants

Credits

(1) The benefit multiplier was lowered from $3.50 to $3.25 for covered employment on and after April 1, 2007.

(2) The IRC Section 415 benefit limit was changed to be applied on an aggregated employer basis rather than 

on an employer-by-employer basis.

(3) The benefit multiplier was lowered from $3.25 to $2.00 for covered employment on and after May 1, 2009.

(4) The special asset valuation rule under Preservation of Access to Care for Medicare Beneficiaries and Pension 

Relief Act of 2010 (PRA 2010) was adopted.

(5) The special amortization rule under Preservation of Access to Care for Medicare Beneficiaries and Pension 

Relief Act of 2010 (PRA 2010) was adopted.

(6) The benefit multiplier was lowered from $2.00 to $1.00 for covered Employment on and after January 1, 2010 

and the rehabilitation plan was effective June 1, 2010.

(7) The mortality projection scale was changed to MP-2017 from MP-2015.

The mortality projection scale was change from MP-2015 to MP-2017.

AFMEPF1481
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 20

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 12

Current Liability

In accordance with IRS requirements, the Current Liability has been calculated at 3.08%. The Current Liability as 

of April 1, 2019 is determined below.

1. Current Liability

a. Active participants

b. Terminated vested participants

c. Retirees, beneficiaries, and

disabled participants

d. Total

Count

20,316

14,295

16,286

50,897

Vested Benefits

$2,053,451,623

744,436,727

2,452,148,334

5,250,036,684

All Benefits

$2,113,321,524

755,643,791

2,452,148,334

5,321,113,649

2. Expected increase in Current Liability for benefit accruals during year 55,288,405

3. Expected release from “RPA 94” Current Liability 202,750,067

4. Expected distributions during year 219,358,819

5. Market Value of Assets 1,802,580,746

6. Current Liability funded percentage

[(5) ÷ (1d)] 33.88%

AFMEPF1482
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 21

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 13

Full Funding Limitation

The full funding limitation (FFL) for the plan year ending March 31, 2020 and the tax year ending March 31, 2020

is determined below.

Minimum 

Required 

Contribution

Maximum 

Deductible 

Contribution

1. 100% Actuarial Accrued Liability (AAL) FFL

a. AAL as of April 1, 2019

b. Normal Cost as of April 1, 2019

c. Value of assets as of April 1, 2019

i. Lesser of actuarial and market value

ii. Credit Balance

iii. Undeducted employer contributions

iv. Plan assets 

[(i) - (ii) - (iii)]

d. Interest to March 31, 2020 at 7.50% on (a), (b), & (civ)

e. 100% AAL FFL 

[(a) + (b) - (civ) + (d), but not <$0]

$3,255,198,921

31,784,107

1,802,580,746

0

n/a

1,802,580,746

111,330,171

1,595,732,454

$3,255,198,921

31,784,107

1,802,580,746

n/a

0

1,802,580,746

111,330,171

1,595,732,454

2. Estimated Current Liability as of March 31, 2020

a. Current Liability as of April 1, 2019

b. Normal Cost as of April 1, 2019

c. Estimated benefit disbursements to March 31, 2020

d. Interest to March 31, 2020 at 3.08% on (a), (b), & (c)

e. Estimated EOY Current Liability 

[(a) + (b) - (c) + (d)]

5,321,113,649

71,307,308

202,750,067

162,987,893

5,352,658,783

5,321,113,649

71,307,308

202,750,067

162,987,893

5,352,658,783

3. Estimated assets for Current Liability FFL

a. Actuarial Value of Assets as of April 1, 2019

b. Estimated return to at 7.50% 

on (3a), (1ciii) & (2c)

c. Estimated assets as of March 31, 2020 

[(3a) - (1ciii) - (2c) + (3b)]

1,829,653,768

129,758,356

1,756,662,057

1,829,653,768

129,758,356

1,756,662,057

4. 90% Current Liability minimum funding limitation

a. 90% EOY RPA Current Liability [90% x (2e)]

b. 90% Current Liability FFL [(a) - (3c), but not < $0]

4,817,392,905

3,060,730,848

4,817,376,193

3,060,730,848

5. Full funding limitation [maximum of (1e) and (4b)] 3,060,730,848 3,060,730,848

AFMEPF1483
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 22

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 14

Maximum Deductible Contribution under IRC Section 404

The Maximum Deductible Contribution under IRC Section 404 for the tax year beginning April 1, 2019 is 

determined below.

