Disability and The Musicians’ Pension

Are you no longer performing due to injury or disability? If you are a participant in the Union Pension, the AFM-EPF, you should know about the plan’s disability benefits. The reason why a disability pension is more desirable than a retirement benefit today is that under the ERISA rules, the pension cannot reduce payments for Disability Benefits. You would be immune to the expected cut in benefits, versus if you were planning to wait to make an application for regular retirement benefits.

With the plan entering Critical and Declining status this year, the AFM-EPF has announced its intention to reduce benefits to retirees and participants. We won’t know the extent of the cuts needed until later this year, but the plan is underfunded by about one-third, and only about half of all participants would be subject to a cut in benefits, due to age, disability, or a small benefit. Read More: Musicians’ Pension to Cut Benefits.

There are two ways to qualify for disability. First, if you have already qualified for disability under Social Security, you can provide a copy of your disability letter when applying for the AFM-EPF benefits. This is the more difficult way, because Social Security requires you to be totally disabled for any type of work. But if you have already qualified under Social Security, that should suffice.

The second way to apply for disability through the AFM-EPF is by submitting a physician’s statement with your application. This requires a three-page form attesting to your disability. Link: Attending Physician Statement. This states that you are unable to continue to perform, which could be due to repetitive use injuries, back or shoulder problems, mental or nervous impairment, etc. This is an “own occupation” definition of disability, which unlike Social Security, means you could still do other work such as teaching music, or you could switch to another career.

If you are no longer playing due to a disability, or if you are playing today in pain, you may want to consider if you want to apply for the disability benefit now. Since the EPF plans to cut benefits, your future benefits under a Disability application could remain higher than if you apply under a regular Retirement application. Here are the full instructions for a disability application:

To be eligible for a disability pension, a participant must:

(1) file a complete application with the Fund Office;

(2) stop working in Covered Employment because of a condition of Total Disability;

(3) have at least 10 years of Vesting Service;

(4) have not started to receive a Regular Pension Benefit;

(5) be determined to have a Total Disability by the Administrative Committee of the Board of Trustees;

(6) not be eligible, on his or her Pension Effective Date for a Regular Pension Benefit; and

(7) have earned at least 1 Year of Vesting Service in the three calendar year period immediately preceding the Pension Effective Date.

To clarify requirement #6, you become eligible to receive a Regular Pension Benefit when you meet either of the following requirements:

  • You reach  your  Normal  Retirement  Age  (generally  age  65)  while  you  are  still  an  Active Participant; or
  • You reach age 55, are vested, and retire from all Covered Employment.

Have questions about your retirement planning? Does your financial advisor have the specific expertise and experience of working with professional musicians? Send me a message and let’s discuss your goals.