Practice Part 1: Passion

Posted April 30, 2010 by nashmusicians
Categories: Uncategorized

Note: The following article is reprinted with permission from Mike Valeras’ blog.

Over the years, I’ve been asked many questions regarding practicing and motivation.  Due to the recent interest expressed by some of you on this matter, I would like to respond by exploring reasons for, and ways to avoid, “Hitting the Wall.”  Today’s post, the first of three, will address what I believe to be the most important element of any artist’s/musician’s quest for self-improvement.  Passion.

It is my belief that if you are to excel at something, in this case music, you must know, with all your heart and soul, what your passion is.  What is the one thing that makes you so happy, that you would want to do it everyday, for free?  Mine is so clearly defined that I even include it in short bios of myself.  See my myspace page for example.  I love the guitar and  it’s function in the overall sound-scape of music.  Everything else stems from this.  I  could expand on it endlessly but that’s pretty much it in a nutshell.  Your passion may be songwriting, performing, or a specific style of music.  Whatever it is.  Define it. 

 The most important thing about your passion should be your innocence towards, and excitement for, whatever that passion is.  Every time I pick up a guitar, I get jazzed!  The possibilities wash over me like a wave, and I can’t wait to dig in.  The shape of the instrument, the feel of the wood, and the sound of a string vibrating give me the same feeling of butterflies that I felt the first time I picked one up as a boy.  You must see your passion through the eyes of a child.  When you do this, you will begin to see the musical world, and your instrument, as infinite.  Can you imagine the spirit of a child, with endless possibilities, ever ”Hitting the Wall?”  Next time, in Part II, I’ll discuss the natural extension of defining your passion.  Following your path, and using it to jump-start your practice regimen.


Local 257 Pension Update

Posted April 19, 2010 by nashmusicians
Categories: Uncategorized

Local 257 AFM-EP Pension update


As soon as the recent changes to the AFM-EP Pension Fund were announced on March 1st, 2010, I made a request to the Fund to send representatives to Nashville to speak with our members as soon as possible. In response to my request, the Executive Director Maureen Kilkelly and Director of Finance Will Luebking came to Nashville and spoke with our members after our regular General Membership Meeting, on Monday, March 8, 2010. There was a good turnout at the meeting, but many of you were unable to attend, so I have gone over my notes and the audio transcript of our discussion and have summarized the information that was presented in order to keep you informed.

It goes without saying that the financial equations that determine the ratios and actuarial projections of the Funds assets and liabilities are extremely complicated. Maureen and Will spent quite some time explaining the history of the Fund, how it is set up, monitored and administered, and how the recent economic downturn has affected all Pension Funds, and ours in particular. They answered many questions and were very open and honest with their answers.

1. Background The AFM-Employer Pension Fund is a multi-employer, defined benefit plan, and was created in 1959. In accordance with the requirements of the Taft-Hartley Act, the Fund is governed by a joint Board of Trustees, half of whom are appointed by the AFM and half of whom are appointed by representatives of the Music Industry. Harold Bradley is one of the Trustees appointed by the AFM. Maureen and Will and the other directors and employees of the Fund take their orders from the Trustees, and their job is to execute those orders in compliance with Federal laws regulating pensions. The main federal law governing pension plans is the 1974 ERISA (Employee Retirement Income Security Act) as most recently amended by the Pension Protection Act of 1996, which was put in place primarily to ensure the sufficient funding of pension funds after the collapse of a significant number of funds over the previous five years. Single employer plans have traditionally been more unstable than multiemployer plans such as the AFM-EP Fund. The Fund’s income is from a combination of employer contributions and investment income. These investments are made by teams of investment managers chosen by the Trustees in consultation with their investment consultant, and are diversified over a variety of investment types in order to minimize risk. These investments are conservative, but are still subject to the fluctuations of the market, which as we all know, has not been doing well. There are currently over 4000 Collective Bargaining Agreements and 8000 employers paying into the Fund, which paid out over $120 Million to participants last year, against $50M in employer contributions, so that $70M was drawn out of the Fund’s assets. This is not out of line for a 50 year old plan, but the 29% drop in the value of the Funds investment in 2008/09 was unexpected. Market forces are still the main driving force behind the changes in the Fund, which in normal times is expected to return 7.5% annually on its investments. Even though the Fund regained 25% of its value in 2009/10, it is still significantly behind where it would have been.