1. Minimum Required Contribution for plan year beginning April 1, 2019 $335,934,620

2. Preliminary Maximum Deductible Contribution under 

IRC Section 404 for tax year

a. Normal Cost

b. 10-year amortization of unfunded Actuarial Accrued Liability 

c. Interest to earlier of tax year end or plan year end

d. Total

31,784,107

193,192,435

16,872,241

241,849,783

3. Full funding limitation for tax year 3,060,730,848

4. Unfunded 140% of Current Liability as of March 31, 2020

a. Current Liability (for IRC Section 404 purposes) projected to end of year

b. Actuarial Value of Assets (for IRC Section 404 purposes) 

projected to end of year

c. Unfunded 140% of Current Liability

[140% × (a) - (b), but not less than $0]

5,352,658,783

1,756,662,057

5,737,060,239

5. Maximum Deductible Contribution under IRC Section 404 for tax year

[maximum of (1) and (2d), but not greater than (3), nor less than (4c)] 5,737,060,239

There are alternative calculations of the Maximum Deductible Contribution under IRC Section 404 that may

produce a different amount than illustrated above. Additionally, deductibility of contributions to a defined 

contribution plan maintained for the same employees may be affected by the 25% of pay limitation for defined 

benefit and defined contribution plans combined. Employers should consult their tax advisors regarding the 

deductibility of contributions.

AFMEPF1484
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 23

American Federation of Musicians & Employers’ Pension Fund

Exhibit 15

Present Value of Accumulated Plan Benefits for PPA 2006

Accumulated Plan Benefits are benefits earned to date, based on pay history and service rendered to date, 

expected to be paid in the future to retired, terminated vested, and active participants, and beneficiaries of active 

or former participants. The Present Value of Accumulated Plan Benefits for PPA 2006 as of April 1, 2018 and 

April 1, 2019 is shown below.

4/1/2018 4/1/2019

1. Present Value of vested Accumulated Plan Benefits

a. Active participants

b. Retired participants

c. Terminated vested participants

d. Beneficiaries

e. Disabled participants

f. Total

$1,008,862,209

1,429,474,412

368,737,801

99,058,722

26,704,916

2,932,838,060

$966,901,563

1,577,814,221

369,483,709

105,028,255

28,048,050

3,047,275,798

2. Present Value of non-vested 

Accumulated Plan Benefits 53,124,105 41,190,874

3. Present Value of all Accumulated Plan Benefits

[(1f) + (2)] 2,985,962,165 3,088,466,672

4. Market Value of Assets 1,876,609,576 1,802,580,746

5. Funded percentage on Market Value of Assets

a. Vested benefits

[(4) ÷ (1f)]

b. All benefits

[(4) ÷ (3)]

63.99%

62.85%

59.15%

58.36%

6. Actuarial Value of Assets $1,844,511,996 $1,829,653,768

7. Funded percentage on Actuarial Value of Assets

b. Vested benefits

[(6) ÷ (1f)]

c. All benefits

[(6) ÷ (3)]

62.89%

61.77%

60.04%

59.24%

AFMEPF1485
Milliman

 

 Actuarial Valuation

April 1, 2018 Actuarial Valuation 24

American Federation of Musicians & Employers’ Pension Fund

Exhibit 16

FASB ASC Topic 960 Present Value of Accumulated Plan Benefits

Accumulated Plan Benefits are benefits earned to date, based on pay history and service rendered to date, 

expected to be paid in the future to retired, terminated vested, and active participants, and beneficiaries of active 

or former participants. The Present Value of Accumulated Plan Benefits (determined on a plan continuation basis 

in accordance with FASB ASC Topic 960) as of April 1, 2019 is shown below.

Benefits Expenses Total

1. Present Value of vested Accumulated 

Plan Benefits

a. Participants in pay status

b. Participants not in pay status

c. Total

$1,710,890,526

1,336,385,272

3,047,275,798

$82,065,909

64,102,098

146,003,645

$1,792,956,435

1,400,487,370

3,193,443,805

2. Present Value of non-vested 

Accumulated Plan Benefits 41,190,874 1,975,794 43,166,668

3. Present Value of all Accumulated Plan 

Benefits

[(1c) + (2)] $3,088,466,672 $148,143,801 3,236,610,473

AFMEPF1486
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 25

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 17

Change in FASB ASC Topic 960 Present Value of Accumulated Plan Benefits

The change in the Present Value of Accumulated Plan Benefits (determined on a plan continuation basis in 

accordance with FASB ASC Topic 960) from April 1, 2018 to April 1, 2019 is shown below.

1. Present Value of all Accumulated Plan Benefits as of April 1, 2018 $3,129,450,520

2. Changes

a. Reduction in discount period

b. Benefits accumulated plus Actuarial (gain) / loss

c. Benefit payments

d. Plan amendments

e. Change in assumptions

f. Total

227,888,925

40,066,429

(185,211,329)

0

24,415,928

107,159,953

3. Present Value of all Accumulated Plan Benefits as of April 1, 2019

[(1) + (2f)] 3,236,610,473

AFMEPF1487
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 26

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 18

Unfunded Vested Benefit Liability for Withdrawal Liability Calculations

Withdrawal liability payments are based on unfunded vested benefit liability. Vested benefit liability is the present 

value of benefits earned to date, excluding benefits for non-vested participants and certain benefits such as death 

and disability benefits which are not considered vested. These liabilities have been determined as of 

March 31, 2018 and March 31, 2019. However, if there is a termination by mass withdrawal during the year, a 

separate calculation has to be performed.

3/31/2018 3/31/2019

1. Present Value of Vested Benefits

a. Active participants

b. Retired participants

c. Terminated vested participants

d. Beneficiaries

e. Disabled participants

f. Total vested benefits

$2,463,299,826

2,177,944,992

792,497,291

151,888,458

39,517,069

5,625,147,636

$2,117,233,478

2,258,363,094

762,955,173

150,209,978

38,869,159

5,327,630,882

2. Market Value of Assets 1,876,609,576 1,802,580,746

3. Funded ratio

[(2) ÷ (1f)] 33.36% 33.83%

4. Unfunded vested benefit liability

[(1f) - (2), but not less than $0] $3,748,538,060 $3,525,050,136

5. Unamortized portion of value of affected benefits 

disregarded under Code Section 432(e)(9)(A)* 83,985,150 75,945,503

6. Total effective unfunded vested benefit liability for 

Withdrawal Liability Calculations

[(4) + (5)] 3,832,523,210 3,600,995,639

* Initial amount subject to amortization as of March 31, 2011 under “simplified method” pursuant to PBGC 

Technical Update 10-3 is $126,567,964 with unamortized amount based on 7.50% interest rate assumption 

from of that date.

AFMEPF1488
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 27

American Federation of Musicians & Employers’ Pension Fund 

Exhibit 19

Summary of Participant Data

A summary of participant data for the plan years beginning April 1, 2018 and April 1, 2019 is shown below.

4/1/2018 4/1/2019

1. Active participants

a. Count

b. Average age

c. Average vesting service

d. Total plan compensation

e. Average plan compensation

20,602

46.5

13.9

$489,834,750

23,776

20,316

46.4

13.8

$487,070,021

23,975

2. Retired participants

a. Count

b. Average age

c. Total annual benefits

d. Average annual benefit

12,848

74.3

$161,006,487

12,532

13,672

74.3

$174,380,392

12,754

3. Terminated vested participants

a. Count*

b. Average age

c. Total annual benefits

d. Average annual benefit

14,177

56.6

$60,740,449

4,284

14,295

57.0

$58,059,367

4,085

4. Beneficiaries

a. Count

b. Average age

c. Total annual benefits

d. Average annual benefit

2,305

73.4

$11,891,610

5,159

2,434

73.7

$12,648,596

5,197

5. Disabled participants

a. Count

b. Average age

c. Total annual benefits

d. Average annual benefit

175

70.3

$3,320,980

18,977

180

70.7

$3,536,497

19,647

* Includes 146 and 82 participants with retirement account balance only as of April 1, 2018 and April 1, 2019, 

respectively. 

AFMEPF1489
Milliman

 

 Actuarial Valuation

April 1, 2019 Actuarial Valuation 28

American Federation of Musicians & Employers’ Pension Fund

Exhibit 20

Change in Participant Counts

The change in participant counts from April 1, 2018 to April 1, 2019 is shown below.

Active

Terminated

Vested Retired Beneficiary* Disabled Total

As of 4/1/2018 20,602 14,177 12,848 2,305 175 50,107

Retired (479) (736) 1,215 0 0 0

Received lump sum

distribution (14) (56) 0 0 0 (70)

Terminated non-vested (1,763) 0 0 0 0 (1,763)

Terminated vested (1,612) 1,612 0 0 0 0

Disabled (5) (3) 0 0 8 0

Died with beneficiary (12) (18) (110) 141 (1) 0

Died without beneficiary (16) (53) (301) (77) (2) (449)

Benefit expired 0 (11) 0 (15) 0 (26)

Rehired 1,068 (1,067) (1) 0 0 0

New during plan year 2,547 449 17 34 0 3,047

Net data adjustments 0 1 4 46 0 51

As of 4/1/2019 20,316 14,295 13,672 2,434 180 50,897

* The above participant counts include 202 and 219 alternate payees entitled to benefits under Qualified 

Domestic Relations Orders as of April 1, 2018 and April 1, 2019, respectively.

AFMEPF1490
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April 1, 2019 Actuarial Valuation 29

American Federation of Musicians & Employers’ Pension Fund

Exhibit 21

Active Participants by Age and Service

The number of active participants summarized by attained age and years of credited service as of April 1, 2019 is 

shown below.

Years of Credited Service

Age 0 1–4 5–9 10–14 15–19 20–24 25–29 30–34 35–39 40+ Total

0–24 - 313 4 - - - - - - - 317

25–29 - 1,455 213 1 - - - - - - 1,669

30–34 - 1,539 865 145 4 - - - - - 2,553

35–39 - 974 868 710 162 6 - - - - 2,720

40–44 - 562 462 587 622 144 2 - - - 2,379

45–49 - 379 286 355 530 642 130 3 - - 2,325

50–54 - 221 200 256 351 601 424 86 3 - 2,142

55–59 - 186 184 242 304 493 536 493 125 4 2,567

60–64 - 137 145 210 292 430 419 493 450 139 2,715

65–69 - 69 68 75 133 138 113 88 81 48 813

70+ - 45 13 8 19 8 4 7 4 8 116

Total - 5,880 3,308 2,589 2,417 2,462 1,628 1,170 663 199 20,316

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April 1, 2019 Actuarial Valuation 30

American Federation of Musicians & Employers’ Pension Fund

Exhibit 22

Summary of Contribution History

The average contribution of active participants, summarized by plan year is shown below.