2. Recent Changes The stock market downturn of late 2008, the second large downturn in the last eight years, is the primary reason for the latest adjustments to the Fund, which were decided upon by the Pension Trustees on February 24, 2010 at a meeting that Pension Trustee Harold Bradley did not attend. These changes were announced at the AFM’s Western Conference February 27, 2010 and officially released to all AFM members on March 1, 2010. This document can be viewed at

3. Pension Fund Status The Fund’s fiscal year ends on March 31, and each year the Fund must certify its “funded status” to the U.S. Government. There are four “funding zones”, ranging from the most well-funded (“green” zone) to the least funded (“red” zone, or “critical”). As of April 1, 2008 the Fund was fully funded and in the green zone. The stock market downturn of 2008 and 2009 caused the Fund’s total assets to drop from $2 Billion to $1.3 Billion at its lowest, causing the Fund’s funding status to drop to 75.2% as of April 1, 2009. As a result, the Fund would have been in the “red” zone as of April 1, 2009, but the Trustees elected to “freeze” its “green” status for a year as permitted by law in hopes that the stock market would begin to recover, that Congress would pass pension relief legislation, and generally to give them time to consider an appropriate recovery plan for the Fund. While the stock market has regained some of its losses, the Fund expects to enter “red” zone status on April 1, 2010, which by law requires more drastic adjustments to ensure the long term health of the Fund. These announced changes are being finalized as you read this. Critical status for the Fund means that it is expected to incur a “funding deficiency” within the next 4-5 years. The Fund is NOT insolvent, and these changes are all designed to return the fund to the green zone as soon as practicable. The recent reductions of the multipliers are also designed to protect the health of the Fund going forward, but were not enough on their own and the Trustees do not want to lower them any more. The Trustees decided to act swiftly to enable the plan to emerge from critical status (red zone).

4. How These Changes Affect You Here are the key elements of the changes that will affect participants in the Fund. If you have already begun to take your pension, nothing will change in the benefits you are receiving. The major area of change is in the early retirement multipliers. Many of you have expressed concern about the status of pre-2004 contributions, when the multiplier was at its highest, so I will start there.

1. All pre-2004 contributions at the 4.65 multiplier and benefits, when taken at age 65, are EXACTLY what they were before these changes. In other words, if you wait until 65 to take your Pension, or if you have already taken your Pension, no matter what your age, the changes will not affect you.

2. Early retirement benefits, which can be taken at age 55 through 64, will be adjusted downward. Specifically, the amount of benefit earned from pre-2004 contributions will now be the “actuarial equivalent” to the age 65 benefit – that is, the same value as the age 65 benefit – rather than “subsidized” – that is, a value greater than the age 65 benefit. In either case, the early retirement benefit is less than the age 65 benefit because it is paid over a longer time. At 55, the multiplier for pre-2004 contributions is currently $2.33, 50% of the 4.65 multiplier. For benefits that begin on or after June 1 (or on or after July 1, if an application was filed with the Fund by February 24, 2010), the age 55 multiplier will be $1.70, which is 37% of the $4.65 age 65 multiplier, a 13% drop from the previous number. Each year between 55 and 64 has a higher multiplier as you move towards 65, when you receive the full benefit. These numbers are now lower, and I will enclose a chart at the end of this document that will illustrate the new rates vs. the old. For many of you between the ages of 55 and 65 who were contemplating taking your Pension early, this is obviously of great concern. I had no knowledge of the impending changes and had no way to “warn” you that this would happen. However, it is also important to remember that early retirement is a privilege under this plan and could have been eliminated altogether.

3. All employers will be required BY LAW to increase their contributions to the Fund. A 5% surcharge will take effect on or around June 1st, 2010. In other words, a 10% Pension contribution will become 10.5%. On April 1, 2011, the surcharge will increase to 10% of contributions, so that same 10% Pension contribution in May 2010 will become 11%. This will greatly help to get the Fund back to pre 2008 levels. For reference, all record work is currently paid at 11%, so it will become 11.55% in June 2010 and 12.1% in April 2011. These extra contributions will go to the fund directly and will not be attached to your individual Fund contribution credits. If a signatory employer refuses to pay the surcharge, the Fund can exact a “withdrawal liability” penalty charge that will be strong motivation for employers to stay with the plan. Obviously this is not an easy sell, but it is required by law.

4. An employer can avoid the surcharge by amending the existing Collective Bargaining Agreement (with the agreement of the Union) to incorporate a reduced increase in contributions of 4% instead of the 5% surcharge and 9% instead of the 10% surcharge AND most importantly, you WILL receive pension credit for these extra contributions. For example, we hope that we can do this with the Grand Ole Opry, General Jackson, and Nashville Symphony agreements when the final changes are announced on June 1, 2010.