Total Contribution Active Participants Average Contribution

Year Ending 

3/31 Amount

Percent 

Change Number

Percent 

Change Amount

Percent 

Change

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

46,119,911

47,814,858

49,047,228

45,966,116

44,673,896

47,096,445

47,849,801

47,993,760

49,813,186

51,014,824

52,872,746

53,859,286

53,290,783

5.05%

3.68%

2.58%

(6.28)%

(2.81)%

5.42%

1.60%

0.30%

3.79%

2.41%

3.64%

1.87%

(1.06)%

23,762

23,413

23,164

21,704

21,510

20,836

20,614

20,423

20,884

21,031

21,085

20,602

20,316

0.98%

(1.47)%

(1.06)%

(6.30)%

(0.89)%

(3.13)%

(1.07)%

(0.93)%

2.26%

0.70%

0.25%

(2.29)%

(1.39)%

1,941

2,042

2,117

2,118

2,077

2,260

2,321

2,350

2,385

2,426

2,508

2,614

2,623

4.02%

5.20%

3.67%

0.05%

(1.94)%

8.81%

2.70%

1.25%

1.49%

1.72%

3.38%

4.23%

0.34%

 Five-year average contributions: $52,170,165

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 Actuarial Valuation 

April 1, 2019 Actuarial Valuation 31

American Federation of Musicians & Employers’ Pension Fund

Appendices

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 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 32

American Federation of Musicians & Employers’ Pension Fund

Appendix A – Summary of Actuarial Assumptions and Methods

Actuarial Assumptions

 Investment Return:

 7.50% (net of investment-related administrative expenses) for ERISA minimum funding and FASB ASC 

Topic 960 plan accounting.

 3.08% for current liability purposes.

 March 2019 PBGC interest rates for mass withdrawal purposes of 3.09% for first 20 years and ultimate

rate of 2.84% for unfunded vested benefit liability for withdrawal liability calculations.

 Mortality:

Employee: RP-2014 Employee Mortality Table adjusted to reflect Mortality Improvement Scale MP-2019 from 

2006 base year, and projected forward using MP-2019 on a generational basis for males and females

Annuitant: RP-2014 Annuitant Mortality Table adjusted to reflect Mortality Improvement Scale MP-2019 from 

2006 base year, and projected forward using MP-2019 on a generational basis for males and females

Disabled: RP-2014 Disabled Annuitant Mortality Table adjusted to reflect Mortality Improvement Scale MP2019 from 2006 base year, and projected forward using MP-2019 on a generational basis for males and 

females.

Mortality Rates Used in Conjunction with Full Funding Limitation Computations

Test I (ERISA): Based on the Plan’s mortality, as defined above.

Test II (RPA ’94): RP-2014 mortality table (male and female rates) with projection for mortality improvement, 

updated annually, as mandated by the IRS.

 Termination Rates:

Termination rates have been separated into two groups.

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Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 33

American Federation of Musicians & Employers’ Pension Fund

Sample rates are shown below for participants who earned less than $10,000 in the plan year prior to the 

valuation date:

Years of Service

Attained Age 0-2* (Select) 2-3 (Select) 3-4 (Select) 4 or More (Ultimate)

20

25

30

35

40

45

50

55

60

64

65

35.0%

35.0

40.0

45.0

45.0

45.0

45.0

45.0

45.0

45.0

0.0

30.0%

30.0

35.0

40.0

40.0

40.0

35.0

35.0

35.0

35.0

0.0

20.0%

20.0

25.0

30.0

30.0

30.0

30.0

30.0

30.0

30.0

0.0

20.0%

20.0

20.0

20.0

20.0

20.0

20.0

20.0

20.0

20.0

0.0

* Participants with less than one year of service are not included for valuation purposes. Therefore, 

this select period with respect to the present value of benefits only impacts participants who have 

accrued between 1 and 2 years of vesting service as of the valuation date. Nonetheless, this select 

period has an impact on the Normal Cost (which spreads liability from entry age to retirement age) 

for all participants.

Sample rates are shown below for participants who earned $10,000 or more in the plan year prior to the valuation 

date:

Attained Age Termination Rate

20

25

30

35

40

45

50

55

60

64

65

6.0%

6.0%

6.0%

4.0%

4.0%

4.0%

3.0%

3.0%

3.0%

3.0%

0.0%

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 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 34

American Federation of Musicians & Employers’ Pension Fund

 Retirement Rates:

Retirement rates used are shown below:

Attained Age Retirement Rate

55-61

62-63

64

65

66-69

70

71 and Over

1.0%

2.0

15.0

50.0

20.0

100.0

N/A

The weighted average retirement age is 66.1.

 Disability Rates:

None.

 Form of Payment: 

Future retirees will elect each optional form of benefit as shown below:

Form of Payment % Electing

Single Life 45%

Joint & 50% Survivor 30%

Joint & 75% Survivor 25%

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Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 35

American Federation of Musicians & Employers’ Pension Fund

 Assumed Age of Commencement of Deferred Benefits:

Participants who have terminated with deferred benefits or who are assumed to terminate with deferred benefits 

in the future as shown below:

Attained Age % Retiring

55-59 1.0%

60-61 3.0

62-63 3.0

64 3.0

65 20.0

66-68 20.0

69 10.0

70 10.0

71 and Over 100.0

 Pre-Retirement Death Benefits:

80% of the participants are assumed to have beneficiaries. Male participants are assumed to be three years 

older than female beneficiaries and female participants are assumed to be three years younger than male 

beneficiaries.

 Future Benefit Accruals:

Current actives until retirement and current in-pay retirees under 65 until age 65: Future years’ contributions 

are assumed to increase by 2.25% per year from those contributions reported for the prior pension credit year.

Current in-pay retirees at or over 65: Future years’ contributions are assumed to be equal to contributions 

reported for the prior pension credit year.

Contribution amounts for future retirees and current in-pay retirees under 65 starting at age 65 are shown below:

Attained Age Annual Contribution Amount

55-75 $750

76-85 250

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Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 36

American Federation of Musicians & Employers’ Pension Fund

 Administrative Expenses:

The average of the prior two years’ administrative expenses, increased by 2.25%. For FASB ASC Topic 960 

plan accounting, the present value of the administrative expenses was calculated by projecting the payment 

of expected administrative expenses for the duration of the Plan’s liabilities. The duration of the Plan’s 

liabilities was calculated to be 12 years at April 1, 2019 and 12 years at April 1, 2018. Projected 

administrative expenses were increased 2.25% per annum after the valuation year, then discounted using the 

Plan’s investment return assumption of 7.5% as of April 1, 2019 and April 1, 2018.

 Benefit Limitations:

The Section 415 limit of $195,000* is applied on an aggregate basis but the participant’s total benefit at 

December 31, 2007 is applied on an employer-by-employer basis using a Section 415 limit of $180,000.

The Section 401(a)(17) limit of $245,000* is applied on an employer-by-employer basis. For valuation 

purposes, the Section 401(a)(17) limit is assumed to not apply for future accruals.

* The limits do not change based on automatic cost-of-living adjustments. Rather, the limits will remain at 

the noted levels above until the Trustees amend the plan.

 Assumptions regarding missing or incomplete data:

Lost Participants: Assume 100% of lost participants will receive benefits. Lost participants over age 701⁄2 receive 

actuarial increase from Normal Retirement Date to Required Beginning Date. In addition, a one-time payment 

of missed payments from Required Beginning Date to the valuation date with interest at 7.5%. 

Summary of Lost Participants as of 4/1/2019

Count 541

Average Age 65

Average Annual Benefit $2,623

One-Time Payment $6.5M

Unreported Data: Active participants with unreported data (gender, date of birth) are assumed to have 

characteristics of the average group. If not easily determined, participants with unknown sex are assumed to 

be male.

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Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 37

American Federation of Musicians & Employers’ Pension Fund

 Rationale for Significant Assumptions

Investment Return for ERISA minimum funding and FASB ASC Topic 960 plan accounting: Selected 

based on the Plan’s target asset allocation as of the valuation date, capital market assumptions from several 

sources, including published studies summarizing the expectations of various investment experts. This 

information was used to develop forward-looking long-term expected returns, producing a range of 

reasonable expectations according to industry experts. Based on the resulting range of potential 

assumptions, in our professional judgement the selected investment return assumption is reasonable for this 

purpose and is not expected to have any significant bias.

Investment Return for withdrawal liability: Rates of return used by the PBGC to value annuities under a 

mass withdrawal. Withdrawal liability is used to allocate a portion of Unfunded Vested Benefits to employers 

who withdraw from the fund. A withdrawal is viewed as a settlement similar to an annuity purchase where the 

transfer of investment risk for a portion of a plan’s liabilities is assumed by an insurance company. Use of the 

PBGC rates reflects the fact that a withdrawn employer transfers investment risk to the remaining employers. 

As such it is reasonable to use PBGC interest rates that are used to measure plan termination liabilities and 

which are considered comparable to rates used by insurance companies for annuities to measure the 

financial obligation of the withdrawing employer. In our professional judgement, the selected investment 

return assumption for withdrawal liability is reasonable for this purpose and is not expected to have any 

significant bias.

Mortality: Based on recent pension mortality research conducted by the Society of Actuaries as of the 

April 1, 2019 valuation publication date.

Retirement Rates: Based on analysis of retirements experienced by the Plan from April 2011 through April 

2016.

 Changes in Assumptions from Prior Valuation

The methods and assumptions used in this valuation are the same as those used in the prior valuation except 

as follows: 

 The mortality projection scale was changed to MP-2019 from MP-2017.

 Assumed retirement rates after termination were changed to a graded scale from 100% at 65.

 Assumed form of payment election was changed to 45% electing Single Life Annuity, 30% electing 50% 

Joint & Survivor Annuity, and 25% electing 75% Joint & Survivor Annuity from 100% electing Single Life 

Annuity.