5. For a single individual, a single life annuity is the typical benefit one would take. The single life annuity now has a guarantee of 100 times the benefits earned before 2004, which means that if you died before receiving 100 payments, the remainder would go to your beneficiary. In the 50% joint and survivor annuity there is a 60 month guarantee applicable to benefits earned before 2004; if both the participant and the spouse or other “joint annuitant” die before receiving 60 payments the remainder goes to a beneficiary. These guarantees will no longer be allowed. In addition, if you elect a 50% joint and survivor annuity and your spouse or other joint annuitant dies within 5 years, your benefit will not automatically convert to a single life annuity as the pre-2004 portion did in the past.

6. The annual limits of the plan will indefinitely remain at the IRS approved 2010 levels of $245,000 in compensation per year and a maximum benefit payout of $195,000 per year.

Who Funds the Pension Fund, based on total annual contributions to the Fund?

Symphonic 44%

Casuals 21%

Broadway 12%

Television 6%

Recording 5%

Jingles 5%

Motion Pictures 4%

AFM and Locals 3%


Early Retirement Work Sheet – On early retirement, every year after age 55 the multipliers go up towards the age 65 multiplier. Previous to the change, at age 55, the multiplier for benefits earned before 2004 was $2.33. It has now been changed to $1.70 (the actuarial equivalent of the age 65 multiplier), and every year it gets closer to the full age 65 multiplier. Once you take your early pension, you are locked into that rate. Adjustments are made at age 65 to allow for any additional contributions if any, earned after your early retirement in which the full multiplier levels are used. For reference here, are the age 65multipliers but I am only going to illustrate the different levels for each year up to the age 65 for the $4.65 multiplier, as that is the biggest number.

Pre-2004 = $4.65

1/1/2004 – 3/31/2007 = $3.50

4/1/2007 -4/31/2009 = $3.25

5/1/2009 – 12/31/2009 = $2.00

After 1/1/2010 = $1.00

Here is a chart that illustrates the changes in the new early retirement benefits on Pre-2004 contributions. There are different multipliers for benefits earned from contributions in or after 2004.

Age           New Pre ’04 benefits – Previous Pre ’04 benefits – Difference

65+ or older     4.65                              4.65                          0

64                       4.16                              4.46                       .40

63                       3.75                              4.28                       .53

62                       3.36                              4.09                       .73

61                        3.04                              3.91                       .87

60                       2.75                              3.72                       .97

59                      2.48                              3.44                       .96

58                      2.26                              3.16                       .90

57                       2.05                              2.88                       .83

56                       1.86                              2.60                       .76

55                       1.70                              2.33                       .63

What does this mean? Previously, 58 or 59 was thought by many to be the optimum ages to take your pension, as whatever age you take it, you are locking in to that rate until you turn 65. Now, one can make the argument that “61/62 is the new 58/59”, as the recent changes become are much less drastic as you approach 65.

Three Final Points 1. Please visit the Fund’s website at and register with the Fund. In addition to viewing your historical Annual Reports of Covered Earnings (Annual Statements, registering will allow you to view an on-line report of your covered earnings through the end of the previous calendar quarter. 2. Please make sure you have a beneficiary on file with the Fund. Beneficiary forms are available for download from the Fund’s web site. 3. You should know that once you take your Pension, you are not allowed to change your beneficiary, so be aware of that when you are ready to take your Pension!

Editorial comment – I do understand the immediate knee jerk reaction of “the heck with the Union, I’m gonna work for cash and find my own way to fund my pension.” I am sure there are many of you who may have the investment skills to try this. However, I believe this would be a drastic mistake. The opposite is what needs to happen. We need to INCREASE contributions to the Fund to speed up this rehabilitation process. It is more important than ever to bring more dark dates ‘on the card’, and we need to do all we can to help the Fund grow. As the stock market improves, so will the Fund. The new single song overdub scale will allow you to pay into your own pension for the first time and with the employers paying an additional 9 or 10% beginning next year, the goal of everyone involved will be to get the multipliers back up as soon as possible.

As difficult as this is for everyone, believe or not, it could have been much worse. Small consolation, I know, but I hope that during these challenging times we can stick together and do what is best for all of us going forward. This is about all I know at this time, and I hope this information has been helpful for you to understand this complicated situation. I will continue to ask the Fund to give us “workingman’s” version of the legal language of their announcements, but in the meantime I hope this helps. Thanks to Maureen and Will for coming down to speak with us on short notice.

In Unity,

Dave Pomeroy

President, Nashville Musicians Association, AFM Local 257


Local 257 hits the blogosphere!

Posted April 14, 2010 by nashmusicians
Categories: Uncategorized

Hi there! President Dave Pomeroy here with our first blog post. We have been making a lot of changes here at Local 257 and the response has been fantastic. We are here to help you navigate your way through the business of making music. Let us know what we can do for you and remember that the more you are involved in the Union, the better it will be!