 Post-retirement accruals were modified.

 Lost participants are assumed to be owed benefits.

These changes resulted in an increase in plan liabilities. 

Actuarial Cost Methods

 Liability Valuation Method:

The Entry Age Normal actuarial cost method where Normal Cost is determined based on projected benefits 

for current active participants using each individual participant's actual entry age. Entry age is the age at date 

of employment or if date is unknown, attained age minus pension credits. Normal Cost and Actuarial Accrued 

Liability are calculated on an individual basis and are allocated by service. Projected benefits are based on 

benefits as if the current benefit accrual rate had always been in effect.

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 Actuarial Valuation

 

Appendix A – Summary of Actuarial Assumptions and Methods

April 1, 2019 Actuarial Valuation 38

American Federation of Musicians & Employers’ Pension Fund

 Asset Valuation Method:

The market value of assets is adjusted by smoothing the differences between the expected market value of 

assets and the actual market value of assets from the past five years. In accordance with the special asset 

valuation rule under funding relief, the amount of the difference in expected market value of assets and the 

actual market value of assets for the plan year ending March 31, 2009 is amortized over a 10-year period. 

The expected value of assets for each year is the market value of assets at the valuation date for the prior 

year brought forward with interest at the valuation rate to the current year plus contributions minus benefit 

payments and administrative expenses, all adjusted with interest at the valuation rate from the prior year to 

the valuation date for the current year. The actuarial value of assets is the resulting amount except if the 

resulting amount is greater than 120% of the market value, actuarial value of assets is set equal to 120% of 

market value of assets and if the resulting amount is less than 80% of the market value, actuarial value of 

assets is set equal to 80% of market value of assets.

For purposes of determining the unfunded vested benefit liability for withdrawal liability calculations, the asset 

valuation method is market value.

 Special amortization rule:

The Plan’s investment loss for the Plan year ended March 31, 2009 is treated separately from other 

investment gains/losses, to be amortized in equal installments over the period beginning from April 1, 2009 

through March 31, 2039.

The portion of the net experience loss is based on the prospective method as described in Notice 2010-83. 

The schedule of amortization bases is as follows:

Year

Amount

(Gain)/Loss

Years in

Amortization Base*

Years in 

Offset Base*

4/1/09

4/1/10

4/1/11

4/1/12

4/1/13

4/1/14

$ 545,478,705

(124,097,819)

153,283,704

21,184,391

63,061,837

 45,271,288

$ 704,182,106*

29

28

27

26

25

24

15

15

15

15

15

15

* The total loss of $704,182,106 equals the investment loss for the year ended March 31, 2009.

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 Actuarial Valuation

 

Appendix B – Summary of Principal Plan Provisions

April 1, 2019 Actuarial Valuation 39

American Federation of Musicians & Employers’ Pension Fund

Appendix B – Summary of Principal Plan Provisions

Effective Date

November 16, 1959. The plan was amended and restated effective January 1, 2014.

Participation

An eligible employee becomes a participant on January 1 of the year in which the participant earns $750 in 

Covered Earnings by an Employer who is required to make contributions to the Fund.

Normal Retirement Age

Age 65 or if later, the date on which a Participant completes five years of participation in the Plan.

Vesting Service

Vesting Service is based on the Covered Earnings earned in each calendar year, as follow:

Covered Earnings Years of Vesting Service

< $750 0.00

$750 - $1,499 0.25

$1,500 - $2,249 0.50

$2,250 - $2,999 0.75

>= $3,000 1.00

A Participant becomes vested upon completion of 5 years of Vesting Service or upon attainment of Normal 

Retirement Age.

Regular Pension Benefit

A Participant is eligible to receive a Regular Pension Benefit at Normal Retirement Age or at age 55 with 5 years 

Vesting Service.

Regular Pension Benefit is calculated by multiplying each $100 of vested contributions earned by a Benefit 

Multiplier (a specific dollar amount). The monthly benefit amount under the Life Annuity form of payment is 

calculated in accordance with the following tables:

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Appendix B – Summary of Principal Plan Provisions

April 1, 2019 Actuarial Valuation 40

American Federation of Musicians & Employers’ Pension Fund

Effective June 1, 2010 Monthly Amount per $100 of Vested Contributions

Age

For Contributions

for Covered 

Employment

before 1/1/04

For Contributions

for Covered

Employment 

Between

1/1/04 and 3/31/07

For Contributions

for Covered

Employment

Between

4/1/07 and 4/30/09

For Contributions

for Covered

Employment

Between

5/1/09 and 12/31/09

For Contributions

For Covered

Employment

on and after

1/1/10

55 $1.70 $1.28 $1.19 $0.73 $0.37

56 1.86 1.40 1.30 0.80 0.40

57 2.05 1.54 1.43 0.88 0.44

58 2.26 1.70 1.58 0.97 0.49

59 2.48 1.87 1.74 1.07 0.53

60 2.75 2.07 1.92 1.18 0.59

61 3.04 2.29 2.13 1.31 0.65

62 3.36 2.53 2.35 1.45 0.72

63 3.75 2.82 2.62 1.61 0.80

64 4.16 3.13 2.91 1.79 0.90

65 4.65 3.50 3.25 2.00 1.00

For participants who retire after Normal Retirement Age, the monthly benefit is the regular pension amount at 

Normal Retirement Age actuarially increased to account for delayed retirement.

Disability Pension Benefits

An active participant who has completed at least 10 years of Vesting Service, who has stopped working in 

Covered Employment because of a condition of Total Disability, and who has not started to receive a Regular 

Pension Benefit, is eligible for a Disability Pension Benefit.

The monthly Disability Pension Benefit is calculated by multiplying each $100 of contributions by the applicable 

age-65 Benefit Multipliers, actuarially reduced to participant’s actual age as of the effective date of Disability 

Pension Benefit.

Pre-Retirement Death Benefits

If a vested participant who has not yet retired dies after age 55, the participant’s beneficiary will receive a benefit 

equal to the benefit the beneficiary would have received had the participant retired on his date of death and 

elected to receive a 50% Joint and Survivor Annuity. 

If a vested participant dies before age 55, the beneficiary’s benefit is actuarially equivalent to the 50% Joint and 

Survivor Annuity at age 55.

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 Actuarial Valuation

 

Appendix B – Summary of Principal Plan Provisions

April 1, 2019 Actuarial Valuation 41

American Federation of Musicians & Employers’ Pension Fund

Post-Retirement Death Benefits

If a vested participant dies after his or her benefit begins and the pension benefit was being paid as a Joint and 

Survivor Annuity, the Joint Annuitant will receive 50% of the participant’s monthly benefit for his or her lifetime; if 

the pension benefit was being paid as Life Annuity, the remaining balance of the guaranteed benefit will be paid.

Re-Retirement Benefits

If a participant retires before his or her Normal Retirement Age, later returns to Covered Employment, and earns 

$50 or more of contributions in at least one calendar year between his or her initial pension Benefit Annuity Start 

Date and Normal Retirement Age, an additional benefit calculated based on the contributions made on the 

participant’s behalf during that period will be paid as of the first of the month after the participant reaches Normal

Retirement Age.

Redetermination Benefits

If a pensioner returns to Covered Employment and earns $50 or more of contributions in a calendar year after 

Normal Retirement Age, he or she will earn an additional pension benefit. This redetermination benefit is 

calculated each July 1st based on contributions for Covered Employment earned during the previous calendar 

year. The redetermination benefit is based on the age-65 Benefit Multiplier in effect at the end of the previous 

calendar year and is offset by the actuarial equivalent of any redetermination benefit received in the previous year 

that is based on contributions earned after 2003.

Normal Form of Payment

If a participant has an eligible spouse as of his or her Annuity Starting Date, the normal form of payment is Joint 

and Survivor Annuity. If a participant does not have an eligible spouse as of the Annuity Starting Date, the normal 

form of payment will be Single Life Annuity with respect to any benefit earned on and after January 1, 2004. If a 

portion of the participant’s benefit was based on contributions earned prior to January 1, 2004, there is a 

guaranteed amount of 100 times that portion of the participant’s benefit. The guaranteed feature is eliminated for 

benefit with an annuity starting date on or after June 1, 2010.

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 Actuarial Valuation

 

Appendix B – Summary of Principal Plan Provisions

April 1, 2019 Actuarial Valuation 42

American Federation of Musicians & Employers’ Pension Fund

Appendix C – Risk Disclosure

The purpose of this appendix is to identify, assess, and provide illustrations of risks that are significant to the Plan, 

and in some cases to the Plan’s participants. 

The results of the actuarial valuation are based on one set of reasonable assumptions. However, it is almost 

certain that future experience will not exactly match the assumptions. As an example, investments may perform 

better or worse than assumed in any single year and over any longer time horizon. It is therefore important to 

consider the potential impacts of these likely differences when making decisions that may affect the future 

financial health of the Plan, or of the Plan’s participants.

In addition, as plans mature they accumulate larger pools of assets and liabilities. This increases the potential risk 

to plan funding and the finances of those who are responsible for plan funding. As an example, it is more difficult 

for a plan sponsor to deal with the effects of a 10% investment loss on a plan with $1 billion in assets and 

liabilities than if the same plan sponsor is responsible for a 10% investment loss on a plan with $1 million in 

assets and liabilities. Since pension plans make long-term promises and rely on long-term funding, it is important 

to consider how mature the Plan is today, and how mature it may become in the future.

Actuarial Standard of Practice No. 51 (ASOP 51) addresses these issues by providing actuaries with guidance for 

assessing and disclosing the risk associated with measuring pension liabilities and the determination of pension 

plan contributions. Specifically, it directs the actuary to:

 Identify risks that may be significant to the Plan.

 Assess the risks identified as significant to the Plan. The assessment does not need to include numerical 

calculations.

 Disclose plan maturity measures and historical information that are significant to understanding the Plan’s 

risks.

ASOP 51 states that if in the actuary’s professional judgment, a more detailed assessment would be significantly 

beneficial in helping the individuals responsible for the Plan to understand the risks identified by the actuary, then 

the actuary should recommend that such an assessment be performed.

This appendix uses the framework of ASOP 51 to communicate important information about: significant risks to 

the Plan, the Plan’s maturity, and relevant historical plan data.

Investment Risk

Definition: The potential that investment returns will be different than expected.

Identification: To the extent that actual investment returns differ from the assumed investment return, the Plan’s 

future assets, funding contributions, and funded status may differ significantly from those presented in this 

valuation.

Interest Rate Risk

Definition: The potential that interest rates will be different than expected.

Identification: The pension liabilities reported herein have been calculated by computing the present value of 

expected future benefit payments using the interest rate(s) described in Appendix B. If interest rates in future 

valuations differ from this valuation, future pension liabilities, funding contributions, and funded status may differ 

significantly from those presented in this valuation. As a general rule, using a higher interest rate to compute the 

present value of future benefit payments will result in a lower pension liability, and vice versa. One aspect that can 

be used to estimate the impact of different interest rates is a plan’s duration. 

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Appendix B – Summary of Principal Plan Provisions

April 1, 2019 Actuarial Valuation 43

American Federation of Musicians & Employers’ Pension Fund

Assessment: If the interest rate changes by 1%, the estimated percentage change in pension liability is a plan’s 

duration in years. The approximate duration of this Plan is 12 years. As such, if the interest rate changes by 1%, 

the estimated change in pension liability is 12%.

Demographic Risks

Definition: The potential that mortality or other demographic experience will be different than expected.

Identification: The pension liabilities reported herein have been calculated by assuming that participants will 

follow patterns of demographic experience (e.g., mortality, withdrawal, disability, retirement, form of payment 

election, etc.) as described in Appendix B. If actual demographic experience or future demographic assumptions 

are different from what is assumed to occur in this valuation, future pension liabilities, funding contributions, and 

funded status may differ significantly from those presented in this valuation.

Contribution Risk

Definition: This is the possibility that actual future contributions deviate from expected future contributions.

Identification: The Plan is subject to the contribution risk that if contributions are lower than anticipated, 

investment income is lost in the intervening period and future collective bargaining agreements will need to have 

higher contribution rates.

Covered Employment Risk

Definition: The potential that future covered employment is lower than expected due to a declining workforce in a 

company or industry, or a temporary workforce reduction due to market forces. 

Identification: A reduction in the Plan’s contribution base can potentially threaten its ability to recover from 

another market downturn.

Employer Withdrawal Risk 

Definition: The potential that contribution rate increases or benefit reductions will drive the bargaining parties to 

withdraw from the Plan. 

Identification: Employer withdrawals will reduce the Plan’s contribution base and add pressure on the remaining 

participating employers and the Plan’s investment returns to restore or strengthen the Plan’s funded status.

Assessment: Since the Plan has negative cash flow (i.e., annual contributions minus benefit payments and 

expenses), a reduction in contributions will add even more pressure on assets to achieve or exceed the assumed 

investment return.

Business Risk 

Definition: The potential that a company suffers a financial setback which impairs its ability to make contributions 

to the Plan. 

Identification: If contributions cannot be recovered, it will shift the weight of maintaining the Plan’s funded status 

upon the remaining employers of the Plan.

Zone Status Risk 

Definition: The potential that the Plan will deteriorate to a zone status such that the Trustees would need to take 

action to improve the Plan’s funded status through the development of an improvement plan that increases 

contributions, reduces benefits, or both. 

Identification: The type of benefit reductions and/or contribution rate increases would depend on the zone status. 

Specifically, yellow zone plans are generally limited to reducing benefits, rights, and features on future accruals 

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Appendix B – Summary of Principal Plan Provisions

April 1, 2019 Actuarial Valuation 44

American Federation of Musicians & Employers’ Pension Fund

only. Red zone plans can reduce features on all accrued benefits (such as early retirement subsidies), but cannot 

reduce benefits to those in pay status. Deep red zone plans have the same tools as red zone plans, but can also 

apply to the IRS and PBGC to reduce benefits to participants and beneficiaries in pay status.

Maturity Risk

Definition: This is the potential for total plan liabilities to become more heavily weighted toward inactive liabilities 

over time.

Identification: The Plan is subject to maturity risk because as plan assets and liabilities continue to grow, the 

impact of any gains or losses on the assets or liabilities also becomes larger. 

Assessment: Currently assets are equal to 24 times last year’s contributions indicating a one-year asset loss of 

10% would be equal to 2.4 times last year’s contributions

Liquidity Risk

Definition: This is the potential that assets must be liquidated at a loss earlier than planned in order to pay for the 

Plan’s benefits and operating costs. This risk is heightened for plans with negative cash flow, in which 

contributions do not exceed annual benefit payments plus expenses. 

Identification: The Plan has moderate cash flow requirements because the sum of benefit payments plus 

expenses exceeds contributions. The Plan also has some allocation to illiquid assets such as real estate and 

private equity. As a result, there is a risk that assets may need to be liquidated at a loss before planned in order to 

pay benefits and expenses.

AFMEPF1506